Earnings release
Page 1
Page | 1 RNS ANNOUNCEMENT 27 January 2026 PARAGON BANKING GROUP PLC Trading update POSITIVE START TO FY26: FULL YEAR GUIDANCE REITERATED Paragon Banking Group PLC (“the Group” or “Paragon”) today publishes its trading update based on the business performance from 1 October to 31 December 2025. The Group’s trading performance has been in line with the Board’s expectations for the first quarter of its 2025/26 financial year and all elements of full year guidance are reiterated. Nigel Terrington, Chief Executive, said: “We delivered a strong operating performance for Q1 . Our digitalisation activities continue apace and we have seen further progress with Spring , our new savings app , with balances now in excess of £800 million. Lending volumes and pipelines across our businesses are robust and we are well placed to continue building on our long-term track record of delivery as we reiterate our 2026 full-year guidance.” Operational highlights • Total lending up 6.9% to £724.0 million (2025 Q1: £677.4 million) • Buy-to-let lending up 0.4% to £425.0 million (2025 Q1: £423.2 million) • Commercial Lending advances up 17.6% to £299.0 million (2025 Q1: £254.2 million) • The Group’s buy-to-let pipeline ended the quarter at £722.2 million, 4.4% above its position a year earlier (December 2024: £691.9 million) • The Group’s combined Development Finance pipeline and undrawn commitment balance was 4.4% lower than the 2025 Q1 position at £700.8 million • Buy-to-let redemptions ran at an annualised redemption rate of 8.2% (2025 Q1: 7.7%), reflecting continued strong retention levels at product maturity and the seasoning of the legacy portfolio • Buy-to-let arrears were little changed from the 2025 year -end and the credit performance in Commercial Lending continues to normalise as expected • The Group’s net loan balances grew 3.9% to £16.5 billion at the quarter end (December 2024: £15.9 billion) maintaining the growth rate seen during FY25
Page 2
Page | 2 Capital and funding Deposit flows through the Group’s Spring savings app continued to grow during the quarter, rising to £0.7 billion at the quarter end and now exceed £0.8 billion. Elsewhere, the broader retail deposit book contracted during the period , leaving overall deposits 3.3% lower year-on-year at £15.9 billion as we continue to diversify the funding structure for the business including accessing wholesale markets. Q1 saw the commencement of the 202 6 share buy-back programme, with £ 11.8 million of the total £50.0 million executed during December. After allowing for half of an interim dividend in line with policy and the full 2026 share buy-back, the Group’s unverified CET1 and total capital ratios remain strong at 13.3% and 15.0% respectively. Guidance and outlook Our FY26 guidance for net interest margin, new business volumes, operating costs and RoTE remain unchanged. For further information, please contact: Paragon Banking Group PLC Headland Nigel Terrington, Chief Executive Richard Woodman, Chief Financial Officer Charlie Twigg paragon@headlandconsultancy.com Tel: 0121 712 2505 Tel: 020 3805 4822 Paragon is expected to release its half-year results for the six months to 31 March 2026 on Tuesday 2 June 2026. FY26 guidance summary Volumes - Buy-to-let £1.5-£1.7 billion - Commercial Lending £1.2-£1.4 billion NIM 2.9% to 3.0% Opex Below £190 million UL RoTE Mid 15-20%