The 2020 Portfolio Performance Rises

Market & Pricing

After holding steady at 17.4% for two consecutive months, the 2020 return rate for originations increased ever so slightly to 17.5% in March. All told, return rates across the board were in line with last month, displaying another month of consistency for returns on Bondora.

 The 2020 Portfolio Performance rises.
 The 2020 Portfolio Performance rises.

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.

Yearly performance

The rise in the 2020 return rate was due to Estonian originations, which saw their returns grow from 20.8% to 21.0% in March. In comparison, Spanish (15.5%) and Finnish (9.8%) return rates fell over the month.

Besides the rise in the overall interest rate for 2020, interest rates either held steady or fell slightly in March. The changes to yearly returns compared to the previous month were as follows:

  • 2020: +0.1%
  • 2019: -0.3%
  • 2018: -0.3%
  • 2017: -0.1%
  • 2016: -0.2%
  • 2015: 0%
Yearly performance – March 2021
Yearly performance– March 2021

Quarterly performance

Returns for the most recent three quarters were higher in March. 2020 Q3 had the highest return rate with 27.9%. All 2020 quarterly return rates remained higher than their target rates. The most recent quarter (2020 Q4) was 9.5% higher than its 11.1% target rate. When looking at the 12 most recent quarters, dating back to 2018, 9 quarters have had double-digit return rates.

Quarterly performance – March 2021
Quarterly performance – March 2021

Finland

Return rates for both C- and D-rated Finnish loans were higher in March, although they were still below their target rates. C-rated loans came in with a 6.6% return, which was 1.9% higher than last month. D-rated loans had a 6.7% rate of return—up from 5.4% in February. On the flipside, returns for 2020 Q1 were lower, with C-rated loans coming in at 3.8% and E-rated loans at 10.6%.

Finland portfolio performance – March 2021
Finland portfolio performance – March 2021

Estonia

For the second consecutive month, all the return rates for 2020 Q4 continued to grow and exceed their target rates. In fact, the same can be said of 2020 Q3, which also saw a rise in returns from all origination categories. E-rated originations still had the highest return rate in 2020 Q4. It increased from 29.4% in February to 30.5% in March. At 14.4%, B-rated loans had the lowest return rate. However, despite it having the lowest return rate, it still manages to outperform its target rate of 9.7%.

Estonia portfolio performance – March 2021
Estonia portfolio performance – March 2021

Spain

Once again, Spanish originations represented the group’s outlier, with return rates falling across the board for 2020 Q1 originations. This month, HR-rated loans saw the most significant decline in returns, dropping 2.1% to 25.0%.

Spain portfolio performance – March 2021
Spain portfolio performance – March 2021

Key takeaways

  • 2020’s origination return rate was 17.5%, which was slightly higher than February’s.
  • Return rates for the most recent 3 quarters grew month-over-month.
  • Originations in 9 out of the most recent 12 quarters have double-digit return rates.
  • Overall, Finnish and Estonian originations had higher return rates, while Spanish originations’ rates were lower across the board.