26th Nov 2019 09:16
(Alliance News) - Paragon Banking Group PLC on Tuesday upped its dividend payment and said that diversification strategy, new mortgage lending, and growth within the commercial lending division resulted in a strong rise in lending volumes and adjusted earnings for financial 2019.
Shares in the banking group were trading flat at 503.50 pence each in London.
For the year ended September 30, the company recorded pretax profit of GBP159.0 million, down 12% from GBP181.5 million the year before. Pretax profit was dented by a GBP15.1 million charge on revaluation of derivatives held for hedging versus a GBP1.2 million gain a year ago.
Underlying profits, however, increased by 5.0% to GBP164.4 million from GBP156.5 million.
Net interest income for financial 2019 increased 9.3% year-on-year to GBP278.4 million, driven by a higher net interest margin and year-on-year increases in loan balances. Net interest margin improved to 229 basis points from 221 basis points.
Total new lending amounted to GBP2.53 billion, an increase of 8.5% on the previous year. Combined with the disposal of the company's residual interest in the Paragon Mortgages (No. 12) PLC securitisation, these left the loan book 0.5% higher at GBP12.19 billion at September 30.
Paragon Banking, which provides mortgages and personal loans, increased its dividend by 9.3% to 21.2p per share from 19.4p paid a year ago.
The company's CET1 ratio reduced marginally to 13.7% in financial 2019 from 13.8% a year ago due to growth in the balance sheet and the impact of shareholder distributions.
"Whilst there is uncertainty in the environment we have prepared well and look forward with optimism to the opportunities ahead." Chief Executive Nigel Terrington said.
By Tapan Panchal; [email protected]
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