olivLaw · European equity research
Paragon Banking Group PLC PAG.L
United Kingdom · London Stock Exchange · ISIN GB00B2NGPM57 · Vertical: Listed companies from United Kingdom
Paragon Banking Group is a UK-listed specialist bank that lends mainly through buy-to-let mortgages and commercial loans, funded largely by retail savings deposits. In fiscal 2025 it reported an underlying return on tangible equity of 17.5%, showing its pricing discipline in a difficult economy.
At the close of 05 Nov 2026, Paragon Banking Group PLC (PAG.L) stock was 7.55 GBP (+0.27% on the day), with market capitalisation 1.5 bn GBP, P/E 8.6 on diluted EPS of 0.88 GBP over the last 12 months, dividend yield 5.40%, beta 0.73, 52-week range 7.01–9.17 GBP.
Data as of · AI analysis dated · Source: ESEF annual reports and closing prices, computed by olivLaw.
Price history
Loading chart…
Technical reading
- RSI (14)
- 59.8
- strong (55–70)
- Bollinger (20, 2)
- 6.87 – 7.55
- above the upper band · %B 1.01 · band width 9.4%
- SMA 50 / 200
- 7.50 / 7.83
- mixed trend
- MACD (12, 26, 9)
- 0.01 / -0.06
- MACD above signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | EURO STOXX 50 | vs EURO STOXX 50 | Vertical median | |
|---|---|---|---|---|
| 1 month | +7.1% | −0.6% | +7.7 pp | — |
| 3 months | −9.0% | −4.2% | −4.9 pp | — |
| 6 months | +1.5% | +4.3% | −2.8 pp | — |
| Year to date | −11.6% | +7.5% | −19.2 pp | — |
| 1 year | −5.8% | +9.9% | −15.7 pp | +6.7% |
| 3 years | +65.4% | +49.8% | +15.5 pp | +24.8% |
| 5 years | +38.5% | +42.8% | −4.3 pp | — |
Price returns, dividends excluded.
Quarterly results
ESEF annual reports carry no quarters: the results are annual (below).
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 33 percentile of its own 3-quarter history (min 7.4, median 9.1, max 9.9; quarters with earnings only).
Fiscal years
| Fiscal year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | unavailable | unavailable | unavailable |
| Revenue YoY | unavailable | unavailable | unavailable |
| Net income | 153.9 m | 186.0 m | 180.3 m |
| Net income YoY | unavailable | +20.9% | −3.1% |
| Diluted EPS | 0.66 | 0.85 | 0.88 |
| Diluted EPS YoY | unavailable | +28.5% | +3.2% |
| net % | unavailable | unavailable | unavailable |
| Free cash flow | unavailable | unavailable | unavailable |
Balance sheet & financial health
Fiscal year 2025 · 30 Sept 2025
- Cash
- 2.4 bn GBP
- Financial debt
- 500.0 k GBP
- Net debt
- -2.4 bn GBP
- Equity
- 1.4 bn GBP
- Total assets
- 19.9 bn GBP
- Debt / equity
- 0.00x
- Current ratio
- unavailable
- ROE
- 12.7%
- ROA
- 0.9%
- FCF margin
- unavailable
Financial statements (source on every figure)
Revenue and net income (GBP)
Income statement · GBP
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Pre-tax income | 199.9 m | 253.8 m | 256.5 m | esef· 27 Jan 2026verified |
| Income tax | 46.0 m | 67.8 m | 76.2 m | esef· 27 Jan 2026verified |
| Net income | 153.9 m | 186.0 m | 180.3 m | esef· 27 Jan 2026verified |
| Diluted EPS | 0.66 | 0.85 | 0.88 | esef· 27 Jan 2026verified |
| Dividend per share | 0.30 | 0.40 | 0.41 | esef· 27 Jan 2026verified |
Balance sheet · GBP
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Cash | 3.0 bn | 2.5 bn | 2.4 bn | esef· 27 Jan 2026verified |
| Property, plant & equipment, net | 74.7 m | 71.0 m | 77.0 m | esef· 27 Jan 2026verified |
| Total assets | 18.4 bn | 19.3 bn | 19.9 bn | esef· 27 Jan 2026verified |
| Short-term debt | 200.0 k | 400.0 k | 500.0 k | esef· 27 Jan 2026verified |
| Total liabilities | 17.0 bn | 17.9 bn | 18.5 bn | esef· 27 Jan 2026verified |
| Equity | 1.4 bn | 1.4 bn | 1.4 bn | esef· 27 Jan 2026verified |
| Shares outstanding at year end | 224.0 m | 210.2 m | 197.7 m | esef· 27 Jan 2026derived |
Cash flow · GBP
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
1 indicators that do not apply to the sector.
Valuation
olivLaw classification
- indicators available: 1 of at least 6
- score weight coverage: 10.4% of at least 60%
A scoring methodology on indicators and valuation, not investment advice.
Closing price
05 Nov 2026Source: olivLaw, closing series
Market cap: 1.5 bn GBP
Key indicators
Coverage and freshness
The data is older than the freshness threshold.
Score by group
10% · Insufficient data
Estimated value range
unavailable — no valuation assumptions for the reporting currency
Valuation assumptions are editorial choices, not measured; beta is not measured.
Valuation methods
Assumptions (illustrative, editorial)
- Risk-free rate
- 6.5%
- Equity risk premium
- 6.0%
- Beta (default)
- 1.00
- Cost of equity
- 12.5%
- Terminal growth
- 3.0%
Factor scorecard
Insufficient data
Minimum-evidence gate: indicators available: 1 of at least 6; score weight coverage: 10.4% of at least 60%
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | unavailable | unavailable | — |
| Net margin · Quality | unavailable | unavailable | — |
| FCF conversion · Quality | unavailable | unavailable | — |
| Revenue CAGR 3Y · Growth | unavailable | unavailable | — |
| EPS CAGR 3Y · Growth | unavailable | unavailable | — |
| Net debt / EBITDA · Balance sheet | unavailable | unavailable | — |
| Interest coverage · Balance sheet | unavailable | unavailable | — |
| Current ratio · Balance sheet | unavailable | unavailable | — |
| P/E (TTM) · Valuation | 8.6x | 84 (vs peers) | 100% |
| EV/EBITDA · Valuation | unavailable | unavailable | — |
| FCF yield · Valuation | unavailable | unavailable | — |
| Shareholder yield (distributions) · Returns | unavailable | unavailable | — |
| Payout ratio (FCF) · Returns | unavailable | unavailable | — |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet· partialunavailable · 0/3 factors with a value
- Growth· partialunavailable · 0/2 factors with a value
- Quality· partialunavailable · 0/3 factors with a value
- Returns· partialunavailable · 0/2 factors with a value
- Valuation· partial84/100 · 1/3 factors with a value
A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.
Memo
PARAGON BANKING GROUP PLC (PAG.L). Latest full fiscal year: 2025; data up to 2025-09-30.
Figures computed from the financial statements: ROE 12.7%.
The estimated value range is 7.21–11.90 GBP per share (median of 2 methods, agreement: low); assumptions are illustrative. Against the central value of 8.95 GBP, the price of 7.55 GBP leaves a potential of 18.6% (value / price − 1) and a margin of safety of 15.7% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
Insufficient data for a verdict (indicators available: 1 of at least 6; score weight coverage: 10.4% of at least 60%).
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- P/E (TTM): 8.6x
What contradicts it
- The valuation methods diverge
Not assessed (insufficient data or a ratio without meaning): ROIC, Net margin, FCF conversion, Revenue CAGR 3Y, EPS CAGR 3Y, Net debt / EBITDA, Interest coverage, Current ratio, EV/EBITDA, FCF yield, Shareholder yield (distributions), Payout ratio (FCF).
Versus the vertical median
Listed companies from United Kingdom · same country · compared with 40 companies
Multiples and returns vs the median
Companies in the vertical
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|---|---|---|---|---|---|---|
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| ABF.LAssociated British Foods PLC | 14.7 bn | 14.3 | 9.2% | 5.3% | −3.1% | −5% / −15% |
| 0EV1.LCarnival PLC | 5.5 bn | 4.1 | 46.7% | 13.4% | +6.4% | unavailable / unavailable |
| BAB.LBabcock International Group PLC | 5.1 bn | 24.7 | 34.7% | 4.1% | +7.2% | −10% / +158% |
| AUTO.LAutotrader Group PLC | 4.8 bn | 16.4 | 60.2% | 47.1% | +3.9% | −13% / −23% |
| BBY.LBalfour Beatty PLC | 4.2 bn | 16.3 | 23.2% | 2.8% | +15.2% | +20% / +160% |
| ABDN.LAberdeen Group PLC | 4.1 bn | 10.8 | 8.0% | 28.9% | −2.1% | +11% / +41% |
| BKG.LThe Berkeley Group Holdings PLC | 3.6 bn | 11.3 | 8.8% | 13.4% | −4.2% | −0% / −22% |
| BME.LB&M European Value Retail PLC | 2.9 bn | 17.4 | 21.2% | 2.8% | +3.7% | +68% / −51% |
| AJB.LAj Bell PLC | 2.4 bn | 22.8 | 49.9% | 33.1% | +18.0% | +8% / +128% |
| ASHM.LAshmore Group PLC | 1.4 bn | 13.9 | 13.1% | 71.6% | −0.1% | +28% / +18% |
| BCG.LBaltic Classifieds Group PLC | 1.2 bn | 23.2 | 15.8% | 57.6% | +6.9% | −99% / −99% |
| APN.LApplied Nutrition PLC | 763.6 m | 36.2 | 41.2% | 19.7% | +24.2% | +71% / unavailable |
| BAG.LA.G. Barr P.L.C. | 671.9 m | 14.4 | 14.4% | 10.8% | +4.0% | −7% / +26% |
| ASC.LAsos PLC | 494.5 m | — | -81.3% | -12.0% | −14.7% | +71% / +8% |
| ALFA.LAlfa Financial Software Holdings PLC | 486.8 m | 16.3 | 61.5% | 23.8% | +15.3% | −28% / +10% |
| AML.LAston Martin Lagonda Global Holdings PLC | 344.3 m | — | -93.4% | -39.2% | −20.6% | −45% / −85% |
| APTD.LAptitude Software Group PLC | 111.3 m | 28.5 | 7.2% | 6.2% | −7.3% | −30% / −23% |
| BMS.LBraemar PLC | 78.3 m | 39.2 | 2.7% | 1.7% | −4.4% | +13% / −11% |
| AMGO.LAmigo Holdings PLC | 9.9 m | — | — | — | −81.9% | +325% / +844% |
| ASBE.LAssociated British Engineering PLC | 605.3 k | — | -19.1% | — | unavailable | unavailable / unavailable |
| AMIF.LAmicorp Fs (uk) PLC | 221.6 k | 0.1 | 27.5% | 9.1% | +8.1% | unavailable / unavailable |
| AAF.LAirtel Africa PLC | — | — | 24.1% | 10.6% | +29.5% | −7% / +164% |
| AAL.LAnglo American PLC | — | — | -19.3% | -20.2% | +4.5% | +30% / +76% |
| ACG.LAcg Metals Limited | — | — | -80.3% | -32.0% | +134.8% | +60% / +63% |
1- and 3-year price returns: for PAG.L from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Scenarios are not available. input data missing
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
In brief
Paragon Banking Group is a UK-listed specialist bank that lends mainly through buy-to-let mortgages and commercial loans, funded largely by retail savings deposits. In fiscal 2025 it reported an underlying return on tangible equity of 17.5%, showing its pricing discipline in a difficult economy 1.
SWOT
Strengths
- A clear specialisation in markets where large banks are less present, with long experience in buy-to-let.
- A funding base built on retail savings deposits, which reduces reliance on wholesale funding.
- A cost-efficient model based on broker distribution and centralised operations.
Weaknesses
- Concentration in mortgage lending exposes the bank to regulatory changes in the rental sector.
- Reliance on a limited number of distribution channels could affect lending volumes.
- Commercial lending remains smaller than the mortgage book.
Opportunities
- Expanding commercial and development lending could diversify revenue.
- Digitalisation and the Spring app could attract new deposits and customers.
- If regulation is recalibrated, the bank could support more customers.
Threats
- Persistent inflation and high living costs could reduce customers' repayment capacity.
- Cyber risk grows with reliance on digital platforms and third-party suppliers.
- Litigation and redress schemes could create unexpected additional costs.
Risks
- Regulatory risk in the rental sectorhigh
Tenant legislation could change the risk profile of the buy-to-let portfolio and the viability of landlord customers if reforms are implemented quickly.
- Motor finance commission litigationmedium
If the FCA imposes an extended redress scheme, costs for the bank could rise significantly.
- Cyber riskhigh
Cyber attacks could disrupt digital services, and reliance on third-party suppliers amplifies this vulnerability.
- Customer credit riskmedium
If cost-of-living pressure increases, customer repayments could become harder, raising credit losses.
- Geopolitical and trade tensionslow
International conflicts and US trade policy could affect the UK economy and supply chains.
Investment thesis
What would need to be true (bull case)
- If specialisation and pricing discipline continue, the bank could sustain solid returns in a difficult economy.
- If commercial lending accelerates, diversification could reduce dependence on the mortgage market.
- If the Spring app attracts new deposits, funding costs could remain competitive.
What would break the thesis
- If rental sector regulation tightens, the buy-to-let portfolio could become less attractive.
- If inflation stays high, pressure on customers could lead to higher credit losses.
- If litigation and redress costs rise, profitability could be affected.
What to watch
- Trend in loan arrears and impairment chargesQ1 2026
- Implementation of the Renters' Rights Act 2025 and its effect on the buy-to-let portfolio2026
- Outcome of the FCA consultation on the motor finance redress scheme2026
- Progress of commercial lending and its share of new lendingnext 10-K
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
The business
Paragon presents itself as a specialist bank whose purpose is to support the ambitions of people and businesses in the UK through specialist financial services 1. Its activity splits between mortgage lending, where it has originated £32.2 billion of buy-to-let loans since the mid-1990s 1, and commercial lending, with loan assets of £2.46 billion at the end of fiscal 2025 1. Its main funding source is retail savings deposits collected through the Paragon Bank and Spring brands 1.
The company distributes its lending products mainly through third-party brokers and collects savings deposits online, which the report says supports a cost-efficient model 1. The bank states its vision to become the UK's leading technology-enabled specialist bank 1. The group is headquartered in Solihull and employs around 1,400 people across the UK 1.
Strategy rests on five priorities: growth, diversification, digitalisation, capital management and sustainability 1. Management stresses a low-risk, robust model that can support customers through the economic cycle 1.
Segments
Mortgage lending
The segment includes buy-to-let finance for landlords in the Private Rented Sector, with loan assets of £13.88 billion at the end of fiscal 2025 1. The company describes itself as a pioneer in this market, with many customers holding portfolios of four or more properties 1.
Commercial lending
The segment covers SME lending, structured lending, development finance and motor finance, with loan assets of £2.46 billion 1. The report notes that commercial lending reached 44.3% of new lending in fiscal 2025 1.
Savings
Savings deposits of £16.27 billion are the main funding source for lending and are collected through Paragon Bank and the recently launched Spring app 1.
Market context
Paragon focuses on lending markets that large high street banks tend to underserve, such as landlord and developer finance 1. The report says inflation stayed higher for longer than expected and that economic growth is expected to remain subdued 1.
Banking regulation and private rented sector reforms, including the Renters' Rights Act 2025, could change the risk profile of buy-to-let portfolios 1. Management is monitoring how these changes could affect the viability of its landlord customers 1.
Trends
- Gradual easing of interest ratestailwind
The report notes that interest rates edged down during the period, more slowly than anticipated, giving a relatively stable outlook for lending 1. If the easing continues, demand for mortgages could recover.
- Inflation and cost-of-living pressureheadwind
Inflation and high living costs remain a challenge for individuals and businesses, which could weigh on customers' ability to repay 1.
- Digitalisation of lending and savingsmixed
The launch of a digital mortgage origination platform and the Spring app may improve productivity and access to new markets, but also brings new cyber and data risks 1.
- Motor finance commission redressheadwind
The Supreme Court ruling of August 2025 and the FCA consultation on an industry-wide redress scheme could create unexpected costs if the scheme is extended to the banking sector 1.
Competitive position
The report describes competition from large high street banks but does not name specific rivals 1. Paragon argues that its specialisation gives it a competitive advantage in segments that larger banks serve less well 1.
In commercial lending and savings, the bank compares itself with other specialist lenders and online savings platforms, without giving further detail in the sources 1.
- Large high street banks
Referred to generically in the report as banks that serve specialist segments less well than Paragon.
- Non-bank specialist lenders
Competitors in commercial and development lending, mentioned generically in the report.
- Online savings platforms
Competition for savings deposits, relevant in the context of the Spring app launch.
- Brokers and credit intermediaries
Paragon's distribution channels, which are also partners and in part competitors for customers.
News & filings
In the press
- Former WWE wrestler Mojo Rawley built a talent agency after leaving the ring ; Paragon Talent Group helps wrestlers secure brand deals , negotiate contracts and plan their financesSurge — GDELT DOC · 23 Oct 2026 · RO
- Controversial spyware firm Paragon to go public by end of yearThe Record (Recorded Future) · 29 Sept 2026 · EN
- Paragon Debt Targeted by Deutsche Bank Analysts Over Deal SpreeBloomberg Markets · 22 Jun 2026 · EN
Annual reports (ESEF)
- Annual report 202527 Jan 2026
- Annual report 202430 Jan 2025
Sources
- [1] Annual report, fiscal year ended 2025-09-30 (ESEF) · SEC / Paragon Banking Group PLC · 30 Sept 2025
Figures computed by olivLaw from ESEF annual reports and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.