RNS Announcement
Paragon Banking Group PLC
3 December 2024
Another year of strong
operational and financial performance
Paragon Banking
Group PLC ('Paragon' or 'the Group'), the specialist lender and
banking group, today announces its full year results for the year
ended 30 September 2024
Nigel Terrington, Chief Executive of Paragon
said:
"It has been
another year of strong financial and operational performance,
building on our consistent track record over the past decade,
underpinned by the strength of our business model and long-term
strategy.
We have seen
accelerating momentum throughout the year, with new lending levels
reaching the upper range of our expectations and strong customer
retention. Improving customer sentiment, robust year-end pipelines,
and our strategic focus on specialist markets, gives us confidence
as we enter the new financial year.
Our savings
franchise also continues to grow at pace, with retail deposits up
almost 23%, outperforming the market, supporting our growth
ambitions and providing strong liquidity.
Paragon's
consistent focus on sustainable growth, enabled by an increasingly
diversified and digitalised operating model, together with strong
internal capital generation, puts us in a strong position to
continue delivering superior returns to our shareholders whilst
continually supporting our customers' ambitions."
Financial highlights
·
Operating profit before fair value items increased by 5.4% to
£292.7 million (2023: £277.6 million)
·
Statutory profit before tax increased by 27.0% to £253.8
million (2023: £199.9 million)
· Net
interest margin widened by 7 basis points year-on-year to 316 basis
points
·
Cost efficiency remains strong, cost-to-income ratio 36.1%
(2022: 36.6%)
·
Cost-of-risk rose slightly, to 16 basis points from 12 basis
points in 2023, reflecting the higher interest rate
environment
·
Underlying basic EPS increased 7.3% to 101.1p (2023: 94.2p)
and statutory basic EPS increased 28.8% to 88.5p (2023:
68.7p)
·
Capital ratios remain strong: CET1 ratio 14.2% (2023: 15.5%),
reflecting strong growth and significant capital returns
·
Underlying Return on Tangible Equity at top of target range
20.3% (2023: 20.2%)
· 30
September 2024 Tangible Net Asset Value per share £6.11 (2023:
£5.79)
·
Total dividend rose 8.0% to 40.4p (2023: 37.4p)
·
£92.5 million of the £100.0 million FY24 share buy-back
completed. Balance of £7.5 million together with a further £50.0
million announced for FY25
Operational highlights
·
Total new lending of £2.73 billion (2023: £3.01 billion)
delivered in line with guidance:
o Mortgage
Lending advances totalled £1.49 billion (2023: £1.88
billion)
o Commercial
Lending advances totalled £1.24 billion (2023: £1.13
billion)
·
Year-end pipelines strong, driving volumes for
FY25
o Buy-to-let
pipeline up 48.2% year-on-year to £0.88 billion (2023: £0.59
billion)
o Development
finance pipeline up 31.0% year-on-year to £0.20 billion (2023:
£0.15 billion)
· Net
loan book grew by 5.6% to £15.7 billion (2023: £14.9
billion)
·
Buy-to-let 3-month plus arrears 0.38% (2023:
0.34%)
·
Buy-to-let portfolio loan-to-value ratio at 62.8% (2023:
62.8%)
·
Strong liquidity. Retail deposits up 22.9% to £16.3 billion
(2023: £13.3 billion)
·
£2.0 billion of TFSME repaid in the year, with £0.75 billion
outstanding
·
Digitalisation process continues apace, with new buy-to-let
broker portal roll-out continuing during final quarter of
2024
·
Continued engagement with PRA on modelling requirements for
IRB. Near-final rules for Basel 3.1 reduce potential exposure to
104 basis points like-for-like with original consultation paper,
where estimated impact was 210 basis points
For further information,
please contact:
Paragon Banking Group PLC
|
Headland Consultancy
|
Nigel Terrington, Chief
Executive
|
paragon@headlandconsultancy.com
|
Richard Woodman, Chief Financial
Officer
|
Lucy Legh / Charlie Twigg
|
|
|
0121 712 2505
|
020 3805 4822
|
The Group will be holding a call for sell-side
analysts on Tuesday 3 December 2024 at 9:30am at UBS, 5 Broadgate,
London EC2M 2QS.
This will be webcast live at:
https://secure.emincote.com/client/paragon/full-year-results-2024
A recording of the presentation will be
available on our corporate website www.paragonbankinggroup.co.uk/investors
from 2:30pm that day. The presentation material will be available
on the website at 7:00am on the same day.
Cautionary statement
Sections of this Announcement may
contain forward-looking statements with respect to certain of the
plans and current goals and expectations relating to the future
financial condition, business performance and results of the Group.
These statements can be identified by the fact that they do not
relate strictly to historical or current facts. They use words such
as 'anticipate', 'estimate', 'expect', 'intend', 'will', 'project',
'plan', 'believe', 'target' and other words and terms of similar
meaning in connection with any discussion of future operating or
financial performance but are not the exclusive means of
identifying such statements. These have been made by the directors
in good faith using information available up to the date on which
they approved this report, and the Group undertakes no obligation
to update or revise these forward-looking statements for any reason
other than in accordance with its legal or regulatory obligations
(including under the UK Market Abuse Regulation, UK Listing Rules
and the Disclosure Guidance and Transparency Rules of the Financial
Conduct Authority ('FCA')).
By their nature, all forward-looking
statements involve risk and uncertainty because they relate to
future events and circumstances that are beyond the control of the
Group and depend upon circumstances that may or may not occur in
the future that could cause actual results or events to differ
materially from those expressed or implied by the forward-looking
statements. There are also a number of factors that could cause
actual future financial conditions, business performance, results
or developments to differ materially from the plans, goals and
expectations expressed or implied by these forward-looking
statements and forecasts. As a result, you are cautioned not to
place reliance on such forward-looking statements as a prediction
of actual results or otherwise.
These factors include, but are not
limited to: material impacts related to foreign exchange
fluctuations; macro-economic activity; the impact of outbreaks,
epidemics or pandemics, and the extent of their impact on overall
demand for the Group's services and products; potential changes in
dividend policy; changes in government policy and regulation
(including the monetary, interest rate and other policies of
central banks and other regulatory authorities in the principal
markets in which the Group operates) and the consequences thereof;
actions by the Group's competitors or counterparties; third party,
fraud and reputational risks inherent in its operations; the UK's
exit from the EU; unstable UK and global economic conditions and
market volatility, including currency and interest rate
fluctuations and inflation or deflation; the risk of a global
economic downturn; social unrest; acts of terrorism and other acts
of hostility or war and responses to, and consequences of those
acts; technological changes and risks to the security of IT and operational
infrastructure, systems, data and information resulting from
increased threat of cyber and other attacks; general changes in
government policy that may significantly influence investor
decisions (including, without limitation, actions taken in support
of managing and mitigating climate change and in supporting the
global transition to net zero carbon emissions); societal shifts in
customer financing and investment needs; and other risks inherent
to the industries in which the Group operates.
Nothing in this Announcement should
be construed as a profit forecast.