Paragon Banking Group (PAG) Q1 2025 TU earnings summary

Executive summary

• Trading performance for Q1 FY25 was in line with expectations, with full-year guidance reiterated.

• New business flows and net interest margin (NIM) exceeded expectations, supported by digitalisation and efficiency gains.

• Strong capital levels position the group to deliver robust shareholder returns and customer support.

Financial highlights

• New lending for Q1 FY25 reached £677.4m, up from £610.7m in Q1 FY24.

• Buy-to-let lending rose to £423.2m (Q1 FY24: £336.3m); commercial lending was £254.2m (Q1 FY24: £274.4m).

• Net loan balances grew 1.0% in the quarter to £15.9bn, up 5.5% year-over-year.

• Deposit growth of 0.9% in the quarter supported NIM performance.

Outlook and guidance

• FY25 guidance for NIM, new business volumes, operating costs, and ROTE remains unchanged.

• Margins currently running ahead of expectations; buy-to-let lending guidance: £1.6–£1.8bn, commercial: £1.2–£1.4bn.

• Opex guidance around £185m; underlying ROTE expected in the mid 15–20% range.