But the lender cautioned it is still early in this stage of the crisis and “uncertainty will remain for some time to come”.
In the nine months to the end of June, Paragon’s mortgage advances have fallen 13 per cent, while commercial advances fell 12 per cent over the same period.
The group’s buy-to-let pipeline recovered from its low point of £598.7m at the end of May to reach £651.3m at the end of June and currently stands at over £700m.
The recovery in new business flows following the Covid-19 lockdown has been encouraging, the lender added.
New activity in the commercial lending division has also seen improvements in recent weeks, with continued resilience and growth being seen in development finance and a stable position in SME lending, Paragon said.
Just under 21 per cent of the group’s loan balances have had a payment deferral at some stage as a result of Covid-19, of which, to date, around 75 per cent have not requested any further support.
Paragon said the full economic effect of Covid-19 remains uncertain and it is therefore difficult to provide guidance for the year.
Nigel Terrington, chief executive (pictured), said: “Our people and operations have shown considerable resilience, agility and adaptability during this difficult period.
“New business flows have picked-up from their April lows and with improving performance in customer payments no additional overlay provision has been required.
“There may well be further challenges to come from this crisis, which we are well placed to deal with. We have strong levels of capital and liquidity and are well placed to develop our core businesses as well as make the most of any potential opportunities that will arise in future.”