UK bank Paragon has reported strong new lending growth following a surge in demand from professional landlords.
The bank said total new lending for the three months to 31 December hit £660m, a 40 per cent increase on the previous year.
The majority of new business flows – £424.7m – came from buy-to-let lending as the company continued its focus on professional landlords.
Chief executive Nigel Terrington said the company remained confident in its outlook but would maintain its capital liquidity buffer in case the “external operating environment” deteriorated.
It said the December buy-to-let pipeline stood at £729.1m, a 17.8 per cent increase on December 2017.
Following its acquisition of property lender Titlestone, commercial lending was also boosted – rising 105 per cent to £212m in new business flows.
Paragon said the value of its outstanding deposits rose to £5.6bn from £5.3bn at the end of September.
Terrington said: “The group has started the year well, delivering strong lending growth across all our core business areas.
“Our retail deposit base continues to grow, creating further efficiencies in our funding structure.”
AJ Bell analyst Russ Mould that after a recent profit warning from Metro Bank, Paragon investors may have been concerned ahead of its trading update.
He said: “Despite the patchy nature of the company’s long-term track record, it turns out investors needn’t have worried as the group delivered strong growth across all areas.
“The numbers show the benefit of a diversified approach with the commercial lending book proving to be a big driver in this particular period, boosted by the acquisition of Titlestone last summer.”