Mortgage provider Paragon has bought a portfolio of loans from
Royal Bank of Scotland (RBS) with the aim of kick-starting its own
lending activity.
The buy-to-let lender bought £43.2m ($70m) of
personal loans that RBS deemed non-core.
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Paragon was forced to stop lending in 2008 as
it struggled to obtain financing. It resumed buy-to-let lending a
year ago and intends to broaden its offering to include personal
loans.
CEO of Paragon Nigel Terrington said the
purchase of the RBS loans could speed up the process.
“We intend to do new consumer lending – that
is a natural development. While it will not happen immediately, the
purchase could accelerate it,” he said.
The RBS portfolio, which Paragon has managed
for the past two years, is the largest Paragon has bought to
date.
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By GlobalDataSo far Paragon has bought six loan portfolios
totaling £89.5m since the middle of 2009, four of which have been
bought this year.
Paragon expects to buy unwanted loan
portfolios, from banks that are shrinking their balance sheets to
meet regulatory requirements, in the coming months.
