Tuesday 8 June 2021 12:09 pm

Paragon bank posts record profits, reaping the benefits of lending surge

Paragon banking group has posted record profits in the last six months, reaping the benefits of a surge in lending and chasmic margins.

Since revealing the strong results, the banking group’s shares rocketed 9.47 per cent in the afternoon’s London trading, taking Paragon’s share price to 560.5p per share.

The group’s profit before tax soared 44.9 per cent, in its half-year results ending 31 March, as the bank raked in £82.9m. The bank’s statutory results looked even brighter, increasing by 68.8 per cent to £96.4m.

Paragon has also launched a £40m share buy-back programme, to encourage shareholder returns.

Lending, which helped the bank secure its sturdy results, saw new volumes grow by 45.1 per cent compared to the second half of 2020.

Development finance bolstered Paragon’s lending results as the pandemic pushed people to rethink their homes – pushing the pipeline to swell by 65.2 per cent.

In the last six months, Paragon became the first UK bank to offer a subordinated green bond, in a bid for climate-conscious finance ahead of the G7 and COP26 summits.

The money raised from the bond will go to green loans which incentivise landlords to mitigate the impact of climate change.

The bank’s strong capital position has it well placed for issuing an interim dividend of 7.2p.

“We have delivered record half-year profits and go into the second half of 2021 with strong momentum, healthy new business pipelines and enhanced margins,” chief executive Nigel Terrington said.

“Our people continue to excel, maintaining both productivity and flexibility as we look to develop options for the future operating model of the group. We look forward to the second half with strong capital ratios, prudent liquidity and with growing confidence as the UK emerges from the Covid crisis.”