This was split between £1.5bn in mortgage loans and £1.2bn in commercial lending, compared to figures of £1.9bn and £1.1bn in 2023.
Improved BTL activity
Paragon’s buy-to-let (BTL) business improved annually, as its pipeline rose 48% to £881.4m. It also saw the BTL loan book grow to £13.3bn.
The lender said new lending “accelerated” in the second half of the financial year as market sentiment improved, resulting in a 30% rise in completions when comparing the first half of its financial year to the latter six months.
Paragon also saw a rise in the share of lending on properties with an Energy Performance Certificate (EPC) rating between A and C. During the period, it lent £795.3m on energy-efficiency properties, accounting for 53% of completions, up from 50% the year before.
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It said its post-2010 BTL portfolio, which is made up of landlords with more specialist requirements and larger portfolios, expanded by 9.7% and now makes up 79% of the mortgage division’s assets.
Arrears on the BTL book rose from 0.34% last year to 0.38% this year, but was significantly down from a rate of 0.68% in the six months to March.
The average loan to value (LTV) ratio of the BTL portfolio was flat at 62.8%.
Louisa Sedgwick (pictured), managing director of mortgages for Paragon Bank, said: “We are delighted to announce a 4.4% increase in our buy-to-let mortgages loan book in challenging market conditions.
“New lending accelerated in the second half of the financial year, and we enter the new year with great momentum, with our new business pipeline 48% higher.”
She added: “2025 promises to be an exciting year for Paragon. We are launching our new, bespoke mortgage originations platform, making it quicker and easier for intermediaries to submit cases, which will reduce the time from application to offer.”
Its development finance pipeline also increased annually from £150m to £200m.
Paragon sees rise in profits
Paragon Banking Group posted a statutory profit before tax of £253.8m, 27% higher than the year before.
Its net interest margin (NIM) improved by seven basis points to 3.16%.
The group’s net loan book increased by 5.6% to £15.7bn.
Nigel Terrington, chief executive of Paragon, said: “It has been another year of strong financial and operational performance, building on our consistent track record over the past decade, underpinned by the strength of our business model and long-term strategy.
“We have seen accelerating momentum throughout the year, with new lending levels reaching the upper range of our expectations and strong customer retention. Improving customer sentiment, robust year-end pipelines, and our strategic focus on specialist markets gives us confidence as we enter the new financial year.”
He added: “Paragon’s consistent focus on sustainable growth, enabled by an increasingly diversified and digitalised operating model, together with strong internal capital generation, puts us in a strong position to continue delivering superior returns to our shareholders whilst continually supporting our customers’ ambitions.”
