Paragon has posted an operating profit of £30.9m for the three months between 1 October to 31 December 2014, a 14.9 per cent increase from the end of 2013.
Pre-tax profits, after a debit of £700,000 for fair value hedging items, was £30.2m for the period.
During the quarter, buy-to-let completions across the group were £222.1m, an increase of 58.4 per cent compared with the same period in the last financial year.
Of this, £193.3m (87 per cent) was originated through Paragon Mortgages and £28.8m (13 per cent) through Paragon Bank.
At 31 December 2014, the pipeline of buy-to-let business (including Paragon Bank) stood at £416.7m. This compared with £222.5m at the same point in 2013.
At 31 December 2014, the group’s arrears on its buy-to-let portfolio stood at 22 basis points, showing “continued strong performance” from the 25 basis point level reported at 30 September 2014.
Redemptions across the buy-to let portfolio were £96.9m for the period to 31 December, a reduction from the £106.5m seen in the quarter to 30 September 2014.
The quarter also saw the launch of Paragon Bank’s secured lending proposition.
In November 2014, the group completed its latest securitisation of loan assets through Paragon Mortgages, which brought total securitisation note issuance to £929.7m in the 2014 calendar year.
Nigel Terrington, chief executive of Paragon, said: “Activity levels in the buy-to-let market have remained robust with good demand evident from tenants and landlords being reflected in the growth in new advances and the pipeline of new business.
“A considerable number of debt purchase opportunities, particularly as measured by value, continue to exist, although as previously stated, timing is unpredictable.
“The bank is making good progress in establishing and building distribution, which will support the group’s strategy to diversify its income streams and funding sources over time.
“The group is well placed to generate further growth in each of its target markets and continues to focus on improving shareholder returns through active capital management.”
emma.hughes@ft.com
