European P2P Lending Platform Bondora Reports 2021 Return Rates Zooming Past Targets

The team at European P2P lender Bondora reports that 2021 return rates have been zooming past their targets.

As noted by Bondora in a blog post dated June 28, 2021, investment returns on platform originations showed “signs of positive growth” during the month of May 2021. The company also noted that the “return rate for 2021 was higher this month than in April” and this may be considered  “a great sign for investors as we move into the summer months.”

Bondora also noted that country-specific performance has been broken down by the “number of loan issuances over the given period” (in their latest market update).

As noted by the company, the yearly return rate for 2021 “came in at 16.4%.” This is reportedly 1.3% “higher than in April.” This growth spurt was “led by Estonian originations, which returned 18.1% compared to 16.7% last month” and Finnish returns “also increased, totaling 7.7% compared to the lower 6.7% in April,” Bondora revealed in its report.

The company pointed out that even though the 2020 return rate fell, “it still came in at 17.2%, which is 4.8% higher than its target rate.” Meanwhile, Estonian originations “proved to be the strongest here and fell only 0.1% to 21.0% in total.”

The Bondora team further revealed:

“The last two quarters showed a boost in returns for investors. 2021 Q1 returns came in at 16.4% compared to 15.1% last month, while 2020 Q4 returns totaled 21.1% in May, up 0.1% from the month prior. Still, all quarterly return rates for 2020 remain above their target rates.”

While commenting on Finland markets, the company also noted that “the most recent quarter’s D-rated originations saw their returns jump above their target rate, ending the month at 7.7%, a full 1.0% month-over-month gain.” For 2020 Q4, “both C-rated (7.7%) and D-rated (8.3%) originations were higher than last month as well,” the company added.

Going on to share stats from Estonia, Bondora revealed that “all 5 rating categories of Estonian originations in 2021 Q1 were not only higher than their target rate but grew month-over-month compared to April:” Additionally, the company pointed out that 2020 Q4 returns “were also quite positive, with B- and C-rated loans higher on the month.”

For Spain, 2020 Q1 — “the most recent quarter where Spanish loans were originated — return rates predictably fell by about 1% across all five rating categories.” But F- and HR-rated originations still managed to return higher than their target rate, “coming in at 18.1% and 23.5%, respectively.” The same trend can be seen “in the previous few quarters,” the company noted while adding that “one thing that stands out is that D-rated originations from 2019 Q3 turned in a negative return rate, at -0.5% in May.”

Here are the main takeaways from Bondora’s report:

  • While return rates generally trend downward over time, May “ended with a return rate 1.3% higher than in April”
  • The two most recent quarters, 2021 Q1 and 2020 Q4 “saw an increase in return rates”
  • Estonian originations led the charge, “higher in all five originating categories and up a cumulative 1.4% month-over-month”
  • Lower-rated Spanish originations (F and HR-Rated) are “still returning above their target rates”
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