Paragon eyes takeovers as earnings rise

BUY to let mortgage specialist Paragon posted a surge in full-year profits yesterday and said it remained on the lookout for acquisition opportunities, having bought a portfolio off Royal Bank of Scotland last month.

Paragon’s pre-tax profits for the year ending September rose 12.5 per cent from a year ago to £80.8m, helped by acquisitions and growth in lending. The result beat an analyst average pre-tax profit forecast of £78.5m for Paragon.

“We have successfully re-established our buy-to-let new lending business and completed a securitisation of buy-to-let assets originated during the year, our first since 2007. This augurs well for a strong start to 2012,” chief executive Nigel Terrington said in a statement.

Paragon acquired three consumer loan portfolios worth a total £22.7m in the year and added the £43.2m RBS deal after the year end. It also completed a securitisation of £168.3m of buy-to-let loans this month, the first seen since 2007 before the housing market crash.

On Monday Prime Minister David Cameron announced plans to boost the housing market by indemnifying banks to provide support for new mortgages for up to 100,000 people.