Strong profit growth
Underlying profit increased by 10.4% to £63.9 million (2014 H1: £57.9 million)
Statutory profit before tax increased by 7.6% to £62.6 million (2014 H1: £58.2 million)
Return on equity improved to 10.8% (2014 H1: 10.5%)
Dividend increased by 20% to 3.6p per share, in line with target cover ratio
New business flows, strong momentum
New buy-to-let lending up 65.7%
Buy-to-let pipeline up 101.5% to £701.4 million (2014 H1: £348.1 million)
Paragon Bank origination flows building across multiple products
Idem Capital: strong performance, with new investments and commitments of £28.9 million
Funding capacity increased with further diversification
Paragon Bank deposit balances increased to £165.0 million
Warehouse capacity increased to £750.0 million
Corporate investment grade rating assigned by Fitch
Commenting on the results, Nigel Terrington, Chief Executive of Paragon, said:
"These results demonstrate how far Paragon has progressed in recent years as one of the UK's leading specialist lenders. Considerable growth in buy-to-let lending volumes and strong momentum into the second half of the year, complemented by the launch of a number of additional products which contribute to the on-going diversification of its income streams, have significantly enhanced the Group's franchise. Notwithstanding the start-up costs of Paragon Bank and new business strain associated with higher volume levels, the Group delivered record interim profits, up 10.4% from the same period in 2014.
The substantial increase in capacity and access to new and deeper funding markets, particularly through Paragon Bank, provides the platform to support further sustainable growth and diversification going forward. The bank has made excellent progress since its launch just over a year ago and is on track to break even during the 2016 financial year.
The Group remains focussed on enhancing shareholder returns. The interim dividend has grown by 20.0% and good progress has been made on the share buy-back programme. Return on equity has improved to 10.8% whilst maintaining robust and high quality capital levels to support the Group's aspiration for strong future growth."
