Paragon Banking Grp - Final Results
03/12/2024 07:00
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RNS Number : 5078O Paragon Banking Group PLC 03 December 2024
RNS Announcement
Paragon Banking Group PLC
3 December 2024
Another year of strong operational and financial performance
Paragon Banking Group PLC ('Paragon' or 'the Group'), the specialist lender
and banking group, today announces its full year results for the year ended 30
September 2024
The full text of the results announcement can be
accessed at http://www.rns-pdf.londonstockexchange.com/rns/5078O_1-2024-12-2.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/5078O_1-2024-12-2.pdf) and via
the Paragon Group website at:
https://www.paragonbankinggroup.co.uk/investors/reports-results-presentations
(https://www.paragonbankinggroup.co.uk/investors/reports-results-presentations)
The results announcement will also be submitted to the National Storage
Mechanism and will shortly be available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
This announcement is made in accordance with DTR 6.3.5R(1A).
Nigel Terrington, Chief Executive of Paragon said:
"It has been another year of strong financial and operational performance,
building on our consistent track record over the past decade, underpinned by
the strength of our business model and long-term strategy.
We have seen accelerating momentum throughout the year, with new lending
levels reaching the upper range of our expectations and strong customer
retention. Improving customer sentiment, robust year-end pipelines, and our
strategic focus on specialist markets, gives us confidence as we enter the new
financial year.
Our savings franchise also continues to grow at pace, with retail deposits up
almost 23%, outperforming the market, supporting our growth ambitions and
providing strong liquidity.
Paragon's consistent focus on sustainable growth, enabled by an increasingly
diversified and digitalised operating model, together with strong internal
capital generation, puts us in a strong position to continue delivering
superior returns to our shareholders whilst continually supporting our
customers' ambitions."
Financial highlights
· Operating profit before fair value items increased by 5.4% to £292.7
million (2023: £277.6 million)
· Statutory profit before tax increased by 27.0% to £253.8 million
(2023: £199.9 million)
· Net interest margin widened by 7 basis points year-on-year to 316
basis points
· Cost efficiency remains strong, cost-to-income ratio 36.1% (2022:
36.6%)
· Cost-of-risk rose slightly, to 16 basis points from 12 basis points
in 2023, reflecting the higher interest rate environment
· Underlying basic EPS increased 7.3% to 101.1p (2023: 94.2p) and
statutory basic EPS increased 28.8% to 88.5p (2023: 68.7p)
· Capital ratios remain strong: CET1 ratio 14.2% (2023: 15.5%),
reflecting strong growth and significant capital returns
· Underlying Return on Tangible Equity at top of target range 20.3%
(2023: 20.2%)
· 30 September 2024 Tangible Net Asset Value per share £6.11 (2023:
£5.79)
· Total dividend rose 8.0% to 40.4p (2023: 37.4p)
· £92.5 million of the £100.0 million FY24 share buy-back completed.
Balance of £7.5 million together with a further £50.0 million announced for
FY25
Operational highlights
· Total new lending of £2.73 billion (2023: £3.01 billion) delivered
in line with guidance:
o Mortgage Lending advances totalled £1.49 billion (2023: £1.88 billion)
o Commercial Lending advances totalled £1.24 billion (2023: £1.13 billion)
· Year-end pipelines strong, driving volumes for FY25
o Buy-to-let pipeline up 48.2% year-on-year to £0.88 billion (2023: £0.59
billion)
o Development finance pipeline up 31.0% year-on-year to £0.20 billion
(2023: £0.15 billion)
· Net loan book grew by 5.6% to £15.7 billion (2023: £14.9 billion)
· Buy-to-let 3-month plus arrears 0.38% (2023: 0.34%)
· Buy-to-let portfolio loan-to-value ratio at 62.8% (2023: 62.8%)
· Strong liquidity. Retail deposits up 22.9% to £16.3 billion (2023:
£13.3 billion)
· £2.0 billion of TFSME repaid in the year, with £0.75 billion
outstanding
· Digitalisation process continues apace, with new buy-to-let broker
portal roll-out continuing during final quarter of 2024
· Continued engagement with PRA on modelling requirements for IRB.
Near-final rules for Basel 3.1 reduce potential exposure to 104 basis points
like-for-like with original consultation paper, where estimated impact was 210
basis points
For further information, please contact:
Paragon Banking Group PLC Headland Consultancy
Nigel Terrington, Chief Executive paragon@headlandconsultancy.com
Richard Woodman, Chief Financial Officer Lucy Legh / Charlie Twigg
0121 712 2505 020 3805 4822
The Group will be holding a call for sell-side analysts on Tuesday 3 December
2024 at 9:30am at UBS, 5 Broadgate, London EC2M 2QS.
This will be webcast live at:
https://secure.emincote.com/client/paragon/full-year-results-2024
(https://url.uk.m.mimecastprotect.com/s/-lPQCymyMSyD8R4iMhpFxL3Bb?domain=secure.emincote.com)
A recording of the presentation will be available on our corporate website
www.paragonbankinggroup.co.uk/investors
(http://www.paragonbankinggroup.co.uk/investors) from 2:30pm that day. The
presentation material will be available on the website at 7:00am on the
same day.
Cautionary statement
Sections of this Announcement may contain forward-looking statements with
respect to certain of the plans and current goals and expectations relating to
the future financial condition, business performance and results of the Group.
These statements can be identified by the fact that they do not relate
strictly to historical or current facts. They use words such as 'anticipate',
'estimate', 'expect', 'intend', 'will', 'project', 'plan', 'believe', 'target'
and other words and terms of similar meaning in connection with any discussion
of future operating or financial performance but are not the exclusive means
of identifying such statements. These have been made by the directors in good
faith using information available up to the date on which they approved this
report, and the Group undertakes no obligation to update or revise these
forward-looking statements for any reason other than in accordance with its
legal or regulatory obligations (including under the UK Market Abuse
Regulation, UK Listing Rules and the Disclosure Guidance and Transparency
Rules of the Financial Conduct Authority ('FCA')).
By their nature, all forward-looking statements involve risk and uncertainty
because they relate to future events and circumstances that are beyond the
control of the Group and depend upon circumstances that may or may not occur
in the future that could cause actual results or events to differ materially
from those expressed or implied by the forward-looking statements. There are
also a number of factors that could cause actual future financial conditions,
business performance, results or developments to differ materially from the
plans, goals and expectations expressed or implied by these forward-looking
statements and forecasts. As a result, you are cautioned not to place reliance
on such forward-looking statements as a prediction of actual results or
otherwise.
These factors include, but are not limited to: material impacts related to
foreign exchange fluctuations; macro-economic activity; the impact of
outbreaks, epidemics or pandemics, and the extent of their impact on overall
demand for the Group's services and products; potential changes in dividend
policy; changes in government policy and regulation (including the monetary,
interest rate and other policies of central banks and other regulatory
authorities in the principal markets in which the Group operates) and the
consequences thereof; actions by the Group's competitors or counterparties;
third party, fraud and reputational risks inherent in its operations; the UK's
exit from the EU; unstable UK and global economic conditions and market
volatility, including currency and interest rate fluctuations and inflation or
deflation; the risk of a global economic downturn; social unrest; acts of
terrorism and other acts of hostility or war and responses to, and
consequences of those acts; technological changes and risks to the security of
IT and operational infrastructure, systems, data and information resulting
from increased threat of cyber and other attacks; general changes in
government policy that may significantly influence investor decisions
(including, without limitation, actions taken in support of managing and
mitigating climate change and in supporting the global transition to net zero
carbon emissions); societal shifts in customer financing and investment needs;
and other risks inherent to the industries in which the Group operates.
Nothing in this Announcement should be construed as a profit forecast.
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