The Paragon Group of Companies PLC has reported operating profits (before fair value items) of £75.5 million for the nine months to 30 June 2013, compared with £68.9 million for the corresponding period in the previous year.
Pre-tax profits, inclusive of a credit of £1.1 million for fair value hedging items, were £76.6 million for the period.
Meanwhile, new buy-to-let lending in the third quarter represented a 164% increase on the average of the first two quarters of the year.
In addition, investments by Idem Capital, the Group’s investment division, increased during the quarter by a further £35.1 million bringing the total invested in the year to date to £92.7 million.
At 30 June 2013 arrears of three months or more on the buy-to-let portfolio, including acquired loans and receivership cases but excluding properties held for sale, were 38bp (40bp at 31 March 2013).
Loan completions by Paragon Mortgages during the quarter were £135.4 million, compared with £102.3 million for the first six months of the year, resulting in year to date advances of £237.7 million. The pipeline of new business at 30 June 2013 was £220.2 million, which Paragons claims augers well for strong completion volumes in the fourth quarter.
During the quarter, Idem Capital invested £35.1 million in the acquisition of a further portfolio of unsecured loans, bringing the total investments in the year to date to £92.7 million. Paragon expect further investment opportunities to arise through the ongoing process of financial institutions disposing of loan assets and a number of opportunities are currently under consideration.
During the quarter the servicing of a further 20,400 accounts commenced and a number of other potential servicing arrangements are currently under review.
The Group is continuing to prepare for a return to new consumer finance lending, which is likely to be undertaken within a banking subsidiary. Further information on the progress of this business line will be provided in due course.
Paragon says it will continue to pursue the strategy of “prudent management” of the existing and acquired books whilst seeking growth through new buy-to-let and, in due course, consumer finance originations and through portfolio acquisitions.
