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PAG Paragon Banking Group Plc

690.50
16.00 (2.37%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Paragon Banking Group Plc LSE:PAG London Ordinary Share GB00B2NGPM57 ORD 100P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  16.00 2.37% 690.50 686.50 690.00 690.50 657.50 657.50 464,479 16:35:22
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Mortgage Bankers & Loan Corr 410.1M 153.9M 0.7108 9.71 1.49B
Paragon Banking Group Plc is listed in the Mortgage Bankers & Loan Corr sector of the London Stock Exchange with ticker PAG. The last closing price for Paragon Banking was 674.50p. Over the last year, Paragon Banking shares have traded in a share price range of 439.20p to 724.00p.

Paragon Banking currently has 216,529,960 shares in issue. The market capitalisation of Paragon Banking is £1.49 billion. Paragon Banking has a price to earnings ratio (PE ratio) of 9.71.

Paragon Banking Share Discussion Threads

Showing 2926 to 2949 of 3325 messages
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DateSubjectAuthorDiscuss
06/2/2015
17:53
I.C article.

There may be a lull in housing activity ahead of the general election, but buy-to-let lending to professional landlords is still going from strength to strength.

The Paragon Group (PAG) is one of the key suppliers of such finance, and in the three months to January this year buy-to-let completions at Paragon rose 58.4 per cent from a year earlier to £222m. And there is no sign of demand drying up because the pipeline of loans at the end of December stood at £417m; that’s nearly double the amount from a year earlier.

Credit quality remains impressive, too. Arrears on the buy-to-let portfolio stood at just 22 basis points at the end of December, down from 25 in September, while redemptions fell over the same period from £107m to £97m. Paragon caters mostly for well-established professional landlords, typically with a dozen or more properties. There is considerable security here because in cases where arrears start to grow, the group has recourse to using a property's rental income to meet repayments. And where this is not possible, the property can be sold to redeem the mortgage, which is usually not more than around 70 per cent of the property value. One of the strengths of the Paragon business model is the diversity of income streams.

This reflects the group's success in addressing the adverse conditions that accompanied the financial crash, a time when the share price collapsed from over 1,000p to just 31p. The problem then was that, as well as a complete freeze in the wholesale finance market, there was also a total moratorium on securitisation.

Prior to the crash, Paragon would bundle up a parcel of buy-to-let mortgages and use them as collateral to issue bonds. These were consequently removed from the balance sheet, leaving the group's "warehouse facility" with banks replenished and available to make further loans.

While the crash left Paragon ticking over, it was at this time that plans were hatched to reduce the reliance on mortgage lending. Since then, it has moved into car finance, buying up distressed debt from banks anxious to reduce their debt portfolios, and has also opened its own deposit-taking bank, a useful source of finance which reduces its reliance on the wholesale money market. Buying up packages of distressed debt has really taken off.

Under the group's operating arm, Idem Capital, net investments last year nearly doubled to £175m, taking outstanding balances up to £427m. These debts are purchased at significant discounts to face value, a useful buffer against the inevitable batch of non-performing loans. Cash performance remains strong though, and Idem contributed £48m to group underlying profits last year, up from £35m a year earlier. Paragon's own bank is the latest addition to the business model, receiving formal authorisation in February last year. The bank concentrates on three revenue streams; car finance, personal finance and buy-to-let.

Paragon's own bank is the latest addition to the business model, receiving formal authorisation in February last year. The bank concentrates on three revenue streams; car finance, personal finance and buy-to-let.

And last summer, it launched its own internet-only savings product. Overall progress here has been encouraging, with £94m of deposits taken by the end of 2014. The bank also offers easy access one, two and three year bonds, as well as 40 and 120 day notice deposit accounts.

Inevitably, starting up a new business line involves significant capital investment, and the group injected an additional £36m of capital into the bank at the end of September. Losses last year amounted to £6.4m, in line with expectations.

With the securitisation market now functioning again, the group was able to complete its latest securitisation in November, bringing total note issuance last year to £930m. It also renewed its £250m mortgage warehouse facility with Macquarie Bank, which now runs until December 2016, and the total warehouse facilities for buy-to-let lending now stand at £550m.

Cash generation continues to strengthen, too, with available cash rising from £177m in September to £222m in January this year. Paragon is also progressing with a £50m share buy-back programme.

Paragon could see trading conditions toughen up when interest rates start to rise, but the effects are likely to be gradual, not least because any rise in rates will initially be small, and look to be some way off. The dividend payout is expected to grow, although the yield remains relatively modest. However, it is the solid cash generation and business pipeline that makes Paragon attractive.

The shares are trading on a modest 10 times forecast 2016 earnings and just 1.1 times forecast net assets, which gives plenty of room for advancement. Buy.

yupawiese2010
06/2/2015
15:07
Nice breakout and tipped in ic
purple boots
23/1/2015
07:04
FF,you should check your facts before making stupid assertions about OSB.The CEO has 25 years experience in finance ,including 10 years as CEO of Saffron Building Society which came through the crash smelling of roses unlike PAG.A fair part of his team also came from Saffron.
I have laid it out in full on the OSB board.
As the latest RNS made clear the PAG price is being supported at the moment by the company buying in its own shares.

mikeja
22/1/2015
12:32
Anybody looked at today's share price graph - looks like a big buy order @414!
future financier
22/1/2015
12:10
Yes - I remember that well (and that's why I said EXTERNAL bail-out)! But they only needed the rights issue because their bankers failed to re-new an overdraft facility (of £350m from memory) for no good reason - and to be honest I don't hold that against them!
future financier
22/1/2015
11:34
In fairness FF, the lack of external bailout might well be because they couldn't get one.

They had a MASSIVE £285m discounted rights issue to bail them out at 25p (consolidated to effectively £2.50) with about 25 new shares for every 1 owned?

That said, despite the sometimes outrageous greed of the exec board, they've steered the ship through some choppy waters since.

the drewster
22/1/2015
09:33
mikeja - PAG and OSB are VERY different animals. Whatever you have to say about the greed of the PAG management, you do have to acknowledge that they saw the business thru the GFC without external bail-out - and they know what they are doing, having the lowest level of borrower default in the industry.

Whereas OSB is the failed Kent Reliance Building Society now managed by fresh management that has precious little true knowledge of the market in which they operate - and certainly has not seen the business through any form of downturn. They rely on keeping their costs down by outsourcing several elements of their business to India and they have also taken operational decisions that MAY be good in the short-term but which will undoubtedly cost dearly in the long-term. Bear in mind they were set up by JC Flowers - and their operational imperative is a quick turn on their invested funds. Expect some chickens to come home to roost here!!!

All in all I agree (as usual!) with TD - I strongly suspect that our knowledge of PAG and of the market in which it operates is considerably better than that of Numis!

future financier
22/1/2015
09:16
Q4 to Q1 has, for the last 3 years at least, fallen.

Q4 2012/2013 25.3, next Q fell to 23.7
Q4 2013/2014 29.9, next Q fell to 26.9
Q4 2014/2015 34.5, next Q fell to 30.2

With a potential 3% yield at todays price, they look very safe, if not spectacular, hence I'd be a buyer, and in quantity, at 289, even if not at current lofty levels!!

the drewster
22/1/2015
08:59
Numis suggests assets may be well overpriced which would account for ROE being lowest in sector.There are better investments in this sector.OSB is growing twice as fast,selling at a substantial discount to PAG on a forward p/e of 7 for 2016 and with an ROE more than double that of PAG
mikeja
22/1/2015
08:38
I'd be a buyer again at 289!
the drewster
22/1/2015
08:33
Below Q4 profits,Numis puts sell with tp of 289
mikeja
22/1/2015
08:02
Looks like a good set of results.
chector177
09/1/2015
07:22
Agree chector177

CR

cockneyrebel
09/1/2015
07:18
Do you think PAG will receive a boost from the new pension rules in April? With more people able to get at their cash earlier, perhaps they will look to Buy to let as a good investment.
chector177
08/1/2015
10:14
A little reverse head and shoulders?


free stock charts from uk.advfn.com


6p XD today so most of the dip due to that imo.

CR

cockneyrebel
07/1/2015
11:54
Paragon appear to be recovering their Mojo (AT LAST!!!) - could well see major outperformance over the years ahead.

Looking to double current (small - < 2% of portfolio) investment.

future financier
07/1/2015
10:45
Lovely bowl on the chart and been breaking out - trading update at the end of the month should be interesting imo.

CR

cockneyrebel
28/11/2014
14:24
Any idea on the time scale on the share buy-back? I would expect this to impact the broker targets, if only on time frame.
elrico
27/11/2014
08:36
27 Nov 2014 Paragon Group of... PAG Berenberg Buy 414.05 403.10 450.00 450.00 Retains

SP target 450p

mike740
26/11/2014
10:04
By Emma Ann Hughes | Published Nov 25, 2014
Paragon buy-to-let completions up 82.5%

Buy-to-let completions at Paragon rose 82.5 per cent to £656.6m for the year to the end of 30 September 2014.

Today (25 November), Paragon reported a lending total of £500,000 by Paragon Bank for the 12 months to the end of September, which commenced its buy-to-let operations during September 2014.

The indexed loan-to-value of the overall buy-to-let portfolio stood at 71.7 per cent at 30 September 2014 compared with 78.4 per cent at the end of 2013.

Annualised redemption rate on the total buy-to-let portfolio was 4.1 per cent in 2014 compared to 2.5 per cent in 2013, reflecting increased housing market activity.

Paragon Mortgages maintains a significant presence for the group in this growing sector of the UK mortgage market, contributing £80.5m to underlying group profit, a 14.5 per cent increase.

The aggregate new business pipeline stood at £414.8m at the year-end, 78.9 per cent above the level at 30 September 2013, underpinning strong growth rates into the new financial year.

Nigel Terrington, chief executive of Paragon, said: “The past year has seen considerable progress in the group’s strategic plans and in the performance of its businesses. Significant progress has also been achieved in diversifying further the group’s funding sources.

“In particular, the formation of Paragon Bank has provided us with the opportunity to diversify further both income streams and funding and we expect it to play an important role in the group’s future plans.

“The group benefits from a strong capital position and I am pleased to announce a 25 per cent increase in the dividend, as well as an initial £50m share buy-back programme, as we seek to complement strong and sustainable growth with improving shareholder returns.”

emma.hughes@ft.com

mike740
26/11/2014
09:54
PAG

From The FT......

Paragon buoyed by buy-to-let market
Emma DunkleyAuthor 26/11/2014


Paragon Group, the specialist lender, said profits had reached a record level this year as the growth of the buy-to-let market in the UK gathered pace.
The group said underlying pre-tax profits rose 18 per cent to £122m for the year ending September 30, up from £104m last year.

Profits were buoyed by the group widening its distribution of buy-to-let loans across its Paragon Mortgages and Mortgage Trust brands, which helped spur an 82.5 per cent increase in buy-to-let completions to £656.6m.
Nigel Terrington, chief executive, said there was “ongoing demand” for rented property and that Paragon was “in the thick of it”.
“There are more people renting than in the past,” he said. “This has also been compounded by the Mortgage Market Review coming in. The likely reduction of available finance to homeowners pushes up more rental demand.”
Savills, the estate agent, forecasts the UK private rental sector will grow to represent 24 per cent of total housing stock over the next five years, up from 18 per cent at present.
Idem Capital, the specialist debt purchasing division of Paragon, also contributed positively to profit growth, increasing its investments net of debt by 89.3 per cent to £175.7m.
Mr Terrington said large banks will increasingly offload their non-core divisions and that bid-offer spreads have narrowed on these assets because of a better funding environment, meaning non-core portfolios are now more likely to sell.
Paragon’s profits would have been higher had it not been for a £6.4m loss as a result of costs associated with establishing its new bank, which launched in February.
“But we’re not trying to challenge major UK banks; we’re a specialist lender,” said Mr Terrington. “We have no plans for branches or current accounts, as we focus on narrow areas where we think we can do things better than others.”
The bank offers a range of savings products and loans for consumers and small businesses and was initially injected with £12.7m of capital from Paragon Group.
Paragon bank started taking retail deposits in June and gathered £60.1m by the year-end.
The group said its capital position remained strong, with a core tier one ratio of 19.7 per cent and a leverage ratio of 8.3 per cent.
Paragon has also announced an initial £50m share buy-back programme to help improve shareholder returns, Mr Terrington said.
Dividend payments for the year will increase 25 per cent to a total of 9p as a result of the profit increase, the group added.

mike740
26/11/2014
09:15
26 Nov 2014 Paragon Group of... PAG Barclays Capital Overweight 407.45 406.90 - 445.00 Reiterates
mike740
26/11/2014
08:57
26 Nov 2014 Paragon Group of... PAG JP Morgan Cazenove Overweight 408.45 406.90 420.00 420.00 Retains
mike740
26/11/2014
08:51
PAG Consensus recommendation

As of Nov 22, 2014, the consensus forecast amongst 25 polled investment analysts covering Paragon Group of Companies PLC advises that the company will outperform the market. This has been the consensus forecast since the sentiment of investment analysts improved on Feb 26, 2013. The previous consensus forecast advised investors to hold their position in Paragon Group of Companies PLC.

mike740
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