Paragon Banking Group PLC

Latest Results (12.10.2025):

Paragon Banking Group PLC reported a strong performance in Q3 2025, demonstrating growth in loan balances and deposit growth driven by the successful launch of the new Spring App. The company remains well-positioned to support its customers and deliver robust returns for shareholders.

Trading Performance

During the nine months ending June 2025, Paragon Banking Group PLC saw loan balances increase by 4.8% from Q3 2024. Deposit growth was significantly supported by the new Spring App, which exceeded market expectations and positioned the company near the top of UK bank deposit-taker rankings.

Mortgage Advances

Mortgage advances totaled £1.1 billion over the nine months, showing a slight increase from the previous year. The buy-to-let pipeline grew by 27.6% compared to March 2025, reaching £0.8 billion, primarily driven by end-of-period growth.

Commercial Lending

Commercial lending volumes were in line with expectations, with combined motor, asset finance, and development finance advances up by 6.6% year-on-year to £0.9 billion. Despite a slight reduction due to net repayments on structured lending revolving credit facilities, the pipeline remains strong.

Customer Retention

Customer retention rates remained robust, with the annualised buy-to-let redemption rate steady at 7.0% at the end of Q3 2025, showing little change from the first half of the year.

Credit Performance

Credit dynamics stayed consistent with the mid-year report, maintaining low arrears levels at 54 basis points for the buy-to-let portfolio. There were no new default cases in development finance for the June quarter.

Funding

Retail savings balances increased by 1.5% to £16.0 billion during the quarter, bolstered by the new Spring App launched in April, which attracted significant customer deposits.

Capital

Unverified capital ratios remained in line with expectations, recording 13.6% for CET1 and 15.4% for TCR at quarter end, factoring in half of the assumed final dividend and a £100.0 million buy-back for FY 2025.

Guidance and Outlook

For FY 2025, Paragon Banking Group PLC maintains its guidance with mortgage lending advances around £1.6 billion, commercial lending advances between £1.2 – £1.4 billion, and a return on tangible equity (RoTE) of 15-20%. Share buy-backs are expected to be up to £100 million, supporting the company's continued growth and shareholder returns.