Its latest trading update, which covers business performance from 1 October to 31 December and is the first quarter of the group’s financial year, said that Paragon had “seen an encouraging start to the financial year with improved customer sentiment leading to rising enquiry levels. We expect this to translate to improving volumes as the year progresses.”
The report continued that overall new lending came to £610.7m which compares to the same period last year at £861.7m.
Within that commercial lending advances accounted for £274.4m, which is up from £270.6m in the same period last year.
Paragon said that its buy-to-let pipeline at the end of the quarter came to £559.6m, which is above the 2023-year end level.
Buy-to-let redemption levels came to £204.5m of loans redeeming at an annualized redemption rate of 6.4 per cent, which compares to £407.8m of loans redeeming at a rate of 13.5 per cent.
The lender said that there were “strong retention levels at product maturity”.
Paragon: ‘Positive momentum’
The group continued that arrears were “below the industry average” but said that its “variable rate legacy buy-to-let book” was impacted by the higher rate environment. It added that its buy-to-let book and all commercial portfolios were “seeing low and stable arrears”.
The report added that the group “continues to make progress” with the Prudential Regulatory Authority on its buy-to-let IRB application.
Paragon Bank’s chief executive Nigel Terrington (pictured) said: “The first quarter of the new year has started well. The positive momentum seen in the business in 2023 has continued, alongside robust margins and a resilient credit performance. This, coupled with a notable improvement in sentiment, gives us encouragement for the remainder of the year.”
