Paragon Banking Group PLC Covid-19 update (4647J)
14 Abril 2020 - 1:00AM
UK Regulatory
TIDMPAG
RNS Number : 4647J
Paragon Banking Group PLC
14 April 2020
PARAGON BANKING GROUP PLC
14 April 2020
Covid-19 update
Our priorities through this exceptionally challenging period are
to support and protect our customers, employees, business partners,
capital and the long-term value of our business. We are fully
operational with over 90% of our employees working from home.
Prior to any Covid-19-related impacts, the business operated in
line with the Board's expectations for the period from 1 October
2019 to 31 March 2020, with sustained levels of new lending flows
in the Group's Mortgages and Commercial Lending businesses, a
strong pipeline of buy-to-let business and lower redemptions.
Comparisons to the same period in 2019 are detailed below.
6 months ended March 2020 March 2019 Change
New lending flows:
------------------ ------------------ --------
* Specialist buy-to-let GBP694.6 million GBP693.1 million +0.2%
------------------ ------------------ --------
GBP98.2 million GBP140.8 million -30.3%*
* Other mortgages
------------------ ------------------ --------
* Commercial Lending GBP481.3 million GBP455.3 million +5.7%
------------------ ------------------ --------
Mortgage redemptions GBP393.2 million GBP448.9 million -12.4%
------------------ ------------------ --------
Buy-to-let pipeline GBP789.8 million GBP711.1 million +11.1%
------------------ ------------------ --------
* Reduced volumes due to refocus towards specialist
buy-to-let
Underlying net interest margins continued to improve, tempered
by the expected amortisation of the Idem Capital portfolio, where
no further purchases were made during the period. Deposit costs
have continued to benefit from our strategic actions, including
broadening the product range, distribution and scale of market
access and were lower at the end of March 2020 than at the end of
September 2019. Operating costs are running slightly below
expectations and charge-offs remained benign.
However, in spite of the strength of our business, it remains
too early to determine the impact that the Covid-19 crisis will
have on new business flows, redemptions, income recognition and
IFRS9-related impairment charges.
Paragon enters this period of uncertainty with a strong capital
base and significant liquidity. The Group's unaudited capital
ratios at 29 February 2020 comprised CET1 of 14.4% and a Total
Capital Ratio of 16.7%. Its Liquidity Coverage Ratio was 218% as at
31 March 2020.
The Group had effective contingency and resilience plans in
place to respond to these developments which has allowed us to
focus on supporting and protecting our customers, employees,
business partners, capital and the long-term value of our business.
Paragon's through-the-cycle experience, robust credit approach,
experienced workforce and resilient systems will be crucial as the
Group navigates the coming months.
Notwithstanding this strong position, Paragon's Board is
conscious that we are operating in an exceptionally uncertain
environment and recognises the importance of its role in supporting
its customers, UK businesses and consumers during this period. As a
consequence, the Board has decided not to declare an interim
dividend with its forthcoming half-year results. The Board also
recognises the significance of dividends to its shareholders and
will consider an appropriate dividend for the year as a whole with
its full-year results in November, when more will be known about
the extent of this crisis, as well as the Group's performance and
outlook.
Nigel Terrington, Chief Executive Officer said, "Paragon is a
strong, resilient and diversified business. Whilst there will
undoubtedly be challenges ahead, we are well positioned and will
take all responsible action to mitigate any potential impact. The
Group's operations have reacted well to the rapidly changing
environment and I am grateful for the considerable efforts and
support of my colleagues in delivering services to our customers in
difficult circumstances."
Forthcoming dates
The announcement of the Group's results for the six months to 31
March 2020 is currently scheduled for Wednesday 20 May 2020 but may
be delayed as a result of the logistical challenges involved in the
independent review arising from the current Covid-19 situation.
Enquiries
Paragon Banking Group PLC Headland
Deborah Bateman - 0121 712 2025 Del Jones - 07894 077816
Michael Clarke - 07740 090746 Lucy Legh - 07788 577637
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END
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