Paragon grows development finance book as it delivers on regional expansion strategy
Paragon Bank’s Development Finance division grew its loan book by 3.9% in the 12 months to 30 September 2023 as it delivered on its strategy of broadening lending to wider areas of the UK.
The Development Finance loan book at the end of Paragon Banking Group’s Full Year period stood at £747.8 million, compared to £719.9 million at the same point last year.
Overall, Paragon Banking Group reported a record underlying operating profit of £277.6 million for the period, up 25.4% on last year.
Total advances for the period stood at £528.1 million, with the proportion of the portfolio in the regions outside of London and the South East growing during the period to 54% this year, compared to 43% in the same period in 2022.
Regional expansion has been a key focus of the Development Finance team in recent years, with strong growth reported in the South West of England in particular.
Additionally, the Development Finance business extended its green financing option during the year, with the amount of funding available increased to £200 million.
This product provides beneficial terms for projects to develop energy-efficient properties, those with an EPC A grade, and by 30 September 2023, £155 million of new lending facilities had been agreed under the scheme.
Neal Moy, Paragon Bank Managing Director of Development Finance, said:
“2023 has been challenging for the housebuilding sector, with slowing buyer demand feeding through to decreasing starts across the industry.
Despite this, we have recorded new lending in excess of £500 million, continued to extend our national coverage, broadened our product offering through the launch of our build-to-rent proposition and increased our exposure in more specialist segments of the market, such as Purpose Built Student Accommodation.
I’m also pleased that we were able to double our Green Homes Initiative fund to £200 million.
This shows that there is healthy demand for energy-efficient homes and our developer customers are responding.”