UK’s Paragon Banking to offer lower mortgage rates for eco-friendly homes

By Sinchita Mitra

(Reuters) – Britain’s Paragon Banking has started offering homeowners lower-priced mortgages if they plan to buy eco-friendly properties or are upgrading their current homes, Chief Executive Officer Nigel Terrington said on Tuesday.

Terrington detailed the lender’s plans on expanding its “green mortgage” offerings after Paragon posted a record annual profit.

London-listed Paragon is looking to launch more such products as part of its green initiative, Terrington told Reuters, as the company looks to promote sustainability and help the country push toward its net zero carbon emission target by 2050.

“We want to help individuals to buy electric vehicles, so I would expect there to be a lot more in the way of green initiatives into the future. Of course, it will be within the bounds of our existing markets,” Paragon’s CEO said.

Bigger British banks like Barclays have already started to offer lower mortgage rates to buy energy efficient homes.

Paragon shares were up 2.1% by 10:04 GMT after it posted a near 30% jump in mortgage lending to 1.63 billion pounds ($2.16 billion) for the full year on the back of strong demand for “buy-to-let” properties, specifically bought to be rented out.

The company’s net interest margin, the main measure of a bank’s profitability, increased to 239 basis points from 224 a year earlier. Statutory profit before tax for the 12 months ended Sept. 30 surged 80.5% to 213.7 million pounds.

Paragon’s impairment coverage levels – provisions against bad debts – have “appropriately provisioned” it against macroeconomic volatility or one-off COVID-related impacts, the company said in a statement.

($1 = 0.7550 pounds)

(Reporting by Sinchita Mitra in Bengaluru; Editing by Devika Syamnath and Anil D’Silva)