European P2P Lender Bondora Reports 2021 Return Rates Still Staying Above Target

The team at European P2P lending service provider Bondora notes that while return rates on their platform originations declined in June when compared to figures from May 2021, returns over the most recent few years “were still above their target rates.”

The Bondora team has shared some takeaways from their new report:

  • The return rate for 2021 Bondora originations “remains above target”
  • The first return numbers for Finnish originations in Q2 2021 are “below their target rate”
  • A and AA-rated Estonian originations “returned for the first time in four quarters in Q2”
  • Q1 2021 Estonian origination return rates “grew across all five rating categories for the second month”

The return rate for 2021 originations came in “at 15.1%, down 1.3% from the previous month,” Bondora’s management writes in a blog post. However these numbers are still well “above the 9.9% target rate.”

The update from the P2P lending platform also mentioned that Estonian originations continue “to have a significantly higher rate of return (17.3%) than their Finnish counterparts (6.9%).” Meanwhile, returns for 2020 originations “were only 0.2% lower on the month, down to 17.0%,” the report revealed.

The Bondora team added that the first reported quarterly return rate for 2021 Q2 stood at 11.3%, compared “to a 9.6% target rate.” Notably, 2021 Q1 originations had “a higher return rate, coming in at 17.0% in June compared to 16.4% in May,” the report revealed while pointing out that 2020 Q4 and Q3 return rates were unchanged MoM, while the returns for the first two quarters of 2020 were “down on the month, but only slightly.”

As stated in the report:

“Once again, in 2021 Q2, only D-rated loans were originated in Finland. However, returns for the most recent quarter of originations are already below their target rate, returning 5.4% against a target of 6.9%. This is contrary to the previous quarter’s returns, which remain 1.5% above target.”

The report added:

“There were a few changes to Estonian loan originations in June. Both A and AA-rated loans originated for the first time since Q2 2020. In fact, both categories originated more loans now than during that time. However, the return rates on these originations (-0.9% and 0.1% respectively) were well below their target rates.”

Meanwhile, 2021 Q1 originations saw their return rates “grow across the board for the second consecutive month, a trend that is highly unusual but welcome for Bondora investors,” the report noted.

It also mentioned that all five originating categories of Spanish loans for 2020 Q1 “were slightly lower on the month.” Return rates for F and HR-rated loans “remain above their target rates at 17.2% and 22.4% respectively,” the report revealed. It further noted that when going back several quarters, F and HR-rated loans have “performed much better than C, D, and E-rated loans, as compared to their target rates.”

The report from Bondora concluded:

“Return rate originations are lower in June compared to May. But despite this, return rates for the last couple of years are still outperforming their target rates. This indicates sustainable growth for the Bondora platform.”

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