Profits came in at £49.1m, up 9.6 per cent on the £44.8m recorded in the first half of 2012.
Much of the gain came from a strong uptick in the buy-to-let market. Loan volumes increased 14.7 per cent on the year, coming in at £102.3m in the six months to March 2013 compared with £89.2m loaned out in the same period of the previous year.
And pipeline volumes stood at £241.2m in March, showing increasing expected lending in the rest of the year.
But despite the gains analysts were unimpressed with the profits.
“Paragon is a low return on equity (ROE) business. We do not believe it will be able to refinance its back book as the yield is far too low given the current funding environment,” said Numis’ James Hamilton.
“Consequently as time passes the ROE will fall as these books repay and the leverage declines. When we see rising interest rates which we do not expected any time soon then there is the very real possibility of shareholders losing all of their money again.”