Yorkshire Building Society and Leeds Building Society are among the organisations examining a possible purchase of Atom Bank, reported Financial Times citing sources.
The digital lender, whose shareholders include BBVA of Spain and Toscafund, has hired Jefferies to oversee a sale, the people said.
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The owners are seeking a valuation of more than £600m for Atom, which serves about 250,000 customers.
Interest from the two mutual lenders reflects a wider pattern in which UK building societies have pursued deals to increase their scale, strengthen their position against larger banks and widen the range of services offered to customers.
Atom was established in 2014 as an online bank and has developed substantial savings and mortgage operations.
It has, however, remained smaller than retail fintech rivals including Revolut and Monzo, which have 70 million and 15million customers respectively.
Atom had previously planned to seek a stock market listing, but the owners later chose to explore a disposal instead, the news publication noted.
Recent transactions in the sector include Nationwide’s £2.9bn ($3.9bn) acquisition of Virgin Money in 2024, which added a business banking arm and increased its mortgage assets.
Coventry Building Society also acquired the Co-operative Bank for £780m last year.
Yorkshire Building Society, founded in 1864, has grown into one of the UK’s largest mutual institutions and has 3.1mn members.
It reported pre-tax profit of £377.9mn last year and said its loan book rose to £10bn. Leeds Building Society recorded profit before tax of £198.6mn over the same period.
Atom, Leeds Building Society, Yorkshire Building Society and Jefferies declined to comment.
