StockMarketWire.com - Specialist lender Paragon Banking booked a 12% fall in first-half profit, owing to higher operating expenses and a loss in the value of hedging instruments.

Pre-tax profit for the year through September fell to £159.0m, down from £181.5m on-year.

Underlying net interest income rose 8.5% to £278.4, though underlying operating expenses rose 12% to £125.2m.

Underlying pre-tax profit, which stripped out the hedging losses, rose 5.0% to £164.4m.

Paragon Banking declared a full-year dividend of 21.2p per share, up 9.3% on-year.

Its net interest margin improved by 7 basis points to 2.29% but its cost to income ratio rose to 42.1%, up from 40.6%.

'We are delighted to report another excellent financial and operational performance, underpinned by our effective diversification strategy and focus on specialist lending,' chief executive Nigel Terrington said.

'Volumes, profits and dividends are up strongly, and we are moving closer to our medium-term target of over 15% return on tangible equity.'

'Whilst there is uncertainty in the environment we have prepared well and look forward with optimism to the opportunities ahead.'








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