Monthly origination summary for June 2017

June’s originations came in at €2,778,332, outpacing the months of February and May, although the total was below the monthly average for 2017 of €2,845,226. Just over half of this total came from loans rated in the “B,” “C,” and “D” range. However, there was something of a polarizing effect with regard to risk. The second highest portion of the months total originations came from “HR” loans, exhibiting the greatest risk. “C” rated loans took the greatest share at 21.14% of the total.

Loan origination by country

As expected Estonia carries the largest portion of the total at 67.56%. However, this is a definitive drop from last month when the country took in 77.44% of the total. Spain was second with an 18.57% share of June’s originations followed by Finland at 13.88%. Both figures are clear increases over May. This may be the start of an equalizing trend where originations are more evenly distributed across regions.

Share by country – June 2017
Country Interest Amount Share
ESTONIA 20.74% 1876925 67.56%
SPAIN 95.81% 515814 18.57%
FINLAND 50.24% 385593 13.88%

Loan origination by rating

There was little or no consistency among loans by rating. There were only three common ratings among the originations in each country, “D,” “E,” and “F” which, among this group, dominated in Estonia, Finland and Spain respectively. Originations seem to be driven more by what’s available rather than pure investor risk tolerance.

  • “AA,” and “A” rated loans were the two lowest groups stemming, likely, from lower availability.
  • Both Spain and Finland saw loan originations also from less risky ratings than usual – “D” and “E” rated loans for Spain, “AA,” “A,” and “B” rated loans from Finland.
  • Interestingly, “HR” loans in Finland represent the highest portion despite a wide range of options. This metric may signal a more flexible approach to risk by investors.
  • “AA,” “A,” and “B” loans together represent 25.94% of originations whereas “HR” and “F” loans together hold 26.34% of the total. Again, it seem investor’s drive towards return is more influential than their concern with the risk of a higher default.
Share by country and rating – June 2017
ESTONIA SPAIN FINLAND
Rating Interest Amount Share Interest Amount Share Interest Amount Share
AA 10.20% 77799 2.80% 8.47% 2650 0.10%
A 11.66% 149217 5.37% 11.27% 5840 0.21%
B 14.57% 468695 16.87% 16.60% 16590 0.60%
C 20.13% 545595 19.64% 22.12% 41642 1.50%
D 26.25% 372867 13.42% 29.40% 7872 0.28% 25.12% 41327 1.49%
E 33.09% 219303 7.89% 38.48% 21920 0.79% 35.25% 75155 2.71%
F 35.17% 43449 1.56% 48.79% 67300 2.42% 48.91% 62458 2.25%
HR 107.62% 418722 15.07% 80.89% 139931 5.04%