Bondora portfolio performance – June 2017

Key takeaways

  • To date, the realised return across all countries is on track to continue a trend of three consecutive years of improved performance moving from 12.70% to 18.25% to 19.78% for 2015, 2016 and 2017 respectively.
  • Spain and Finland have each exhibited three consecutive years of improved realised net returns. At this point, their 2017 performance suggests this trend is ongoing, though it’s still early in the year.
  • If 2017 figures hold steady the total realised net return will be the highest seen since 2012.
  • The variance between the realised net return for each country is growing as Spain begins to deliver greater performance.

Actual and targeted bondora net returns by grade and country

Estonia

  • “D” rated loans are beginning to strengthen their returns. Their Q1, 2017 performance exceeds the performance seen in the last three quarters.
  • The average realised net return has dropped to 16.62% which is slightly lower than the same measurement over each quarter for the last two years.
  • The lower risk loans (“AA,” “A” and “B”) have been delivering lower realised net returns in recent quarters than in 2015.
Estonia AA A B C D E F HR
2015
Q1
Actual 14,60% 13,75% 15,45% 18,31% 20,37% 24,10% 24,57% 23,02%
Target 13,10% 13,84% 14,31% 15,76% 18,47% 20,43% 23,17% 23,51%
2015
Q2
Actual 14,19% 11,39% 14,96% 14,33% 21.56% 16,97% 31,19% 19,48%
Target 13,20% 13,82% 14,29% 15,89% 18,40% 20,46% 23,08% 23,65%
2015
Q3
Actual 15,41% 15,20% 16,02% 17,60% 18,07% 26,74% 27,87% 27,25%
Target 13,18% 13,85% 14,30% 15,79% 18,43% 20,32% 23,19% 23,85%
2015
Q4
Actual 14,03% 15,42% 15,05% 19,01% 19,93% 14,51% 23,36% 27,04%
Target 12,20% 13,17% 13,81% 15,50% 17,59% 18,41% 21,29% 20,83%
2016
Q1
Actual 11,88% 13,68% 15,01% 19,03% 23,72% 25,85% 23,45% 34,70%
Target 10,62% 11,32% 12,09% 14,38% 16,17% 17,51% 18,28% 17,96%
2016
Q2
Actual 9,74% 1,51% 13,89% 15,78% 17,99% 20,82% 28,51% 26,28%
Target 8,15% 9,74% 11,46% 13,62% 15,22% 16,47% 17,05% 17,10%
2016
Q3
Actual 9,93% 12,11% 11,77% 14,42% 17,94% 22,80% 24,72% 27,29%
Target 8,40% 9,77% 11,48% 13,64% 15,22% 16,48% 17,04% 17,10%
2016
Q4
Actual 9,25% 10,46% 11,84% 15,80% 18,02% 25,51% 30,22%
Target 8,21% 8,61% 9,61% 11,10% 12,47% 14,09% 14,94%
2017
Q1
Actual 9,46% 8,97% 12,33% 14,97% 19,69% 23,91% 26,99%
Target 8,29% 8,61% 9,44% 10,84% 12,68% 13,99% 14,63%

Finland

  • Finland has had an excellent Q1 this year delivering an average realised net return of 24.79%.
  • The riskier “HR” rated loans are performing again after two consecutive quarters of low returns. “HR” loans returned 30.09% in Q4 of 2016 and 23.07% in this years first quarter relative to the return of -4.08% and 4.40% seen in Q3 and Q2 of 2016 respectively.
Finland AA A B C D E F HR
2015
Q1
Actual 7,77% 6,44% 6,87% 10,03% 18,60% 41,17%
Target 12,87% 13,33% 14,50% 16,61% 18,15% 20,82%
2015
Q2
Actual 3,49% 9,93% 10,69% 7,73% 4,59% 11,19%
Target 12,88% 13,33% 14,67% 16,67% 18,07% 20,86%
2015
Q3
Actual 1,58% 8,07% 10,69% 13,60% 6,62% 16,52%
Target 12,90% 13,30% 14,70% 16,58% 18,36% 20,81%
2015
Q4
Actual 0,99% 10,56% 15,01% 14,58% 8,02% 23,85%
Target 12,89% 12,80% 14,49% 16,02% 16,86% 18,11%
2016
Q1
Actual 15,14% 12,16% 16,82% 24,64% 21,22% 14,83%
Target 9,87% 11,22% 12,56% 13,44% 14,24% 14,40%
2016
Q2
Actual 17,50% 16,07% 13,41% 20,83% 18,73% 4,40%
Target 12,07% 14,05% 16,17% 17,55% 18,27% 19,19%
2016
Q3
Actual 7,74% 18,02% 14,48% 12,48% 12,53% -4,08%
Target 12,45% 14,34% 16,37% 17,89% 18,91% 19,19%
2016
Q4
Actual -19,31% 17,90% 23,84% 22,28% 29,67% 30,09%
Target 9,90% 11,87% 14,32% 16,37% 20,66% 27,53%
2017
Q1
Actual 18,09% 11,38% 19,02% 22,99% 35,05% 23,07%
Target 11,86% 11,20% 13,81% 15,47% 18,70% 23,57%

Spain

  • Spain has seen the second best average realised net return since the start of 2015. First quarter of 2017 for the country returned an average of 30.50%.
  • The country’s limited offering of riskier loans (“E,” “F,” and “HR”) have helped boost the total average return as higher interest rates offset the higher likelihood of default.
  • These three loan ratings are currently outperforming their targeted figures by an average of almost 7 percentage points.
Spain AA A B C D E F HR
2015
Q1
Actual -6,68% -8,83% -7,13% 5,17% 9,81% 8,43%
Target 12,62% 12,90% 14,33% 16,21% 18,32% 20,24%
2015
Q2
Actual -13,98% -10,57% 3,93% 10,26% 12,51%
Target 12,85% 14,33% 16,23% 18,32% 20,22%
2015
Q3
Actual 15,29% -6,88% 5,44% 10,58% 2,39%
Target 13,11% 14,55% 16,18% 18,32% 20,31%
2015
Q4
Actual 17,76% -0,99% 6,48% 15,65% 11,45%
Target 13,41% 14,93% 16,24% 17,85% 18,06%
2016
Q1
Actual 37,26% 24,35% 17,95%
Target 14,61% 14,58% 13,93%
2016
Q2
Actual -17,43% 4,21% 0,39%
Target 19,41% 20,16% 20,36%
2016
Q3
Actual 28,38% 25,66% 8,74%
Target 19,30% 20,24% 20,65%
2016
Q4
Actual 37,38% 23,93% 29,24%
Target 16,44% 17,15% 27,79%
2017
Q1
Actual 22,23% 37,13% 29,69%
Target 15,12% 17,17% 29,14%

Actual and targeted bondora net returns across portfolio per quarter

Just as last month, the average realized returns for 2016 vastly outperformed 2015 quarterly returns. Average for 2016 came to 18.34%, exceeding 2015 aversages by more than five percentage points. 2017 has also started strong, with Q1 average realized returns of 19.80%, which is 5.01 percentage points higher its target return (14.78%). Overall, the total average quarterly returns since 2015 is exceeding the target by 0.84%.

2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4 2017-Q1
Actual 12,61% 11,77% 12,98% 15,48% 20,89% 16,07% 16,19% 22,54% 20,86%
Target 16,56% 16,52% 16,79% 16,28% 14,66% 15,64% 16,38% 16,41% 14,84%

Actual and targeted bondora net returns across previous 8 years

The early Q1 indicators for this year suggest we’re on track to deliver a fourth consecutive year of improved total realised net returns. The current realised return of 19.78% is less than that of years like 2010, 2011 and 2012, however, today we offer far more loan investments across more countries.

2009 2010 2011 2012 2013 2014 2015 2016 2017
Country Actual Actual Actual Actual Actual Actual Actual Target Actual Target Actual Target
EE 16,65% 29,59% 24,44% 23,25% 20,99% 20,70% 18,29% 17,00% 18,90% 13,86% 16,30% 11,23%
ES -10,82% -4,40% 6,00% 17,42% 15,54% 21,48% 30,49% 27,41%
FI 9,24% 8,42% 9,87% 15,50% 18,39% 16,85% 24,75% 18,00%
SK -9,75%
ALL 16,65% 29,59% 24,44% 23,25% 18,35%  10,95% 12,70% 16,57% 18,25% 15,89% 19,78% 14,78%

Monthly origination summary for May 2017

Originations for May 2017 were lower compared to last month. The total of €2,710,450 was also lower than the average monthly origination of €2,858,604. More than half of this month’s total is comprised of “B” through “D” rated loans from the Estonian market. Investors continue to balance mid-level risk with a reach for higher interests ranging from approximately 14% to 25%. The average interest across all countries came to 30.99%.

Loan origination by country

Estonia continues to hold the majority of originations at just over two-thirds of the total (77.44%). Spain carried 13.59% with Finland following at 8.97%. However, recent research released by the Fund for Peace cited Finland as the most stable country in the world. This strong signal of political, economic and social strength may, in time, boost originations in the country as investors seek stability.

Share by country – May 2017
Country Interest Amount Share
ESTONIA 19.89% 2098983 77.44%
SPAIN 85.12% 368360 13.59%
FINLAND 44.79% 243107 8.97%

Loan origination by rating

“C” Rated loans represented the largest portion of new loan originations with 26.40% total share, nearly all of it within the Estonia region. The greater availability of these loans in Estonia has been a contributing factor for the country’s dominance in total originations.

  • “B” and “C” rated loans both exhibit higher proportions of total originations this month versus last month. This may indicate a gradual progression towards lower risk loans.
  • Across Estonia, Spain and Finland, 11 of the 14 different ratings have seen increases in their interests over last month.
  • HR loans continue to offer outsized interest in reward for their higher risk. Spain’s HR loans generated 92.66% while Finland’s same rating offered 76.91%.
Share by country and rating – May 2017
ESTONIA SPAIN FINLAND
Rating Interest Amount Share Interest Amount Share Interest Amount Share
AA 10.34% 45409 1.68%
A 11.48% 113799 4.20%
B 14.42% 594904 21.95%
C 19.22% 696733 25.71% 21.81% 18905 0.70%
D 25.18% 392097 14.47% 26.05% 36996 1.36%
E 31.63% 243772 8.99% 37.07% 54205 2.00%
F 35.21% 12269 0.45% 85.12% 56163 2.07% 45.65% 87174 3.22%
HR 92.66% 312197 11.52% 76.91% 45827 1.69%

Bondora portfolio performance – May 2017

Key takeaways

  • All countries have generated double digit realized net returns for the last three consecutive quarters. Though some of the Q1 2017 figures may decrease over time they’re all very likely to remain well into the double digits.
  • As we move from 2015 to the present Estonia, Spain and Finland are all generating returns to a more equal degree. Previously the performance across countries was less balanced.
  • The realized net return in each quarter of 2016 was significantly higher than the same quarter in the previous year by a minimum of 321 basis points.

Actual and targeted bondora net returns by grade and country

Estonia

  • “AA,” “B” and “F” rated loans have all outperformed their target every quarter since Q1 of 2015 offering investors an excellent range of returns across various risk levels.
  • For each of the previous nine quarters more loan ratings have outperformed their target than those that have not.
  • Loan ratings “B” through “F” have all returned double digits since Q1 of 2015.
Estonia AA A B C D E F HR
2015
Q1
Actual 14,59% 13,86% 15,60% 18,44% 20,30% 23,27% 24,57% 23,38%
Target 13,10% 13,84% 14,31% 15,76% 18,47% 20,43% 23,17% 23,51%
2015
Q2
Actual 14,28% 11,39% 15,09% 14,38% 21.90% 17,63% 31,44% 19,88%
Target 13,20% 13,82% 14,29% 15,89% 18,40% 20,46% 23,08% 23,65%
2015
Q3
Actual 15,50% 15,14% 16,11% 17,70% 18,34% 26,84% 28,25% 28,17%
Target 13,18% 13,85% 14,30% 15,79% 18,43% 20,32% 23,19% 23,85%
2015
Q4
Actual 13,99% 15,27% 15,10% 19,23% 20,13% 14,52% 23,76% 27,76%
Target 12,20% 13,17% 13,81% 15,50% 17,59% 18,41% 21,29% 20,83%
2016
Q1
Actual 11,85% 13,61% 15,14% 19,17% 23,91% 26,09% 24,10% 35,39%
Target 10,62% 11,32% 12,09% 14,38% 16,17% 17,51% 18,28% 17,96%
2016
Q2
Actual 9,64% 1,07% 13,98% 15,89% 18,46% 21,62% 29,03% 27,21%
Target 8,15% 9,74% 11,46% 13,62% 15,22% 16,47% 17,05% 17,10%
2016
Q3
Actual 9,82% 12,19% 11,88% 14,51% 18,54% 22,94% 25,08% 28,11%
Target 8,40% 9,77% 11,48% 13,64% 15,22% 16,48% 17,04% 17,10%
2016
Q4
Actual 9,27% 10,37% 12,20% 15,77% 18,75% 26,46% 30,35%
Target 8,21% 8,61% 9,61% 11,10% 12,47% 14,09% 14,94%
2017
Q1
Actual 8,64% 8,41% 12,23% 13,94% 21,40% 24,95% 32,06%
Target 8,35% 8,61% 9,61% 10,79% 12,70% 13,99% 14,71%

Finland

  • “C” rated loans in Finland have outperformed the same rating in all other countries for the last four consecutive quarters.
  • Also, “C” rated loans are offering a nice risk/reward balance as this mid-level rating has delivered performance above its targeted figure for the last five quarters.
Finland AA A B C D E F HR
2015
Q1
Actual 8,09% 6,35% 7,27% 10,52% 18,87% 41,80%
Target 12,87% 13,33% 14,50% 16,61% 18,15% 20,82%
2015
Q2
Actual 3,95% 8,88% 11,15% 8,22% 5,14% 11,78%
Target 12,88% 13,33% 14,67% 16,67% 18,07% 20,86%
2015
Q3
Actual 1,55% 8,46% 11,18% 14,00% 6,55% 17,20%
Target 12,90% 13,30% 14,70% 16,58% 18,36% 20,81%
2015
Q4
Actual 0,96% 10,86% 15,36% 14,23% 8,68% 24,81%
Target 12,89% 12,80% 14,49% 16,02% 16,86% 18,11%
2016
Q1
Actual 15,10% 12,59% 17,40% 25,26% 21,73% 15,51%
Target 9,87% 11,22% 12,56% 13,44% 14,24% 14,40%
2016
Q2
Actual 16,92% 16,65% 14,03% 21,85% 19,41% 6,11%
Target 12,07% 14,05% 16,17% 17,55% 18,27% 19,19%
2016
Q3
Actual 8,21% 17,46% 15,40% 13,32% 13,79% -2,08%
Target 12,45% 14,34% 16,37% 17,89% 18,91% 19,19%
2016
Q4
Actual -15,40% 18,30% 23,98% 23,85% 30,85% 32,06%
Target 9,90% 11,87% 14,32% 16,37% 20,66% 27,53%
2017
Q1
Actual 18,09% 18,99% 19,46% 22,65% 35,21% 25,97%
Target 11,86% 11,20% 13,81% 15,47% 18,70% 23,57%

Spain

  • The average excess return above the targeted figure in Spain for the last five quarters was 3.74% which is in between the same measurement for Estonia (5.32%) and Finland (1.84%).
  • The “E,” “F,” and “HR” loans all outperformed their targeted figure in the last two consecutive quarters.
  • Each loan rating segment in the last three quarters has outperformed the same rating in the previous year’s quarter with the exception of “E” in 2017.” For example, “E” of Q4, 2016 generated a realized net return of 38.66% compared to Q4 of 2015 where this segmented returned only 6.20%. This outperformance is likely to hold even in the coming months.
  • “E” and “F” rated loans all outperformed their targeted figure in the last three consecutive quarters.
Spain AA A B C D E F HR
2015
Q1
Actual -6,00% -8,33% -6,83% 5,53% 10,48% 8,96%
Target 12,62% 12,90% 14,33% 16,21% 18,32% 20,24%
2015
Q2
Actual -13,72% -10,31% 4,44% 10,84% 13,13%
Target 12,85% 14,33% 16,23% 18,32% 20,22%
2015
Q3
Actual 15,64% -6,92% 6,13% 11,31% 3,06%
Target 13,11% 14,55% 16,18% 18,32% 20,31%
2015
Q4
Actual 17,91% -1,11% 6,20% 16,33% 12,20%
Target 13,41% 14,93% 16,24% 17,85% 18,06%
2016
Q1
Actual 37,26% 24,79% 18,72%
Target 14,61% 14,58% 13,93%
2016
Q2
Actual -14,26% 5,03% 1,22%
Target 19,41% 20,16% 20,36%
2016
Q3
Actual 30,01% 26,62% 10,39%
Target 19,30% 20,24% 20,65%
2016
Q4
Actual 38,66% 24,41% 31,02%
Target 16,44% 17,15% 27,79%

Actual and targeted bondora net returns across portfolio per quarter

The realized net returns in 2016 average 18.92% per quarter compared to a quarterly average of just 13.21% for 2015. Additionally, this increase has occurred without any significant reduction in the variety of loan ratings across each country. In other words, the increase in average quarterly performance does not appear to come at the cost of investors taking on more risk.

2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4 2017-Q1
Actual 12,61% 11,77% 12,98% 15,48% 20,89% 16,07% 16,19% 22,54% 20,86%
Target 16,56% 16,52% 16,79% 16,28% 14,66% 15,64% 16,38% 16,41% 14,84%

Actual and targeted bondora net returns across previous 8 years

We’re pleased to see an increase in performance relative to a slowdown in total realized net returns in 2013, 2014, and 2015. This downshift came as we increased our exposure to countries beyond Estonia in those same years. A positive trend is building as the total realized net return has increased each consecutive year since 2015. With three more strong quarters in 2017 we should be able to continue the momentum.

2009 2010 2011 2012 2013 2014 2015 2016 2017
Country Actual Actual Actual Actual Actual Actual Actual Target Actual Target Actual Target
EE 16,54% 29,55% 24,43% 23,25% 21,13% 20,86% 18,45% 17,00% 11,22% 13,86% 16,42% 11,22%
ES -9,62% -4,06% 6,50% 17,42% 16,59% 21,48% 35,49% 27,25%
FI 9,56% 8,74% 10,19% 15,50% 19,15% 16,85% 25,98% 17,68%
SK -9,31%
ALL 16,54% 29,55% 24,43% 23,25% 18,54%  11,19% 12,99% 16,57% 18,81% 15,89%  20,92%  14,84%

Monthly origination summary for April 2017

April’s loan origination total of €2,871,397 was slightly less than last month but is mostly in line with the average of the last three months. The concentration of originations is found in the “B” through “D” rated loans. This section of the loans offered total interest rates ranging from 14% to 25% as higher risk ratings generated increasingly aggressive returns.

Loan origination by country

As usual, Estonia continues to lead the group with 74.00% of the total share of originations. Spain and Finland followed at 14.84% and 11.16% respectively. This disproportionate share comes largely from the fact that Estonia has an offering of loans with “AA” through “B” that are nonexistent in the other two countries. Interestingly, Estonia leads by a wide margin even among the “D” rated loans also offered by Finland despite comparable interest rates. Again, part of this difference is likely due to simple supply and demand.

Share by country – April 2017
Country Interest Amount Share
ESTONIA 21.09% 2124762 74,00%
SPAIN 66.89% 426163 14,84%
FINLAND 43.41% 320472 11,16%

Loan origination by rating

Investors continue to seek a balance between risk and reward. For this reason, the “C” rated loans continue to be the most popular at a total share of 25.30%. These origination numbers also represent the development of the average borrower profile.

As marketplace lending grows in popularity there appear to be fewer borrowers with credit profiles exhibiting the strength necessary to earn an “AA” or “A” rating. In other words, lenders can only support the loans that are made available and fewer borrowers exhibit the responsibility of a high-rated loan. This relationship may also explain why the total share of “HR” loans is relatively high at 15.86% making it the fourth largest portion of the total originations.

  • The average “HR” interest rate of 91.01% in Spain and 88.84% in Finland illustrate the higher return investors command for heavier risk.
  • Interest rates among identical loan ratings in different countries are largely similar which illustrates that the country of the borrower doesn’t impact the risk measurement.
  • The total average interest rate among all countries and all ratings is 35.61%.
Share by country and rating – April 2017
ESTONIA SPAIN FINLAND
Rating Interest Amount Share Interest Amount Share Interest Amount Share
AA 10,41% 31090 1,08%
A 11,44% 92067 3,21%
B 14,35% 541811 18,87%
C 18,90% 710744 24,75% 21,58% 15825 0,55%
D 25,14% 466010 16,23% 25,52% 84109 2,93%
E 32,23% 239738 8,35% 35,33% 90741 3,16%
F 35,17% 43302 1,51% 42,76% 46900 1,63% 45,80% 53554 1,87%
HR 91,01% 379263 13,21% 88,84% 76243 2,66%

Bondora portfolio performance – April 2017

Key takeaways

  • Generally, the quarterly realised net return from 2015 to 2016 is on an significant uptrend compared to previous years.
  • Slovakia and Spain underperformed in 2014 with a realised net return of -8.84% and -3.66% respectively.
  • Despite strong performance in 2015 and 2016, the total realised net return for Spain across all periods is low at just 2.93% due to a slow start in 2013 and 2014.
  • In recent years Spain and Finland have experienced continued improvement.
  • Estonia is continuing its stable performance across years while also exceeding target returns each year. Realised returns for 2016 are showing biggest difference yet, exceeding the target by nearly 6 percentage points.

Actual and targeted bondora net returns by grade and country

Estonia

  • Every loan rating has outperformed its target in each quarter of 2016 except the “A” rated loans in Q2.
  • The highest outperformance relative to targeted net return has been seen in the “F” and “HR” rated loans in each quarter of 2016.
  • Loans rated “B” through “HR” have earned double digit net returns for every quarter since 2015.
Estonia AA A B C D E F HR
2015
Q1
Actual 14,61% 13,99% 15,76% 18,67% 20,92% 23,71% 24,99% 23,74%
Target 13,10% 13,84% 14,31% 15,76% 18,47% 20,43% 23,17% 23,51%
2015
Q2
Actual 14,30% 11,40% 15,25% 14,49% 22,17% 17,99% 31,74% 20,66%
Target 13,20% 13,82% 14,29% 15,89% 18,40% 20,46% 23,08% 23,65%
2015
Q3
Actual 15,50% 15,25% 16,19% 17,79% 18,53% 27,50% 28,89% 28,97%
Target 13,18% 13,85% 14,30% 15,79% 18,43% 20,32% 23,19% 23,85%
2015
Q4
Actual 14,03% 15,39% 15,30% 19,41% 20,42% 15,61% 23,87% 29,23%
Target 12,20% 13,17% 13,81% 15,50% 17,59% 18,41% 21,29% 20,83%
2016
Q1
Actual 11,81% 13,43% 15,20% 19,33% 24,15% 26,34% 24,49% 35,93%
Target 10,62% 11,32% 12,09% 14,38% 16,17% 17,51% 18,28% 17,96%
2016
Q2
Actual 9,45% 1,42% 14,10% 15,82% 18,90% 22,66% 29,63% 27,54%
Target 8,15% 9,74% 11,46% 13,62% 15,22% 16,47% 17,05% 17,10%
2016
Q3
Actual 9,66% 11,98% 11,86% 14,79% 19,04% 23,77% 27,71% 29,29%
Target 8,40% 9,77% 11,48% 13,64% 15,22% 16,48% 17,04% 17,10%
2016
Q4
Actual 9,14% 10,47% 12,15% 15,95% 18,88% 26,81% 30,13%
Target 8,21% 8,61% 9,61% 11,10% 12,47% 14,09% 14,94%

Finland

  • The performance of the realised net return compared to the targeted figure has fluctuated since 2015, however, three out of the four quarters in 2016 outperformed their target.
  • Realised net returns have reached the double digits in 7 of the last 8 quarters.
  • “E” and “F” rated loans frequently outperform their targeted figure by the widest margin.
Finland AA A B C D E F HR
2015
Q1
Actual 8,50% 6,59% 7,71% 11,03% 19,64% 42,58%
Target 12,87% 13,33% 14,50% 16,61% 18,15% 20,82%
2015
Q2
Actual 4,27% 9,22% 11,48% 8,62% 5,69% 12,27%
Target 12,88% 13,33% 14,67% 16,67% 18,07% 20,86%
2015
Q3
Actual 1,49% 8,08% 11,66% 14,17% 7,13% 18,02%
Target 12,90% 13,30% 14,70% 16,58% 18,36% 20,81%
2015
Q4
Actual 1,08% 11,39% 15,69% 14,55% 9,16% 25,20%
Target 12,89% 12,80% 14,49% 16,02% 16,86% 18,11%
2016
Q1
Actual 15,10% 12,77% 17,86% 25,75% 22,47% 15,22%
Target 9,87% 11,22% 12,56% 13,44% 14,24% 14,40%
2016
Q2
Actual 16,86% 16,90% 14,97% 22,62% 19,82% 7,47%
Target 12,07% 14,05% 16,17% 17,55% 18,27% 19,19%
2016
Q3
Actual 7,82% 17,30% 15,63% 14,39% 15,10% -1,23%
Target 12,45% 14,34% 16,37% 17,89% 18,91% 19,19%
2016
Q4
Actual -10,93% 18,34% 23,97% 24,96% 30,94% 32,77%
Target 9,90% 11,87% 14,32% 16,37% 20,66% 27,53%

Spain

  • Spain had poor performance in Q2 of 2016 but the other three quarters generated realised net returns in the double digits.
  • “F” loans have outperformed their targeted figures for 3 quarters in 2016.
  • Spain has seen its realised return grow from -9.15% to 17.41% over 4 years of uninterrupted improvement.
Spain AA A B C D E F HR
2015
Q1
Actual -5,13% -7,73% -6,80% 5,97% 10,83% 9,49%
Target 12,62% 12,90% 14,33% 16,21% 18,32% 20,24%
2015
Q2
Actual -13,32% -9,91% 5,04% 11,50% 13,70%
Target 12,85% 14,33% 16,23% 18,32% 20,22%
2015
Q3
Actual 16,04% -6,99% 7,30% 11,78% 3,89%
Target 13,11% 14,55% 16,18% 18,32% 20,31%
2015
Q4
Actual 18,31% -1,07% 6,64% 17,03% 12,94%
Target 13,41% 14,93% 16,24% 17,85% 18,06%
2016
Q1
Actual 37,26% 25,33% 19,60%
Target 14,61% 14,58% 13,93%
2016
Q2
Actual -11,55% 7,66% 2,34%
Target 19,41% 20,16% 20,36%
2016
Q3
Actual 31,14% 26,79% 11,97%
Target 19,30% 20,24% 20,65%
2016
Q4
Actual 37,32% 23,02% 32,28%
Target 16,44% 17,15% 27,79%

Actual and targeted bondora net returns across portfolio per quarter

In each quarter of 2016 we’ve seen the total realised net return outperform the targeted figure. Improvements across all countries have led to realised returns in 2016 that exceed figures for the same periods in 2015. On average, the performance of the realised return was on par with the targeted figure, slightly surpassing it by 0.35 percentage points. However, in 2016 the realised return average across quarters exceeded the average targeted figure by 3.66 percentage points.

2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4
Actual 13,00% 12,10% 13,36% 15,88% 21,24% 16,60% 16,99% 22,89%
Target 16,56% 16,52% 16,79% 16,28% 14,66% 15,64% 16,38% 16,41%

Actual and targeted bondora net returns across previous 8 years

Estonia remains a top performer with each year’s realised return exceeding the targeted figure. Spain had a slow start but we’ve seen continued improvement from one year to the next and are pleased with the general trajectory. This year Finland has outperformed it’s target for the first time. Finally, Slovakia remains a poor performer, however our investors are still benefitting from plenty of good options with the other countries.

2009 2010 2011 2012 2013 2014 2015 2016
Country Actual Actual Actual Actual Actual Target Actual Target Actual Target Actual Target
EE 16,50% 29,53% 24,41% 23,22% 21,31% 18,15% 21,05% 18,16% 18,72% 17,00%  19,60%  13,86%
ES -9,15% 19,26% -3,66% 19,37% 7,10% 17,42%  17,41%  21,48%
FI 9,91% 17,53% 9,14% 15,99% 10,55% 15,50%  19,58%  16,85%
SK -8,84% 23,76%
ALL 16,50% 29,53% 24,41% 23,22% 18,75% 18,11% 11,48% 18,11% 13,35% 16,57%  19,26%  15,89%

Monthly origination summary for March 2017

Loan originations increased over previous month reaching €3,017,555. Much of this month’s originations comes from Estonia which comprises 75.60% of the total. This proportion exceeds the same measurement for January and February of this year. Most of the originations fell on ratings B, C and D which held a combined share of over 60% of all March loan originations.

Loan origination by country

Estonia leads the pack with 75.60% share of the total, followed by Spain at 12.92% and Finland at 11.48%. Part of Estonia’s larger presence comes from “AA” and “A” rated loans which are not offered by Spain or Finland. However, even among “B” through “E” rated loans Estonia is generating more originations. Some of this performance may be the result of a thriving P2P market and greater demand within the country compared to Spain and Finland. March’s figures represent a trend in this regard. Estonia captured 62.98% of the total in January and 70.24% in February.

Share by country – March 2017
Country Interest Amount Share
ESTONIA 20,43% 2281250 75,60%
SPAIN 101,28% 389880 12,92%
FINLAND 51,72% 346425 11,48%

Loan origination by rating

A concentration within “C” rated loans appears to illustrate a drive towards larger returns. This middle ground of risk offers more aggressive returns amid slightly elevated risk. This acceptance of risk steadily drops off moving down the list from “D” to “F” loans. Interestingly, “HR” loans still capture a significant portion of the total (14.70%) as it appears there is a segment committed to seeking outsized returns in exchange for riskier loans.

  • It’s important to remember that investors can only fund the loans that are available. For example, “A” and “AA” rated loans are a much smaller portion relative to “HR” loans. This difference is due, in part, to the characteristics of borrowers in the market.
  • Investors considering “E” “F” and “HR” loans in the Spain and Finland markets appear to choose return over risk.
  • Finland has the most even distribution of originations among ratings. This wide sampling of credit risk represents an equitable distribution of risk and return among investors within the country.
Share by country and rating – March 2017
ESTONIA SPAIN FINLAND
Rating Interest Amount Share Interest Amount Share Interest Amount Share
AA 10,00% 26745 0,89%
A 11,78% 118370 3,92%
B 14,65% 555785 18,42%  17,05%  3720 0,12%
C 19,19% 770125 25,52% 23,95% 39145 1,30%
D 25,35% 462440 15,32% 27,89% 38140 1,26%
E 31,82% 294255 9,75% 37,33% 4270 0,14% 36,34% 75425 2,50%
F 36,11% 53530 1,77% 41,14% 46460 1,54% 46,63% 85570 2,84%
HR 108,87% 339150 11,24% 87,58% 104425 3,46%

Bondora portfolio performance – March 2017

Key takeaways

  • Updated performance data shows a total realised gain of 23,57% for 2016 Q4, carried by Spains and Finlands performance. This exceeds all other quarterly performance totals since 2015.
  • The margin of total outperformance relative to the targeted figure also exceeds all previous quarters dating back to 2015.
  • The latest total realised returns marks a three quarter trend of rising performance.
  • 2016 realised net returns are at a four-year high.

Actual and targeted bondora net returns by grade and country

Estonia

  • In 2016, all ratings exceeded their target returns with the exception of rating A in Q2 of 2016.
  • The “A” through “F” rated loans in Q4 of 2016 all delivered double digit returns offering investors strong income across nearly all risk levels.
  • The average realised net return across all ratings is roughly consistent with previous quarters despite the fact that “HR” loans were not available in Q4 2016.
Estonia AA A B C D E F HR
2015
Q1
Actual 14,60% 13,94% 15,93% 18,82% 21,10% 24,29% 25,30% 23,74%
Target 13,10% 13,84% 14,31% 15,76% 18,47% 20,43% 23,17% 23,51%
2015
Q2
Actual 14,46% 11,29% 15,88% 15,31% 22,53% 18,29% 32,24% 20,81%
Target 13,20% 13,82% 14,29% 15,89% 18,40% 20,46% 23,08% 23,65%
2015
Q3
Actual 15,48% 15,31% 16,29% 17,89% 18,52% 27,92% 29,82% 30,00%
Target 13,18% 13,85% 14,30% 15,79% 18,43% 20,32% 23,19% 23,85%
2015
Q4
Actual 14,13% 15,54% 15,53% 19,41% 20,64% 14,61% 28,00% 29,95%
Target 12,20% 13,17% 13,81% 15,50% 17,59% 18,41% 21,29% 20,83%
2016
Q1
Actual 11,85% 13,36% 15,31% 19,65% 23,99% 26,74% 25,39% 36,43%
Target 10,62% 11,32% 12,09% 14,38% 16,17% 17,51% 18,28% 17,96%
2016
Q2
Actual 9,57% 2,66% 14,06% 15,85% 19,66% 23,47% 30,30% 27,88%
Target 8,15% 9,74% 11,46% 13,62% 15,22% 16,47% 17,05% 17,10%
2016
Q3
Actual 9,75% 11,81% 12,33% 15,20% 19,74% 25,06% 27,16% 29,80%
Target 8,40% 9,77% 11,48% 13,64% 15,22% 16,48% 17,04% 17,10%
2016
Q4
Actual 8,96% 10,48% 11,96% 16,66% 19,11% 27,00% 30,32%
Target 8,22% 8,61% 9,66% 11,16% 12,43% 14,07% 15,04%

Finland

  • On average, E, F and HR rated loans are accelerating their performance growth at a faster rate than all other ratings in the country.
  • D and E rating have been bringing the most stable returns across 2015 and 2016 with the average of nearly 17%.
Finland AA A B C D E F HR
2015
Q1
Actual 8,87% 7,00% 8,33% 11,63% 20,25% 43,25%
Target 12,87% 13,33% 14,50% 16,61% 18,15% 20,82%
2015
Q2
Actual 4,71% 9,83% 12,05% 10,18% 6,09% 12,77%
Target 12,88% 13,33% 14,67% 16,67% 18,07% 20,86%
2015
Q3
Actual 1,66% 8,07% 12,18% 14,51% 7,82% 18,55%
Target 12,90% 13,30% 14,70% 16,58% 18,36% 20,81%
2015
Q4
Actual 1,87% 10,20% 16,12% 15,03% 9,83% 25,59%
Target 12,89% 12,80% 14,49% 16,02% 16,86% 18,11%
2016
Q1
Actual 15,10% 13,14% 18,41% 26,20% 23,17% 17,73%
Target 9,87% 11,22% 12,56% 13,44% 14,24% 14,40%
2016
Q2
Actual 16,79% 16,88% 15,73% 24,00% 21,25% 8,46%
Target 12,07% 14,05% 16,17% 17,55% 18,27% 19,19%
2016
Q3
Actual 7,78% 17,82% 16,92% 15,96% 17,03% 1,39%
Target 12,45% 14,34% 16,37% 17,89% 18,91% 19,19%
2016
Q4
Actual -5,24% 18,07% 25,08% 28,05% 35,77% 31,57%
Target 9,90% 11,75% 14,40% 16,36% 20,85% 27,89%

Spain

  • Each loan outperformed its targeted figure by a wide margin.
  • “HR” rated loans generated their strongest performance dating back to Q1 of 2015.
  • The Q4, 2016 average performance of all Spain loans is greater than any quarter dating back to the start of 2015.
Spain AA A B C D E F HR
2015
Q1
Actual -3,48% -6,87% -6,18% 6,95% 12,33% 10,87%
Target 12,62% 12,90% 14,33% 16,21% 18,32% 20,24%
2015
Q2
Actual -12,37% -8,91% 6,36% 13,08% 14,92%
Target 12,85% 14,33% 16,23% 18,32% 20,22%
2015
Q3
Actual 16,48% -7,04% 8,71% 13,15% 5,53%
Target 13,11% 14,55% 16,18% 18,32% 20,31%
2015
Q4
Actual 19,35% -1,11% 7,58% 18,73% 14,36%
Target 13,41% 14,93% 16,24% 17,85% 18,06%
2016
Q1
Actual 36,87% 27,39% 21,40%
Target 14,61% 14,58% 13,93%
2016
Q2
Actual -5,41% 13,57% 5,36%
Target 19,41% 20,16% 20,36%
2016
Q3
Actual 30,94% 27,39% 17,10%
Target 19,30% 20,24% 20,65%
2016
Q4
Actual 42,19% 24,71% 28,34%
Target 17,61% 17,24% 28,44%

Actual and targeted bondora net returns across portfolio per quarter

The quarterly performance across all ratings has continued to show much better returns in 2016 compared to 2015. For 2015, the the average target figures exceeded the actual returns by 2,45 percentage points, whereas for 2016 the actual returns were higher than the target by 4,4 percentage points on average. Across two past years the actual performance on the portfolio is still on par or slightly exceeding its targets.

2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4
Actual 13,40% 12,80% 13,77% 16,31% 21,72% 17,28% 18,11% 23,57%
Target 16,56% 16,52% 16,79% 16,28% 14,66% 15,64% 16,38% 16,34%

Actual and targeted bondora net returns across previous 8 years

Looking at the returns by yearly vintage, we see that Estonia has delivered above-target returns across all 8 years. Across all years, Spain and Slovakia are showing poorest performance for loans issued in 2013 and 2014 respectively. Still, Spain has significantly improved the returns for the last two years. While Finlands returns before from 2013-2015 has performance under its target, 2016 has seen great improvement by outpacing its target so far.

2009 2010 2011 2012 2013 2014 2015 2016
Country Actual Actual Actual Actual Actual Target Actual Target Actual Target Actual Target
EE 16,45% 29,53% 24,37% 23,17% 21,42% 18,15% 21,19% 18,16% 19,05% 17,00%  20,10%  14,11%
ES -8,58% 19,26% -3,18% 19,37% 7,78% 17,42%  17,83%  20,67%
FI 10,18% 17,53% 9,65% 15,99% 11,10% 15,50%  20,07%  16,63%
SK -8,32% 23,76%
ALL 16,45% 29,53% 24,37% 23,17% 18,90% 18,11% 11,79% 18,11% 13,83% 16,57%  19,75%  15,81%

Monthly origination summary for February 2017

Originations for the month of February dipped since last month as our total reached €2,460,575. However, there was a noticeable increase in the total interest for Finland which came in at 49.99% compared to 45.38% last month. Estonia held steady with a total interest of 20.84% compared to 20.79% last month. Spains interest dropped significantly from 98.01% to 86.34%. The figures for February bring the total interest across all countries to a respectable 34.67%.

Loan origination by country

Estonia’s range of ratings continues to attract investors as the lower risk A, AA, and B rating loans capture 23.51% of the total originations for the month. The popularity of these ratings coupled with the lower total interest rate illustrates investor’s drive for preserving capital. Moreover, a broad use of the “Conservative” Portfolio Manager setting may also explain this trend.

Interestingly, Finland’s share dropped while its total interest grew. It will be interesting to see if the country’s surge from 45.38% last month to 49.99% in February will encourage a greater sharer of the total originations in the future.

Finally, Spain represented the highest level of originations among the E F, and HR ratings. Investors were rewarded for this risk with the high total interest rate of 86.34%.

Share by country – February 2017
Country Interest Amount Share
ESTONIA 20,84% 1728405 70,24%
SPAIN 86,34% 348970 14,18%
FINLAND 49,99% 383200 15,57%

Loan origination by rating

Investors opted for a balance between risk and reward as B and C rated loans represented the two most popular choices as measured by proportion across all countries at 18.97% and 22.23% respectively. Meanwhile higher rated loans carry a smaller portion of the total due to their limited availability.

  • Originations reflected a similar composition to the previous month with most activity concentrated among B through E rated loans which captured 71.06% of the total.
  • F Rated loans continue to be less popular as investors are driven to the decisive action of either a high rating with a lower relative return, or a much lower rating with an aggressive return.
  • HR rated loans continue to represent the third greatest portion of the total at 16.38% across all countries. This activity is centralized in Spain.
Share by country and rating – February 2017
ESTONIA SPAIN FINLAND
Rating Interest Amount Share Interest Amount Share Interest Amount Share
AA 10,16% 25250 1,03%
A 11,69% 86485 3,51%
B 14,30% 466680 18,97%
C 19,32% 522935 21,25% 18,05% 24025 0,98%
D 25,75% 330975 13,45% 28,48% 29510 1,20%
E 31,50% 254795 10,36% 37,33% 2440 0,10% 33,89% 116965 4,75%
F 34,71% 41285 1,68% 43,34% 59105 2,40% 45,72% 97015 3,94%
HR 95,60% 287425 11,68% 81,98% 115685 4,70%

Bondora portfolio performance – February 2017

Key takeaways

  • The latest performance data marks the fifth consecutive quarter of realised net returns exceeding the targeted figure.
  • Estonia continue to deliver the strongest average realised net return of 19,57% since Q1 of 2015.
  • Q4 of 2016 marks the second highest realised net return for all countries (20,53%) since Q1 of 2015 as Spain’s surging performance of 28,22% marks the single highest return for a country in the last eight consecutive quarters.

Actual and targeted bondora net returns by grade and country

Estonia

  • For all of 2016 every rating has outperformed the targeted figure (excluding “A” in Q2).
  • The strongest returns continue to concentrate around the higher risk ratings of “D”, “E” and “F”.
  • The “C” rated loans in the country have outperformed their targeted figure for each quarter of 2016 offering investors a good mid-level solution to the risk/reward balance.
Estonia AA A B C D E F HR
2015
Q1
Actual 14,63% 14,11% 16,05% 18,92% 21,32% 24,56% 25,80% 24,14%
Target 13,10% 13,84% 14,31% 15,76% 18,47% 20,43% 23,17% 23,51%
2015
Q2
Actual 14,50% 11,32% 15,54% 15,39% 22,73% 18,66% 32,56% 21,23%
Target 13,20% 13,82% 14,29% 15,89% 18,40% 20,46% 23,08% 23,65%
2015
Q3
Actual 15,43% 15,35% 16,26% 17,88% 18,67% 28,28% 30,27% 30,45%
Target 13,18% 13,85% 14,30% 15,79% 18,43% 20,32% 23,19% 23,85%
2015
Q4
Actual 14,13% 15,56% 15,70% 19,38% 20,75% 18,04% 27,96% 31,22%
Target 12,20% 13,17% 13,81% 15,50% 17,59% 18,41% 21,29% 20,83%
2016
Q1
Actual 11,71% 13,15% 15,34% 19,64% 24,04% 26,57% 26,37% 34,78%
Target 10,62% 11,32% 12,09% 14,38% 16,17% 17,51% 18,28% 17,96%
2016
Q2
Actual 9,44% 3,01% 14,01% 15,63% 20,04% 23,82% 30,25% 28,27%
Target 8,15% 9,74% 11,46% 13,62% 15,22% 16,47% 17,05% 17,10%
2016
Q3
Actual 9,58% 11,76% 12,27% 15,05% 20,28% 25,01% 27,19% 29,21%
Target 8,40% 9,77% 11,48% 13,64% 15,22% 16,48% 17,04% 17,10%
2016
Q4
Actual 9,13% 10,95% 11,26% 16,35% 18,42% 26,65% 26,11%
Target 8,23% 8,60% 9,76% 11,31% 12,38% 14,27% 15,13%

Finland

  • The “HR” rated loans boosted their performance to our less risk sensitive investors with a realised net return of 23.09%, the best for the rating since 2015.
  • The “E” rated loans exhibited the best performance in both Finland (25.30%) and as the best performer as measured by average return across all countries (31.38%).
  • The “C” rated loans in the country have outperformed their targeted figure for each quarter of 2016 offering investors a good mid-level solution to the risk/reward balance.
Finland AA A B C D E F HR
2015
Q1
Actual 9,25% 7,41% 8,94% 12,07% 20,02% 43,58%
Target 12,87% 13,33% 14,50% 16,61% 18,15% 20,82%
2015
Q2
Actual 4,96% 10,41% 12,33% 10,21% 6,82% 13,30%
Target 12,88% 13,33% 14,67% 16,67% 18,07% 20,86%
2015
Q3
Actual 1,62% 8,36% 13,11% 15,00% 8,16% 19,27%
Target 12,90% 13,30% 14,70% 16,58% 18,36% 20,81%
2015
Q4
Actual 1,84% 10,56% 16,35% 15,18% 10,36% 26,47%
Target 12,89% 12,80% 14,49% 16,02% 16,86% 18,11%
2016
Q1
Actual 14,99% 13,59% 18,73% 26,38% 23,64% 17,71%
Target 9,87% 11,22% 12,56% 13,44% 14,24% 14,40%
2016
Q2
Actual 16,57% 17,50% 16,16% 24,54% 21,51% 10,26%
Target 12,07% 14,05% 16,17% 17,55% 18,27% 19,19%
2016
Q3
Actual 7,69% 17,55% 16,69% 17,03% 17,60% 2,88%
Target 12,45% 14,34% 16,37% 17,89% 18,91% 19,19%
2016
Q4
Actual 2,47% 16,88% 22,57% 25,30% 17,40% 23,09%
Target 9,90% 11,36% 14,04% 15,53% 21,39% 29,22%

Spain

  • Though the country only offer riskier loans the reward has been proportional; the 42.19% performance for “E” loans surpassed all others.
  • Spain reversed the poor performance of Q2 while delivering the highest return for the country over the last two years.
  • Less risky loans are becoming increasingly scarce for those investing in Spain.
Spain AA A B C D E F HR
2015
Q1
Actual -3,48% -6,87% -6,18% 6,95% 12,33% 10,87%
Target 12,62% 12,90% 14,33% 16,21% 18,32% 20,24%
2015
Q2
Actual -12,37% -8,91% 6,36% 13,08% 14,92%
Target 12,85% 14,33% 16,23% 18,32% 20,22%
2015
Q3
Actual 16,48% -7,04% 8,71% 13,15% 5,53%
Target 13,11% 14,55% 16,18% 18,32% 20,31%
2015
Q4
Actual 19,35% -1,11% 7,58% 18,73% 14,36%
Target 13,41% 14,93% 16,24% 17,85% 18,06%
2016
Q1
Actual 36,87% 27,39% 21,40%
Target 14,61% 14,58% 13,93%
2016
Q2
Actual -5,41% 13,57% 5,36%
Target 19,41% 20,16% 20,36%
2016
Q3
Actual 30,94% 27,39% 17,10%
Target 19,30% 20,24% 20,65%
2016
Q4
Actual 42,19% 24,71% 28,34%
Target 17,61% 17,24% 28,44%

Actual and targeted bondora net returns across portfolio per quarter

Since Q4 of 2015 the total performance of all Bondora loans has surpassed the targeted figure. The combined quarterly vintage performances for all countries continue the trend of realised returns surpassing their target since last quarter of 2015. Across all quarters the actual returns putperformed their targets by 1 percentage point.

2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4
Actual 13,76% 13,05% 14,18% 16,74% 21,94% 17,63% 18,60% 20,53%
Target 16,56% 16,52% 16,79% 16,28% 14,66% 15,64% 16,38% 15,77%

Actual and targeted bondora net returns across previous 7 years

All countries show the same trends for realised net returns as those reported a month ago. Estonia’s average returns across the years have slightly increased to 21,97% and have been very stable compared to other countries. While performance of earlier yearly vintages for Spain’s is still poor, the past two years has seen healthy improvement, with average returns 8,35% in 2015 and 17,70% in 2016. Finland’s average returns saw a decrease of nearly 3 percentage points due to the steep drop in loan performance for the 2013 vintage.

2009 2010 2011 2012 2013 2014 2015 2016
Country Actual Actual Actual Actual Actual Target Actual Target Actual Target Actual Target
EE 16,45% 29,49% 24,33% 23,14% 21,66% 18,16% 21,52% 18,15% 19,25% 17,00%  20,24%  14,43%
ES -7,99% 19,26% -2,75% 19,37% 8,35% 17,42%  17,70%  19,80%
FI 10,53% 17,53% 9,95% 15,99% 11,51% 15,50%  19,31%  15,97%
SK -7,84% 23,76%
ALL 16,45% 29,49% 24,33% 23,14% 19,05% 18,11% 12,04% 18,11% 14,18% 16,57%  19,64%  15,66%

Monthly origination summary for January 2017

January was a strong month for originations. Bondora issued €3,233,045 in new loans as we came within €105,525 of matching our all-time record high. “C” Rated loans comprised the greatest share at 23,57% of the total. “E” and “HR” rated loans represented the next largest category at 16,55% and 17,09% respectively. As the world of marketplace lending continues to develop, more investors are becoming confident in the technology.

Loan origination by country

Estonia continues to lead in originations capturing 62,98% of the total. Finland and Spain earned 24,22% and 12,80% respectively. Estonia remains popular with investors due to its diversity among ratings. This is the only country to offer opportunities across nearly all ratings from “A” to “F.” The numbers for January represent an increase in Estonia’s share compared to December of 2016 where the country picked up 50% of originations.

Share by country – January 2017
Country Interest Amount Share
ESTONIA 20,79% 2036225 62,98%
SPAIN 98,01% 413735 12,80%
FINLAND 45,38% 783085 24,22%

Loan origination by rating

The “A” and “AA” rated loans together represent 4,88% of all originations. As we discussed in a recent post, many conservative investors have asked why more of their investments have not gone to these lower risk borrowers. The figures for January show that the popularity of higher rated loans means there are fewer opportunities to share among investors.

  • The higher risk “HR” loans continue to deliver outsized interest in return for the higher chance of default or missed payments. Spain and Finland’s “HR” loans offered strong returns of 105% and 73% respectively. The next highest opportunity for earning power was Finland’s “F” rated loan at 48%.
  • The weighted average return across the “A” through “B” rated loans in Estonia was 13,71%. This is slightly lower than the same measurement in December of 2016 where the return reached 13,85%. January’s figure still represents a respectable return for lower risk.
  • The interest of 25,80% on Estonia’s “D” rated loans crept up over the 25,40% investors earned for the same segment of the market in December of 2016.
Share by country and rating – January 2017
ESTONIA SPAIN FINLAND
Rating Interest Amount Share Interest Amount Share Interest Amount Share
AA 10,62% 38000 1,18%
A 11,40% 119625 3,70%
B 14,33% 444280 13,74%  21,87%  850  0,03%
C 18,99% 716145 22,15% 19,97% 46060 1,42%
D 25,80% 371775 11,50% 29,07% 126640 3,92%
E 31,33% 308765 9,55% 33,83% 8775 0,27% 35,19% 226310 7,00%
F 35,38% 37635 1,16% 41,54% 37595 1,16% 48,19% 198080 6,13%
HR 105,32% 367365 11,36% 73,12% 185145 5,73%