Paragon Banking Group PLC on Wednesday reaffirmed its full year guidance, as it posts continued momentum in lending volumes and an ‘exemplary’ credit performance.
Paragon Banking is a Solihull, England-based lender and savings bank.
In the six months ended June 30, total advances increased 17% to £2.2 billion from GB1.9 billion the same period a year prior. Notably, commercial lending volumes climbed 32% to £900 million from £700 million, whilst mortgage lending volumes were up 7.5% to £1.3 billion from £1.2 billion.
Paragon also reported that in the year-to-date its buy-to-let pipeline surged by 46% to £1.3 billion from £900 million in the first six months of 2021. The annualised redemption rate for the buy-to-let portfolio stands at 7.8%, it added.
Despite of the uncertain macroeconomic outlook, the company said that its credit performance remains ‘exemplary’, with no evidence of deterioration. At 15 basis points, the three-month plus arrears metric on the buy-to-let portfolio compares favourably to the 28 basis points reported at June 30, 2021, whilst loan to value ratios also continue to improve, with the weighted average falling to 58%.
The company also said that it has completed 55% of its £75 million annual share buyback, leaving a further £33.8 million to be purchased during the remainder of the year.
Looking ahead, Paragon reaffirmed its full year guidance of at least £1.8 billion in mortgage lending advances and £1.2 billion in commercial lending advances, as well as maximum operating costs of £150 million.
Chief Executive Officer Nigel Terrington said: ‘Paragon has delivered another strong performance, with continued momentum in new business flows and improving margins driving robust revenue growth, whilst maintaining a tight cost focus.
‘With strong levels of capital and an exemplary credit performance, we are well positioned to deal with any economic weakness that emerges,’ Terrington added.
Shares in Paragon were up 0.8% to 525.50 pence each in London on Wednesday morning.
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