Atom Bank, a UK retail bank built for smartphones and tablets with no physical branches, reported a £36 million operating loss for the fiscal year ending in March 2021, down from the previous years £46 million in losses, according to FinExtra.
Despite continued loss making, the first digital-only challenger bank to be granted a full UK regulatory license reported its first monthly operating profit in June 2021 amid strong growth during the COVID-19 pandemic.
“While we continue to be loss making, the dynamics of the business have been transformed and we have developed strong momentum towards reaching breakeven on a monthly run rate during 2022,” Atom CEO Mark Mullen said.
Mullen says the bank expects to deliver month-on-month profit later in 2021 and plans for long-term earnings ahead of a potential future listing in 2022 or 2023. The bank grew due to COVID-related lending, up £662 million from £240 million last year.
The news shows growth for the digital challenger bank, which competes with fellow UK banks Monzo, Starling Bank and Revolut, all of which are attempting to mature and reach long-term profitability.
Mullen told Financial News that reaching profitability is a matter of timing, but it would be unwise for Atom to go public without being profitable month by month.
Atom Bank’s valuation has declined about 40% from the £530m valuation it received in 2019, but covered losses its £36 million yearly loss with a recent £40 million venture funding round in April, according to TodayUKNews.
That round was led by BBVA and Toscafund Asset Management, and brought Atom’s total funding to approximately $640 million through nine funding rounds.
In other recent fintech news, B2B e-commerce company Balance raised a $25 million Series A led by Ribbit Capital. BBVA’s dynamic security code card Aqua is also entering Latin America following a million users adopting the card in Spain and Mexico.