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Strong mortgage volumes push Paragon's interim profit to record peak

By Reuters

– Paragon Banking Group posted a record first-half underlying profit on Tuesday, boosted by a bounce back in its lending volumes from a pandemic-hit 2020, prompting the lender to set out a 40 million pound ($56.60 million) buyback plan.

The London-listed company said its underlying profit for the six months ended March 31 surged 45% to 82.9 million pounds ($117.30 million) from 57.2 million pounds a year earlier, with total loan book growing by 2.5% to 12.82 billion pounds.

Shares in Paragon were up 5% at 5.37 pounds by 0710 GMT.

The lender said it ended the first half with strong new business pipelines in its development finance and buy-to-let units, while loans under payment holidays fell to a negligible 40 million pounds from 2.5 billion pounds at the peak in 2020.

“We look forward to the second half with strong capital ratios, prudent liquidity and growing confidence as the UK emerges from the COVID crisis,” Chief Executive Officer Nigel Terrington said.

The housing market has rebounded, after initial disruptions from the health crisis, due to pent-up demand and a desire for spacious homes better suited for remote working, which has in turn lifted mortgage volumes.

Paragon’s mortgage book bulked up to 11.13 billion pounds from 10.68 billion pounds a year earlier. Overall net interest margin, a key measure of profitability for a bank, inched up to 2.32% from 2.29%.

($1 = 0.7067 pounds)