June: 2021 Return Rates Still Above Target

Market & Pricing

While return rates on Bondora originations fell in June compared to May, returns over the most recent few years were still above their target rates.

Key takeaways:

  • The return rate for 2021 Bondora originations remains above target
  • The first return numbers for Finnish originations in Q2 2021 are below their target rate
  • A and AA-rated Estonian originations returned for the first time in four quarters in Q2
  • Q1 2021 Estonian origination return rates grew across all five rating categories for the second month

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

The return rate for 2021 originations came in at 15.1%, down 1.3% from the previous month, but is still well above the 9.9% target rate. Estonian originations continue to have a significantly higher rate of return (17.3%) than their Finnish counterparts (6.9%). Meanwhile, returns for 2020 originations were only 0.2% lower on the month, down to 17.0%.

Yearly performance – June 2021
Yearly performance – June 2021

Quarterly performance

The first reported quarterly return rate for 2021 Q2 was 11.3%, compared to a 9.6% target rate. Interestingly, 2021 Q1 originations had a higher return rate, coming in at 17.0% in June compared to 16.4% in May. Both 2020 Q4 and Q3 return rates remained unchanged month-over-month, while the returns for the first two quarters of 2020 were down on the month, but only slightly.

Quarterly performance – June 2021
Quarterly performance – June 2021

Finland

Once again, in 2021 Q2, only D-rated loans were originated in Finland. However, returns for the most recent quarter of originations are already below their target rate, returning 5.4% against a target of 6.9%. This is contrary to the previous quarter’s returns, which remain 1.5% above target.

Finland portfolio performance – June 2021
Finland portfolio performance – June 2021

Estonia

There were a few changes to Estonian loan originations in June. Both A and AA-rated loans originated for the first time since Q2 2020. In fact, both categories originated more loans now than during that time. However, the return rates on these originations (-0.9% and 0.1% respectively) were well below their target rates. Meanwhile, 2021 Q1 originations saw their return rates grow across the board for the second consecutive month, a trend that is highly unusual but welcome for Bondora investors.

Estonia portfolio performance – June 2021
Estonia portfolio performance – June 2021

Spain

All five originating categories of Spanish loans for 2020 Q1 were slightly lower on the month. Return rates for both F and HR-rated loans remain above their target rates at 17.2% and 22.4% respectively. Going back several quarters, F and HR-rated loans have performed much better than C, D, and E-rated loans, as compared to their target rates.

Spain portfolio performance – June 2021
Spain portfolio performance – June 2021

In conclusion

Return rate originations are lower in June compared to May. But despite this, return rates for the last couple of years are still outperforming their target rates. This indicates sustainable growth for the Bondora platform.