Paragon Banking Group down as H1 performance disappoints

Shares in FTSE 250 financial services provider Paragon Banking Group (LON:PAG) tumbled 3.36% to 357p (as of 14:40 BST) after the company reported a 21% drop in statutory pre-tax profits for the six months ended 31st March. The company had maintained full functionality during the lockdown with 90% of staff working from home, but there were still £27.7 million in COVID-linked charges and impairments for the period.

CEO Nigel Terrington commented: “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“.