Broker snap: Paragon makes progress on all fronts, says Panmure

31st Jan 2014 11:38

Panmure Gordon has reiterated its 'buy' rating and 390p target price for financial services group Paragon, saying that the company made progress across the board in the first quarter."Progress was clear on all fronts including increased mortgage originations, Idem Capital investing more, progress on the banking licence, and increased funding," said Analyst Keith Baird.The buy-to-let mortgages and loans provider said that its financial performance during the three months to December 31st "remained strong" and in line with expectations.The loan portfolio performed well during the period, the company said, with loan completions rising threefold year-on-year to £140.2m. This annualises to £560m, Baird said, close to its full-year target of £600m compared with £360m the previous year.The broker highlighted that the quality of the lending has also improved with arrears down to 31 basis points (bps), compared with 35bps at the end of September and 44bps at the end of 2012.The company, which has applied to regulators to set up a banking division to take deposits and make car and second-mortgage loans, said that the application process and preparations are "well advanced"."We are not expecting to alter our estimates but there looks scope for market consensus to improve especially on the new banking operation," Baird said.The stock was up 4.3% at 362.8p on Friday morning.BC