Former JP Morgan man leads acquisition of £3.5m stake in Atom Bank

A former JP Morgan executive is at the helm of bid to buy a stake in North East-based challenger bank Atom, it has been reported.

Sanjiv Somani, who led the US giant's digitally only Chase UK bank until last year, is leading investment firm Lexham Partners, which was set up last year by venture capitalist Dominic Perks. The firm is said to be negotiating the purchase of a stakeholding from existing shareholders.

The move, which was first reported by Sky News, means Mr Somani - who also led digital wealth manager Nutmeg after its acquisition by JP Morgan in 2021 - will manage the stake in Atom. Lexham is reported to be looking at £3.5m worth of stock at 40-per-share, valuing Atom at £400m.

It comes a year after Atom raised £100m in new equity capital from long-term shareholders BBVA, Toscafund and Infinity Investment Partners - money which was used to boost balance sheet growth. At the time, Atom said the funding round formed part of a long term strategy to "deliver a liquidity event in the future". with CEO Mark Mullen saying the bank was working to make itself a "credible candidate for IPO".

In June Atom published results for the year to the end of March 2024, in which it said it had generated a 600% increase in operating profit to £27m. Net interest income was boosted 31% to £99.5m thanks to strong loan book growth of 39% to £4.1bn on the back of growth in residential mortgage balances to £3.2bn.

The results were said to be the best since the bank's launch in 2013, and also saw operating income rise to £88.3m from £65.8m, while the pre-tax profit of £6.7m was compared with the previous year's pre-tax loss of £10.1m. The bank, which has switched to a four day working week, also grew its headcount, surpassing 500 staff.

In May, Atom appointed former Virgin Money chief financial officer Lee Rochford as chairman. Mr Rochford was instrumental in Virgin Money's stock market flotation in 2014.

At the time of its results, Mr Mullen said: "This has been our best year yet at Atom bank. We have achieved profitability across all measures, grown our loan book significantly, maintained robust credit quality, avoided fraud losses altogether, kept our costs tightly controlled and enhanced our already industry leading customer experience metrics.

“We begin the new year with tailwinds in the form of strong asset pipelines, excellent technology, a highly engaged team, supportive investors and an enviable reputation with customers. Beyond the confines of banking, we have exciting plans to further reduce our impact on the planet and to create even more opportunities in our local community.