Paragon profit rises on return of buy-to-let
INCREASED popularity of buy-to-let mortgages powered lender Paragon to a 13.4 per cent rise in profit to £44.8m for the six months to March.
Chief executive Nigel Terrington told City A.M. he is “delighted” that the profit growth was driven by improved revenues rather than cost-cutting.
“For the first time since the credit crunch [the buy-to-let] balance sheet has expanded. At the same time we did the UK’s first buy-to-let securitisation since 2007,” he said.
“Buy-to-let is a very strong and robust market for many years to come – we’re only halfway through a transformation of the market. Banks are not actively chasing new business so it presents opportunities for smaller lenders.”
Paragon has used its strong cashflow to enable Idem Capital – its portfolio investment business – to acquire loan portfolios from banks as they deleverage.
Shares in the FTSE 250 firm closed yesterday up more than five per cent.