REG - Paragon Banking Grp - Trading Update

Paragon BankingAnnouncement

Tue 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:20250729:nRSc8648Sa&default-theme=true

RNS Number : 8648S  Paragon Banking Group PLC  29 July 2025

 

RNS
ANNOUNCEMENT

Tuesday 29 July 2025

PARAGON BANKING GROUP PLC

Trading update

Continued strong performance

Paragon Banking Group PLC ("the Group" or "Paragon") today publishes its Q3 trading update based on the business performance from 1 October 2024 to 30 June 2025.

Nigel Terrington, Chief Executive, said:

"The nine months to June 2025 have seen another strong trading period for the
Group, with loan balances up 4.8% from Q3 2024 and deposit growth supported by
the take-up of our new Spring App, which was launched to the public during the
quarter. Spring's market entry exceeded expectations, with deposit balances
growing well and strong customer service feedback placing it close to the top
of UK bank deposit-taker rankings.

We welcome the changes to the MREL regime which, along with a proposed broader set of reforms, support a more competitive and dynamic financial services sector. The momentum in our business and the resilience of our business model means we are well-positioned to continue supporting our customers and delivering strong returns for our shareholders."
Financial and operational highlights

The Group has maintained its strong performance, with volumes, margins, costs
and capital in line with our expectations.

 

Mortgage advances for the nine months totalled £1.1 billion, up marginally on
the previous year's levels, with new business completions for the quarter
reflecting the stamp duty disruption on the opening pipeline.  A stronger
buy-to-let pipeline built across the period, ended 27.6% above its March 2025
level at £0.8 billion. The growth in the pipeline mainly occurred towards the
end of the period and consequently our full year volumes are expected to be
around the lower end of original guidance but should support a more favourable
start to the new financial year.

 

Commercial Lending volumes remain in line with expectations, with combined
motor, asset finance and development finance advances for the nine months to
June up 6.6% year-on-year. However net repayments on structured lending
revolving credit facilities took overall commercial lending advances to £0.9
billion, a reduction of 1.5% from the prior year's level. However, the
structured lending pipeline is strong and the development finance pipeline at
the quarter end was broadly in line with its March 2025 position.

 

Customer retention rates have remained strong, with the annualised buy-to-let
redemption rate at the end of Q3 at 7.0%, little changed from the position
reported at the half-year (H1 2025: 7.1%).

 

At £16.2 billion, the net loan book was up 1.1% during the quarter and 4.8%
from its Q3 2024 level.

 

Credit performance

 

Credit dynamics remain in line with the position reported at the 2025
half-year results. The three-month plus arrears levels on the buy-to-let
portfolio stood at 54 basis points (H1 2025: 51bp), and the work out of the
cohort of development finance loans from early 2022, impacted by the step-up
in interest rates and inflation, continues to generate impairment
requirements. There were no new development finance default cases in the June
quarter.

 

Funding

Retail savings balances rose by 1.5% during the quarter to £16.0 billion,
supported in part by flows through the new Spring app following its public
launch in April.

 

Capital

 

Our unverified capital ratios were in line with expectations at 13.6% for CET1
and 15.4% for TCR at the quarter end (these reflect half of the assumed final
dividend and the full £100.0 million buy-back for FY 2025). These figures
compare to 14.2% and 16.0% at H1 2025 respectively.

 

Guidance and outlook

 

The following guidance applies for our FY 2025 performance:

 

 FY 2025 metric               Previous guidance      Updated guidance
 Mortgage Lending advances    £1.6 - £1.8 billion    Around £1.6 billion
 Commercial Lending advances  £1.2 - £1.4 billion    Unchanged
 NIM                          Over 300 bp            Unchanged
 Operating expenses           Below £185 million     Unchanged
 RoTE                         15 - 20%               Unchanged
 Share buy-backs              Up to £100 million     Unchanged

 

For further information, please contact:

 

 Paragon Banking Group PLC                 Headland
 Nigel Terrington, Chief Executive         Lucy Legh / Charlie Twigg
 Richard Woodman, Chief Financial Officer  paragon@headlandconsultancy.com
 Tel: 0121 712 3161                        Tel: 020 3805 4822

 

Paragon will be releasing its full year results for the twelve months to 30
September 2025 on Wednesday 3 December 2025.

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  TSTSEFFIAEISEIW