June: Decline in Secondary Market Activity

Market & Pricing

As has become quite normal, Secondary Market activity decreased after increasing the previous month. Activity decreased by 24.0% to a total of €138,878 transacted. Manual transactions still have the largest share of all transactions (49.2%), which equals €68,345. Read more:

June: decline in Secondary Market activity
June: decline in Secondary Market activity

In June, all three categories decreased, with Portfolio Manager dropping the most (-30.8%) from May. Manual transactions followed with a -24.1% rate, and API transactions with -22.3%. Manual transactions continue to have the largest share of all transactions (49.2%), followed by the API (42.5%) and Portfolio Manager (8.3%).

Secondary Mark total volume – June 2022
Secondary Mark total volume – June 2022

Current loans

A total of €109,499 was transacted in the current loan category. After increasing in May, current loan transactions decreased by 21.0% in June. Portfolio Manager transactions decreased by 30.8%, API by 20.3%, and Manual transactions decreased by19.1%. But, API transactions still reign supreme with a 47.3% share, followed by Manual (42.2%) and Portfolio Manager (10.5%).

Current loans sold at a premium remain the most popular, despite a 20.7% decrease. It made up a 60.7% share of all current loan transactions, totaling €66,446. Loans sold at par declined by 22.8% and made up a 36.1% share. Loans sold at a discount made up 3.2%, which is 0.5% higher than in May.

Secondary Market current loan transactions – June 2022
Secondary Market current loan transactions – June 2022

Overdue loans

In May, overdue loan transactions grew by 14.7% but declined by 30.8% in June, totaling €13,690. For the first time in recent months, loans sold at a discount, at a premium, and at par, all have pretty different sized shares of the total transaction. This month, ‘at a discount’ take the crown from ‘at par.’

Changing pace, manual transactions increased this month by 1.1%, taking the majority 63.2% share with €12,500.

Manual transactions are the most popular platform category, having a 74.1% share. The API makes up the remaining 74.1%. The latter decreased by 51.3% from May, whereas Manual transactions decreased by only 18.9%.

Secondary Market overdue loan transactions – June 2022
Secondary Market overdue loan transactions – June 2022

Defaulted loans

After the increases in May, June reverted to April’s decreases, dropping by 35.2% to €15,687.

Manual transactions had a 76.3% share, and API transactions had a 23.7% share. The most significant decrease came from Manual transactions, declining by 37.6%. The API had a minuscule decline of 0.4%.

Those sold at a discount were still the most popular when selling defaulted loans, making up 91.6% of all such transactions. Transactions at a premium increased by a mammoth 854.7% to take a 7.1% share, while those at par only managed to get a 1.3% share. This increase might sound unbelievable, but it’s simply because it was €117 in May and €1,117 in June.

Secondary Market defaulted loan transactions – June 2022
Secondary Market defaulted loan transactions – June 2022

The Secondary Market decreases

As has become the norm, the Secondary Market see-saws in activity, with solid increases in May inevitably inviting decreases in June. Overall, activity declined by 24% to a total of €138,878 transacted. But during these dips, it’s always interesting to see minor irregularities, such as the hyper increased ‘at a premium’ rate for defaulted loan transactions.

As more investors opt for the hands-free Go & Grow investment method, it’s natural to see a drop in manual buying and selling of loans on the Secondary Market. But, as the Secondary Market activity is known to go up and down, let’s see if the activity will pick up again.

Remember, investors should not seek higher returns from buying and selling loans on the Bondora secondary market.