Acquisition and disposal drive year-end progress at Paragon

18th Sep 2018 07:23

(Sharecast News) - Paragon Banking Group updated the market on its trading on Tuesday, ahead of its 30 September year-end, reporting that it had continued to operate in line with its own expectations.The FTSE 250 company reiterated the guidance given at the half year in respect of volumes, margins and costs, and made further progress on growing its retail deposit base, which now exceeds £5bn.Idem Capital, Paragon's portfolio purchase division, had disposed of a portfolio of wholesale funded assets for a premium, capitalising on strong market conditions.The bulk of the remaining Idem assets would be transferred to Paragon Bank, which would be funded by retail deposits and which would improve the returns from those assets going forward.Underlying profits for 2018 remained in line with the board's expectations.The firm said the Idem disposal would, however, have a favourable one-off impact of about 7p per share on reported earnings for 2018, subject to final closing mechanics.Paragon's buy-to-let pipeline at 30 September was expected to be more than 25% above the level reported at 30 September 2017, supporting lending volumes into the next financial year.The buy-to-let operation had maintained its focus on professional landlord business, which now represented approximately 90% of application flows.Paragon said the integration of the Titlestone business acquired in July was progressing "well", and had added further scale to Paragon's commercial lending division, where the existing business streams had also maintained their progress during the period."The Idem Capital transaction and Titlestone acquisition in the final quarter of 2018 demonstrate the group's ability to refocus capital to support its growth businesses and enhance value for shareholders," said Paragon's chief executive Nigel Terrington."In spite of the prevailing macro uncertainties we are well placed to benefit from scale economies in the commercial lending division, and the group continues to cement its position as a leading lender to professional landlords in the UK, underpinned by its 22 year history in this market."We look to the future with confidence."Paragon said it would release its full-year results for the 12 months to 30 September on 21 November.