littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Jan 22, 2017 12:07:10 GMT
Pasted from their site (my bold):
"Loan Book To Date
Together, our lenders have funded loans valued at £176,867,500 over 289 loans.
Around 24% of that has been funded in the last 3 months and 52% in the last 12 months.
So far, our lenders have earned approximately £14,900,000 in interest since April 2013 (when we started lending), including £866,000 of interest recovered from loans that have defaulted.
Defaulted Loans Recovered
We have completed the recovery of 9 loans to date, recovering £5,670,000 of capital and £372,000 of interest due after the loan defaulted.
That is 100.00% of capital and 100.00%* of interest recovered on these first 9 loans.
*Lenders agreed to reduce default interest on one loan.
Defaulted Loans Being Recovered
We are working to recover monies on a further 15 loans.
We expect to recover £7,265,500 of capital and £494,000 of interest that has accrued after the loans defaulted."
Now I assume that the £866,000 is the sum of £372,000 and £494,000. If so there seems to be a discrepancy between the words 'recovered' and 'expect'. Or am I missing something?
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oldgrumpy
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Post by oldgrumpy on Jan 22, 2017 12:37:01 GMT
I think it's AC who have missed something, and that they will correct the section "including £866,000 of interest recovered from loans that have defaulted" which has been carelessly written.
I am also mindful that my largest loss on p2p is highly likely on AC (Plumber) and there is also Optical lensman on which I do not expect much more. Others are stuck in much bigger loan defaults still to be finalised, and I note that AC choose to highlight the £7,265,500 capital and interest from defaulted loans and accrued interest they expect to recover, but find it inconvenient to mention any estimated figures from other outstanding defaults in which they do not expect recovery of full capital or accrued interest (and have already indicated so to us).
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Liz
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Post by Liz on Jan 22, 2017 13:20:14 GMT
It's about time that we got some real statistics on defaults and recoveries from all of the p2p sites, figures that were agreed upon by the sites and easily comparable.
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mikes1531
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Post by mikes1531 on Jan 22, 2017 21:21:54 GMT
Defaulted Loans Being Recovered We are working to recover monies on a further 15 loans. We expect to recover £7,265,500 of capital and £494,000 of interest that has accrued after the loans defaulted." I am also mindful that my largest loss on p2p is highly likely on AC (Plumber) and there is also Optical lensman on which I do not expect much more. Others are stuck in much bigger loan defaults still to be finalised, and I note that AC choose to highlight the £7,265,500 capital and interest from defaulted loans and accrued interest they expect to recover, but find it inconvenient to mention any estimated figures from other outstanding defaults in which they do not expect recovery of full capital or accrued interest (and have already indicated so to us). The AC statement quoted by LOL is not the least bit clear to me. ISTM that oldgrumpy has interpreted it to mean the £7M of capital expected to be recovered is full recovery on some loans and that AC haven't said anything about other defaulted loans where AC don't expect full recovery. When I read it, I interpreted it to say that the £7M was the capital expected to be recovered on all unresolved defaulted loans, so the number I thought AC had found inconvenient to supply was the total face amount of the defaulted loans. I.e. do AC expect to recover £7M out of £7M, or £7M out of £10M, or £7M out of £20M, or £7M out of £50M, or...? Perhaps andrewholgate could persuade someone to make these AC statements clearer.
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Post by andrewholgate on Jan 23, 2017 9:02:58 GMT
mikes1531 . My interpretation is AC have a current loan default notional of £8,624,734 (£7,265,500+£1,359,234) of which they forecast a recovery of £7,265,500 and a loss of £1,359,234. They have already recovered principal on £5,670,000 of loans. So their forecast recovery rate on the impaired loans in their historic portfolio is 90.5% [1.359mm/(5.67mm+8.624mm)] As a side note, AC state that their expected LGD (loss given default) is 0.31%. Given their forecast default rate is 6.25% that implies a recovery rate of 95%, which, while marginally better than their current portfolio forecast, is not miles away either. A 95% recovery rate is the average recovery rate for a senior secured bank portfolio (taking say a typical historic data-set from a major rating agency such as Moody's or S&P). Personally, I'm skeptical that the AC loan portfolio is of the same quality as a bank portfolio but it's not an unreasonable starting point for a forecast. AC are skewing their LGDs lower by not calculating LGDs based on PV(recovery), where the present value is discounted at the coupon rate; they just use notional recovery. Assuming a 2 year recovery lag, at 10% loan recovering at 95%, PV(recovery)= 78%, pushing the LGD to a more useful 1.375%. Nonetheless, still have to give AC credit for having the guts to put at least some sort of forecast LGD numbers on paper. Interesting assumptions on how we calculate LGD. However, thanks for the credit.
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Liz
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Post by Liz on Jan 23, 2017 20:37:37 GMT
mikes1531 . My interpretation is AC have a current loan default notional of £8,624,734 (£7,265,500+£1,359,234) of which they forecast a recovery of £7,265,500 and a loss of £1,359,234. They have already recovered principal on £5,670,000 of loans. So their forecast recovery rate on the impaired loans in their historic portfolio is 90.5% [1.359mm/(5.67mm+8.624mm)] As a side note, AC state that their expected LGD (loss given default) is 0.31%. Given their forecast default rate is 6.25% that implies a recovery rate of 95%, which, while marginally better than their current portfolio forecast, is not miles away either. A 95% recovery rate is the average recovery rate for a senior secured bank portfolio (taking say a typical historic data-set from a major rating agency such as Moody's or S&P). Personally, I'm skeptical that the AC loan portfolio is of the same quality as a bank portfolio but it's not an unreasonable starting point for a forecast. AC are skewing their LGDs lower by not calculating LGDs based on PV(recovery), where the present value is discounted at the coupon rate; they just use notional recovery. Assuming a 2 year recovery lag, at 10% loan recovering at 95%, PV(recovery)= 78%, pushing the LGD to a more useful 1.375%. Nonetheless, still have to give AC credit for having the guts to put at least some sort of forecast LGD numbers on paper. I wonder how that compare to Thincats. My experience of TC recoveries is that they are dire.
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tomtom
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Post by tomtom on Mar 3, 2017 20:56:19 GMT
End of tax year is now just 4 weeks away and would like some advice regarding the two loans which I have on this site where the receiver has been appointed, Am I correct is my assumption that i can claim relief on my interest gains by off setting the capital invested in these two loans for this tax year, and in the event of the capital being repaid ay later date include that capital in my income for the year capital is repaid?
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Post by GSV3MIaC on Mar 4, 2017 12:18:46 GMT
/mod hat off
/not financial or tax advice
My take (which I am applying to myself, on several platforms) is approximately 'yes', although it'd be nice if the platform(s) showed it as a 'loss' on some official documentation.
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tomtom
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Post by tomtom on Mar 4, 2017 13:11:29 GMT
/mod hat off /not financial or tax advice My take (which I am applying to myself, on several platforms) is approximately 'yes', although it'd be nice if the platform(s) showed it as a 'loss' on some official documentation. thanks for your reply, just pity you could not clain "capital loss" x 20% , assuming you are paying tax at 20%.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Mar 4, 2017 16:20:01 GMT
End of tax year is now just 4 weeks away and would like some advice regarding the two loans which I have on this site where the receiver has been appointed, Am I correct is my assumption that i can claim relief on my interest gains by off setting the capital invested in these two loans for this tax year, and in the event of the capital being repaid ay later date include that capital in my income for the year capital is repaid? My understanding of tax law is that you can, but I would strongly advise to submit the same data as the platform does. If they report the loss then you can do so without worry. But if you submit different figures you might provoke investigations into your affairs which will be burdensome even if they are spotless. Personally I would rather wait a year for the allowance if necessary.
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pikestaff
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Post by pikestaff on Mar 4, 2017 17:08:27 GMT
mikes1531 . My interpretation is AC have a current loan default notional of £8,624,734 (£7,265,500+£1,359,234) of which they forecast a recovery of £7,265,500 and a loss of £1,359,234. They have already recovered principal on £5,670,000 of loans. So their forecast recovery rate on the impaired loans in their historic portfolio is 90.5% [1.359mm/(5.67mm+8.624mm)] As a side note, AC state that their expected LGD (loss given default) is 0.31%. Given their forecast default rate is 6.25% that implies a recovery rate of 95%, which, while marginally better than their current portfolio forecast, is not miles away either. A 95% recovery rate is the average recovery rate for a senior secured bank portfolio (taking say a typical historic data-set from a major rating agency such as Moody's or S&P). Personally, I'm skeptical that the AC loan portfolio is of the same quality as a bank portfolio but it's not an unreasonable starting point for a forecast. AC are skewing their LGDs lower by not calculating LGDs based on PV(recovery), where the present value is discounted at the coupon rate; they just use notional recovery. Assuming a 2 year recovery lag, at 10% loan recovering at 95%, PV(recovery)= 78%, pushing the LGD to a more useful 1.375%. Nonetheless, still have to give AC credit for having the guts to put at least some sort of forecast LGD numbers on paper. I wonder how that compare to Thincats. My experience of TC recoveries is that they are dire. Sorry for the late post, I've only just seen this. AC's portfolio is very different from TC's and you need to take the different mix into account. I don't recall TC yet having had a loss on a property loan. Like for like, the default rate on my loans to ordinary businesses is significantly higher on AC than on TC and the recovery rate is similar, albeit on a small sample. Having said that, my worse experience on AC is possibly because I was less selective. Lesson learned. If I think a loan is not good enough to risk TC's minimum of £1k I should not touch it at all. I would add that historical information on both platforms may be of little relevance as both have tightened their underwriting criteria and there have been significant changes in process at TC.
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Post by andrewholgate on Mar 6, 2017 9:33:17 GMT
I will add one thing. No loan written after 31 December 2014 has suffered a loss. and the number of defaults from that date forwards is very low.
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ton27
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Post by ton27 on Mar 7, 2017 20:58:17 GMT
...and I would add something more - the rates on AC are generally much lower than on TC so they cannot afford too many defaults. This is not posted so much as a criticism, as an observation as I retain quite a large portfolio in both.
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Post by cyrilmadrid on May 8, 2017 17:09:59 GMT
I can share some stats on my book that I computed over the week end:
* of 370 loans I invested in in AC since 2014: 15 have a credit event, 35 have either a credit or monitoring event
* in terms of invested money, the loans with credit events represent 13% of my Manual account, 0 % of GBB or GRE
* aggregating all my accounts, it is 6.6% of my money which is under a credit event
* therefore, if I consider a 50 % loss given default, that would mean a 3.3 % expect loss
* including loans with monitoring events, the percentage of loans which have a credit status which is not OK are 28 % in the Manual account, 1.8 % for GBB
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