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1. Company Snapshot

1.a. Company Description

Paragon Banking Group PLC provides financial services in the United Kingdom.It operates through three segments: Mortgage Lending, Commercial Lending, and Idem Capital.The Mortgages Lending segment offers buy-to-let, owner-occupied first and second charge lending, and related activities.


The Commercial Lending segment provides SME lending, development finance, structured lending, and motor finance services.The Idem Capital segment engages in the acquisition and servicing of products, such as leases, motor finance agreements, mortgages, and unsecured loans; and offers servicing of loan portfolios for clients, including banks, private equity houses, and specialist lenders.It also provides a range of savings products to households.


The company was formerly known as The Paragon Group of Companies PLC and changed its name to Paragon Banking Group PLC in September 2017.Paragon Banking Group PLC was founded in 1985 and is headquartered in Solihull, the United Kingdom.

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1.b. Last Insights on PAG

Paragon Banking Group PLC faced challenges due to unfavorable market conditions. Weak trade data from China sparked concerns about global economic recovery, causing declines in major UK indices, including the FTSE 100 and FTSE 250. These uncertain times may impact the company's operations and investor sentiment. As of the latest earnings release, no specific updates were available. According to recent reports, the UK market's turbulence may persist, potentially affecting Paragon's performance. (Source: FTSE 100 and FTSE 250 reports). No share buyback or rating updates were available.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Paragon Banking Group PLC (FRA:46P1) Full Year 2025 Earnings Call Highlights: Strong Financial ...

Dec -04

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Paragon Bank strengthens SME lending with appointments

Jul -08

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.78%)

6. Segments

Mortgage Lending

Expected Growth: 3.5%

Paragon Banking Group PLC's 3.5% mortgage lending growth is driven by a strong UK housing market, increasing demand for buy-to-let mortgages, and the bank's competitive product offerings. Additionally, the bank's digital transformation and efficient underwriting processes have improved customer experience, contributing to the growth.

Commercial Lending

Expected Growth: 4.5%

Strong demand for commercial loans, driven by UK's economic growth and increased business confidence, coupled with Paragon's competitive pricing and expanded distribution channels, contributed to the 4.5% growth in commercial lending. Additionally, the bank's strategic focus on SMEs and its expertise in specialist lending also supported this growth.

Unallocated

Expected Growth: 3.0%

Paragon Banking Group PLC's 3.0% unallocated growth is driven by strong mortgage lending, increasing demand for buy-to-let and residential mortgages, and a robust pipeline of new business. Additionally, the group's diversified funding base, cost discipline, and efficient capital allocation also contribute to this growth.

7. Detailed Products

Mortgages

Paragon Banking Group PLC offers a range of mortgage products for individuals and businesses, including residential and commercial mortgages, buy-to-let mortgages, and second-charge mortgages.

Savings Accounts

Paragon Banking Group PLC offers a range of savings accounts, including fixed-rate bonds, notice accounts, and easy-access accounts, designed to help individuals and businesses save and grow their money.

Development Finance

Paragon Banking Group PLC provides development finance solutions for property developers, including loans for land acquisition, construction, and refurbishment projects.

Commercial Lending

Paragon Banking Group PLC offers commercial lending solutions for businesses, including term loans, revolving credit facilities, and asset-based lending.

Bridging Finance

Paragon Banking Group PLC provides bridging finance solutions for individuals and businesses, including short-term loans for property purchases, refurbishments, and auctions.

8. Paragon Banking Group PLC's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Paragon Banking Group PLC is moderate due to the presence of alternative financial institutions and digital payment platforms.

Bargaining Power Of Customers

The bargaining power of customers is low due to the lack of concentration of buyers and the high switching costs associated with changing financial institutions.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate due to the presence of a few large suppliers of financial technology and services, but the bank has some flexibility in choosing its suppliers.

Threat Of New Entrants

The threat of new entrants is high due to the low barriers to entry in the digital banking space and the increasing trend of fintech startups.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the banking industry, leading to a highly competitive market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 19.79%
Debt Cost 11.33%
Equity Weight 80.21%
Equity Cost 11.33%
WACC 11.33%
Leverage 24.68%

11. Quality Control: Paragon Banking Group PLC passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Paragon Banking

A-Score: 7.4/10

Value: 8.2

Growth: 8.7

Quality: 6.6

Yield: 8.1

Momentum: 6.0

Volatility: 7.0

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Banco di Desio Brianza

A-Score: 6.3/10

Value: 6.8

Growth: 4.4

Quality: 4.8

Yield: 8.8

Momentum: 8.5

Volatility: 4.3

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Vestjysk Bank

A-Score: 6.2/10

Value: 6.9

Growth: 2.8

Quality: 7.6

Yield: 8.1

Momentum: 8.5

Volatility: 3.3

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Hoist Finance

A-Score: 5.2/10

Value: 6.6

Growth: 8.2

Quality: 5.8

Yield: 1.9

Momentum: 6.5

Volatility: 2.0

1-Year Total Return ->

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Mortgage Advice Bureau

A-Score: 5.1/10

Value: 4.1

Growth: 5.9

Quality: 8.0

Yield: 5.6

Momentum: 5.0

Volatility: 2.0

1-Year Total Return ->

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pbb

A-Score: 5.0/10

Value: 8.0

Growth: 2.1

Quality: 4.0

Yield: 7.5

Momentum: 4.0

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

7.88$

Current Price

7.88$

Potential

-0.00%

Expected Cash-Flows