Final Results

Strong performance, with 17.5% underlying RoTE, 8.7% dividend growth and new £50 million buy-back announced for FY26

Paragon Banking Group PLC ('Paragon', 'the Group' or 'we'), the specialist lender and banking group, today announces its full year results for the year ended 30 September 2025

The full unedited text of the results announcement can be accessed at http://www.rns-pdf.londonstockexchange.com/rns/9734J_1-2025-12-2.pdf and via the Paragon Group website at:

The results announcement will also be submitted to the National Storage Mechanism and will shortly be available for inspection at:

This announcement is made in accordance with DTR 6.3.5R(1A).

Nigel Terrington, Chief Executive of Paragon said:

"Paragon has delivered another strong performance in 2025, demonstrating the strength and resilience of our specialist model and building on our consistent track record of delivery. We've grown our loan book, maintained excellent cost discipline and delivered record underlying earnings per share of 109.7p, all while continuing to deliver enhanced returns to our shareholders through increased dividends and continued share buy-backs.

Operationally, we've made significant strides in digitalisation this year. The successful launch of Spring, our new app-based savings brand, and the roll-out of our digital buy-to-let origination platform represent major milestones in our technology transformation. These developments are already delivering tangible benefits for customers and driving efficiency across the Group.

We enter the new financial year with good momentum. While the external environment remains uncertain, we see plenty of opportunity ahead in our chosen specialist markets. With a strong capital position, a modern digital platform and a clear strategy, Paragon is well placed to continue building on this success, delivering sustainable growth and attractive returns for our shareholders."

Financial highlights

• Underlying basic EPS increased 8.5% to 109.7p (2024: 101.1p)*
• Strong underlying Return on Tangible Equity remains comfortably within target range at 17.5% (2024: 17.2%)
• Operating profit before adjusting items increased by 0.4% to £293.9 million (2024: £292.7 million)*
• Pre provision profits up 5.9% to £335.8 million (2024: £317.2 million)
• Statutory profit before tax increased by 1.1% to £256.5 million (2024: £253.8 million) and statutory basic EPS increased 3.1% to 91.2p (2024: 88.5p)
• Net loan book grew by 4.0% to £16.3 billion (2024: £15.7 billion)
• Net interest margin 3.13% (2024: 3.16%) ahead of expectations due to controlled growth and careful management of funding options
• Cost efficiency remains strong, with the cost:income ratio 34.8% (2024: 36.1%) including investments in digital capabilities
• Cost-of-risk rose to 26 basis points from 16 basis points in 2024, with the charge concentrated in a defined cohort of development finance loans
• £25.5 million provision made in respect of potential motor commission redress reflecting FCA consultation paper rather than scenario-based approach used at the half year
• Capital ratios remain strong with our CET1 ratio at 13.6% (2024: 14.2%), well above regulatory requirements
• Tangible Net Asset Value per share increased by 7.2% to £6.55 at 30 September 2025 (2024: £6.11)
• Total dividend per share increased 8.7% to 43.9p (2024: 40.4p)
• FY25 share buy-back completed. A further £50.0 million announced for FY26

Operational highlights

• Digital transformation continues apace with major milestones delivered with limited capitalisation of expenditure
• New app-based digital savings brand "Spring" successfully launched, with balances standing at over £425 million at year end and over £600 million at the end of November
• New digital buy-to-let origination system rolled out to full introducer network
• Total new lending of £2.68 billion (2024: £2.73 billion):

o Mortgage Lending advances totalled £1.49 billion (2024: £1.49 billion) with continued strong customer retention contributing to loan book growth of 3.4%, or 7.8% excluding the legacy book

o Commercial Lending advances totalled £1.19 billion (2024: £1.24 billion) with development finance and motor businesses showing growth. Overall commercial loan book up 7.6% to £2.46 billion (2024: £2.29 billion)

• Combined pipelines stable year-on-year with customer activity expected to recover as rates fall and budget uncertainty fades
• Strong liquidity. Retail deposits stable at £16.3 billion (2024: £16.3 billion)
• Inaugural £500.0 million, AAA-rated, Regulated Covered Bond issued, significantly oversubscribed at an attractive price
• £0.5 billion of TFSME repaid in the year, with a further £0.25 billion repaid shortly after the year end

* See Appendix A of the linked announcement

Dividend details

The dividend noted above includes a final dividend for the year ended 30 September 2025 of 30.3 pence per share proposed by the directors for approval at our forthcoming Annual General Meeting ('AGM') on 4 March 2026. Detail of the payment arrangements for this dividend, subject to approval at the AGM, are set out below.

The Group will be holding a results presentation on Wednesday 3 December 2025 at 9:30am at UBS, 5 Broadgate, London EC2M 2QS.

This will be webcast live at: https://secure.emincote.com/client/paragon/full-year-results-2025

The presentation material will be available on our corporate website www.paragonbankinggroup.co.uk/investors from 7:00am on the same day, with a webcast replay available from 2:30pm that day.