While shares of big challenger banks like Metro Bank (LON:MTRO) and CYBG (LON:CYBG) have been struggling to impress investors over the last two quarters, Paragon Bank (LON:PAG) has a different story for investors. This challenger bank is set to outperform the two largest counterparts, thanks to substantial growth in its financial numbers.
Paragon Bank shares traded in the range of £379.20 – £558.50 in the past 52-weeks. The drop in its share price during the second half of last year was only due to the market reaction over accounting controversies related to Metro bank – which is the largest challenger bank in the U.K.
The shares of Paragon Bank resumed the uptrend since the start of this year. Its financial numbers for the first quarter helped in restoring investor’s confidence.
This emerging challenger bank has generated 22% year over year growth in mortgages and a staggering 105% growth in commercial lending.
Commenting on results CEO said, “The Group has started the year well, delivering strong lending growth across all our core business areas. Our retail deposit base continues to grow, creating further efficiencies in our funding structure. We remain confident in the outlook, but will maintain our capital, liquidity and broader risk disciplines in case the external operating environment should deteriorate.”
It has generated double-digit revenue and earnings per share growth in the latest quarter; the average earnings growth in the past five years stood around 12%.
The dividend factor makes Paragon stock a good pick for long-term investors and retirees. The bank offers a strong dividend yield of 4.20%. It has increased dividends over the past two straight years; the company is likely to make a similar dividend increase for this year.
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Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.