Paragon posts 10% rise in profits

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The Paragon Group of Companies has reported a 10.2% increase in underlying profit for for the year ending 30 September 2015, totalling £134.7 million.

During the year Paragon saw a large rise in activity, with buy-to-let lending totalling £1.33 billion – representing a 102% increase on the previous year.

The pipeline of new applications stood at £713.7 million on 30 September, up 72.1% compared with the same period last year.

Nigel Terrington, chief executive of Paragon, said: “I am delighted to report another year of excellent progress for Paragon, as we continue our strategy of diversifying the Group’s income and funding streams, whilst continuing to improve shareholder returns. Paragon Bank’s development over a short space of time has been significant and the recent acquisition of Five Arrows Leasing Group takes us into the SME finance market. We are looking forward to working closely with the Five Arrows management team on a business that has substantial growth potential under Paragon’s ownership.

“The Group’s financial performance has been strong, including profit growth of 10.2%. Buy-to-let volumes increased by 102% and our pipeline at the year-end was up 72%. The level of capacity and diversification we have achieved in our funding, including over £950 million in retail deposits raised to date through Paragon Bank, will allow us to capitalise on future growth opportunities.

“Capital management remains a priority for the Group. We have delivered improved return on equity, increased the dividend by over 22% and have extended the share buy-back programme by a further £50.0 million as we continue to balance strong growth with increased shareholder returns.

“This set of results demonstrates the strength of the Group’s existing franchises which are being extended by the ongoing diversification of both our funding and income streams.”

John Heron, director of mortgages, added: “Access to retail markets through Paragon Bank has provided the Group with a material diversification of funding. This has helped facilitate a step change in buy-to-let lending driven by a significant broadening of our product range and a more consistently competitive position for both large-scale professional landlords and smaller-scale property investors.

“It has been a fantastic year for the Group overall and with our acquisition of Five Arrows Leasing through Paragon Bank, there will be more exciting opportunities to come.”

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