Paragon Banking Group reports fall in first quarter lending
Challenger bank Paragon Banking Group has reported an “encouraging start to the year” despite a fall in lending volumes.
“We have made an encouraging start to the year. Good momentum in new business flows has led to strong growth in the pipelines, particularly for buy-to-let and development finance,” chief executive Nigel Terrington said.
In the first quarter specialist buy-to-let volumes plunged £110.8m to £298.7m in the three months to December compared to the same period last year.
Paragon said this largely reflects the lagged impacts of the first lockdown on its pipeline as well as wider market challenges.
Commercial volumes fell 14 per cent to £217.7m although there has been strong growth in SME lending as a result of the government loan schemes.
While aided by a further £13.6m of lending through the CBILS and BBLS schemes, lending is still below the levels seen pre-pandemic.
Paragon’s loan book by the end of 2020 was robust at £12.67bn with lower new business volumes offset by buy-to-let redemptions.
“Notwithstanding the economic environment, the Group’s loan portfolios have continued to demonstrate the quality of our underwriting with low levels of arrears. With strong capital ratios and high levels of liquidity, we are well positioned to face the challenges and opportunities ahead,” Terrington said.
Shares edged 0.2 per cent higher in early trading.