Paragon Banking Group PLC (LSE:PAG) shares fell 8.1 % to 875p in what looked like profit taking after the lender reported third-quarter results largely in line with expectations, following a strong run for the shares.
The net loan book stood at £16.2 billion for the nine months to 30 June, up 4.8% year-on-year, while credit performance was stable and CET1 stood at 13.6%.
Retail savings rose 1.5% during the quarter, driven by strong uptake of the FTSE 250 group's new Spring savings app.
Mortgage advances were roughly flat at £1.1 billion, while the buy-to-let pipeline has climbed to £0.8 billion, 27.6% above its level at the half-year period.
"The growth in the pipeline mainly occurred towards the end of the period and consequently our full year volumes are expected to be around the lower end of original guidance but should support a more favourable start to the new financial year," Paragon said.
Analysts at Shore Capital said that, "overall, Q3 trading was robust", with deposit growth better than expected but mortgage volumes a little softer than anticipated in the period post the April stamp duty change.
The pick-up towards the end of the quarter and the pipeline indicated that "this doesn’t seem to be an ongoing issue".
While Shore Cap has kept its financial forecasts unchanged, it downgraded its rating to 'hold' from 'buy' after Paragon’s shares closed in the broker's 975p fair value level.
** Update: Adds new broker comment **