Atom bank has said it intends to raise £40 million from its existing shareholders over the next year, and to pursue an initial public offering (IPO) during the financial year 2022/23.

The Durham-based lender claimed its revenues are growing strongly and that it is on course to become profitable from its mortgage and business lending within a year.

Atom said it is on track to achieve 100bps of Net Interest Margin (NIM) by the end March 2021, and that they will have grown lending to SMEs on its balance sheet to over £700 million by the end of March 2021, which they said represents a tripling of business loans over last 12 months.

Atom also claimed it has seen strong growth in its mortgage portfolio, adding £362 million of mortgages in the second half of its financial year 2020/21.

Since its launch, Atom said it has loaned £2.8 billion to UK mortgage customers.

The Durham-based lender also covered its place in the secondary markets for UK mortgages, and said it had issued a £775 million prime mortgage securitisation last year.

In addition, Atom launched a new Instant Saver product last September and said it has so far added £0.6 billion of Instant Saver balances to its existing £1.7 billion of fixed rate savings.
Atom said these changes in income and technology have been achieved while holding the bank’s operating costs flat.

“We turn to our shareholders for capital as and when we need it to drive growth.” said Mark Mullen, chief executive officer at Atom. “Despite it being a difficult environment for all companies that need to raise funding, this capital raise will allow us to continue to progress towards profitability and ever-improving levels of efficiency and engagement.”

“The team retains an IPO as our objective and we’ll take the business there when we and the markets are ready.”

He added: “After the year that’s just gone I’m not going to claim perfect foresight, but we’re looking at the financial year 2022/23 as our IPO target.”

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