Commercial Lending at Paragon has led profit growth for the banking group over the past year, Group annual results reveal today.
The Commercial Lending division, which includes asset finance, motor finance, structured lending and development finance, reported the largest increase in profits across the Group – a 41% increase to £20 million compared to the same period last year.
Overall, underlying profits for Paragon Banking Group grew by 8% to £157 million for the 12 months to 30 September 2018, up from £145 million the previous year.
Acquisitions of property development finance business Titlestone in July 2018 and legal finance firm Iceberg in December 2017 also provided further capabilities and scale to the Commercial Lending division. The total volume generated from these businesses in their first part year was £96 million (Iceberg) and £49 million (Titlestone).
Before acquisitions, underlying growth across Paragon’s Commercial Lending products grew by 45% in 2018, with investments and infrastructure previously established underpinning further expansion in new business flows.
In Asset Finance alone, the combination of organic growth and new acquisitions led to a 61% increase in new lending to £355 million, up from £220 million a year ago. A relatively new area for Paragon, Asset Finance earned the bank the title of SME Specialist of the Year at the Leasing World Awards 2018 in November.
The strong performance in Commercial Lending over the past year has also included new product launches, including aviation finance.
The motor finance business also saw strong growth in 2018. Operating in the hire and lease purchase segments of the market, new business grew by 48% to £178 million. The business addresses specialist propositions in the motor finance market and includes funding for less mainstream vehicle types, such as light commercial vehicles and motorhomes.
Richard Doe, Managing Director of Commercial Lending at Paragon, said:
“Strong growth in lending, particularly to small and medium sized UK businesses, reflects our commitment to improving access to funding for British companies to help them achieve their financial ambitions.
“As a specialist lender financing a variety of industry sectors, the acquisitions of Titlestone and Iceberg have broadened our product reach and will contribute to further diversification of our income streams in the years ahead.”