Paragon underlying H1 profit 38.4 mln pounds

LONDON (Reuters) - Mortgage lender Paragon (PARA.L) reported underlying pretax profit of 38.4 million pounds against 40.2 million pounds a year earlier, for the six months to end-March.

The buy-to-let lender said on Wednesday that total loan advances for the period were 53.4 percent lower year-on-year at 987.6 million pounds, but added that arrears were low and stable.

Paragon, which completed a 287 million pound emergency rights issue in February, has slashed the amount of new funds it makes to buy-to-let customers because it cannot get funding from capital markets.

The company said it is entering the second half in a strong financial position.

Paragon said it was reinstating the dividend at 1.0 pence a share, against 8.0p for the first half of 2007.

(Reporting by Paul Sandle, editing by Elizabeth Fullerton)