May 22 (Reuters) - Paragon Banking Group PARA.L reported a jump in first-half underlying profit, driven by a surge in Mortgage and commercial lending volumes.
Paragon, which has worked to transform into a banking group focussed on small- and medium-sized businesses and consumers in specialist lending markets, said underlying profit rose 8.7% to 79.8 million pounds ($101.30 million) in the six months ended March 31.
Net interest margin - the difference between what it earns from loans and pays for deposits - improved by 8 basis points to 224 basis points.
"This was achieved despite maintaining cautious liquidity levels in the face of Brexit-related market uncertainties," Paragon said in a statement.
Basic common equity tier 1 ratio - a gauge of a bank's financial strength - was 13.7% vs 15.5% a year earlier.
Lending volume rose 30.2% to 1.29 billion pounds, Paragon said.
($1 = 0.7878 pounds)
(Reporting by Yadarisa Shabong and Noor Zainab Hussain in Bangalore; editing by Gopakumar Warrier)