Paragon Banking on track after "encouraging" Q1

Paragon Banking, the FTSE 250-listed mortgages, savings accounts and business finance provider, has delivered a confident outlook for the current financial year as it reiterated guidance following a solid first quarter.

New lending across the business for the quarter to 31 December was significantly down at £610.7m, from £861.7m the year before, though the bulk of that decrease comes from buy-to-let lending which was expected.

Nevertheless, Paragon ended the period with a buy-to-let pipeline of £559.6m, which is said was now comfortably above the 2023 year-end level.

"We have seen an encouraging start to the financial year with improved customer sentiment leading to rising enquiry levels. We expect this to translate to improving volumes as the year progresses," the company said.

Looking ahead, the company said that guidance for margins, new business flows, operating costs and return on tangible equity remain unchanged, although margins are currently running slightly ahead of expectations.

"The first quarter of the new year has started well," said chief executive Nigel Terrington. "The positive momentum seen in the business in 2023 has continued, alongside robust margins and a resilient credit performance. This, coupled with a notable improvement in sentiment, gives us encouragement for the remainder of the year."