BBVA name dropped in Atom Bank takeover talks
Sky News has learnt that Atom is in talks to appoint Citi to advise its board on options for the business.
The appointment, which is expected to be confirmed shortly, comes nearly a year after Atom raised almost £150 million from investors led by BBVA, Spain’s second-biggest lender.
Sky News explains that under the terms of its shareholder agreement, BBVA, which owns nearly 40% of the Durham-based digital bank, has an option to acquire the remainder of the shares.
Sources close to Atom denied that hiring Citi represented a “sale mandate” although they conceded that either a takeover, further equity fundraising or stock market listing was likely during 2019.
This is at the very early stages and nothing is confirmed yet, but BBVA would not be the first Spanish bank to move in on the UK’s consumer banking market.
Santander has got Abbey National, Alliance & Leicester and parts of Bradford & Bingley to create Britain’s fifth-biggest bank.
Sabadell took over TSB, but the latter has not had a marvellous time of late due to all its IT issues.
According to insiders that spoke with Sky News, if BBVA does not exercise its option to acquire Atom in the coming months, a further private fundraising or stock market listing is likely by the autumn.
Atom declined to comment on the appointment of Citi.
Atom was founded in 2014 and opened for business in October 2016.
It has created a hefty technology set-up in its run up to the launch: FIS’s Profile core banking system; FIS/Sungard’s Ambit Quantum and Ambit Focus for treasury and risk management; Iress’ Mortgage Sales & Origination (MSO) suite for mortgage business, front-to-back office; Wolters Kluwer’s OneSumX for regulatory reporting; Intelligent Environments (IE) for front office capabilities; CSC’s ConfidentID system for security; Phoebus Software for secured business lending and account servicing for residential lending; and WDS Virtual Agent for customer queries supplied by WDS (a subsidiary of Xerox).
Atom also acquired a local digital design agency, Grasp.
In H1 2017, it announced it was suspending the launch of current accounts for at least a year. Later in the year, it partnered with Deposit Solutions to offer retail deposits in Germany.
In spring 2018, Atom raised £149 million in the latest funding round (as mentioned above), including £85.4 million from its existing investor, BBVA. In autumn 2018, it announced a multi-year tech deal with Thought Machine, a UK-based core banking software start-up.