Paragon Banking Group has reaffirmed its full-year guidance as it announced an increase in its net loan book for the first three quarters of the fiscal year. The specialist U.K. property-and-business lender reported a net loan book of £14.7 billion ($18.85 billion) year-to-date, marking a 4.8% rise from June 2022. While mortgage lending advances saw a 7.8% increase compared to the previous year, commercial lending advances experienced an 8.7% decline.
The London-listed group stated that new business levels in both divisions are in line with their expectations. However, market disruption caused by interest rate and swap volatility led to reduced application flow in the quarter, resulting in a slower rate of pipeline increases.
As of June 30, Paragon’s unverified common equity Tier 1 ratio, a key measure of financial stability, stood at 15.7%, slightly down from 15.9% the previous year.
Paragon has confirmed its expectations of a net interest margin of approximately 3.0% for the year ending September 30. The company anticipates mortgage net lending advances between £1.75 billion and £1.90 billion, and commercial lending advances in the range of £1.1 billion to £1.3 billion. Operating costs are projected to be around £170 million.