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Post by alazon on Nov 1, 2017 11:13:22 GMT
| Year Jan-Dec | Number of loans acquired | Number of defaults on these loans | Defaults as % of loans | Average lost on defaulted loans | | (start 16/03/2007) | 121 | None | - | - | | 2008 | 177 | 7 | 4 | 46% | | 2009 | 170 | 6 | 3.5 | 36% | | 2010 | 236 | 6 | 2.5 | 51% | | 2011 | 185 | 3 | 1.6 | 14% | | 2012 | 382 | 10 | 3 | 68% | | 2013 | 1400 | 10 | 0.7 | 38% | | 2014 | 1466 | 6 | 0.4 | 38% | | 2015 | 2230 | 10 | 0.4 | 59% | | 2016 | 3449 | 121 | 3.5 | 88% | | 2017 | 3869 | 78 | 1.9 | 94% |
Average income so far this year (since Jan) is 5.15%. And, since January 2017, 30.84% of that income had been swallowed by defaults. Reducing my ROI to 2.39%. Substantially less than advertised. I think there will be more than a few disappointed faces next April when the annual income statement appears. One thing that’s making me a little jittery is the increasing loss on defaults. Since 2015 the average amount lost per defaulted loan has climbed from 59% to 94%. Last summer I spent a happy 30 minutes ear-bashing the luckless guy on the Zopa phone. The main thrust was along the lines of, “Why are losing so much of MY money?” The general response felt like it was from a script (we kept going round in circles), but at one point he told me that (I paraphrase) my account was returning above average and therefore I shouldn’t complain as I was doing much better that some others. WHAT! You mean there are investors loosing more than me? Silence prior to the start of the circular conversation – again. So, should I go or should I stay. This declining performance coupled with the incompetent IT department is enough to give me doubts (sorry guys, it was working fine, you rolled out new systems and now it's generally screwed and you don't seem to be able to fix it, or seem to have tested it adequately before deploying, or seem to be able to roll it back). Plus I have grave misgivings about the new algorithms proposed by the microbiologist in charge of these things. I would have though someone from the finance sector would have been more appropriate. But that’s just me, another (sort of) microbiologist. Attachments:
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Post by BrianC on Nov 1, 2017 12:34:28 GMT
Zopa is broke. The inventor and innovator of P2P is dead. Much better platforms out there now.
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r00lish67
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Post by r00lish67 on Nov 1, 2017 12:44:01 GMT
I'm afraid your chappy on the phone's claim was correct, there are investors that have done worse. My Calendar YTD net earnings are -2.2% so far, and my tax year to date -3.8%. As I've advised them in a recent complaint, for an auto-diversified product in a relatively benign economic climate this is an appalling level of performance.
Edit: Wonder what ill-advised comment I'd get it if I called in? "Some people don't have any savings at all, you should count yourself lucky.."
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ashtondav
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Post by ashtondav on Nov 1, 2017 13:09:32 GMT
Average of about £60,000 invested. This month's interest after bad debt, early adopter bonus and bad debt repayments is £284. That Sounds about right, but I'm withdrawing repayments because the risk return is not worth it when I can get 6.5% at RS with a provision fund (even if, as I believe, it gets depleted come the next recession).
The deafening silence from Zopa on variation in performance is appalling. It's no way to run a business.
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aju
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Post by aju on Nov 1, 2017 17:26:00 GMT
alazon, very interesting analysis but after deciding to have a look at similar figures for my own "Invest" account I came across a couple of anomolies and wondered how you addressed these. 1. Are Classic loans included in this? 2. if so do you included their defaults even though they have paid back? In my data I also noticed a few pre-safeguards (4) that had actually paid off the defaults completely.
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Post by WestonKevTMP on Nov 1, 2017 21:27:22 GMT
Zopa have certainly changed their Credit Policy in response to higher levels of defaults (than forecast). My analysis of their loan book indicates that using "Lending Rates" as a proxy for risk, the share of loans with; > "Lending Rates" above 20% (high risk) has fallen from 10.9% in December 2016 down to 3.6% last month > "Lending Rates" below 10% (average to low risk) was 91.2% in 2015, dropping to a low of 57.7% in March 2017 but has jumped back to 70.4% last month  Clearly they went down the risk curve, didn't like it and are coming back.... Kevin. |
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Post by WestonKevTMP on Nov 1, 2017 21:40:45 GMT
More striking is the shift in "Lending Rates" on the 5-year product (the "riskiest" term). Zopa's maximum "Lending Rate" has dropped from 31.6% just 6-months ago to 20.9% last month. Average "Lending Rates" have dropped from 10.5% down to 7.2%.  Kevin |
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Post by alazon on Nov 5, 2017 0:10:01 GMT
alazon , very interesting analysis but after deciding to have a look at similar figures for my own "Invest" account I came across a couple of anomolies and wondered how you addressed these. 1. Are Classic loans included in this? 2. if so do you included their defaults even though they have paid back? In my data I also noticed a few pre-safeguards (4) that had actually paid off the defaults completely. Thanks for your comment aju. The figures I've used are actual defaults. i.e. where money was lost. I removed all safe-guarded loans, and a couple of loans where the borrower unfortunately deceased. Of course this is only a generalized overview - but nevertheless I think it shows the level of loss quite accurately, given that some debt is recovered, although very little in my experience. However, more worrying is the increasing level of loss per loan over the last three years - which may indicate a somewhat lax (or over-optimistic) approach to vetting. It's easy to be tempted to say "I'm quitting Zopa", but over the years I have been pleased with the return. But now I'm having doubts. Looking at the recent defaults of the last two years, most (of my) defaults are from borrowers 'consolidating exiting debts' - with an average loss of 90%. Maybe indicating something about 'consolidating debt' as a measure of reliability?
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Post by newlender on Nov 5, 2017 6:53:09 GMT
When I look at my loan book there seem to be a lot under that category. Of course, it does make sense to re-finance lots of credit card debt and other loans at a lower rate of interest but I wonder how much Zopa check to see how much of that debt is in arrears already before lending. Mind you, I'm not over keen when I see 'wedding expenses' either as my take on that is that if you need to borrow, a wedding is the last thing to splash £10k on. Just checked my loan book (Investing) - consolidation of debt makes up 20/47 defaults, so going on for 50%. I can't really see why Zopa would have lent at 20%+ to someone who already has a lot of debt, as much of it will be below that (even credit cards). This goes back to the old Z+ of course so hopefully the restriction on D/E loans will help to stabilise the situation. Am gradually withdrawing from the old Z+ on the Investing side but have a bit of a gamble (just £3k) in my ISA.
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ashtondav
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Post by ashtondav on Nov 5, 2017 8:32:41 GMT
Why bother gambling on Zopa+ at less than 5% when you can get 6% to 6.5% on RS and provision fund coverage. Both models cannot be right, so I'm transferring repayments and building up my exposure to RS.
zopa default projections were amateurishly appalling, and I am really surprised their underperformance has not been picked up by the press.
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Post by newlender on Nov 5, 2017 11:09:52 GMT
I do have some RS holdings with a few loans for 5 years at 6.5% and most over 6%. But I seem to get a lot of early repayers and as the loans can be for >£1k each it's a bit annoying when it happens. Their 1yr rates are also consistently > 4% and I have a slice of that too. I like lending large sums in one go and with the PF there's no risk. RS don't have the ISA, of course and that gives Zopa the edge for those wanting tax-free income.
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coogaruk
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Post by coogaruk on Nov 5, 2017 12:51:33 GMT
I like lending large sums in one go and with the PF there's no risk. Don't think for one moment that the existence of a PF equates to NO risk.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Nov 5, 2017 12:58:46 GMT
I like lending large sums in one go and with the PF there's no risk. Don't think for one moment that the existence of a PF equates to NO risk. newlender's tongue has gotta be very firmly pressed against cheek ..................
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ashtondav
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Post by ashtondav on Nov 5, 2017 14:42:42 GMT
Any kind of PF is better than none. I for one am under no illusion but that RS lenders will have an interest rate hair cut, come the next recession. I still don't reckon it will be as incompetently severe as the hair cut from old Zopa+ vs new Zopa +
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Post by newlender on Nov 5, 2017 15:47:11 GMT
My tongue has been slurping up a very nice Beaujolais which went well with my roast lamb lunch, but I take the point that a PF doesn't guarantee safety. As ashtondav says though, it's better than nothing. The new Z+ has a few 25%+ loans to E borrowers and in my haste to fully fund my ISA I picked up a couple of £40 ones  I expect that you've noticed that the Statements page has a section where, if you scroll down past all the previous months available, it gives you performance for past calendar and tax years. My tax year to date (Investing) shows interest of £639 and defaults of £373 - this underlines just how bad the old Z+ was. And only about 50% of that portfolio was in Z+ anyway. Year to date £942 and £419, so in 2017 it's looking like half my interest has gone in defaults. Truly shocking! The experts say that defaults level out after two years but who would wait to see given those stats? Off for my third (fourth?) glass now. |
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I expect that you've noticed that the Statements page has a section where, if you scroll down past all the previous months available, it gives you performance for past calendar and tax years. My tax year to date (Investing) shows interest of £639 and defaults of £373 - this underlines just how bad the old Z+ was. And only about 50% of that portfolio was in Z+ anyway. Year to date £942 and £419, so in 2017 it's looking like half my interest has gone in defaults. Truly shocking! The experts say that defaults level out after two years but who would wait to see given those stats? Off for my third (fourth?) glass now.