Paragon sees 41% jump in development finance loans – Show House

Paragon Bank’s Development Finance division saw a 41% increase in advances in the first half of its fiscal year, reflecting strong demand from SME developers and homebuilders.

The division loaned out £323.7m in the six months to the end of March, compared to £229.5m in the same period in 2021.

The short-term outlook for future development finance lending remains strong. Undrawn balances on current facilities increased to £596.4m from £402m last year, of which a significant amount is expected to be drawn down in the second half of the year. The new deal pipeline was £266.7 million.

Total lending across Paragon Banking Group divisions rose 32.2% from the same period last year to £1.49 billion. The company’s pre-tax profits rose 49% to £143.6m.

The division’s loan portfolio ended the period at £672.9 million, compared to £552.3 million the previous year.

Paragon launched its Development Finance Green Homes initiative in the first half, with £23.5m of new loan facilities agreed under the initiative. Under the Green Homes initiative, energy-efficient property development projects, those with an EPC A rating, are eligible for discounted prices.

The geographical distribution of the Group’s loans has widened, with the share of the portfolio located in London and the South East of England falling to 58.2% compared to 63.6% as of September 30, 2021. In particular, activity has increased in the East and West Midlands, with funding planned for a number of flagship projects.

Robert Orr, Paragon’s Chief Development Finance Officer, said, “These results are satisfying and reflective of our team’s efforts during the period. We have expanded our relationship manager team and built a strong support function over the past three years, and are now seeing the benefits through loan growth.

“I have been particularly pleased to see how we have expanded our lending geographically, particularly around the East and West Midlands, as well as the South West. We aim to further develop our business regionally in the coming years. »

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