Paragon Banking Group PLC (LONLPAG) ticked higher on Monday after a reassuring trading update which prompted Numis Securities to up its rating for the FTSE 250-listed group to ‘hold’ from ‘reduce’.
The City broker’s analysts noted that Paragon announced net loan book growth of 1.5%, or £171mln in the quarter to end June 2018, with its buy-to-let lending focused on professional landlord business.
READ: Paragon Banking splashes out around £274mln to diversify business into other specialist lending markets
They also pointed out that Idem Capital, Paragon's portfolio purchase division, also completed its first transaction of the year in early July, buying a mixed portfolio of largely fully performing motor and asset finance loans.
The analysts said: “Costs and the overall group performance is in-line with management guidance and we do not expect to materially alter our forecasts.
They added: “There is no mention of credit quality and it is our working assumption that credit quality remains excellent.”
Numis retained a target price of 452p on Paragon shares, which in early afternoon trading were up 0.1% at 502.5p.