Successful Pricing Of Inaugural At1 Notes Offering

Paragon Banking Group PLC ("the Group" or "Paragon") today announces the successful pricing of its inaugural £150.0 million Fixed Rate Reset Perpetual Contingent Convertible notes (the "Notes").

The Notes will be issued on 5 February 2026, subject to the satisfaction of customary conditions precedent.

Nigel Terrington, Chief Executive, said:

"I'm delighted to announce the successful pricing of our first AT1. The issue demonstrates the market's confidence in our strategy, balance sheet and longer term ambitions.

The transaction generated exceptional demand, with orders of £1.85 billion at final pricing, underscoring the strong market endorsement of the Paragon brand. We are delighted by the depth of support and the confidence investors continue to place in our business.

The capital diversification the issuance brings supports the continuation of our delivery of sustainable value for customers, shareholders and stakeholders, whilst also providing the Group with greater flexibility and optionality going forward."

AT1 issuance - key features

• Total value £150.0 million
• Optional early redemption date 5 February 2033 to 5 August 2033
• Automatic conversion to ordinary shares if the Group's CET1 ratio falls below 7.00%
• Initial coupon 7.5% with a Reset Spread over Gilts of 319.8 basis points
• Interest payments cancellable at Group discretion
• The Notes are expected to be rated "BB" by Fitch and "Ba2" by Moodys
• An application has been made to admit the Notes to trading on the International Securities Market of the London Stock Exchange

Barclays Bank PLC, Merrill Lynch International and UBS AG London Branch were Joint Lead Managers for the issue.

Impacts

The Group recently reported its unverified capital ratios at 31 December 2025. The CET1 ratio stood at 13.3% and the total capital ratio was 15.0%.

Had the AT1 issue taken place at 31 December 2025, the Group's CET1 ratio would have been unchanged, but its Tier 1 ratio (previously the same as the CET1 ratio) would have been 15.0%. The total capital ratio would have been 16.7%.

For financial reporting purposes, the coupon for the notes, as an equity item, will be excluded from the Group's underlying operating income, however, the after-tax effect will be reflected in underlying EPS and RoTE measures.