* H1 underlying pretax profit rises 21 pct at 57.9 mln stg
* Buy-to-let loans more than doubles to 269.3 mln stg
* Interim dividend up 25 pct at 3 pence/shr
(Adds comments from CEO, analyst; updates share movement)
By Aastha Agnihotri
May 20 Buy-to-let mortgage lender Paragon Group
of Companies reported a 21 percent rise in first-half
underlying pretax profit, and its CEO said lending could more
than double in the second half compared with the first.
Shares in the company rose as much as 6.6 percent in morning
trading on Tuesday, making them one of the top percentage
gainers on the London Stock Exchange.
Paragon has been thriving as UK landlords and investors take
advantage of a booming rental market and low interest rates,
while first-time home buyers struggle to get a foot in the door.
"We have a pipeline of 348 million pounds (of buy-to-let
loans) ... so if you look at the year as a whole, we would
expect to be doing in the order of 600 million pounds ($1
billion)," Chief Executive Nigel Terrington told Reuters.
Paragon lent 269.3 million pounds in the six months ended
March 31, up from 102.3 million in the first half of 2013.
The group manages about 10 billion pounds of loans.
The FTSE-250 company's underlying first-half pretax profit
rose to 57.9 million pounds, from 47.9 million a year earlier.
"Buy-to-let lending is growing very nicely in the UK ... and
we think the company will continue to perform very well,"
Panmure Gordon analyst Keith Baird told Reuters. Baird raised
his price target on the stock to 500 pence from 390.
Paragon launched a bank in February, taking advantage of new
rules that allow start-up banks to have less capital than
"The important thing about the bank is that it provides
diversification of lending," Terrington said.
Paragon Bank will use deposits to extend personal and car
"In due course we will do SME (small and medium enterprise)
lending as well, so this is a new source of income to us in the
coming years," Terrington said.
Paragon raised its interim dividend to 3 pence per share
from 2.4 pence.
Shares in the Solihull-based company were up 6.5 percent at
369.55 pence at 1020 GMT.
($1 = 0.5943 British Pounds)
(Reporting by Aastha Agnihotri in Bangalore; Editing by
Gopakumar Warrier and Ted Kerr)