News

Paragon Banking Group Reports Lower Profits for Fiscal 2023

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Andrew R. Michaud

• December 06, 2023

Paragon Banking Group, a specialist property-and-business lender in the U.K., has announced a lower pretax profit for fiscal 2023. However, the company plans to conduct a share buyback of up to £50.0 million ($63 million) in fiscal 2024, highlighting the strength of its capital ratios and liquidity level.

Financial Performance

According to the company's report released on Wednesday, the pretax profit for the year ended September 30 fell by 52.2% to £199.9 million compared to £417.9 million in the same period the previous year. This decline can be attributed to the unwinding of non-cash accounting fair value gains in 2022. On the other hand, underlying profit before fair value items increased by 25.4% to £277.6 million from £221.4 million.

Net Interest Income and Margin

Paragon Banking Group saw an increase in net interest income, which rose from £371.2 million to £448.9 million. Additionally, the net interest margin expanded by 40 basis points year-on-year to reach 309 basis points.

Financial Stability

The lender's common equity Tier 1 ratio, a measure of financial stability, was recorded at 15.5% compared to the previous year's ratio of 16.3%.

Dividend Announcement

Paragon Banking Group's board has declared a final dividend of 37.4 pence per share, showing an increase from 28.6 pence per share.

Optimistic Outlook

Chief Executive Nigel Terrington expressed confidence in the company's business model and management team, stating that their experience throughout various economic cycles provides a strong foundation for capitalizing on opportunities and delivering solid returns to shareholders.