REG - Paragon Banking Grp - Final Results

Paragon BankingAnnouncement

Today 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20251203:nRSC9734Ja&default-theme=true

RNS Number : 9734J  Paragon Banking Group PLC  03 December 2025

RNS Announcement

Paragon Banking Group PLC

3 December 2025

 

Strong performance, with 17.5% underlying RoTE, 8.7% dividend growth and new
£50 million buy-back announced for FY26

Paragon Banking Group PLC ('Paragon', 'the Group' or 'we'), the specialist
lender and banking group, today announces its full year results for the year
ended 30 September 2025

The full unedited text of the results announcement can be accessed at
http://www.rns-pdf.londonstockexchange.com/rns/9734J_1-2025-12-2.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/9734J_1-2025-12-2.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:

"Paragon has delivered another strong performance in 2025, demonstrating the
strength and resilience of our specialist model and building on our consistent
track record of delivery. We've grown our loan book, maintained excellent cost
discipline and delivered record underlying earnings per share of 109.7p, all
while continuing to deliver enhanced returns to our shareholders through
increased dividends and continued share buy-backs.

Operationally, we've made significant strides in digitalisation this year. The
successful launch of Spring, our new app-based savings brand, and the roll-out
of our digital buy-to-let origination platform represent major milestones in
our technology transformation. These developments are already delivering
tangible benefits for customers and driving efficiency across the Group.

We enter the new financial year with good momentum. While the external
environment remains uncertain, we see plenty of opportunity ahead in our
chosen specialist markets. With a strong capital position, a modern digital
platform and a clear strategy, Paragon is well placed to continue building on
this success, delivering sustainable growth and attractive returns for our
shareholders."

 

Financial highlights

·    Underlying basic EPS increased 8.5% to 109.7p (2024: 101.1p)*

·    Strong underlying Return on Tangible Equity remains comfortably
within target range at 17.5% (2024: 17.2%)

·    Operating profit before adjusting items increased by 0.4% to £293.9
million (2024: £292.7 million)*

·    Pre provision profits up 5.9% to £335.8 million (2024: £317.2
million)

·    Statutory profit before tax increased by 1.1% to £256.5 million
(2024: £253.8 million) and statutory basic EPS increased 3.1% to 91.2p (2024:
88.5p)

·    Net loan book grew by 4.0% to £16.3 billion (2024: £15.7 billion)

·    Net interest margin 3.13% (2024: 3.16%) ahead of expectations due to
controlled growth and careful management of funding options

·    Cost efficiency remains strong, with the cost:income ratio 34.8%
(2024: 36.1%) including investments in digital capabilities

·    Cost-of-risk rose to 26 basis points from 16 basis points in 2024,
with the charge concentrated in a defined cohort of development finance loans

·    £25.5 million provision made in respect of potential motor
commission redress reflecting FCA consultation paper rather than
scenario-based approach used at the half year

·    Capital ratios remain strong with our CET1 ratio at 13.6% (2024:
14.2%), well above regulatory requirements

·    Tangible Net Asset Value per share increased by 7.2% to £6.55 at 30
September 2025 (2024: £6.11)

·    Total dividend per share increased 8.7% to 43.9p (2024: 40.4p)

·    FY25 share buy-back completed. A further £50.0 million announced for
FY26

 

Operational highlights

·    Digital transformation continues apace with major milestones
delivered with limited capitalisation of expenditure

·    New app-based digital savings brand "Spring" successfully launched,
with balances standing at over £425 million at year end and over £600
million at the end of November

·    New digital buy-to-let origination system rolled out to full
introducer network

·    Total new lending of £2.68 billion (2024: £2.73 billion):

o  Mortgage Lending advances totalled £1.49 billion (2024: £1.49 billion)
with continued strong customer retention contributing to loan book growth of
3.4%, or 7.8% excluding the legacy book

o  Commercial Lending advances totalled £1.19 billion (2024: £1.24 billion)
with development finance and motor businesses showing growth. Overall
commercial loan book up 7.6% to £2.46 billion (2024: £2.29 billion)

·    Combined pipelines stable year-on-year with customer activity
expected to recover as rates fall and budget uncertainty fades

·    Strong liquidity. Retail deposits stable at £16.3 billion (2024:
£16.3 billion)

·    Inaugural £500.0 million, AAA-rated, Regulated Covered Bond issued,
significantly oversubscribed at an attractive price

·    £0.5 billion of TFSME repaid in the year, with a further £0.25
billion repaid shortly after the year end

 

*              See Appendix A of the linked announcement

 

Dividend details

The dividend noted above includes a final dividend for the year ended 30
September 2025 of 30.3 pence per share proposed by the directors for approval
at our forthcoming Annual General Meeting ('AGM') on 4 March 2026. Detail of
the payment arrangements for this dividend, subject to approval at the AGM,
are set out below.

 ISIN                 GB00B2NGPM57
 Final dividend 2025  30.3 pence per share (GBP)
 Ex-dividend date     5 February 2026
 Record date          6 February 2026
 Payment date         6 March 2026

 

 

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 results presentation on Wednesday 3 December 2025
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-2025

The presentation material will be available on our corporate website
www.paragonbankinggroup.co.uk/investors
(http://www.paragonbankinggroup.co.uk/investors) from 7:00am on the same day,
with a webcast replay available from 2:30pm that 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.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  PREPKBBDNBDBPBK



            Copyright 2019 Regulatory News Service, all rights reserved