Trading Statement

Paragon Group Of Companies PLC
21 September 2005


                       The Paragon Group of Companies PLC

                               TRADING STATEMENT
                               -----------------

The Paragon Group of Companies PLC will shortly be meeting analysts ahead of its
close period for the year ending 30 September 2005. The following is an update
of the trading position of the Group ahead of the year end and follows the
interim results which were announced on 25 May 2005.

The Board expects the results for the year to 30 September 2005 to be in line
with market expectations.

Trading activity has strengthened over the course of the financial year after a
comparatively slow first half, with loan advances in the second half of the year
expected to be significantly ahead of first half volumes. This is attributable
to a strong second half performance by the buy-to-let division, where second
half advances will be well ahead of both the first half and the second half of
2004. As anticipated in our interim statement, consumer finance advances are
likely to be broadly flat between the first and second halves of the year,
leaving them overall below the level for 2004. Consumer finance lending as a
proportion of total lending continues to decrease, reflecting the Group's
strategy to emphasise growth in the buy-to-let lending business.

The year end pipeline of mortgage loans awaiting completion is also expected to
be greater than at the half year end, auguring well for mortgage advances as the
Group moves into the next financial year.

Total loan assets are expected to be materially higher than a year ago, the
strong growth in the buy-to-let portfolio more than compensating for the
continuing run off of the owner-occupied mortgage and unsecured consumer books.
Margins across the business are comparable with 2004 and, given a larger loan
book, shareholders should expect to see strong growth in net interest income for
the year.

The Group has maintained its conservative stance on credit across the lending
businesses and the performance of the buy-to-let book remains exemplary. The
performance of the consumer books has improved from the first half of the year,
although the charge for provisions for losses will be higher in 2005 than in
2004. As a percentage of assets, the charge for provisions for losses is
expected to be similar to 2004.

Costs remain well controlled across the Group. A year on year improvement in the
cost:income ratio is expected.

The outlook for landlords remains positive. Survey evidence continues to point
to strong rental demand, which serves to improve returns to landlords and, for
the Group, underpins the credit performance of the mortgage portfolio. The
recent reduction in money market rates, with the prospect of more to come in
future, will serve to improve net yields and we expect seasoned landlords to
continue to take advantage of market weakness in building their portfolios.

In the interim report the Board outlined its proposals for capital management
going forward. In line with that policy shareholders should expect a significant
increase in dividend as dividend cover is moved towards the market level. The
Board also announced at that time a share buyback programme of up to £20
million. To date, 1,790,000 shares have been repurchased at an average price of
£4.64 per share.

The Board of Directors intends to announce the preliminary results for the year
ending 30 September 2005 on 23 November 2005 and a full report on the progress
of the Group will be issued at that time.

The results for the year ending 30 September 2005 will be the last prepared
under UK GAAP. The Board expects to provide a comparative report to shareholders
setting out the impact of the introduction of International Financial Reporting
Standards ('IFRS') on the 2005 results in advance of the 2006 interim results,
which will be prepared under IFRS.

For further information, please contact:

The Paragon Group of Companies PLC         The Wriglesworth Consultancy
Nick Keen, Finance Director                Mark Baker

Tel: [phone]                         Tel: [phone]




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