JamesFrance
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Port Grimaud 1974
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Post by JamesFrance on Sept 28, 2015 8:05:47 GMT
There has been much discussion on the Bondora forum about their claimed ROI figures. According to them their average return has so far been 18.59%. Many of us think this is a misleading way of assessing the performance of their loans as the default rate has been very high for over a year now, as you can see from the graph, the dark red loans having already defaulted.  Bondora have explained their method of calculation in a blog post www.bondora.com/blog/gross-profits-earned-by-investors-on-bondora/Do you think that they are showing a true picture of their returns and does this comply with FCA requirements? |
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jimbob
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Post by jimbob on Sept 28, 2015 8:30:48 GMT
Hmm - I'm using an excel spreadsheet and a whole bunch of PMT, IPMT etc calculations. Also noting when deposits go off to various P2P companies as I'm 'losing' 1.89+Base on that cash (It's my personal borrowing rate)... so far my ROI is an annualised 700%, but that's because I'm about 6 days in and includes a couple of promotions.
"Overdue Principal REPAYMENTS"... I'd have thought whole principal + recoveries would be more appropriate.
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james
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Post by james on Sept 28, 2015 13:43:46 GMT
Do you think that they are showing a true picture of their returns and does this comply with FCA requirements? It's true but misleading and not fair. True because the numbers given are presumably all accurate. Not fair and misleading because of the way it assumes that all future capital payments will be made for defaulted loans instead of deducting that from the claimed gross profit until there has been recovery, if ever. Also because the recent loans that have had little time to default reduce the apparent value of defaults. Borrowers who have been around or a while presumably know enough not to believe any lending numbers which pretend that the whole capital of a defaulted loan has not been lost until there is recovery or some estimated recovery level for it. Those who are new to P2P are potential suckers who may believe it's a real reflection of how much money an be made. I still have a positive return after deducting the full capital of all defaulted loans and adding any recovered capital but that is helped a lot by only ever lending to Estonian borrowers. The calculation doesn't comply with HMRC requirements for defaults, which for each tax year has the value of capital at default deducted from the combined interest income and capital recovered after default to get the taxable income for the tax year.
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JamesFrance
Member of DD Central
Port Grimaud 1974
Posts: 1,317
Likes: 893
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Post by JamesFrance on Sept 28, 2015 15:23:47 GMT
I just realised that they are referring to Gross Profit which they say has been earned by investors of 6,133,330€.
If you deduct the total unrecovered defaulted amount from that you would arrive at a negative figure for Net Profit.
Maybe that is what they mean.
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