Yorkshire Building Society and Leeds Building Society are reportedly weighing bids to acquire Atom Bank, a digital lender whose owners, including BBVA and Toscafund, are hoping for a valuation exceeding £600 million. Investment bank Jefferies has been appointed to manage the sale process for Atom, which has approximately 250,000 customers. This potential acquisition follows a trend in the UK where building societies are seeking deals to enhance their scale, strengthen their market position against larger banks, and broaden their customer services.
Industry executives, however, suggest that final offers might fall below the £600 million target, noting that Atom, established in 2014, has struggled to match the customer base of rivals like Revolut (70 million customers) and Monzo (15 million customers). Atom had previously aimed for a stock market listing but ultimately decided to explore a sale. The bank was valued at £350 million in its most recent fundraising round.
Recent examples of this trend include Nationwide's £2.9 billion acquisition of Virgin Money in 2024 and Coventry Building Society's £780 million purchase of Co-operative Bank last year. Both Yorkshire and Leeds Building Societies have shown strong financial performance; Yorkshire reported £377.9 million in pre-tax profits and a £10 billion loan book, while Leeds recorded £198.6 million in pre-tax profit in the past year. Yorkshire Building Society, founded in 1864, is one of the UK's largest mutual institutions with 3.1 million members.
Acquisitions by building societies can face scrutiny from their members, as seen with some backlash regarding Nationwide's Virgin Money deal. This highlights the challenge of balancing strategic expansion with maintaining the mutual governance structures characteristic of these institutions. While Yorkshire and Leeds are currently considering bids, other potential offers could still emerge for Atom Bank.
