FTSE 250 challenger Paragon Bank has attracted billions in new deposits over the past year, as customers seek better rates on their savings.

Paragon yesterday said its retail savings balance stood at over £12.3bn by the end of June, up 21.6 per cent on the same period last year.

It noted these deposits were "predominantly fixed term [and] FSCS protected", providing a "stable and reliable basis of funding for the business".

As interest rates have risen, savers have sought to lock up their money longer term with better rates. Fixedterm deposits offer higher rates of interest than easy access accounts or current accounts.

In a trading update covering the nine months to June, Paragon said the net loan book had grown by 4.8 per cent to £14.7bn since June last year.

This, however, masked significant differences within the business, where mortgage lending climbed 7.8 per cent but commercial lending fell 8.7 per cent.

Nigel Terrington, chief executive, said: "The group has delivered another strong trading performance with robust new business flows, strong customer retention and good margins. We expect to deliver results for the year in line with expectations.

"This has been achieved despite continuing volatility in the financial markets and higher interest rates," he added.

(c) 2023 City A.M., source Newspaper