Announcing its half-year results to the end of March today, the lender attributes the growth to an increase to its warehouse credit facilities.
Paragon now has a total credit facility of £450m, after extending the £200m facility from Macquarie Bank to £250m in November and agreeing a further £200m facility with the wholesale division of Lloyds Bank in September.
Paragon’s parent, the Paragon Group of Companies, is still keen on gaining a banking licence to form a banking subsidiary which would be funded by retail deposits, although there are no new details in the half-year results. The results say progress will be provided to shareholders “in due course”.
Paragon says it had a £241.2m pipeline of new business at the end of March, up 134 per cent on £103m a year earlier.
Director of mortgages John Heron says he expects the lender to continue to grow its lending in the coming months.
He says: “The increased funding capacity combined with our ability to fund at tighter margins has allowed us to compete much more effectively in our core market and lay the foundations for further and sustainable growth in the coming months.
“The pipeline of new business is very healthy at £241.2m – this has more than doubled in the three months to the end of March. We are expecting to see a significant increase in loan completions in the second half of the financial year following such a successful period, as the benefit of this increase in lending activity comes through.”
The percentage of its mortgage book in arrears by three months or more stood at 0.4 per cent at 31 March, down from 0.55 per cent a year earlier. At the end of March the Council of Mortgage Lenders’ average stood at 1.22 per cent.
However, Paragon says it has “zero” arrears on the portfolio originated since its return to lending in September 2010.
At a group level, Paragon made a pre-tax profit of £49.1m in the six month to the end of March, up 9.6 per cent on the £44.8m reported a year earlier.