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(Alliance News) - Paragon Banking Group PLC on Tuesday reported a higher interim profit, boosted by growth in new lending at "attractive margins".
Paragon Banking shares were 9.3% higher at 513.50 pence each in London on Tuesday morning.
Pretax profit for the half-year ended March 31 rose 49% to GBP143.6 million from GBP96.4 million a year ago, the Solihull, West Midlands-based provider of mortgages and commercial and personal loans said.
New lending levels were up 32% to GBP1.49 billion compared to GBP1.13 billion a year ago, the firm explained. Its buy-to-let pipeline surged 44% to GBP1.34 billion compared to March 2021.
The bank's net interest margin improved to 2.57% in the first half from 2.32% the year prior. For financial 2022, its NIM is guided to rise by 20 basis points after ending September 30, 2021 at 2.39%.
Fair value net gains climbed to GBP105.5 million from GBP82.9 million. It proposed an interim dividend of 9.4 pence per share, up 31% from 7.2p a year ago.
Regarding an increase of corporate tax for Paragon to 25% from 19% starting April 2023, "this will be mitigated, to some extent, by a reduction of the bank surcharge to 3.0% and an increase in the profit threshold over which it becomes chargeable, both enacted in the period," it said.
"The group, however, remains cautious in its assessment of future credit losses, with the prospects of UK interest rates and inflation reaching levels not seen for many years generating uncertainty on likely credit impacts," it added.
Looking ahead, its mortgage lending is guided to rise by over GBP1.8 billion, with commercial lending to grow by over GBP1.2 billion. In the year prior, mortgage advances rose by GBP1.63 billion, while its commercial book rose by GBP970 million.
By Tom Budszus; tombudszus@alliancenews.com
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