The Paragon Group has reported operating profits for the nine months to June of £88.3m, compared with £75.7m for the corresponding period last year, representing an increase of 16.6 per cent.
The specialist finance provider’s interim management statement also revealed pre-tax profits, inclusive of a credit of £500,000 for fair value hedging items, were £88.8m over the period.
The group’s three business divisions all made strong progress, with Paragon Mortgages converting a strong pipeline into new completions of £187m during the quarter, taking year to date advances to £456.3m, compared to £234.9m in the same period in 2013.
Idem Capital, the group’s portfolio purchase division, invested £47.5m during the quarter, taking net investments for the year to date to £169.5m, and the firm continues to see a strong pipeline of opportunities in the UK debt purchase market.
Lending volumes, whilst modest at this early stage, are expected to expand significantly over time with the broadening of the distribution network.
The first savings products have been launched, initially on a small scale to test delivery and operational systems, before a broader launch to coincide with higher lending volumes. Paragon Bank’s secured personal loan and buy-to-let products are on schedule for launch in September.
At the start of June Richard Woodman became group finance director, replacing Nicholas Keen, who became chairman of Idem Capital.
Dave Newcombe, the group’s former director of consumer loan servicing, succeeded Mr Woodman as managing director of Idem Capital.
In September, Pam Rowland will be joining the group as chief operating officer. She is currently managing director for change delivery at Barclays UK Retail and Business Banking.
The group’s outlook for the second half of the year is positive, reflecting the upward trend in the UK economy and the market’s it operates in, which “are each displaying strong, encouraging and sustainable growth prospects”.
The group’s statement said: “It is our intention to expand further into each of our sectors adding product and distribution to enhance returns.
“The group’s strong asset quality and low risk appetite means it is well placed to meet the anticipated increases in interest rates.”
John Heron, managing director of Paragon Mortgages, said: “The last quarter was very successful for the mortgage business and the wider group. The buy-to-let business continues to grow, and the credit quality remains outstanding.
“The three month plus arrears rate has also reduced from 0.30 per cent at 31 March, to 0.28 per cent at the end of June. This compares very favourably with the market level of buy-to-let arrears which according to CML data was 0.95 per cent at the end of Q1 2014.”
