SOARING buy-to-let lending boosted Paragon’s profits in the year to September, the specialist lender said yesterday.
Pre-tax profits jumped 10.4 per cent to £105.4m, up from £95.5m in the previous 12-month period.
Total operating income increased 4.5 per cent to £177.9m, while operating expenses increased 12.9 per cent to £58.6m.
Earnings per share increased 17.4 per cent to 28.4p, and return on equity improved from 9.3 per cent to 10.2 per cent.
“Buy-to-let lending volumes have grown by over 90 per cent as landlords feel increasingly optimistic about the housing market and the prospects for the private rental sector,” said Paragon’s chief executive Nigel Terrington.
“The group’s actions to increase its warehouse facilities, its successful securitisations and the new retail bond programme all combine to provide substantial capacity to support further growth in our existing business areas.”
And the chief said he also plans to go into new business lines by becoming a bank.
“With our banking licence application making good progress and our plans for a return to consumer finance lending now well advanced, the group is well positioned for further growth in the year ahead,” he said.
Paragon is already involved in customer loans, investing £92.8m in consumer loan portfolios in the year.
The group said it expects to finance its new banking arm through retail deposits, again opening a new line of business.
Shares in the group fell 0.26 per cent on the day.