The buy-to-let specialist advanced £102.3m in the six months to 31 March 2013, compared to £89.2m in the same period last year.
Business in the pipeline more than doubled in the three months to March, reaching £241.2m. The group expects a significant increase in loan completions in the second half of the year.
The group also indicated that, subject to regulatory consent, it would soon be setting up a banking subsidiary lending consumer loans funded by retail deposits.
Paragon director of mortgages John Heron (pictured) said: “The increased funding capacity combined with our ability to fund at tighter margins has allowed us to compete much more effectively in our core market and lay the foundations for further and sustainable growth in the coming months.”
Since December, when Paragon’s attempt to become a bank by acquiring Hampshire Trust fell through, it has been considering the possibility of establishing a bank. The lender has already increased its warehouse capacity for buy-to-let lending to £450m.
Paragon’s latest results stated: “On new business activities, the group is undertaking work in preparation for a return to new consumer loan originations.
“Whilst this work is ongoing, it is currently envisaged that these new activities may be most effectively undertaken within a banking subsidiary, to be established, subject to regulatory consent, within the group and funded primarily through retail deposits.”
The group’s profit before tax increased by 9.6%, to £49.1m. Underlying profit for its First Mortgages brand was £30.3m – 3% higher than the same period last year.
