Paragon Banking resumes dividends after solid performance

Paragon Banking Group PLC (LON:PAG) reinstated its dividend as it took confidence from what it felt was a resilient performance for the past year.

Having eschewed a payout at the half-year stage due to uncertainty about the effects of the coronavirus pandemic, the specialist buy-to-let and commercial lender’s board has declared a full-year dividend of 14.4p, which it said reflected “the resilient performance and strong capital position supporting the growing momentum in the business”.

The FTSE 250-listed bank’s CET1 capital ratio was 14.3% at the end of September, up from 13.7% a year ago.

A statutory profit before tax of GBP118.4mln was down 25% on 2019, which was largely due to a GBP48.3mln impairment charge taken in anticipation of the expected impacts of Covid-19.

“Our lending performance has been robust and we have seen a recovery and growing momentum in new lending activities,” said chief executive Nigel Terrington.

He said the retail savings division had “a transformational year”, with deposits up 22.9% to GBP7.9bn as the product range and distribution was broadened at a lower cost, “providing us with a reliable, scalable and cost-effective source of funding”.