Another Good Month for the Loan Portfolio Performance

Market & Pricing

We’re in the middle of 2022 Q2, and the portfolio performance is looking good. All three markets show robust and reliable growth rates across different risk-rating categories. The yearly return rates for all three markets continue to exceed their targets. Some quarterly rates for 2021 decreased from April, but they perform well ahead of their targets. Read more:

Another good month for the loan portfolio's performance.
Another good month for the loan portfolio’s performance.

Yearly performance

The yearly portfolio performance for 2022 is continuing to grow at a steady pace. In May, the actual rate increased from 13.3 to 14.6%—4.9% above its target rate of 9.7%. Each market also increased its standing from May, exceeding target rates. Spain exceeds its target by 3.2%, Estonia by 4.8%, and Finland by 4.9%.

As we saw last month, 2020 originations continue to decline, again by 0.2% in May. Overall, it still exceeds its target by 2.7%, thanks to the Estonian portfolio’s strong performance. It exceeds its target by 8.3%, just 0.1% lower than in April. However, Spain and Finland underperform due to the origination pause we had put in place for those two markets during the initial phase of the pandemic. They are below target by 10.2% and 8.4%, respectively.

2021’s yearly return rate is looking good, exceeding the target by 5.5%, which is, again, 0.1% lower than the previous month. All three markets exceed their targets, but once again, it is Estonia that is carrying the portfolio with a 7.3% lead over its target rate.

Yearly performance – May 2022
Yearly performance – May 2022 (Click to view all data)

Quarterly performance

For the past 9 quarters, we’ve met and exceeded the target, and we’re thrilled about that. Of those 9 quarters, most are performing at more or less the same level, indicating stability. 2019 Q4 is the first target in recent years to come in below target.

2022 Q1 continues to grow, inclining from 14.0% to 15.4%. Although it’s not as big a leap as we saw in April (+2.4%), we’re still satisfied with this increase of 1.4%.

2020 Q3 remained the quarter with the highest rating of the past couple of years and remained stable from April into May. It has a target rate of 12.5% but outperforms it by more than double, with an actual rate of 27.0%.

Quarterly performance – May 2022
Quarterly performance – May 2022 (Click to view all data)

Finland

The last 5 quarters of the Finnish portfolio continue to exceed their target rates. 2022 Q1’s performance increased for all three risk categories. This month, D-rated loans are performing the best, exceeding their target by 5.1%, just 0.1% more than C-rated loans. Looking at the most recent quarters, 2021 Q4’s C-rated loans have the highest overall performance with 16.3%.

Finland portfolio performance – May 2022
Finland portfolio performance – May 2022 (Click to view all data)

Estonia

Overall, things are still looking good for the Estonian portfolio. Carrying on the momentum from last month, the last 7 quarters of the Estonian portfolio are all exceeding their target rates. In 2020 Q2, the only category to underperform is the A-rating category.

Last month, it was the first time that all 6 risk-rating categories of 2022 Q1 exceeded their targets, and they continued to overachieve in May. This month, the E-rating category is the best performer, exceeding its target by 10.7%.

And once again, the HR-rating category for 2021 Q4 continues to increase and holds the highest performance rate in recent years (a 41.6% actual rate compared to a 5.0% target rate).

Estonia portfolio performance – May 2022
Estonia portfolio performance – May 2022 (Click to view all data)

Spain

Steady growth is the way to go for Spain, as we see consistent and sustainable increases from our most western-located market. We continue only to originate C-rated loans in the Spanish market, and they are performing well ahead of target in 2022 Q1. The target rate is 9.2%, and the actual rate is 12.5%. It increased by 0.3% from April.

Despite declining in May, the C-rated loan categories for 2021 Q3 and Q4 exceed their target rates. Their actual rates declined by 1.4% and 0.3%, respectively.

Other recent performances, especially from 2020 and 2021, are below target because of the pandemic and because we weren’t originating loans in the Spanish market for most of 2021.

Spain portfolio performance – May 2022
Spain portfolio performance – May 2022 (Click to view all data)

Conclusion

Overall, things continue to look good for our three loan markets, especially for 2022 Q1. The yearly return rates for all three markets outperformed their targets and increased their growth rates from April, indicating good things to come as we approach the end of 2022 Q2. All three countries are performing well, and we’re seeing strong growth in all of them. The quarterly return rates from 2020 Q1 to 2022 Q1 continue to exceed their target rates, despite some up and down movement.