Paragon Banking Q1 in line, new business volumes rise
Paragon Banking said on Thursday that it traded in line with management's expectations in the quarter to the end of December, with new business volumes up 3.7% on the same period a year ago.
Volumes came in at £684.9m, with stable redemption levels, while the net loan book rose 1.6% to £12.4bn.
Specialist buy-to-let lending was 1.1% higher on the year at £375.4m, while other mortgage and amateur buy-to-let volumes were lower in comparison following Paragon’s decision to focus on higher margin, professional business. Overall mortgage lending fell 4%, it said.
The quarter end pipeline figure for buy-to-let was £814m, up 11.6% on the year, of which 92% was specialist.
New business volumes in commercial lending rose 19.9% to £254.1m Paragon said the faster growth rate in commercial lending reflects the low market share of its business lines relative to the mortgage division. At the quarter end, commercial lending represented 12% of the group’s net loan assets.
Asset quality remains stable, the company said.
Deposit balances grew to £6.6bn in December from £5.6bn a year earlier and "continue to benefit from product and channel expansion".
Chief executive Nigel Terrington said the company had made a "strong" start to its 2020 financial year, where good progress has been achieved in its key divisions.
"Our loan portfolios continue to deliver an exemplary credit performance. We look forward to the year ahead with confidence as we continue to pursue a diversification strategy. Whilst we welcome recent survey reports indicating improving confidence, it is too early to determine whether this will convert into a sustained improvement in economic activity and we will continue to maintain conservative risk appetite."
At 0850 GMT, the shares were down 1.5% at 519.00p.