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Paragon sees profit jump to £69m

Mortgage group says it will continue to seek growth through new loan originations and portfolio acquisitions.

By Donia O'Loughlin | Published Jul 19, 2012 | comments

The Paragon Group of Companies generated operating profits of £68.9m for the nine months to 30 June 2012, up from a figure of £58.9m for the corresponding period in the previous year.

In is interim management statement, published today (19 July), the mortgage ‘club’ attributed the increase to income generated from the group’s acquired portfolios of customer loans.

The loan portfolios acquired by the group’s investment division Idem Capital since 2009, including a large portfolio of loans from Royal Bank of Scotland, have continued to perform well, the company said in a statement.

It added that a number of opportunities for further investment are currently under review and a series of individual purchases of unsecured loans have been completed under a forward flow agreement with RBS.

Redemptions across the loan books remain low and the credit performance across the portfolio, including legacy buy-to-let and consumer assets, newly originated buy-to-let assets and the acquired books, remains in line with expectations, Paragon said.

Cash generation from the group’s securitisation SPVs and from the acquired portfolios, remained strong over the period. At 30 June 2012, free cash balances were £126.9m (£104.9m at 31 March 2012).

Pre-tax profits, inclusive of a credit of £600,000 for fair value hedging items, were £69.5m for the period.

During the quarter, £45.1m of new buy-to-let loans were advanced and a further £2.1m was advanced by way of further advances to existing borrowers.

In the year to date, advances total £136.4m and the pipeline of new business at 30 June 2012 was £121.3m.

Paragon said in a statement: “During the period, the group has continued to build on the excellent progress made during the first half of the financial year, continuing the prudent management of the existing and acquired books whilst seeking growth through new loan originations and through portfolio acquisitions. The group will continue to pursue this strategy.”

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