Sharp dip in profits at banking group
Profits have dipped sharply at Birmingham-based Paragon Banking Group on the back of the coronavirus pandemic.
Announcing a six-month trading update this morning (10 June), Paragon said that underlying profits stood at £57.2m – down from almost £70m last year.
The firm said that “given the pervasive nature of the crisis it is considered neither practicable nor useful to attempt to present a Covid-19-free position.”
Paragon has cancelled its half-yearly dividend payment and says it will consider its full-year position at year-end.
Nigel Terrington, chief executive of Paragon, said: “Our priorities during the outbreak of Covid-19 have been to support our customers and suppliers, protect our people, safeguard our capital base and preserve the long-term value of our business. We reacted quickly and with agility, achieving full operational stability and making all products and services available. The Group is also providing funding to our SME customers through the UK Government’s CBILS and BBLS schemes.
“Whilst it is difficult to predict the full impact of the pandemic, we have made provisions for £27.7 million in additional charges, based on careful economic modelling and customer analysis.
“The Group made strong progress up to the commencement of the UK lockdown, with lending volumes and yields broadly in line with expectations. We have a high-quality loan book, 98% of which is secured, and strong capital and liquidity, and our business stands ready to meet the changing needs of our customers throughout this challenging period and into the next business cycle.”
