(Alliance News) - Paragon Banking Group PLC on Friday said its trading performance in the first quarter of its financial year ending September 30 fell in line with expectations.
The Solihull, West Midlands-based mortgage and loan provider noted "improved customer sentiment" driving rising enquiry levels, which should translate into improving volumes over the year.
However, new lending was GBP610.7 million in the quarter, down 29% from GBP861.7 million the year before, it said. Within this, Paragon said buy-to-let lending totalled GBP336.3 million, a 43% drop from GBP591.1 million in the corresponding quarter a year ago, and Commercial Lending advances were GBP274.4 million, up 1.4% from GBP270.6 million.
The buy-to-let pipeline at the end of the quarter was GBP559.6 million, down 5.9% from GBP594.6 million. However, Paragon said this is now "comfortably above" the 2023 year-end level.
Deposit balances grew 7.0% in the quarter, bringing year-on-year growth to 26.5%.
Paragon said its guidance for margins, new business flows, operating costs and return on tangible equity remain unchanged, though its margins are currently "slightly ahead of expectations".
"The first quarter of the new year has started well. The positive momentum seen in the business in 2023 has continued, alongside robust margins and a resilient credit performance. This, coupled with a notable improvement in sentiment, gives us encouragement for the remainder of the year," said Chief Executive Nigel Terrington.
Shares in Paragon were down 1.0% to 715.50 pence each in London on Friday morning.
By Sabrina Penty, Alliance News reporter
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Paragon Group (PAG)