Paragon Banking Group PLC (LON: PAG) have seen their shares slip on Tuesday despite reporting an increase in profits on the back of strength in commercial lending.
Paragon Banking Group is one of the United Kingdom’s largest providers of mortgages and personal loans.
Shares of Paragon Banking slipped 0.2% on Tuesday afternoon to 502p. 26/11/19 12:37BST.
The global banking industry has seen general decline, as market leaders such as Lloyd’s (LON: LLOY) and HSBC (LON: HSBA) have seen their third quarter profits decline in tough trading conditions.
Additionally, overseas banks including Deutsche Bank (ETR: DBK) appear to be in crisis following a third quarter loss report.
The FTSE250 (INDEXFTSE: MCX) listed bank reported a 5% rise in underlying earnings for the fiscal year, as a focus on commercial lending helped the firm offset a slowdown in mortgage business caused by Brexit complications.
“The performance of the UK mortgage and housing markets has remained subdued in the face of economic concerns arising from Brexit and the wider economy,” the company said.
Lending at the business rose 36.3% to £968 million while the mortgage division saw a tame 3.5% rise.
The company said that underlying pretax profit rose to £164.4 million for the year ending September 30.
Chief executive Nigel Terrington said: “We are delighted to report another excellent financial and operational performance, underpinned by our effective diversification strategy and focus on specialist lending.
“Volumes, profits and dividends are up strongly, and we are moving closer to our medium-term target of over 15 per cent return on tangible equity.
“Paragon’s transformation to a broadly based specialist banking group has continued over the last year.
“Our customers have increasingly complex needs which are supported by ongoing technology investments and the deep experience of our employees.
“This approach, alongside a disciplined and prudent risk appetite, has enabled us to achieve strong lending growth at improving margins, whilst maintaining an exemplary credit performance.
“Whilst there is uncertainty in the environment we have prepared well and look forward with optimism to the opportunities ahead.”
