mary
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Post by mary on Apr 2, 2020 17:50:36 GMT
From my March statement...
Payments from the Provision Fund
Due to a technical issue, there may have been a discrepancy in the Provision Fund payment figure in your last statement. We are therefore providing you this figure again from 9th December 2019. Since then, £xxxx was paid to you by the Provision Fund.
This PF payment, for the 4 month period, represents over 30% of my loans by value, which was reasonably diversified between 1 Year and Access, with max single loan at 8% of balance. My total account balance was a low 5 figure sum. Very grateful for the PF safety net (while not exhausted).
RS is my only P2P Platform with Zero losses! (Correct at time of writing).
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Post by cinereus on Apr 2, 2020 21:34:16 GMT
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Post by jaycee on Apr 2, 2020 22:39:23 GMT
Similar here, but feels like this has to be another error. How can the provision fund have paid me 25% of my total investment but only be down 4%?
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Post by BrianC on Apr 2, 2020 23:02:05 GMT
Mines much more sensible. Since then, £44.22 was paid to you.... That’s on £14k invested and I assume is not just making up interest but missed capital too which makes it much less than 1% of repayments during the time period.
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jlend
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Post by jlend on Apr 3, 2020 6:17:07 GMT
Similar here, but feels like this has to be another error. How can the provision fund have paid me 25% of my total investment but only be down 4%? You have to remember how the PF works. There are thousands of payments and repayments through the PF every year. If a payment is even a day late the PF kicks in, then nearly always the payment is made by the borrower quickly which goes into the PF. This can be for simple things like a direct debit issue. A PF payment you see is usually not a loss to the PF. From the RS stats page. The average lender rate since RS started is 4.4%. Low due to Market Rate, Going Rate. 4.3% of this has been from the borrower, 0.1% of this from the PF. Of course past performance should not be used as a proxy for future performance we are always reminded for any asset class.
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alanh
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Post by alanh on Apr 3, 2020 9:16:26 GMT
Similar here, but feels like this has to be another error. How can the provision fund have paid me 25% of my total investment but only be down 4%? You have to remember how the PF works. There are thousands of payments and repayments through the PF every year. If a payment is even a day late the PF kicks in, then nearly always the payment is made by the borrower quickly which goes into the PF. This can be for simple things like a direct debit issue. A PF payment you see is usually not a loss to the PF. From the RS stats page. The average lender rate since RS started is 4.4%. Low due to Market Rate, Going Rate. 4.3% of this has been from the borrower, 0.1% of this from the PF. Of course past performance should not be used as a proxy for future performance we are always reminded for any asset class. The provision fund paid me 0.28% of my total investment. The other thing to remember here is that we are looking at the payments we have received (i.e. outflows from the provision fund) and not considering the inflows into it. It is the balance between the outflows and inflows that determines if its going up or down.
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Post by Deleted on Apr 3, 2020 9:18:00 GMT
The funding level and cash balance both show it is going down.
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jlend
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Post by jlend on Apr 3, 2020 9:31:58 GMT
You have to remember how the PF works. There are thousands of payments and repayments through the PF every year. If a payment is even a day late the PF kicks in, then nearly always the payment is made by the borrower quickly which goes into the PF. This can be for simple things like a direct debit issue. A PF payment you see is usually not a loss to the PF. From the RS stats page. The average lender rate since RS started is 4.4%. Low due to Market Rate, Going Rate. 4.3% of this has been from the borrower, 0.1% of this from the PF. Of course past performance should not be used as a proxy for future performance we are always reminded for any asset class. The provision fund paid me 0.28% of my total investment. The other thing to remember here is that we are looking at the payments we have received (i.e. outflows from the provision fund) and not considering the inflows into it. It is the balance between the outflows and inflows that determines if its going up or down. Exactly. The PF contributions vary over different types of loans and borrower circumstances. RS publish the average over the last 12 months. Average borrower rate 11.3% Average borrower fees 7.0% Provision Fund contribution 4.0% RateSetter fees 3.0% Average investor returns 4.3% RS can and do increase the PF contributions some times by diverting more of their margin to the PF.
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alanh
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Post by alanh on Apr 8, 2020 15:35:48 GMT
Check your emails. RS have just added £4.65m cash to the provision fund. Very good news indeed compared to the current doom and gloom elsewhere. That takes it up to somewhere between £12-£13m.
Nice one RS!!!
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cb25
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Post by cb25 on Apr 8, 2020 15:49:18 GMT
Check your emails. RS have just added £4.65m cash to the provision fund. Very good news indeed compared to the current doom and gloom elsewhere. That takes it up to somewhere between £12-£13m. Nice one RS!!! RateSetter just created this thread explaining "This week, RateSetter has completed two sales of non-performing loans, with the combined proceeds of £4.65m added into the Provision Fund"
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wapping35
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Post by wapping35 on Apr 8, 2020 16:11:55 GMT
My reading of what they have done is that whilst this will improve the cash proportion of the assets it will reduce the non-cash amount by the same amount. As such the coverage ratio remains at 113%. That is presuming the they have sold the loans at par to the valuation within the PF.
I assume it acknowledges that cash within the PF was running low.
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alanh
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Post by alanh on Apr 8, 2020 16:34:47 GMT
My reading of what they have done is that whilst this will improve the cash proportion of the assets it will reduce the non-cash amount by the same amount. As such the coverage ratio remains at 113%. That is presuming the they have sold the loans at par to the valuation within the PF. I assume it acknowledges that cash within the PF was running low. I guess there are 2 possibilities: 1. Its a new cash injection into the provision fund 2. Its a conversion of some of the "future provision fund inflows" into cash as you say Clearly 1 is better than 2, but if it is 2 then I think it is still very positive that they have converted some of this "future inflow" into hard cash which can now actually be used to pay out to investors if a loan defaults.
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wapping35
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Post by wapping35 on Apr 8, 2020 16:51:05 GMT
I also assume the loans are sold at par to the PF valuation. I recall when RS sold the loans a few years back they were sold below valuation within the PF accounts and that resulted in the coverage ratio falling... Given RS email heading is a £4.65m "boost" to the PF it would be good to know from RateSetter what the impact on the coverage ratio is likely to be. (if any). Since they say the sale has taken place today and the PF numbers are updated each month for the 1st of the month, we won't otherwise see the impact until late May when the May 1st figure is published. Indeed if it is a boost to the coverage ratio RateSetter , i would suggest you indicate what the improvement to the coverage ratio is likely to be. That would be good for liquidity.
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Post by Ace on Apr 9, 2020 0:55:42 GMT
Since they made a point of saying they were "pleased to say that we did not need to reduce our price expectations in light of the coronavirus outbreak." I assume it was at the PF valuation, so no direct effect on the coverage ratio, which will presumably continue to deteriorate.
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wapping35
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Post by wapping35 on Apr 30, 2020 16:31:31 GMT
Strange (I could use other words i.e. worrying) that RS has not yet supplied the April update on the PF coverage ratio as at April 1st..
It is usually up way before 5.30pm on the last day of the month..Indeed it is usually updated 3-7 days before the end of the month...
It was 113% on March 1 i.e. really before everything went the shape of the pear...
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