Atom Bank chairman Thomson to step aside

whats 'challenger' got to do with anything 

Yes funny, really revolutionary type of bank, this one: £1 billion of loans into the twilight zone of the UK mortgage market and £1 billion of deposits guaranteed by the UK taxpayer under the Financial Services Compensation Scheme. The typical mortgage loan is for 25 years, but Atom's offer on its loans is considerably less than its bid on its deposits. The deposits are cleverly structured so as to fall outside Basel III Liquidity Coverage Ratio and Net Stable Funding Ratio, so the bank appears liquid under Basel III computations even though the average maturity of loans is over 20 years and the average maturity of deposits is about 18 months. The bank is an archetype of gaming the new Basel rules, but they cannot get away from the basics of Net Interest Income: if you pay more on deposits than you earn on loans, you will make a loss, and the greater the volume of business, the bigger the loss and the quicker you burn through your capital. Unfortunately if this bank goes down it will once again be the taxpayer that gets stiffed. So much for "Changing Banking for Good" and avoiding further instances of Northern Rock: thinly capitalised "challenger" banks (often from up in 't North or from Caledonia) aggessively building mortgage books at the low end of credit spectrum, overpaying for deposits, and running a glaring maturity mismatch.