The bank’s results for the six months to 31st March 2021 revealed that lending volumes in the development finance business grew 16% year-on-year to £229.5m.
Its new business pipeline saw a 65.2% increase compared with the same period last year, reaching £320m, while its BTL pipeline was up 17.3% to £930m.
The net loan book for development finance grew to £552.3m, against £502.3m recorded in March 2020.
Robert Orr, development finance managing director at Paragon (pictured above), said: “These are a strong set of numbers which reflect our commitment to supporting SME housebuilders across the country.
“The housebuilding sector quickly recovered from the initial impact from the pandemic and our customers are seeing strong demand for new-build homes.”
New lending levels for the group rose by 45.1% from H2 2020 and are now just below its pre-pandemic run-rate.
The group’s underlying profits increased by 44.9% to a record high of £82.9m, with statutory profit before tax up 68.8% to £96.4m.
Nigel Terrington, chief executive at Paragon, added: “I am incredibly proud of these results; they reflect the hard work of our people during a challenging period as well as the success of our longstanding strategy to build a technology-enabled specialist banking group.
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“We have delivered record half-year profits and go into the second half of 2021 with strong momentum, healthy new business pipelines and enhanced margins.
“Our people continue to excel, maintaining both productivity and flexibility as we look to develop options for the future operating model of the group.”
During the six months to 31st March 2021, Paragon made several changes to its development finance range, including the addition of a new 70% GDV product and the introduction of a new offering for loans between £400,000 and £1m, targeted at new-build residential developments.
The bank also added four new relationship directors and portfolio managers to increase its regional focus, bridging the total development team to 39.
Looking forward, Paragon aims to expand its geographical presence to support housebuilders across England, complementing its core southern market.
“We have been growing our presence outside of the South over the past two years and we will accelerate that going forward,” added Robert.
“We have recruited new relationship directors to focus on regional growth and have funded numerous projects in many regions outside of the South over the past year, [and] we expect to grow that further.”