Paragon Group on the hunt for loan portfolios
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The Paragon Group of Companies is on the acquisition trail for further loan portfolios, according to its results.
Paragon Mortgages’ parent company reported pre-tax profits of £80.8m for the year ended September 30 2011 last week.
During the year, the group increased its operating profit by 55% to £7.6m.
It says it is on the lookout for other books to buy through its investment vehicle, Idem Capital, which has invested £89.5m in portfolios since 2009.
It acquired a £43.2m unsecured loan portfolio from the Royal Bank of Scotland in October.
The results say: “A major area of focus for the group has been the development of new sources of recurring income with the acquisition of loan portfolios through Idem Capital and the servicing of third party loan portfolios through Moorgate Loan Servicing.”
Paragon says it plans to take advantage of the deleveraging activities of the larger banks and financial institutions.
The results further state: “This is an important strategic opportunity with the potential to deliver excellent returns to shareholders. We will continue to pursue opportunities in this area.”
The group advanced £127m of new loans during the year, with another £5.8m of further advances to existing borrowers. It also completed a £163.8m securitisation of buy-to-let loans.
John Heron, managing director of Paragon Mortgages, says: “The focus for the year was to re-establish our distribution capability and prove our business model. Our return to the buy-to-let market was well received and we have seen a strong credit performance across our buy-to-let loan portfolio and in customer retention.”
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