Paragon Banking says mortgage lending picks up in June post softer May

Paragon Banking Group PLC on Wednesday reiterated full-year guidance as it reported an improvement in mortgage lending in June.

In a trading update, the Solihull, West Midlands-based mortgage lender and provider of personal loans and business financing said volumes, margins, costs and capital in the first nine months of 2026 are in line with expectations, and guidance for 2026 is unchanged.

Aggregate new advances for the nine months to June, across both Mortgage and Commercial Lending segments, were up 4.3% year-on-year at £2.06 billion from £1.98 billion.

The net loan book grew by 3.0% over the twelve months to June 30, however, excluding the run-off effects of the legacy portfolio, the underlying growth rate was 6.1%.

Mortgage advances for the nine months were up 1.2% from last year's level at £1.12 billion from £1.11 billion. Here, new business activity was slower in April and May, with buy-to-let demand remaining sensitive to market interest rate movements which was reflected in the guidance update at the half year. June's application flows returned to more normal levels, the firm added.

For the full-year, Paragon continues to expect mortgage lending advances at the lower end of £1.5 billion to £1.7 billion and commercial lending advances of £1.2 billion to £1.4 billion. Net interest margin is seen at around 300 basis points, with return on tangible equity in the middle of the 15% to 20% range.

Shares rose 4.6% to 861.00 pence in London on Wednesday afternoon.

Copyright 2026 Alliance News Ltd. All Rights Reserved.