Paragon’s Q2 new lending rises by nearly quarter to £861.7m

According to its latest results, this is an increase of 21.7 per cent on the previous quarter, where new lending came to £708m.

The volume of new buy-to-let advances rose 44.7 per cent to £591m compared to the prior quarter, with the firm adding that it had a “continued focus on lending to professional landlords”.

Paragon said that the mini Budget had been “hugely disruptive” to new business levels and strong conversion levels.

It added that this had reduced the pipeline to £748m for period end, compared to £1.02bn for Q1 2022.

The lender said that as a result, completions for the second quarter are expected to come in below Q1 levels.

Paragon’s loan book grew by 5.4 per cent in the 12 month to 31 December and it added that net interest margins ran at levels above expectations over the first quarter.

Commercial lending volumes came to £270.6m, which compared to £298.8m in Q1 022.

It also hightlighted that that whilst drawdown levels in development finance “remain robust”, new equiries had slowed down.

The lender said that it expected this trend to “continue for the next quarter at least”.

Deposit balances came to £11.2bn at the end of the quarter, and the firm said that funding costs had risen as base rates and swap rates had increased.

Paragon: ‘Financial year has started well’

Paragon’s chief executive Nigel Terrington said: “The strength of the group’s performance in a quarter of extreme volatility for the banking sector is testament to the resilience of Paragon’s business model, our focus on and deep knowledge of the specialist markets in which we operate, our experience and our prudent approach to managing the business.

“Clearly, the economic backdrop remains uncertain, but our financial year has started well with good loan book growth and net interest margins running at levels above expectations.

“We remain confident in the guidance given for the full year and our strong capital levels mean we are well-positioned to continue to deliver excellent returns for our shareholders and further support our customers.”