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Specialist lender Paragon Banking Group booked a 6.7% fall in first-half profit after an uptick in operating expenses and impairment charges offset rising income.
Pre-tax profit for the year through March fell to £72.0m, down from £77.2m on-year.
Underlying profit rose 8.7% to £79.8m, as lending volumes grew 30% to £1.29bn.
The bank's net interest margin improved to 224 basis points, up from 216 basis points on-year.
Paragon Banking declared an interim dividend of 7.0p per share, up 27% on-year.
'We have delivered a strong first half, with increased profits benefiting from good growth in lending and improved margins,' chief executive Nigel Terrington said.
'This reflects our strategic transformation to become a more broadly based banking group focussed on supporting British SMEs and consumers in specialist lending markets.'
'The half year performance provides further evidence of the success of Paragon's five-year transformation into a specialist banking group.'
'Our diversification will enable us to continue to grow our customer base and deliver improving returns to shareholders.'