Paragon reportedly asked for information on the sale of the bank with a view to buying either the whole bank or a book of loans.
Nigel Terrington, Paragon’s chief executive, has allegedly told the City he is keen to acquire portfolios of loans to grow.
The buy-to-let lender reported a pre-tax profit of £39.5m in H1 2011, up 34.8% from £29.3m in H1 2010.
After suspending new lending for two and a half years, Paragon returned to the market in September last year having securing a revolving £200m funding line from Australian bank Macqaurie.
Northern Rock was nationalised in 2008. In January 2010 the government split it into good and bad banks, Northern Rock and Northern Rock Asset Management.
Last month, Chancellor George Osborne announced the government planned to sell the good bank while it would run down the assets in Northern Rock Asset Management.
Virgin Money and bank buyout group NBNK have also been tipped as potential bidders for the Rock.
