Paragon Banking Group PLC (LON:PAG) unveiled a £40mln share buy-back as higher mortgage volumes, better margins and lower impairments meant the buy-to-let specialist’s interim profits soared.
New mortgage loans jumped 45% in the half-year to end-March 2021 to £1.13bn compared with the six-month period the previous year and demand is now just below the pre-pandemic rate, said the bank.
Buy-to-let advances rose 58% on the previous six months to £715mln with the portfolio worth £10.9bn.
Commercial loans fell due to the impact of the pandemic while development finance volumes rose strongly.
Retail deposits surged by 25% to £8.6bn, while net interest margins were up slightly to 2.32%.
Pre-tax profits jumped 69% to £96.4mln, with an underlying improvement of 45% at £83mln.
Paragon added that the loan portfolio had demonstrated strong resilience, though uncertainties remain about the prospects for SMEs and retail customers once Government COVID-19 support schemes are unwound.
“The markets in which we operate have seen healthy quarter-on-quarter improvements in activity and our business has been building momentum, whilst maintaining our traditional prudent risk appetite," said the statement.
“The group has a strong capital base, high levels of liquidity and is well-positioned to capitalise on any opportunities that may emerge in the future.”
The interim dividend is 7.2p or half of 2020’s final payment.