The usual trend for portfolio returns is to decline over time as more origination payments are missed slightly. However, in November, Bondora portfolio returns wholly bucked this trend and were higher across the board compared to October. This was led by significant rises in Spanish originations’ return rates, even as Estonian originations saw their returns decline.
As always, country-specific performance charts are broken down by the number of loan issuances over the given period, with Orange representing < 50 loans, Blue 51-200, and White > 200.
The overall 2020 returns grew from 17.5% to 17.9% in November, which is now more than 5% higher than the target rate of 12.8%. Returns going back for the past five years were also higher. The yearly return rate that saw the most significant increase was 2019, which came in at 19.2%, which is 3.1% higher than in October.
Gains for 2020 can be attributed mostly to Spain’s originations, where the return was 25.5% this month compared to 20.8% a month ago. Finnish returns also grew by 1.1% to 13.1%. In contrast, the yearly return for Estonian originations decreased by 1.3% to 18.6% in November.
Both Q1 and Q2 of the current year had a return rate of 17.9%. This represents a 7.6% drop in returns for Q2 and a 1.2% increase for Q1. Quarterly return rates were above their target estimates for every quarter dating back to, and including, 2018 Q3. Q2 2019 had the best return rate with 23%—a whopping 8.1% above target.
Returns for E-rated Finnish loans in Q1 2020 grew to 14.1%, putting them slightly higher than their target rate. The same can be said for similar originations in 2019 Q3, which had a 14.5% return rate. Returns for C-rated originations also were higher, up to 5.5%, but still below their 9.5% target rate. C-rated originations had a higher return rate for the past six consecutive quarters, the highest rate of which was 13.8% in Q3 2019.
2020 Q2 return rates for Estonian originations were lower across the board for Q2 2020. Still, only A-rated originations returned lower than their target rate. F-rated originations’ returns were the highest above their target at 28.7%. For Q1, A-rated originations (9.5%) and F-rated originations (21.9%) were higher than in October. The remaining origination categories, however, were lower than the previous month.
The last originated loans from Spain remain from Q1 2020. And yet, returns for those most recent originations were higher in every rating category. F-rated loans were 14.9% higher than their target rate, and HR-rated loans were 15.0% higher than their target rate for Q1 2020. The only previous negative rate of return in the last three years — E-rated originations in 2019 Q1 — turned positive, going from -2.0% to 0.6% in November.
- Yearly returns for the past five years were higher in November.
- Quarterly return rates for the most recent two quarters were both 17.9%.
- Spanish returns had the most significant change, with a 25.5% return rate for 2020.
- After rising last month, Estonian returns were lower across the board.