TIDMPAG
RNS Number : 7956V
Paragon Banking Group PLC
06 December 2023
RNS Announcement
Paragon Banking Group PLC
6 December 2023
Strong financial performance in volatile environment
Paragon Banking Group PLC ('Paragon' or 'the Group'), the
specialist lender and banking group, today announces its full year
results for the year ended 30 September 2023
The full text of the results announcement can be accessed via
the Paragon Group website at:
https://www.paragonbankinggroup.co.uk/investors/reports-results-presentations
The results announcement will also be submitted to the National
Storage Mechanism and will shortly be available for inspection
at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
This announcement is made in accordance with DTR 6.3.5R(1A).
Nigel Terrington, Chief Executive of Paragon said:
"The Group's performance for 2023 again demonstrates the
strength of our business model, with underlying profits up 25.4%,
loan book growth of 4.7% and retail deposits increasing 24.3% to
GBP13.3 billion, outperforming the market, providing strong
liquidity and supporting growth.
The Group's diversification strategy and focus on specialist
markets across buy-to-let and our commercial divisions provides
resilience. Our digitalisation programme continues at pace,
providing better user experience for our customers and
intermediaries, along with delivering operational efficiencies.
We have today announced a further GBP50.0 million share buy-back
for the 2024 financial year. Reflecting the sustained performance
of the Group, strength of our capital ratios and liquidity level,
since 2015, the Group has returned over GBP948.5 million to
shareholders via share buybacks and dividends.
Whilst the external environment remains dynamic with high
interest rates and inflation, the Group remains well placed to
continue supporting its customers in its chosen specialist markets.
The strength of the business model and through-the-cycle experience
of the management team provides strong foundations to capitalise on
opportunities and continue to deliver strong returns for
shareholders."
Financial highlights
-- Underlying profit before fair value items increased by 25.4%
to GBP277.6 million (2022: GBP221.4 million) *
-- Reflecting the unwinding of non-cash accounting fair value
gains reported in 2022, statutory profit before tax fell by 52.2%
to GBP199.9 million (2022: GBP417.9 million including GBP4.6
million of one-off gains)
-- Underlying EPS increased 34.8% to 94.2p (2022: 69.9p) *,
reported EPS fell 46.8% to 68.7p (2022: 129.2p) reflecting fair
value unwinds
-- Underlying cost:income ratio improved further to 36.6% (2022: 39.4%)
-- Cost of risk at 12 basis points (2022: 10 basis points)
continues to reflect high quality customer base
-- Capital ratios remain strong: CET1 ratio 15.5% (2022: 16.3%)
-- Net interest margin widened by 40 basis points year-on-year to 309 basis points
-- Underlying Return on Tangible Equity increased to 20.2% (2022: 16.0%)
-- Tangible Net Asset Value per share at 30 September 2023 of GBP5.79 (2022: GBP5.33)
-- Total dividend up 30.8% to 37.4p (2022: 28.6p), in line with policy
-- GBP100.0 million share buyback programme completed in the
2023 financial year with a further GBP50.0 million announced for
the 2024 financial year
Operational highlights
-- Total new lending of GBP3.01 billion (2022: GBP3.21 billion):
o Mortgage Lending advances totalled GBP1.88 billion (2022:
GBP1.91 billion)
o Commercial Lending advances totalled GBP1.13 billion (2022:
GBP1.30 billion)
-- Enhanced customer retention of over 80 % at product maturity
and new advances support net loan book growth of 4.7% to GBP14.9
billion (2022: GBP14.2 billion)
-- Buy-to-let three-month plus arrears 0.34% (2022: 0.15%),
remaining significantly below the industry average
-- Buy-to-let portfolio loan-to-value ratio at 62.8% (2022:
57.9%), providing substantial security cover
-- Retail deposits increased 24.3% to GBP13.3 billion (2022:
GBP10.7 billion), outperforming the market, supporting growth and
providing strong liquidity
-- Further progress on delivery of digitalisation strategy, with
benefits already available to customers and intermediaries, helping
to drive operational efficiencies
-- Continuing engagement with PRA on IRB application process
* Appendix A of the results announcement
A final dividend for the year of 26.4 pence per share will be
paid on 8 March 2024 to shareholders on the register at 2 February
2024, subject to approval at the forthcoming Annual General Meeting
of the Company
For further information, please contact:
Paragon Banking Group PLC Headland Consultancy
Nigel Terrington, Chief Executive Lucy Legh / Charlie Twigg
Richard Woodman, Chief Financial
Officer
Email: paragon@headlandconsultancy.com
Tel: 0121 712 2505 Tel: 020 3805 4822
The Group will be holding a results presentation for sell-side
analysts on Wednesday 6 December 2023 at 9:30am, at UBS, 5
Broadgate, London EC2M 2QS.
This will be webcast live at:
https://secure.emincote.com/client/paragon/full-year-results-2023
The presentation material will be available on the Group's
corporate website at www.paragonbankinggroup.co.uk/investors from
7:00am on the same day, with a webcast replay available from
2:00pm.
Cautionary statement
Sections of this announcement may contain forward-looking
statements with respect to certain of the plans and current goals
and expectations relating to the future financial condition,
business performance and results of the Group. These statements can
be identified by the fact that they do not relate strictly to
historical or current facts. They use words such as 'anticipate',
'estimate', 'expect', 'intend', 'will', 'project', 'plan',
'believe', 'target' and other words and terms of similar meaning in
connection with any discussion of future operating or financial
performance but are not the exclusive means of identifying such
statements. These have been made by the directors in good faith
using information available up to the date on which they approved
this report, and the Group undertakes no obligation to update or
revise these forward-looking statements for any reason other than
in accordance with its legal or regulatory obligations (including
under the UK Market Abuse Regulation, UK Listing Rules and the
Disclosure Guidance and Transparency Rules of the Financial Conduct
Authority ('FCA')).
By their nature, all forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances
that are beyond the control of the Group and depend upon
circumstances that may or may not occur in the future that could
cause actual results or events to differ materially from those
expressed or implied by the forward-looking statements. There are
also a number of factors that could cause actual future financial
conditions, business performance, results or developments to differ
materially from the plans, goals and expectations expressed or
implied by these forward-looking statements and forecasts. As a
result, you are cautioned not to place reliance on such
forward-looking statements as a prediction of actual results or
otherwise.
These factors include, but are not limited to: material impacts
related to foreign exchange fluctuations; macro-economic activity;
the impact of outbreaks, epidemics or pandemics, and the extent of
their impact on overall demand for the Group's services and
products; potential changes in dividend policy; changes in
government policy and regulation (including the monetary, interest
rate and other policies of central banks and other regulatory
authorities in the principal markets in which the Group operates)
and the consequences thereof; actions by the Group's competitors or
counterparties; third party, fraud and reputational risks inherent
in its operations; the UK's exit from the EU; unstable UK and
global economic conditions and market volatility, including
currency and interest rate fluctuations and inflation or deflation;
the risk of a global economic downturn; social unrest; acts of
terrorism and other acts of hostility or war and responses to, and
consequences of those acts; technological changes and risks to the
security of IT and operational infrastructure, systems, data and
information resulting from increased threat of cyber and other
attacks; general changes in government policy that may
significantly influence investor decisions (including, without
limitation, actions taken in support of managing and mitigating
climate change and in supporting the global transition to net zero
carbon emissions); societal shifts in customer financing and
investment needs; and other risks inherent to the industries in
which the Group operates.
Nothing in this announcement should be construed as a profit
forecast.
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END
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(END) Dow Jones Newswires
December 06, 2023 02:00 ET (07:00 GMT)
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