(Alliance News) - Paragon Banking Group PLC said on Friday that it was trading in line with expectations for the first quarter of its new financial year.
The Solihull, England-based lender and savings bank said the quarter had seen strong new business flows, improving margins and capital strength generated from the company's focus on specialist customers and markets.
For the three months to December 31, total new lending increased by 36% to GBP708.0 million from GBP521.8 million in the first quarter of the previous financial year. Paragon's financial year ends September 30.
The volume of new buy-to-let mortgage advances increased by 37% to GBP408.5 million from GBP298.7 million reported in the same quarter last year. Paragon cited its continued focus on lending to specialist landlords for the rise.
Paragon's commercial lending volumes also increased. At GBP298.8 million, commercial lending volumes were 37% above the GBP217.7 million reported in the first quarter last year. The company added that each of the four business lines within Commercial Lending saw at least double-digit percentage improvements against the comparable quarter.
The buy-to-let pipeline totals GBP1.03 billion, 6.2% above last year's level of GBP966.8 million, and redemptions for the quarter totalled GBP193.8 million, up 15% from GBP169.2 million the previous and representing an annualised redemption rate of 6.8% which, Paragon explained, remains below historical averages.
Looking forward, Paragon said that whilst there continues to be uncertainties stemming from the ongoing impacts of Covid-19, the company's operational and financial performance during the first quarter has been strong and thus its guidance for financial 2022 remains unchanged.
Shares in Paragon were down 1.0% at 569.50 pence on Friday morning in London.
By Heather Rydings; heatherrydings@alliancenews.com
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Paragon Group (PAG)