6th Jun 2023 09:21
(Alliance News) - Paragon Banking Group PLC on Tuesday said its financial and operational performance was strong throughout its first half year, with "record interim operating profits" and "robust growth", while expecting to withstand potential economic headwinds.
Shares in Paragon were up 7.7% at 542.00p in London on Tuesday morning.
The Solihull, West Midlands mortgage and loan provider said its pretax profit decreased 68% to GBP46.4 million for the six months ended March 31, from GBP143.6 million for the same period in 2022. Paragon's total operating income, however, increased 21% to GBP220.2 million from GBP181.7 million.
Paragon's lower profit was partly due to interest payable and similar charges, which more than tripled over the same periods to GBP225.2 million from GBP64.0 million. Operating expenses increased 12% to GBP83.8 million from GBP74.9 million, while provisions for losses increased to GBP7.5 million from GBP1.3 million.
Paragon also said the decreased operating profit reflected the unwinding of GBP82.5 million of its GBP191.9 million in fair value gains recognised last year. This was due to statutory earnings per share decreasing 63% to 16.4 pence from 44.4p in 2022.
Paragon declared an interim dividend of 11.0p per share, up 17% from 9.4p the previous year.
Going forward, Paragon said it is "well-placed" to deliver a profitable loan book, and protect the value of its assets, despite potential "adverse economic headwinds".
It also claimed stronger short-term prospects for future lending, "with a more stable economic outlook leading to increasing numbers of proposals in the system".
Paragon's commercial lending division's business lines "remain strong" and the sector's prospects "appear brighter", it said, allowing the division to contribute more to Paragon's growth.
Chief Executive Nigel Terrington said: "We are delighted to deliver another strong financial and operational performance, achieving record interim operating profits, alongside robust growth in our loan book...Our capital ratios are strong and liquidity levels remain high which enabled us to announce today a further increase in our share buyback programme from GBP50 million to GBP100 million.
"We are well placed to continue to support our customers and deliver strong returns for our shareholders as we look to capitalise on the opportunities that the environment will inevitably produce."
By Emma Curzon, Alliance News reporter
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