Paragon Group report strong results in a transitional year
The Paragon Group of Companies PLC the specialist lender and banking group last week announced its full year results for the year ended 30 September 2016.
Commenting on the results, Nigel Terrington, Chief Executive of Paragon, said: “I am pleased to report a strong set of results in which we significantly increased revenue, strengthened net interest margins and improved return on equity, whilst maintaining pricing and credit discipline. Whilst the year has been disrupted by fiscal and regulatory changes, as well as political and macro economic factors, our customers’ performance has been exemplary and new business activity has seen encouraging growth recently”.
“Paragon’s operating model is undergoing significant change, as it transitions from a non-bank, securitised, monoline lender into a retail funded banking group. Paragon Bank is increasingly at the heart of the Group’s development, with its deposit book now exceeding 2 billion and its franchise firmly established. This has facilitated further progress in our diversification strategy, notably through the acquisition of Five Arrows Leasing Group and, more recently, Premier Asset Finance, which together have given Paragon a strong platform to build on the significant growth potential in the UK SME finance market”.
“We have put in place the foundations for strong and sustainable growth. The business is well funded and well capitalised with a robust operating model and an exemplary track record. ÿWe continue to believe that over the medium term the banking markets will undergo structural change which will favour specialist lending institutions such as Paragon and we are well positioned to take advantage of the opportunities that will arise.”
John Heron, Director of Paragon Mortgages, said: “This was very much a year of two halves for buy-to-let with very strong completion levels being seen in the run up to the stamp duty increase in April followed by a commensurate reduction in activity levels across the market from April.
“However, our pipeline of new business is now gathering momentum with an increase of approaching 20% in October. Much of this is due to the success of Paragon Bank in providing us with diversified funding allowing us to deliver a series of competitive products which is driving an increase in application volumes.
“In particular we are seeing an improvement in the professional landlord segment of the market, a sector we are well positioned to satisfy given our extensive experience of meeting their individual requirements.
“Whilst the buy-to-let market has had a challenging year, we continue to see the potential the sector has to offer. With strong rental demand, there will continue to be a growing need for professional landlords to provide quality, private rental accommodation and, with our 20 years_ experience in the market, we remain very well-positioned to work with these landlords”.
Broker Jeffriesÿ gave a positive endorsement of Paragon Group, analyst Phil Dobbin reportedly said: “Paragon is evolving from a securitized non-bank lender to a more diversified retail funded banking group. We believe that the company has the ability to gain market share in complex underwriting and can benefit from re-gearing its balance sheet. Increased activity since the year-end and increasing clarity of guidance pushes our forecasts up, particularly from 2018 onwards.”
To read the full year results for the Paragon Group in full click here
You May Also Enjoy
Housebuilding sector shows early signs of recovery
Rightmove launches major updates to its agent qualification CELA
Clarity on energy efficiency rules for commercial property needed
English Housing Survey 2024 to 2025
Propertymark responds to latest HMRC property transactions report
