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Paragon posts £15m profit

Paragon has revealed that it has made a profit of more than £15m in the six months ending in March.

Paragon, the specialist buy-to-let, has not lent new mortgages since February 2008 due to funding restrictions, but has still posted profits of £15.9m, albeit down from £26.4m in H1 2008.

Following the cessation of lending to new borrowers, Paragon’s buy-to-let
completions were £10.7m for the six months to 31 March 2009, compared with £855.6m for the corresponding period last year. During the period, the buy-to-let portfolio reduced by 12.4 per cent, to £8.7bn at March 31 2009 from £9.93bn a year earlier.

Arrears on the lender’s book rose from 0.16 per cent in H1 2008 to 1.23 per cent by the end of this quarter. Last week, the Council of Mortgage Lenders revealed buy-to-let arrears averages at 3.07 per cent.

Paragon chief executive Nigel Terrington says: “Despite the continuing difficult economic environment, the Group’s financial performance has remained robust.

“Credit conditions remain tight, despite Government initiatives to stimulate the flow of credit to borrowers and consumers. Prior to the credit crunch, non-deposit taking lenders played a major role in provision of finance to support the specialist loan sectors, such as buy-to-let. We continue to press for the recognition of the importance of non-deposit taking lenders in the mortgage and consumer lending sectors through all avenues available to us and for the schemes to be extended to the non-deposit taking sector.

“We continue to pursue appropriate portfolio acquisition opportunities and seek opportunities to expand further the income enhancing initiatives which utilise our core skills.”

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