Paragon increases share buyback

lender Paragon Group of Companies reported a 9 per cent increase in full-year pre-tax profit and raised its share buyback programme by up to £50m after extending it into next year.
By The Newsroom
Published 24th Nov 2015, 14:39 BST

The company, which owns Paragon Bank, said its buy-to-let lending doubled to £1.33bn in the year ended September 30, while its pipeline at year-end was up 72 per cent at £713.7m.

Increasing house prices, brought about by restricted supply and an uptick in demand, have made such investments more attractive.

Hide Ad
Hide Ad

Paragon said its banking unit, which reported a loss of £8.6m in 2015, is expected to make a profit in 2016. Paragon launched the retail-funded lending bank last year to enable it to diversify beyond the mortgage market.

Chief executive Nigel Terrington said the bank would not earn enough in 2016 to come under a proposed banking tax – an 8 per cent surcharge on banks’ profits above £25m.

“In one sense, it will be good news to pay the extra 8 per cent tax because that means it (Paragon Bank) will be profitable,” Mr Terrington said.

Paragon said last month it had bought SME lending-focused Five Arrows Leasing from Rothschild. The asset finance business would contribute about £10m to the group’s profit this year, with about £3m expected to go towards transaction costs.