European lender Bondora notes that the secondary market ended 2021 with a relatively slow December.
Bondora writes in an update, dated January 4, 2021, that after picking up slightly again in November, Secondary Market transactions “fell to €250,404” in December 2021.
According to Bondora, this is somewhat similar to what they saw happening in December 2020, perhaps “indicating a longer-term trend of investors opting not to buy and sell loans in December actively?”
Despite the decline, Manual transactions “shined with increases,” the update revealed.
In contrast to November, the API and Portfolio Manager transactions “decreased, and Manual transactions increased.” The update also mentioned that the latter “increased by 25.9%, while the API activity decreased by 26.9%, and Portfolio Manager transactions declined by 39.3%.”
Manual transactions “retain the highest value, totaling €159,723 in transactions,” the report noted while adding that in total, Secondary Market transactions “declined by 2.6%.”
Current loans
Once again, current loan transactions “made up most of all transactions, with €164,116,” the team at Bondora wrote in a blog post.
They added that Manual transactions had “the overwhelming majority, with a 51.3% share. They’re followed by the API (35.1%) and Portfolio Manager (13.6%).”
In contrast to November, transactions “done at par were the most popular, making up 48.7% of all transactions,” the report added while noting that loans “sold at a premium were close, coming in with 42.4%.”
Overdue loans
In December, Secondary Market overdue loan transactions “totaled €35,311—up 38.9% from the previous month, jumping back to numbers similar in October.”
This increase “mainly comes from overdue loan transactions at a discount, increasing by a whopping 202.0%,” the update noted while adding that transactions at par “declined by 53.2%, while transactions at premium remained very similar to those in November, increasing only 4.6%.”
The Bondora team also mentioned that Manual transactions “had a massive increase in the discount department, nearly doubling from €15,695 transactions in November to €27,117 in December.” Meanwhile, API transactions had “a slight downward trend, declining by 15.7%.”
Defaulted loans
Once again, defaulted loan transactions “increased, this time by 60.8%.” In December, defaulted loan transactions “at a discount took over, increasing by 145.5%. In contrast to November, transactions at par fell by 97.8% to €292.7.” The report also mentioned that transactions at premium “skyrocketed from €60’s worth of transactions in November to €5,510 in December.”
Manual transactions “increased impressively by 45.5%, while API transactions held steady with a slight 5,0% increase,” the update revealed.
Secondary Market ends off 2021 at a slow pace
The report concluded
“2021 was a slow year for the Secondary Market, with regular ups and downs in activity but ending lower than one year ago. This is no coincidence, as more investors opt for the hands-free Go & Grow investment method rather than buying and selling on the Secondary Market themselves. But one relatively consistent thing is that manual transactions have been the category with the highest value of transactions, throughout the year, except for August.”