Past year results from Paragon Banking Group have shown profits of £20m (€22.5m) in the commercial lending division, a year-on-year increase of 41%.

New lending in the division was also up by 83% to £710m in the year. The commercial lending division, which includes asset finance, motor finance, structured lending and development finance, reported the largest increase in profits across all Paragon subsidiaries.

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Overall, underlying profits for Paragon Banking Group grew by 8% to £157m for the 12 months to 30 September 2018, up from £145m the previous year.

Acquisitions of property development finance business Titlestone in July 2018 and legal finance firm Iceberg in December 2017 also contributed to the commercial lending division. The total volume generated from these businesses in their first part year was £96m for Iceberg and £49m for Titlestone.

Before acquisitions, underlying growth across commercial lending products grew by 45% in 2018, with investments and infrastructure previously established underpinning further expansion in new business flows.

In asset finance there was a 61% increase in new lending to £355m, up from £220m a year ago.

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Paragon’s motor finance business also saw strong growth in 2018. Operating in the hire and lease purchase segments of the market, new business grew by 48% to £178m. The business addresses specialist propositions in the motor finance market and includes funding for less mainstream vehicle types, such as light commercial vehicles and motorhomes.

Richard Doe, managing director of commercial lending at Paragon, said: “Strong growth in lending, particularly to small and medium sized UK businesses, reflects our commitment to improving access to funding for British companies to help them achieve their financial ambitions.

“As a specialist lender financing a variety of industry sectors, the acquisitions of Titlestone and Iceberg have broadened our product reach and will contribute to further diversification of our income streams in the years ahead.”

This month Paragon appointed Anup Sangha as head of credit management for its asset finance business.