June 10, 2020 / 6:48 AM / 24 days ago

Paragon Banking half-year profit slumps on COVID-19-related charges

June 10 (Reuters) - Paragon Banking Group on Wednesday posted a 28% slump in half-year underlying profit, as it booked a 27.7 million pound charge due to the COVID-19 pandemic and set aside millions more to cover expected loan losses because of the crisis.

The specialist banking group reported underlying profit of 57.2 million pounds ($73.02 million) for the six months ended March 31, compared with 79.8 million pounds a year earlier.

It booked a charge of 30 million pounds for expected credit losses due to the coronavirus crisis.

Reduced demand across the economy will hit lending volumes, Paragon said, adding that income therefore will be “hard to predict in the near term, with an inevitable knock-on to the longer-term size of the portfolio”.

Paragon, however, said its common equity tier 1 ratio - a key measure of financial strength - stood at 14.4% as of March 31, compared with 13.7% as at September 30.

$1 = 0.7833 pounds Reporting by Aby Jose Koilparambil and Aniruddha Ghosh in Bengaluru; Editing by Aditya Soni

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