Paragon profits jump as house buyers rush to beat stamp duty changes

(Sharecast News) - Specialist lender Paragon Bank reported a sharp jump in half-year earnings on the back of increased mortgage lending as people raced to beat changes to stamp duty thresholds. Pre-tax profit at the FTSE 250 listed bank soared 26.7% to £149.4m. Mortgage lending surged by a quarter to £810m after Finance Minister Rachel Reeves extended her cash grab from taxpayers to stamp duty by lowering the threshold payable for first-time buyers to £300,000 from £425,000.

The changes kicked in on April 1.

Net interest margin - the difference between what a bank pays out on savings and charges for loans - dropped slightly to 3.13% from 3.14% at the end of 2024.

The bank also extended its share buy-back programme by £50m to £100m for the financial year.

On the downside Paragon set aside £6.5m for its motor finance business as it awaits a Supreme Court ruling on the payment of commissions by lenders to car dealers.

Reporting by Frank Prenesti for Sharecast.com