Paragon Banking Group PLC

Paragon Banking Group PLC (LSE: PAG), a constituent of the FTSE 250 index, is a UK-based specialist banking group. The company provides a variety of savings products and delivers tailored financing solutions for buy-to-let landlords, small and medium-sized enterprises (SMEs), and residential property developers across the UK. This Report covers the Investment Highlights, Conclusion, and Recommendation on the stock. 

Key Investment Rationale – Buy at GBX 805.00

• Loan growth: The net loan book reached £16.2bn (+1.1% QoQ, +4.8% YoY), while buy-to-let pipeline improved 27.6% from March to £0.8bn, helping offset stamp duty disruption and positioning volumes for a more favorable start to the new financial year even if FY25 ends around the lower end of guidance.

• Funding momentum: Retail savings rose 1.5% QoQ to £16.0bn, supported by the public launch of the Spring app, which exceeded initial expectations and ranked highly on customer service; this underpins funding stability and aligns with the reaffirmed NIM >300 bp guidance.

• Resilient Commercial lending: Across motor, asset finance and development finance, nine-month advances were +6.6% YoY; while net repayments on structured lending reduced overall commercial advances to £0.9bn (-1.5% YoY), management highlights a structured-lending pipeline and development finance pipeline broadly in line with March, indicating scope for a steadier exit run-rate.

• Stable Capital and returns: Unverified CET1 13.6% and TCR 15.4% at quarter-end are in line with expectations and already reflect half the assumed final dividend plus the full £100mn FY25 buy-back; guidance is unchanged for commercial lending (£1.2–1.4bn), NIM (>300 bp), opex (<£185mn), RoTE (15–20%), and buy-backs (up to £100mn), while welcomed MREL reforms provide a supportive framework for future funding flexibility.

PAG Daily Chart & Valuation

For conducting the valuation, the following peers have been considered: TP ICAP Group PLC (LSE: TCAP), Standard Chartered PLC (LSE: STAN), etc.

As per the above-mentioned price action and technical indicators analysis, a ‘Buy’ rating has been given on Paragon Banking Group PLC (LSE: PAG) at the Current Market Price of GBX 805.0, as of 18 November 2025, 08:05 AM, GMT.

Markets are trading in a highly volatile zone currently due to certain Macro & Micro-economic data and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 18 November 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.