31st Jan 2014 08:30
LONDON (Alliance News) - The Paragon Group of Companies PLC Friday said trading in the first quarter of its financial year was in line with its expectations, as it unveiled plans to launch a UK retail deposit-taking banking subsidiary before the end of the second half.
In a statement, the consumer finance lender and buy-to-let mortgage provider, which is fresh from raising more than GBP125 million from a retail bond issue earlier in January, said it expects to launch its bank in the second quarter of this year, with its application process with regulators at an advanced stage.
The new UK banking subsidiary will at first provide car and second mortgage loans, with other product lines to follow.
The company said it made a GBP27.1 million pretax profit for the three months ended December 31, 2013, compared with GBP23.5 million for the corresponding quarter the year before.
Operating profit before so-called fair value items rose to GBP26.9 million, compared with GBP23.7 million for the corresponding period last year.
Trading was driven by the company's loan portfolio, which generated strong profits and cash flows over the quarter.
The lender said redemptions across its loan books remain low, while credit performance was in line with its expectations.
Over the course of the quarter, Paragon Mortgages' loan completions amounted to GBP140.2 million, compared with the GBP45.6 million in the first quarter of 2012, with GBP222.5 billion in the pipeline of new business as recorded at the end of the last calendar year.
Meanwhile, the loan portfolios acquired by investment division Idem Capital continued to perform well, according to the statement.
"During the period since October 1 2013, including a transaction which has been signed and is expected to complete today, a further GBP105.7 million of cash has been committed to the purchase of portfolios of secured and unsecured consumer loans," the company said in a statement, adding that it expects further investment opportunities as other financial institutions sell off loan assets.
Paragon Group of Companies shares were Friday quoted at 366.90 pence, up 19.00 pence, 0r 5.5%, making it the top gainer among FTSE 250 stocks.
By Samuel Agini; [email protected]; @samuelagini
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