Atom Bank balance sheet exceeds £5 billion as the company reflects on a positive 2022

Boasting a balance sheet that recently exceeded £5 billion, Atom Bank - the UK’s first purely app-based challenger bank - has gone-from strength-to-strength since obtaining its banking licence in June 2015. Growth Capital Ventures recognised Atom Bank’s potential during the company's early stages and have supported the bank on two rounds to date, with the first in 2014 and the second in 2017, raising a total of over £1.1 million of equity investment.

In a recent interview between Atom Bank’s Chief Customer Officer, Ed Twiddy - one of the digital lender’s six original founding members - and Steven Hugill, editor of the North East Times Magazine, Ed highlighted the hurdles faced by the UK banking sector in recent years, and the ways in which Atom Bank has persisted and excelled amid a challenging backdrop. 

Responding positively to a challenging economic environment

Notably, Ed stated in the interview how Atom Bank has overcome challenges presented by Brexit, Covid-19, and major UK Governmental change, all whilst the bank is still less than 10 years old.

We’ve had the post-Brexit period, and the massive increase of liquidity into banks through the Term Funding Scheme, and seen interest rates go to the floor. 

We’ve had Covid-19, which transformed lives and sent the housing market into lockdown and, on either side of that, had a succession of political changes.

Despite these barriers having the potential to hinder growth, Atom’s timely responses displayed the bank’s agile operations and clear aims and objectives. Their ‘quite simple’ business model focuses on increasing revenue whilst keeping costs low and has enabled Atom to grow in a way that is simultaneously beneficial to its customers, team and investors.

Ed Twiddy illustrated that savings are deposited and processed through an automated expert risk machine that translates these savings into lending in the real economy. Importantly, Atom aims to arbitrage in the very best way possible between savers and borrowers, and claims this approach has played a key role in the company’s growth.

In the last financial year, we grew income by 200% while costs rose by 5%. And we think we can continue to do that, to become not just a £5 billion business, but a £15 billion, £20 billion or even £25 billion business.

In addition to demonstrating an impressive business and revenue model, Atom Bank prides itself on placing customer interests at its core. Earlier this year Atom was the first bank to break the 4.0% interest barrier on a 2-year fixed savings account in over a decade (the same account having now risen to 4.5% interest).

As the Bank of England Base Rate is steadily rising, reaching 3% in November 2022, Atom is committed to continuing to pass on these higher interest rates to reward savers.

By lending wisely, sensitively and fairly, we’re bringing something useful to society.

Delivering on their mission to grow alongside savers, rather than at their expense, in early November 2022, Atom Bank launched a nine-month fixed-rate bond, paying a rate of 3.95% AER, which leads the nine-month fixed-rate market by 0.20 percentage points.

We understand that not everyone wants to lock their cash away for years, so we’ve launched the nine-month product to help those who may have more short-term goals.

- Mark Mullen, Chief Executive Officer at Atom Bank.

Having recognised the company's efforts to support both savers and businesses during challenging economic periods, Atom Bank has been voted Which? Money ‘Best Digital Lender’ in 2022, for the fifth year in a row, and was awarded the accolade of ‘Best Support for SMEs’ at the Credit Strategy Lending Awards after Atom delivered their 1000th SME loan earlier this year.

A growing team and evolving focus

A growing business requires skills, and to that end, Ed says Atom has made noteworthy strides. From its founding six team members, the bank’s headcount now stands at 480, and the business experienced significant success when trialling a four-day working week, with a 500% increase in job applications following the initiative.

Approximately 430 members of Atom Bank’s team are based in the North East, and Ed notes that, for the North East of England:

The change brought by the pandemic has given a new lease of life to a tech sector that was already growing very quickly. And we’re proud of our partnership with the Institute of Coding on the TechUP programme at Durham University, to help people, especially women, retrain for careers in technology.

Furthermore, Atom Bank has worked with the Prince’s Trust, acting as a principal sponsor for young people not in employment, education or training, to provide them with skills for the future.

As well as embracing the evolving talent landscape, Ed emphasised the importance of Atom’s responsibilities surrounding sustainability and inclusivity, pinpointing specific targets that Atom Bank aims to meet over the coming years, including becoming carbon positive by the middle of the next decade and building on existing skills partnerships to support more individuals from diverse backgrounds.

Ed stated that Atom is already a very low carbon business, but is striving to become carbon positive by the mid-2030s. From an industry perspective, regulators and the Government expect banks to account for the reasons why the industries and households they are supporting are going to be sustainable. Working with partners - such as the Durham Energy Institute - helping people to live affordably, in a house fit to deal with climate change, is absolutely in Atom Bank’s interest.

We want to double, triple, quadruple in size as quickly as we possibly can. And we’ll do it safely and sustainably, always with a mind to our customers.

The bottom line

Ultimately, Atom Bank’s key focus revolves around providing a banking service that is faster, easier to access and offers greater value for money than its competitors - especially when customers need this the most. 

Pursuing this mission in a way that is mutually beneficial to their team, region, wider environment and investors, Atom’s accolades in 2022 alone stand testament to the successes of the bank in delivering on this goal. Now operating with a balance sheet of £5 billion - less than a decade since its launch - Atom Bank sits in an admirable position heading into 2023.

At GCV, we are proud to have supported Atom Bank on their journey to reshape the face of UK banking. After working alongside the team to facilitate investment opportunities for the GCV investor network to participate in, we look forward to watching Atom progress through the next stages of growth, particularly as the bank looks towards an initial public offering in the future.