(Alliance News) - Paragon Banking Group PLC on Friday said it made an "encouraging" start to the year despite ongoing Covid-related uncertainties.
The Solihull, England-based provider of mortgages and other asset-backed loans said specialist buy-to-let volumes have remained "robust" during its first quarter - which ended December 31 - at GBP298.7 million.
"Although this represents a GBP110.8 million reduction when compared to Q1 2020, it largely reflects the lagged impacts of the first lockdown on our pipeline and market wide challenges facing the execution of housing transactions," explained Paragon.
At the end of the first quarter, Paragon's buy-to-let pipeline stood at GBP966.8 million, which is up from GBP152.8 million the prior year.
Total advances during the first quarter stood at GBP521.8 million, down from GBP684.9 million in 2019. Commercial lending volumes "remain strong" at GBP217.7 million, with growth led by development finance.
Overall, Paragon said trading in the financial 2021 first quarter has been in line with internal expectations in spite of uncertainties caused by the Covid-19 pandemic.
Looking ahead, Paragon said: "Whilst the full economic effect of Covid-19 remains uncertain, the group's performance during the first quarter has been encouraging and the board's expectations on volumes and net interest margin remain unchanged."
"Good momentum in new business flows has led to strong growth in the pipelines, particularly for buy-to-let and development finance. Notwithstanding the economic environment, the group's loan portfolios have continued to demonstrate the quality of our underwriting with low levels of arrears. With strong capital ratios and high levels of liquidity, we are well positioned to face the challenges and opportunities ahead," said Chief Executive Nigel Terrington.
Shares in Paragon Banking were down 0.7% at 452.00 pence in London on Friday.
By Zoe Wickens; zoewickens@alliancenews.com
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Paragon Group (PAG)