**Summary**
Paragon Banking Group PLC released its Q3 trading update for the period from 1 October 2024 to 30 June 2025, highlighting continued strong performance. Key points include
1. **Financial Performance**
Loan balances increased by 4.8% compared to Q3 2024.
Deposit growth was bolstered by the successful launch of the Spring App, which exceeded expectations in market entry and customer satisfaction.
Mortgage advances totaled £1.1 billion, slightly up from the previous year, with a strong buy-to-let pipeline.
Commercial lending volumes were in line with expectations, though overall advances slightly decreased due to net repayments on structured lending.
2. **Operational Highlights**
Customer retention rates remained robust, with buy-to-let redemption rates stable at 7.0%.
The net loan book grew to £16.2 billion, up 4.8% from Q3 2024.
Credit performance remained consistent, with no new development finance default cases in the quarter.
3. **Funding and Capital**
Retail savings balances rose by 1.5% to £16.0 billion, supported by the Spring App.
Unverified capital ratios were in line with expectations, with CET1 at 13.6% and TCR at 15.4%.
4. **Guidance and Outlook**
FY 2025 guidance was updated, with mortgage lending advances expected around £1.6 billion (down from £1.6-£1.8 billion).
Other metrics, including commercial lending advances, net interest margin (NIM), operating expenses, return on tangible equity (RoTE), and share buy-backs, remained unchanged.
5. **Future Updates**
Full-year results for FY 2025 will be released on 3 December 2025.
Paragon’s CEO, Nigel Terrington, emphasized the Group’s resilience and strong positioning to support customers and deliver shareholder value, particularly in light of regulatory reforms like the MREL regime changes.
| Metric | FY 2024 | FY 2025 (Q3 Update) | Year-on-Year Change |
|---|---|---|---|
| Loan Balances | £15.4 billion | £16.2 billion | +4.8% |
| Mortgage Advances (9 months) | £1.09 billion | £1.1 billion | +0.9% |
| Commercial Lending Advances (9 months) | £0.91 billion | £0.9 billion | -1.5% |
| Retail Savings Balances | £15.7 billion | £16.0 billion | +1.5% |
| CET1 Capital Ratio | 14.2% | 13.6% | -4.2% |
| TCR Capital Ratio | 16.0% | 15.4% | -3.8% |
| Buy-to-Let Redemption Rate | 7.1% | 7.0% | -1.4% |
| 3+ Month Arrears (Buy-to-Let) | 51 bp | 54 bp | +5.9% |