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Times
04-07-2025
- Business
- Times
Nigel Terrington: ‘I like to have plenty of choices — on a menu and in business'
It is a gloriously sunny day in the City of London and Nigel Terrington has something to celebrate. Last month was the 30th anniversary of his appointment as chief executive of Paragon Banking Group, a milestone that makes the 65-year-old one of the longest-serving bosses on the London stock market. To mark the occasion we've gone to lunch at Hispania, one of his favourite restaurants, which is nestled in the heart of the Square Mile in the old Lloyds Bank building a stone's throw from the Bank of England. The Spanish restaurant is a grand affair befitting the former headquarters of one of Britain's biggest lenders, with high ceilings and a striking staircase that leads up to our table on the first floor. Its combination of small and large plates is also perfect for Terrington, who admits he has 'a bad reputation at home for over-ordering' and whose mantra when it comes to running Paragon — and eating — is 'optionality'. 'I like choices,' he explains. 'And actually, it's a great discipline about how to run a business'. This desire to have options has driven Terrington's transformation of Paragon since taking charge of the FTSE 250 group, first by turning it into one of Britain's biggest buy-to-let lenders and then by pushing it into commercial lending to small and mid-sized businesses and property developers, as well as into motor finance. It has also gone from a lender that was reliant on securitisation for funding before the 2007-9 financial crisis, a weakness that was almost its undoing when wholesale markets dried up during the credit crunch, to a fully-fledged deposit-taking bank. This has taken Paragon a long way from its origins in 1985 as a lender of owner-occupier residential mortgages that was called National Home Loans Corporation (NHLC). The Solihull-based Paragon, which also has offices in London's Walkie Talkie skyscraper, now has a net loan book of £16 billion, of which £13.7 billion is in mortgages, and has amassed £15.8 billion in deposits thanks to the banking licence it secured in 2014. Valued by the stock market at more than £1.8 billion, it represents a remarkable recovery from 2007, when the lender avoided collapse only after Terrington and his team orchestrated an emergency £287 million rights issue, a near-death experience that taught him the value of having options. It has also meant that keeping the same job for three decades has been far from dull. 'People have said 'it must be boring running the same business for 30 years',' he says. 'But it's not the same business. We've reinvented ourselves several times and we'll continue to do so.' Having a focus on buy-to-let can have its drawbacks, however. Landlords are seen by some of the public as 'bad people', Terrington concedes, an image that is not helped by soaring rents, which hit a record average of £1,349 per calendar month outside London in the first quarter of this year, while within the capital they reached an all-time high of £2,698, according to Rightmove, the property search website. Sir Keir Starmer also said last year that he did not consider those who made money from property as being 'working people', an idea that is rejected by Terrington. 'If you're a landlord, and this is your only business, that's your job,' the Paragon boss says over the hum of the restaurant, which is now busy with City types enjoying long lunches. Having snacked on bread, our small plates, picked by Terrington, have arrived: Iberico ham croquettes, prawns swimming in a garlic sauce, a portion of padron peppers and a side of bread soaked in tomatoes, washed down with still Hildon mineral water. The conversation turns to the financial health of Paragon's core customer base of professional landlords, defined in the industry as those with four or more properties, who have proved resilient despite the sharp rise in interest rates since last 2021, which spurred speculation the buy-to-let market might come under strain. While arrears rates in the industry moved higher after the Bank of England lifted its base rate to a 16-year peak, they have remained low by historical standards. At Paragon, arrears have also been better than industry averages, with the proportion of its buy-to-let book more than three months behind on payments ticking up to 0.68 per cent last year and then falling back to 0.51 per cent as of the end of March. 'The credit quality has been phenomenal,' Terrington says. He has spent his entire career in banking, having been drawn to the industry when he was a teenager. Initially set on becoming an engineer like his father, Terrington's interest in banking was piqued at the age of 16 while playing cricket at Cheam Cricket Club, in southwest London, during the summer of 1976, when the 'coolest guy on the team' was the wicket keeper, who was a foreign exchange trading-merchant banker and drove a soft-top sports car. 'I don't know whether to be proud or embarrassed by this story,' Terrington admits. 'By the time that summer finished I wanted to be an investment banker.' So he left school at 18 and joined Keyser Ullman, a now defunct merchant bank, where he worked for five years until joining UBS, where one of his clients was NHLC. He then joined NHLC in 1987 and was its treasurer and then finance director before becoming its chief executive in 1995 and overseeing its pivot towards buy-to-let mortgages, as well as its name change. Terrington has spent the years since the 2007-9 financial meltdown diversifying the business, creating a commercial lending division through a series of acquisitions and taking deposits. Paragon also this year raised £500 million from its maiden covered bond sale, opening up a new source of funding, and unveiled a new savings app to broaden its depositor base. Like other lenders, Paragon has been caught in the recent scandal over motor finance commissions and in June said it had set aside £6.5 million to potentially compensate borrowers. This is much smaller than other players in this area: Lloyds, one of the UK's biggest car loans providers, has earmarked £1.15 billion for redress costs. Terrington said that Paragon had deliberately limited the motor finance business it had written because 'some of the commission structures were just a bit aggressive'. 'We were prepared to compromise the growth in the business to ensure it was safe.' We have now moved on to our main course of pork cheeks on a bed of truffle mash potato, which is Terrington's favourite dish, and I ask about future acquisitions. Britain's banking industry has been swept by a wave of dealmaking since last year, including the £2.65 billion purchase of TSB by Santander this week, Nationwide Building Society's recent £2.9 billion takeover of Virgin Money, and moves by NatWest and Barclays to buy banking businesses from Sainsbury's and Tesco, respectively. • Should I buy Paragon shares right now? Terrington says that 'we definitely see ourselves as a consolidator, for want of a better word' but won't be drawn on commenting on possible bid targets, although he notes that Paragon's niche is as a specialist lender. There are also plenty of other issues to keep him busy. The Renters' Rights Bill, which will introduce wide-ranging changes for landlords and is likely to push up their costs, is making its way through parliament. Separately, the government's ambition to bolster the economy by paring back post-crisis regulation on banks and other financial firms, which many City executives complain has become a burden in recent years, could potentially help Paragon if ministers fulfil their promise to cut red-tape. 'You'd expect over time for [regulation] to come back towards maybe a middle ground, to be a bit more proportionate, and it hasn't really, yet.' It seems likely that Terrington, who has a quick double espresso before we leave, will still be working in finance to find out if the government follows through on its deregulation pledge. Is he thinking about retiring? 'No, I'm not. I mean, I do get asked that question a lot.' 'People say 'you've been here 30 years and the business is doing really well, so surely now must be the time?' But running Paragon keeps him on his toes. It's a good thing, too, because, as he notes, 'If you did the same thing for 30 years, you might just go stale.' CV Age: 65 Education: Wimbledon College. After leaving school he went straight into banking. Career: 1978-1983: Keyser Ullman, a British merchant bank that ran into trouble and was rescued by rival Charterhouse in 1981; 1983-1987: UBS, where Paragon, which was then called National Home Loans Corporation, was a client; 1987-present: Paragon, where he was treasurer and finance director before being appointed as chief executive in 1995. Family: Married with four children and nine grandchildren • Croquetas de jamon £12.30• Padron peppers £9.70• Pan con tomate £8.00• Gambas al ajillo £19.00• Carrilleras de cerdo £26.00• Racion de pan £7.40• Hildon still water x 2 £13.00• Double espresso £3.80• Service charge £5.95 Total: £105.15
Yahoo
05-06-2025
- Business
- Yahoo
Broker channel drives lending at Paragon Bank surge amid £6.5m motor finance provision
Paragon Banking Group leaned on strong broker-led SME activity and robust mortgage lending to deliver a 26.7% surge in pre-tax profits in the first half of its financial year, helping to absorb a £6.5 million provision related to motor finance complaints. Pre-tax profit rose to £149.4 million for the six months to 31 March 2025, up from £118 million in the same period last year. The FTSE 250 lender attributed much of the growth to a 4.9% increase in its loan book, as well as a sharp uptick in mortgage and SME lending via broker channels. Paragon's SME Lending business reported a 7.3% rise in new loans to £247 million, while the overall SME loan book grew 9.4% to £853.1 million. Asset finance, accounting for the largest share of the SME division, jumped 11.1% to £169.9 million, well ahead of the market average of 6.4%. Managing Director of SME Lending at Paragon Bank, John Phillipou, said the bank's digital broker portal was a key driver of performance. 'More applications are going through the system, plus conversion and approval rates [are] increasing,' he said. Nearly 60% of SME loan applications were submitted directly by brokers, with the portal now handling close to 90% of new SME lending. One in three cases are eligible for automatic decisions, allowing underwriters to focus on complex cases. The digitalisation push has slashed average approval times by 60% and nearly halved the time from application to payout. Phillipou added that Paragon had also issued £18.3 million in loans under the Government's new Growth Guarantee Scheme during the period. British Business Bank hits £5bn in structured guarantee programmes Paragon half-year results Group-wide, lending grew 11.4% to £1.38 billion, boosted by a 25.1% rise in mortgage volumes to £810 million. The increase came as borrowers rushed to complete purchases ahead of Chancellor Rachel Reeves' stamp duty threshold reductions. Meanwhile, commercial lending slipped 3.7% to £570 million, largely due to timing delays in structured finance repayments. Despite the strong performance, Paragon took a £6.5 million provision related to its motor finance division, amid a wider industry fallout over historic commission arrangements. The case, now before the UK Supreme Court, could have far-reaching implications for banks if prior commissions paid without customer consent are ruled unlawful. While Paragon's exposure remains small relative to peers, Lloyds has provisioned £1.2 billion, the lender acknowledged the uncertainty ahead. Operating expenses fell slightly to £89.3 million, and the bank maintained its net interest margin at 3.13%, showing resilience in a tight lending environment. Paragon also extended its share buyback programme by £50 million, taking the total for the year to £100 million. Chief Executive Nigel Terrington said the bank had 'strong momentum' and a 'resilient business model,' adding: 'We are well placed to navigate the evolving external environment and remain optimistic about the remainder of the financial year and beyond.' "Broker channel drives lending at Paragon Bank surge amid £6.5m motor finance provision" was originally created and published by Leasing Life, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Yahoo
14-02-2025
- Business
- Yahoo
3 UK Dividend Stocks Offering Up To 5.7% Yield
The United Kingdom's stock market has recently faced turbulence, with the FTSE 100 and FTSE 250 indices experiencing declines amid weak trade data from China, highlighting ongoing global economic challenges. In such a volatile environment, dividend stocks can offer a degree of stability and income potential for investors seeking to navigate uncertain markets. Name Dividend Yield Dividend Rating Keller Group (LSE:KLR) 3.57% ★★★★★☆ OSB Group (LSE:OSB) 7.83% ★★★★★☆ Dunelm Group (LSE:DNLM) 7.83% ★★★★★☆ Man Group (LSE:EMG) 5.92% ★★★★★☆ DCC (LSE:DCC) 3.71% ★★★★★☆ Big Yellow Group (LSE:BYG) 4.80% ★★★★★☆ NWF Group (AIM:NWF) 4.76% ★★★★★☆ James Latham (AIM:LTHM) 7.28% ★★★★★☆ Grafton Group (LSE:GFTU) 4.00% ★★★★★☆ RS Group (LSE:RS1) 3.36% ★★★★★☆ Click here to see the full list of 60 stocks from our Top UK Dividend Stocks screener. We'll examine a selection from our screener results. Simply Wall St Dividend Rating: ★★★★☆☆ Overview: Paragon Banking Group PLC offers financial products and services in the United Kingdom, with a market capitalization of £1.57 billion. Operations: Paragon Banking Group PLC generates revenue from its Mortgage Lending segment at £280.50 million and Commercial Lending segment at £115.20 million in the United Kingdom. Dividend Yield: 5.1% Paragon Banking Group's dividend payments are well-covered by earnings, with a payout ratio of 45.6%, and cash flows, reflected in a low cash payout ratio of 3.6%. Despite an increase in dividends over the past decade, their track record remains volatile. Recent financials show net income growth to £186 million for the year ended September 2024. The company is trading at good value compared to peers but offers a lower yield than top UK dividend payers. Click to explore a detailed breakdown of our findings in Paragon Banking Group's dividend report. Our valuation report here indicates Paragon Banking Group may be undervalued. Simply Wall St Dividend Rating: ★★★★☆☆ Overview: Plus500 Ltd. is a fintech company that provides technology-based trading platforms across Europe, the United Kingdom, Australia, and internationally, with a market cap of £2.08 billion. Operations: Plus500 Ltd. generates revenue primarily through its CFD Trading segment, which amounts to $750.80 million. Dividend Yield: 5.5% Plus500's dividends are well-covered by earnings, with a payout ratio of 24.9%, and cash flows, indicated by a cash payout ratio of 36.5%. Despite dividend growth over the past decade, payments have been volatile. The stock trades at 35.8% below estimated fair value and offers good relative value compared to peers; however, its yield of 5.52% is slightly below the top UK dividend payers' threshold of 5.7%. Click here to discover the nuances of Plus500 with our detailed analytical dividend report. Insights from our recent valuation report point to the potential undervaluation of Plus500 shares in the market. Simply Wall St Dividend Rating: ★★★★☆☆ Overview: TBC Bank Group PLC operates in Georgia, Azerbaijan, and Uzbekistan, offering banking, leasing, insurance, brokerage, and card processing services to both corporate and individual clients with a market cap of approximately £2.21 billion. Operations: TBC Bank Group PLC generates revenue primarily from its Georgian Financial Services segment, which accounts for GEL 2.28 billion, and its operations in Uzbekistan, contributing GEL 336.77 million. Dividend Yield: 5.8% TBC Bank Group's dividends are well-covered by earnings, with a payout ratio of 31.6%, and they have been stable over the eight years of payments. The company recently announced a proposed dividend increase for 2024, subject to shareholder approval. Earnings grew by GEL 159.87 million last year, supporting dividend sustainability. TBC trades at a significant discount to estimated fair value and offers an attractive yield of 5.78%, ranking among the top UK dividend payers despite high bad loans at 2.2%. Delve into the full analysis dividend report here for a deeper understanding of TBC Bank Group. Upon reviewing our latest valuation report, TBC Bank Group's share price might be too pessimistic. Delve into our full catalog of 60 Top UK Dividend Stocks here. Got skin in the game with these stocks? Elevate how you manage them by using Simply Wall St's portfolio, where intuitive tools await to help optimize your investment outcomes. Simply Wall St is a revolutionary app designed for long-term stock investors, it's free and covers every market in the world. Explore high-performing small cap companies that haven't yet garnered significant analyst attention. Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management. Find companies with promising cash flow potential yet trading below their fair value. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include LSE:PAG LSE:PLUS and LSE:TBCG. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@
