The announcement was accompanied by the news that Paragon Bank has seen its underlying profits climb from an £8.6m loss during 2015 to £11.6m in the black for 2016. This was boosted by a 164.4% increase in the bank’s retail deposit balances, which now stand at £1.87bn.
Nigel Terrington, chief executive of parent company Paragon Group, said “I am pleased to report a strong set of results in which we significantly increased revenue, strengthened net interest margins and improved return on equity, while maintaining pricing and credit discipline. While the year has been disrupted by fiscal and regulatory changes, as well as political and macro-economic factors, our customers’ performance has been exemplary and new business activity has seen encouraging growth recently.”
The bank’s growth was mirrored by Paragon Group, which reported a 9.1% increase in its underlying profit to £146.9m. This was attributed in part to diversification of income streams, merger and acquisitions activity and effective capital management. This rise came despite a 12.5% decline in its buy-to-let completions over the same period.
Commenting on the group’s results, John Heron, director of mortgages at Paragon Mortgages, added: “While the buy-to-let market has had a challenging year, we continue to see the potential the sector has to offer. With strong rental demand, there will continue to be a growing need for professional landlords to provide quality, private rental accommodation and, with our 20 years’ experience in the market, we remain very well-positioned to work with these landlords.”