Bondora portfolio performance – September 2016

KEY TAKEAWAYS

  • Country level performance continues to be positive and grow across all 3 countries.
  • All countries and loan grades are yielding above 10%.
  • Estonia sees steady and growing rates across credit grades. What this means is that the higher rate credit grades like E, F, and HR have a strong repayment history. Their rates overall stay higher than the lower rate grades like A and B due to lack of defaults.
  • Spain is exceeding targeted rates across the board.
  • Finland has double digit interest rates across all grades.

ACTUAL AND TARGETED BONDORA NET RETURNS BY GRADE AND COUNTRY

ESTONIA:

  • Estonia sees double digit realized rates across the board.
  • Even the A and AA grades earn 11.68% and 12.53%.
  • There is lots of competition to fund Estonia loans at these rates so you need to invest wisely to be sure you are putting your money to work.
  • The highest realized rate is HR at 35.6%.
  • Estonia consistently exceeds its targeted rates at all credit grades.
Estonia AA A B C D E F HR ALL
2015
Q1
Actual 14,98% 14,03% 16,88% 20,05% 23,62% 27,67% 29,66% 25,81% 20,82%
Target 12,98% 13,82% 14,30% 15,74% 18,51% 20,34% 23,14% 23,46% 16,88%
2015
Q2
Actual 14,97% 10,08% 16,25% 18,07% 25,14% 21,99% 35,87% 26,16% 19,92%
Target 13,11% 13,83% 14,26% 15,96% 18,47% 20,49% 23,06% 23,62% 16,81%
2015
Q3
Actual 15,02% 15,77% 16,90% 20,66% 22,19% 29,93% 34,14% 34,87% 22,38%
Target 13,09% 13,84% 14,27% 15,85% 18,39% 20,32% 23,15% 23,85% 17,21%
2015
Q4
Actual 14,01% 15,43% 16,00% 20,40% 23,32% 22,87% 30,05% 39,07% 21,94%
Target 12,20% 13,17% 13,81% 15,50% 17,59% 18,41% 21,29% 20,83% 16,65%
2016
Q1
Actual 11,68% 12,53% 14,92% 19,45% 24,41% 28,57% 29,66% 35,60% 22,85%
Target 10,62% 11,32% 12,09% 14,38% 16,18% 17,51% 18,28% 17,96% 15,48%

FINLAND:

  • Finland exceeded targets across all credit grades as well.
  • While HR exceeded its target, that is the only rate where defaults are meaningful in lowering returns for investors, while still earning 17.29%.
  • HR’s 17.29% is equal to owning a mix of C and D credit grade loans from Finland.
  • After some previous quarters with realized rates that were positive but fell short of the targeted rates, this quarter every grade exceeded its target.
Finland AA A B C D E F HR ALL
2015
Q1
Actual 11,51% 10,07% 12,64% 16,58% 24,17% 45,25% 14,20%
Target 12,88% 13,33% 14,41% 16,58% 17,98% 20,90% 14,86%
2015
Q2
Actual 7,24% 13,72% 15,16% 13,92% 10,23% 17,63% 13,67%
Target 12,88% 13,31% 14,70% 16,62% 18,04% 21,04% 15,41%
2015
Q3
Actual 10,95% 12,73% 16,41% 18,35% 11,04% 24,47% 15,97%
Target 12,90% 13,28% 14,71% 16,49% 18,54% 20,81% 15,62%
2015
Q4
Actual 3,09% 11,38% 19,07% 17,16% 13,61% 26,52% 16,56%
Target 12,89% 12,80% 14,49% 16,02% 16,86% 18,11% 15,23%
2016
Q1
Actual 14,35% 15,48% 21,07% 26,23% 25,67% 17,29% 22,62%
Target 9,87% 11,22% 12,56% 13,44% 14,24% 14,40% 13,21%

SPAIN:

  • Spain has loans available in 3 credit grades: E, F and HR.
  • Targeted rates are in the teens from 13.83% up to 14.61%.
  • Actual realized rates are between 27% and 33%.
  • The loan book is growing and becoming more profitable in Spain.
  • As mentioned in our recovery post, we are starting to use the legal process more in Spain to help with recoveries and this is starting to help with returns for our lenders. We hope this continues.
Spain AA A B C D E F HR ALL
2015
Q1
Actual -0,53% -5,99% -5,03% 10,09% 16,91% 16,20% 11,68%
Target 12,61% 12,85% 14,39% 16,17% 18,32% 20,33% 17,69%
2015
Q2
Actual -10,10% -6,76% 9,82% 17,82% 18,52% 11,45%
Target 12,80% 12,80% 14,36% 16,29% 18,32% 20,31% 17,56%
2015
Q3
Actual 17,61% -8,94% 12,76% 18,08% 11,73% 11,85%
Target 13,01% 14,74% 16,20% 18,32% 20,31% 17,56%
2015
Q4
Actual 20,16% -4,05% 11,81% 22,16% 18,30% 15,14%
Target 13,41% 14,93% 16,22% 17,85% 18,06% 17,07%
2016
Q1
Actual 33,10% 31,30% 27,68% 28,34%
Target 14,61% 14,58% 13,93% 14,05%

ACTUAL AND TARGETED BONDORA NET RETURNS ACROSS PORTFOLIO PER QUARTER

The returns are largely in-line with expectations and no substantial changes are expected on the total portfolio level.

2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1
Actual 16,52% 15,88% 17,54% 19,02% 23,55%
Target 16,34% 16,33% 16,63% 16,28% 14,66%

ACTUAL AND TARGETED BONDORA NET RETURNS ACROSS PREVIOUS 7 YEARS

Although the performance numbers decreased very slightly in the past month, the overall performance over the past 7 years and across all markets stayed basically the same, still beating the rest of the market.

2009 2010 2011 2012 2013 2014 2015
Country Actual Actual Actual Actual Actual Actual Actual Target
EE 16.39% 29.23% 23.81% 22.92% 22.27% 22.50% 21.10% 16.88%
ES -6.07% -0.75% 12.17% 17.50%
FI 12.00% 12.13% 14.76% 15.30%
SK -5.22%
ALL 16.39% 29.23% 23.81% 22.92% 19.95% 13.71% 16.95% 16.40%

DISCLAIMER

Please note that past performance does not guarantee future results as economic environment, competition, performance of risk models, loan pricing and recovery processes can improve or deteriorate over time.

We do not recommend to set unrealistic expectations although 84.2% of investors on Bondora peer-to-peer lending marketplace have earned more than 10% annually (investors who have invested more than 1,000 euro over a period of 12+ months). Investing on Bondora is not suitable in case you expect to invest less than 1,000 euro as proper risk diversification shall not be achieved and returns can be highly volatile.

PS! In case you are looking for technical details on the net return calculation then please read an earlier article on the subject here.

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