Paragon in buy-to-let boost as it prepares banking launch

Mortgage and credit specialist Paragon Group has posted pre-tax profit of £76.6m for the nine months to June 2013, driven by a 164 per cent increase in buy-to-let lending over the period.

In its half-year results, Paragon chief executive Nigel Terrington said the firm was “continuing to prepare for a return to new consumer finance lending” that is “likely to be undertaken within a banking subsidiary”.

Mr Terrington said more information on the launch of the banking subsidiary would be “provided in due course”.

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Investments by Idem Capital, the group’s investment division, increased during the last quarter by a further £35.1m.

At 30 June 2013 arrears of three months or more on the buy-to-let portfolio, including acquired loans and receivership cases but excluding properties held for sale, were 0.38 per cent, compared with 40 per cent at 31 March 2013.

Loan completions by Paragon Mortgages during the quarter were £135.4m, compared with £102.3m for the first six months of the year, resulting in year-to-date advances of £237.7m.

The pipeline of new business at 30 June 2013 was £220.2m.

Mr Terrington said: “The group is continuing to prepare for a return to new consumer finance lending, which is likely to be undertaken within a banking subsidiary. Further information on the progress of this business line will be provided in due course.

“With total warehouse capacity of £450m, the group is well placed to support the increased origination levels now being seen within our buy-to-let lending business. In due course, additional warehouse capacity may be sought to support further growth in this business.”