View more on these topics

Paragon holding talks to buy private bank Hampshire Trust

Paragon Group of Companies, the parent of Paragon Mortgages, last week confirmed that it is in talks with National Counties Building Society over the purchase of private bank Hampshire Trust, which would give the buy-to-let lender a banking licence.

If the deal were to conclude, Paragon would be able to offer its customers savings accounts.

However, Paragon says the deal is far from being completed.

In a statement to the London Stock Exchange this morning, it says: “The Paragon Group of Companies Plc notes the recent press speculation and confirms that it is in the early stages of considering the acquisition of Hampshire Trust Plc, a wholly owned subsidiary of National Counties Building Society.

“There is no certainty that a transaction will be concluded. Paragon will update the market when it is appropriate to do so.”

Hampshire Trust, which was established in 1977, offers bridging loans, development finance and various deposit accounts and savings bonds.

At the end of November, Paragon Group of Companies reported a £95.5m pre-tax profit for the year ending 30 September 2012, up from £80.8m a year earlier.

Paragon withdrew from new lending in February 2008 after the wholesale markets on which it was reliant upon for funding closed. It returned to lending in September 2010.

In September, the buy-to-let lender secured a second £200m warehouse facility with Lloyds Bank to be used alongside the existing £200m facility from Macquarie Bank, which was increased to £250m on 5 November. Currently, Paragon’s only method of funding is by renewing these facilities by securitising its loan book.

Buy To Let Funding Services principal Geoff Laird says: “It is an excellent strategic move. By gaining a banking licence it can draw funding from deposits and is therefore less vulnerable to the idiosyncrasies of the money markets.”

Recommended

Barclays Rain 480
1

Ex-FSA chief exec Hector Sants in talks to join Barclays

Former FSA chief executive Hector Sants is in talks with Barclays about taking up a senior executive role, according to reports. Sky News is reporting that Sants is in talks to fill an executive role overseeing compliance at the bank, which would involve regularly dealing with the FSA. Sants quit the regulator in June this […]

Most brokers expect 0.5% base rate to last

Two thirds of brokers now expect the Bank of England base rate to remain at 0.5 per cent for at least another year. A survey of brokers compiled by United Trust Bank shows 66 per cent expect the central bank to further hold the base rate where it has remained since March 2009. This majority […]

The curse of long-term cash

Trevor Greetham, Head of Multi Asset at Royal London Asset Management, reveals why clients should be seriously concerned when short-term holdings of cash turn into a long-term investment. There is nothing wrong with holding wealth in the form of cash on a short-term basis. For many people capital stability is important and access to ready cash […]

Newsletter

News and expert analysis straight to your inbox

Sign up