Volume and margin growth delivering record profits
Paragon Banking Group PLC
Financial results
Six months ended March 2022
Strong operational and financial performance
Financial performance
Strong new business growth
Robust balance sheet
- Operating profit £105.5 million, up 27.3% on H1 2021
- Pre-provisionprofit up 20.1%
- Underlying EPS +29.4%
- Underlying NIM trajectory (2.57%, +25bps on H1 2021) accelerated by liability-side gains
- Underlying RoTE 14.9%
- Dividend at 9.4p in line with policy; DPS +30.6% on H1 2021
- Net loan growth 8.6%; strong originations and good customer retention
- Period end pipelines strong, BTL at record levels
- Deposit balances +14% year-on-year
- Good progress on digitalisation transformation strategy
- Exemplary and disciplined credit standards
- Impairment overlays remain and LTVs reduced further given strong HPI
- Capital strong, CET1 15.4%, IRB continuing to progress
- £25 million extension to the buy-back programme announced
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Financial overview
Richard J Woodman
Chief Financial Officer
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Income statement
£ million | 2022 H1) | 2021 H1) | Change) | |
Net interest income | 175.2) | 147.5) | +18.8%) | Favourable rate and volume impacts |
Other income | 6.5) | 7.2) | (9.7%) | Maintaining recent trends |
Total operating income | 181.7) | 154.7) | +17.5%) | |
Operating expenses | (74.9) | (65.8) | +13.8%) | Reflects investment / in line with expectation |
Pre-provision profit | 106.8) | 88.9) | +20.1%) | |
Impairments | (1.3) | (6.0) | -78.3%. | MES remain conservative |
Operating profit | 105.5) | 82.9) | +27.3%) | |
Fair value net gains / (losses) | 38.1) | 13.5) | +182.2% | Favourable impact focused on pipeline hedging |
Profit before taxation | 143.6) | 96.4) | +49.0%) | |
Reported earnings per share | 44.4p | 29.3p | +51.5%) | |
Underlying earnings per share | 32.6p | 25.2p | +29.4%) |
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Segmental results
Strong pre-provision profits in both key divisions
Underlying £ million | Mortgage Lending | Commercial Lending | Idem Capital | Central | Total |
Total operating income (H1:22) | 124.9) | 57.6) | 8.3) | (9.1) | 181.7) |
Change (v H1:21) | +18.9) | +7.0) | (2.7) | +3.8) | +27.0) |
Operating expenses | (9.3) | (12.8) | (2.6) | (50.2) | (74.9) |
Change | (0.6) | (1.1) | (0.1) | (7.3) | (9.1) |
Pre-provision profit | 115.6) | 44.8) | 5.7) | (59.3) | 106.8) |
Change | +18.3) | +5.9) | (2.8) | (3.5) | +17.9) |
Provisions for losses | 1.0) | (3.2) | 0.9) | -) | (1.3) |
Change | +5.9) | (1.9) | +0.7) | -) | +4.7) |
Operating profit | 116.6) | 41.6) | 6.6) | (59.3) | 105.5) |
Change | +24.2) | +4.0) | (2.1) | (3.5) | +22.6) |
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Paragon Banking Group plc published this content on 14 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 June 2022 06:12:05 UTC.