Paragon grows development finance loan book by 14%
Paragon Bank’s Development Finance division grew its total loan book by 14% during the first half of its financial year, the company announced today.
Paragon’s Half Year Financial Report showed the division’s loan book was £765.8 million at 31 March 2023, compared to £672.9 million the year before.
The division advanced £273.1 million in new lending for the period, down 15.6% on the previous year, as SME housebuilders and developers adopted a more cautious approach in challenging economic and political conditions.
However, there were signs of recovery towards the end of the period, with March seeing increased levels of new enquiries and feedback from customers more positive.
The new business pipeline recovered to £250 million by the end of the first half from its low point of £188.4 million in September at Paragon’s year-end.
A significant amount of these balances would be expected to be drawn in the second half of the financial year providing a stronger base for lending in this period.
Overall, Paragon Banking Group increased underlying profits for the six months to 31 March 2023 by 22.2% to £128.9 million against the same period last year.
Total new lending across Paragon’s divisions increased by 6.9% during the first half to £1.59 billion, driving a 4.6% year-on-year growth in the total loan book to £14.6 billion.
Neal Moy, Paragon Bank Managing Director of Development Finance, said:
“We are seeing SME developer confidence return after a difficult period following the mini-budget and new business enquiries increased as we entered spring.
“This was a pleasing performance in challenging market conditions and we have made good strategic progress in broadening our lending activity outside of London and the South East, with strong activity in the South West and East Midlands particularly.”