Challenger bank Paragon Banking Group has reported “outstanding” full year performance as lending volumes across the business swelled above pre-pandemic levels.
“We have delivered an outstanding performance in 2021, which is testament to the strength of our operating model, the quality of our customer base and the capability and adaptability of our people,” chief executive Nigel Terrington said.
“Every lending business in the Group has this year made excellent progress, and at over £2.6 billion, aggregate new lending now comfortably exceeds pre-pandemic levels.
“We have made huge strides on the funding side, growing retail deposits by 18.4% at attractive rates, and have delivered significant digital improvements as part of the Group’s cloud-based strategy.”
Underlying profit increased by 61.8 per cent to £194.2m in the year to 30 September, up from £120m a year earlier.
Earnings per share surged almost 63 per cent to 59.3p, up from 36.5p, and the firm announced a full year dividend of 26p, up from 14.4p last year.
Paragon therefore announced a 2022 share buyback of up to £50m, in addition to a remaining £2.2m from its 2021 buyback.
Mortgage lending volumes rose 29.4 per cent to £1.63 billion, and at the end of the year, the firm said its specialist buy-to-let pipeline stands at more than £1bn.
Commercial lending volumes increased 22.9 per cent to £970,000 and Paragon said its pipeline surged 63.2 per cent to £370,000.
Paragon’s retail deposits loan book grew 18.4 per cent to £9.3bn, up from £7.9bn a year earlier.
Looking ahead, the lender said it was confident in its outlook.
“We enter 2022 with strong pipelines at near record levels, improved margins and the capital to continue to invest in and grow our business, as well as deliver additional returns for shareholders via a new buyback programme and materially increasing our full year dividend,” said Terrington.