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Specialist lender Paragon Banking reported a 21% fall in first-half profit and scrapped its interim dividend after it was hurt by loan impairments related to the Covid-19 crisis.
Pre-tax profit for the six months through March dropped to £57.1m, down from £72.0m on-year.
Paragon Banking said it had taken £27.7m of Covid-19 related charges, including £3.7m related to income and £24.0m of impairments.
Total provisions were expected at £30.0m, when adding the £24.0m of Covid-19 related impairments to a £6.0m base case.
The company said its liquidity remained strong, with a liquidity cover ratio at 31 March 2020 of 219%, with it increasing liquidity levels towards the end of the period as part of its response to Covid-19.
'Whilst it is difficult to predict the full impact of the pandemic, we have made provisions for £27.7m in additional charges, based on careful economic modelling and customer analysis,' chief executive Nigel Terrington said.
'The group made strong progress up to the commencement of the UK lockdown, with lending volumes and yields broadly in line with expectations.'
'We have a high-quality loan book, 98% of which is secured, and strong capital and liquidity, and our business stands ready to meet the changing needs of our customers throughout this challenging period and into the next business cycle.'