Paragon profit falls but capital position remains 'strong' through Covid-19

Archived article

Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.

Paragon Banking Group's profit fell for the financial year ended 30 September 2020, it announced today, largely due to the impact of the Covid-19 pandemic.

Its underlying profit fell to £120 million, down from £164.4 million the previous year, which it said was driven by IFRS 9 expected credit loss charges of £48.3 million, reflecting the impact of Covid-19.

However, its capital ratios remained strong through the period, with the CET1 ratio rising to 14.3%.

Its net interest margin fell slightly to 2.24% from 2.29% a year earlier due to the cut in the base rate.

The company said it intended to pay a full-year dividend of 14.4p per share, reflecting 'resilient performance and strong capital position supporting the growing momentum in the business'.

Chief executive Nigel Terrington said: 'Covid-19 has impacted every individual and business across the UK. However, we entered this year from a position of strength, with strong capital and liquidity, an exemplary loan book and an increasingly diversified business.

'Our lending performance has been robust and we have seen a recovery and growing momentum in new lending activities. Our retail deposit division has had a transformational year, broadening its product range and distribution with balances increasing by 22.9%, at a lower cost, providing us with a reliable, scalable and cost-effective source of funding.'