Paragon holds guidance as volumes, margins perform

30th Jul 2024 08:10

(Sharecast News) - Paragon Bank confirmed full-year guidance as volumes margins and costs during the third quarter were in line with expectations.

The lender and savings provider said new business levels were running ahead of expectations with buy-to-let mortgage application flows strong, resulting in the pipeline increasing slightly during the quarter, at £888.5m, and "significantly higher" than the £594.6m reported last September.

"Growth in development finance enquiry levels reported at the half-year results has continued, with the pipeline up 29% and the value of undrawn commitments remaining at elevated levels during the quarter," it added.

"The new government's focus on developing the scale of new house building also enhances the outlook for this sector. Following the quarter end, the SME division gained accreditation to provide additional lending under the Growth Guarantee Scheme."

Paragon said the combination of new lending levels and strong customer retention has resulted in the net loan book increasing by 5% year-on-year, to £15.4bn.

It also said net interest margin - the difference between savings and loan rates - remained strong and guidance for the full year of more than 310 basis points was reconfirmed.

Reporting by Frank Prenesti for Sharecast.com