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| Date | 3 Dec 2025 |
| Time | 07:00:09 |
| Category | Results |
| ID | 9734J |
RNS Announcement
Paragon Banking Group PLC
3 December 2025
Strong performance, with 17.5% underlying RoTE, 8.7% dividend growth and new £50 million buy-back announced for FY26
Paragon Banking Group PLC ('Paragon', 'the Group' or 'we'), the specialist lender and banking group, today announces its full year results for the year ended 30 September 2025
The full unedited text of the results announcement can be accessed at http://www.rns-pdf.londonstockexchange.com/rns/9734J_1-2025-12-2.pdf and via the Paragon Group website at:
https://www.paragonbankinggroup.co.uk/investors/reports-results-presentations
The results announcement will also be submitted to the National Storage Mechanism and will shortly be available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
This announcement is made in accordance with DTR 6.3.5R(1A).
Nigel Terrington, Chief Executive of Paragon said:
"Paragon has delivered another strong performance in 2025, demonstrating the strength and resilience of our specialist model and building on our consistent track record of delivery. We've grown our loan book, maintained excellent cost discipline and delivered record underlying earnings per share of 109.7p, all while continuing to deliver enhanced returns to our shareholders through increased dividends and continued share buy-backs.
Operationally, we've made significant strides in digitalisation this year. The successful launch of Spring, our new app-based savings brand, and the roll-out of our digital buy-to-let origination platform represent major milestones in our technology transformation. These developments are already delivering tangible benefits for customers and driving efficiency across the Group.
We enter the new financial year with good momentum. While the external environment remains uncertain, we see plenty of opportunity ahead in our chosen specialist markets. With a strong capital position, a modern digital platform and a clear strategy, Paragon is well placed to continue building on this success, delivering sustainable growth and attractive returns for our shareholders."
Financial highlights
· Underlying basic EPS increased 8.5% to 109.7p (2024: 101.1p)*
· Strong underlying Return on Tangible Equity remains comfortably within target range at 17.5% (2024: 17.2%)
· Operating profit before adjusting items increased by 0.4% to £293.9 million (2024: £292.7 million)*
· Pre provision profits up 5.9% to £335.8 million (2024: £317.2 million)
· Statutory profit before tax increased by 1.1% to £256.5 million (2024: £253.8 million) and statutory basic EPS increased 3.1% to 91.2p (2024: 88.5p)
· Net loan book grew by 4.0% to £16.3 billion (2024: £15.7 billion)
· Net interest margin 3.13% (2024: 3.16%) ahead of expectations due to controlled growth and careful management of funding options
· Cost efficiency remains strong, with the cost:income ratio 34.8% (2024: 36.1%) including investments in digital capabilities
· Cost-of-risk rose to 26 basis points from 16 basis points in 2024, with the charge concentrated in a defined cohort of development finance loans
· £25.5 million provision made in respect of potential motor commission redress reflecting FCA consultation paper rather than scenario-based approach used at the half year
· Capital ratios remain strong with our CET1 ratio at 13.6% (2024: 14.2%), well above regulatory requirements
· Tangible Net Asset Value per share increased by 7.2% to £6.55 at 30 September 2025 (2024: £6.11)
· Total dividend per share increased 8.7% to 43.9p (2024: 40.4p)
· FY25 share buy-back completed. A further £50.0 million announced for FY26
Operational highlights
· Digital transformation continues apace with major milestones delivered with limited capitalisation of expenditure
· New app-based digital savings brand "Spring" successfully launched, with balances standing at over £425 million at year end and over £600 million at the end of November
· New digital buy-to-let origination system rolled out to full introducer network
· Total new lending of £2.68 billion (2024: £2.73 billion):
o Mortgage Lending advances totalled £1.49 billion (2024: £1.49 billion) with continued strong customer retention contributing to loan book growth of 3.4%, or 7.8% excluding the legacy book
o Commercial Lending advances totalled £1.19 billion (2024: £1.24 billion) with development finance and motor businesses showing growth. Overall commercial loan book up 7.6% to £2.46 billion (2024: £2.29 billion)
· Combined pipelines stable year-on-year with customer activity expected to recover as rates fall and budget uncertainty fades
· Strong liquidity. Retail deposits stable at £16.3 billion (2024: £16.3 billion)
· Inaugural £500.0 million, AAA-rated, Regulated Covered Bond issued, significantly oversubscribed at an attractive price
· £0.5 billion of TFSME repaid in the year, with a further £0.25 billion repaid shortly after the year end
* See Appendix A of the linked announcement
Dividend details
The dividend noted above includes a final dividend for the year ended 30 September 2025 of 30.3 pence per share proposed by the directors for approval at our forthcoming Annual General Meeting ('AGM') on 4 March 2026. Detail of the payment arrangements for this dividend, subject to approval at the AGM, are set out below.
|
ISIN |
GB00B2NGPM57 |
|
Final dividend 2025 |
30.3 pence per share (GBP) |
|
Ex-dividend date |
5 February 2026 |
|
Record date |
6 February 2026 |
|
Payment date |
6 March 2026 |
For further information, please contact:
|
Paragon Banking Group PLC |
Headland Consultancy |
|
Nigel Terrington, Chief Executive |
|
|
Richard Woodman, Chief Financial Officer |
Lucy Legh / Charlie Twigg |
|
|
|
|
0121 712 2505 |
020 3805 4822 |
The Group will be holding a results presentation on Wednesday 3 December 2025 at 9:30am at UBS, 5 Broadgate, London EC2M 2QS.
This will be webcast live at: https://secure.emincote.com/client/paragon/full-year-results-2025
The presentation material will be available on our corporate website www.paragonbankinggroup.co.uk/investors from 7:00am on the same day, with a webcast replay available from 2:30pm that day.
Cautionary statement
Sections of this Announcement may contain forward-looking statements with respect to certain of the plans and current goals and expectations relating to the future financial condition, business performance and results of the Group. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words such as 'anticipate', 'estimate', 'expect', 'intend', 'will', 'project', 'plan', 'believe', 'target' and other words and terms of similar meaning in connection with any discussion of future operating or financial performance but are not the exclusive means of identifying such statements. These have been made by the directors in good faith using information available up to the date on which they approved this report, and the Group undertakes no obligation to update or revise these forward-looking statements for any reason other than in accordance with its legal or regulatory obligations (including under the UK Market Abuse Regulation, UK Listing Rules and the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority ('FCA')).
By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that are beyond the control of the Group and depend upon circumstances that may or may not occur in the future that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. There are also a number of factors that could cause actual future financial conditions, business performance, results or developments to differ materially from the plans, goals and expectations expressed or implied by these forward-looking statements and forecasts. As a result, you are cautioned not to place reliance on such forward-looking statements as a prediction of actual results or otherwise.
These factors include, but are not limited to: material impacts related to foreign exchange fluctuations; macro-economic activity; the impact of outbreaks, epidemics or pandemics, and the extent of their impact on overall demand for the Group's services and products; potential changes in dividend policy; changes in government policy and regulation (including the monetary, interest rate and other policies of central banks and other regulatory authorities in the principal markets in which the Group operates) and the consequences thereof; actions by the Group's competitors or counterparties; third party, fraud and reputational risks inherent in its operations; the UK's exit from the EU; unstable UK and global economic conditions and market volatility, including currency and interest rate fluctuations and inflation or deflation; the risk of a global economic downturn; social unrest; acts of terrorism and other acts of hostility or war and responses to, and consequences of those acts; technological changes and risks to the security of IT and operational infrastructure, systems, data and information resulting from increased threat of cyber and other attacks; general changes in government policy that may significantly influence investor decisions (including, without limitation, actions taken in support of managing and mitigating climate change and in supporting the global transition to net zero carbon emissions); societal shifts in customer financing and investment needs; and other risks inherent to the industries in which the Group operates.
Nothing in this Announcement should be construed as a profit forecast.