Paragon Banking pulls interim dividend
Paragon Banking pulled its interim dividend due to the Covid-19 pandemic but said it had a strong capital base and “significant liquidity”.
The so-called challenger bank on Tuesday said it was too early to determine the impact that the coronavirus crisis would have on new business flows, redemptions, income recognition and IFRS9-related impairment charges.
Paragon said unaudited capital ratios at 29 February 2020 comprised CET1 of 14.4% and a total capital ratio of 16.7%. Its liquidity coverage ratio was 218% at March 31.
The Bank of England last month unveiled monetary easing measures which included giving banks more leeway in their capital requirements by reducing the countercyclical capital buffer rate and incentives for SME lending.
The company reported flat specialist buy-to-let mortgage lending of £694.6m for the six months to end-March and an 11% rise in its buy-to-let pipeline to £789.8m.
“Underlying net interest margins continued to improve, tempered by the expected amortisation of the Idem Capital portfolio, where no further purchases were made during the period,” Paragon said.
“Deposit costs have continued to benefit from our strategic actions, including broadening the product range, distribution and scale of market access and were lower at the end of March 2020 than at the end of September 2019.”