Paragon Bank grew its mortgages loan book by 4.7% in the year to 30th September 2023 on the back of strong trading and retention performance, the company has revealed.
The mortgages loan book at the end of Paragon’s full year period stood at £12.9bn, compared to £12.3bn at the same point last year.
Overall, Paragon Banking Group reported a record underlying operating profit of £277.6m for the period, up 25.4% on last year.
The group’s new BTL lending outperformed the market despite challenging economic conditions.
Total mortgage originations were broadly flat at £1.88bn, attributed to Paragon’s pipeline hedging policy protecting customers in the pipeline from rate volatility at the time of the mini budget.
Paragon increased its focus on specialist BTL during the period, with 98.8% of completions classed as specialist, whilst the bank also recorded an uptick in lending on property with an EPC rating of A-C.
Completions on A-C-rated property stood at £904.6m for the period, up 8.7% on last year.
Paragon’s mortgages arrears performance remained strong, with arrears on the BTL book finishing the period at 0.34% compared to 0.69% across the broader BTL market.
The division also benefits from low loan-to-value coverage across the book at 62.8%, with Paragon’s landlord customers benefiting from £9bn of equity in their mortgaged portfolios.
Richard Rowntree, managing director for mortgages at Paragon Bank (pictured above), said: “We delivered a strong set of results despite the challenging market conditions.
“New lending was broadly in line with the previous year, which reflects our hedging policy designed to protect customers as well as our focus on portfolio landlords who remained active in the market.
“Whilst the overall market was down, we continued to see healthy demand for more specialist BTL propositions, such as HMOs, which we are well-placed to serve.
“I’m also pleased with our strong retention performance, which has been driven by the performance of the book written post-2010.
“We launched several initiatives aimed at improving retention of customers two years ago, so we entered this period with good processes in place to serve customers and brokers.”
