2020 returns remain stable in December

Market & Pricing

After a month of increased portfolio returns in November, Bondora maintained these solid return rates to the end of the year. Returns on Estonian originations were strong, and all return rates for the year remained in double-figures.

Bondora's 2020 return rates remain stable in December.
Bondora’s 2020 return rates remain stable in December.

As always, country-specific performance charts are broken down by the number of loan issuances over the given period, with Orange representing < 50 loans, Blue 51-200, and White > 200.

Yearly Performance

2020 return rates on Estonian originations grew from 18.6% to 19.9% over the month. On the flipside, both returns on Spanish originations (22.1%) and originations out of Finland (12.4%) were lower in December. Still, overall, the yearly rate of return remained steady at 17.9%. 

Returns for previous years declined as expected. Spain’s return rate from 2013 originations (the worst return rate in the past decade) improved on the month by more than 1% up to -18.1%.

Yearly performance – December 2020
Yearly performance – December 2020

Quarterly performance

The first reported numbers for 2020 Q3 originations came in 6.7% higher than their target, settling at 19.2%. The return rate for Q2 2020 was an impressive 7.2% higher than last month, making it the highest quarterly return for Bondora at 25.1%.

All told, returns for all 2020 originations remain strong and well above their respective target figures. 

Quarterly performance – December 2020
Quarterly performance – December 2020

Finland

Returns for originations out of Finland were lower, but not any more than expected. For Q1 2020, C-rated loans fell from 5.5% in November to 5.3% in December. E-rated loans dropped by 0.7% to 13.4%. In the previous quarter, C-rated originations had a higher return rate (5.8%) than the most recent quarter.

Finland portfolio performance – December 2020
Finland portfolio performance – December 2020

Estonia

For Q3 2020, Estonian loans with A, AA, F, and HR ratings were not originated. This created more consolidated originations in the middle rating categories. All the rating categories had higher returns than their targets in the most recent quarter, with E-rated loans performing the best, 10.8% higher than their target, coming in at 24.7%. This was followed by D-rated loans that returned 20.2% on the month.

But it wasn’t just the most recent quarter’s rates that were positive; previous quarters showed an increase in returns as well. Returns in December were higher than November’s for all 7 rating categories of originations in 2020 Q2.  Both E and F-rated originations surpassed a 30% return rate.

Estonia portfolio performance – December 2020
Estonia portfolio performance – December 2020

Spain

Even as returns fell from one month ago, all Spanish loans’ rating categories continue to return higher than their target rates for 2020 Q1. HR originations maintained the highest return rate at 32.7%, which is 13.2% higher than their target rate. D-rated Spanish originations from 2019 Q4 fell below their target return rate, coming in at 10.3%, even as the rest of the same quarter’s rating categories were higher on the month.

Spain portfolio performance – December 2020
Spain portfolio performance – December 2020


Key takeaways

  • The return rate for Bondora originations remained at 17.9% for the second consecutive month.
  • The only originations on the Bondora platform for both Q2 and Q3 2020 were from Estonia.
  • Returns for Q2 2020 on originations in Estonia were higher across all rating categories.
  • Both Spanish and Finnish return rates were lower but in-line with what was to be expected.