LONDON (ShareCast) - (Sharecast News) - Specialist lender Paragon Banking more than doubled interim profit and said it would extend its share buyback by up to £50m as customer demand returned after the 'mini-budget' fiasco of Liz Truss's short-lived government last October.
Pre-tax profit for the six months to March 31 came in at £110.6m from £46.4m a year earlier reflecting lower fair value reversals, the bank said on Wednesday.

Net interest margin (NIM) - the difference between savings and lending rates - rose to 3.19% from 2.95%.

The group also said mortgage and commercial lending would come in at the higher end of previous guidance for the full year, at £1.4bn - £1.6bn and £1.1bn - £1.2bn respectively.

It also forecasted its NIM to come in higher than the previously guided range of between 3 - 3.1%.

"There has been a strong recovery in customer demand with new business pipelines materially above the levels seen at the year-end, improving the outlook for lending volumes for the rest of this year," said chief executive Nigel Terrington.

New mortgage lending fell 36.2% at £0.65bn, reflecting the "much-reduced" September 2023 pipeline, while the buy-to-let pipeline stood at £0.87bn, compared with £0.81bn a year earlier, with recent application flows have maintaining their positive trajectory, Paragon said.

Impairments for bad debts rose 37.3% to £10.3m largely due to more receiver of rent appointments on legacy buy-to-let mortgage accounts, but also "results from the forecast economic environment which features ongoing pressures on the cost of living and doing business for customers".

Reporting by Frank Prenesti for Sharecast.com

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