r00lish67
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Post by r00lish67 on Jul 30, 2020 9:24:51 GMT
Does anyone have a tracker for this? I tried the google sheet in the original post, but hasn't been updated for a long time. Thanks This is my record. The dates are roughly when the stats were published rather than the effective date. Thanks @inv11 , I like looking at the stats but just have a jumble of saved webpages, and I forgot to save last month's too! The current stats suggest the PF should be dropping on average by £1m a month before the interest haircut (Inflows (£19.2m) - outflows (£38.1m) / average loan term (19). The interest haircut adds approx 2.15% of loans outstanding, about £1.3m a month. So, on average after the haircut , we should expect the PF to be rising by £300k a month as I see it, so we're about £800k short of that. However, whilst averages pre-COVID seemed reasonable enough to extrapolate from, they're a bit too crude now as of course the default curve is all over the place with the ongoing impacts of the virus. freefalljunkie .I think the ICR should be rising, but as above it might be that it won't for a while. I note the wording on the ICR has changed this month, I think: ("*Before the Temporary Interest reduction which will seeks to bring the ICR to 100%"). The thing is, for it to reach 100% would mean the equalising of the PF buffer (£25m) with forecast PF losses (£38m). We're £13m short of that at the moment, and two months ago it was only £11m. Given that there's only now an average loan term of 19 months left for our borrowers and within that we need to get across all of the pain that the tapering of the Govt. support schemes will bring, then it does seem a bit of a mountain to me to get back to 100% without further intervention. There just doesn't seem enough road left. Re: whether there will be a capital loss. Well, if RS had already implemented a 100% haircut (not saying they should, just for illustration), then this month that would have added another £1.3m to the PF and put us on +£800k rather than -£500k. The +£800k trajectory feels much more like it in terms of being avoiding a capital loss sting in the tail. Another way of looking at it is the CCR that RS provide. If we remove half of the 'expected future investor interest' to reflect the ongoing 50% interest reduction, then the capital PF buffer is £25.5m + £16.6m = £42.1m versus £38.1m expected losses. So, as it stands with the 50% haircut we should in RS's estimation be just about fine. However, 2 months ago that "£42.1m vs £38.1m" was £49.9m vs £41.1m i.e. the breathing space has decreased from £8.8m to £4m in only 2 months. In other words, at the current direction and pace of travel, the 50% haircut does not appear enough IMO to then also see remaining investors receive 100% of their capital back at the end. It's all finger in the air stuff of course as it's just so volatile in the real world, but I'd guess that if remaining investors were to treat any interest they do receive not as interest but a capital reduction (or indeed if RS force their hand and do it themselves by making it a 100% interest reduction), then we'll probably end up with everyone receiving all of their remaining exposure back - there or thereabouts. The potential fly in the ointment of course is if it becomes messy with administrators and extra cost. Still, no-one should be afraid of losing their shirt here IMHO, just at worst delayed and a little tighter around the waist.
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Post by Deleted on Jul 30, 2020 9:40:28 GMT
Great analysis, thank you. I see Lloyds is increasing its reserves against bad debts "Britain's biggest retail bank has put aside another £2.4bn to deal with people and firms defaulting on loans." www.bbc.co.uk/news/business-53592401
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Post by freefalljunkie on Jul 30, 2020 10:09:31 GMT
Thanks r00lish67, very useful.
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Post by Ace on Jul 30, 2020 10:47:28 GMT
Excellent, calm, unbiased and rational analysis as always r00lish67. Unlike my own which tends to let too much emotion creep in. My only disagreement is that it generally assumes that current trends continue. I feel (there we go with the emotion again) that it's more likely that the general climate will worsen. So, I'm expecting that trapped investors will likely suffer a smallish capital haircut. Fingers crossed that I'm wrong as usual. Hopefully in the right direction.
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r00lish67
Member of DD Central
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Post by r00lish67 on Jul 30, 2020 11:27:10 GMT
Excellent, calm, unbiased and rational analysis as always r00lish67 . Unlike my own which tends to let too much emotion creep in. My only disagreement is that it generally assumes that current trends continue. I feel (there we go with the emotion again) that it's more likely that the general climate will worsen. So, I'm expecting that trapped investors will likely suffer a smallish capital haircut. Fingers crossed that I'm wrong as usual. Hopefully in the right direction. It's easy to be unemotional when you're no longer invested Anyway, if it's possible, then I agree with your disagreement. Certainly if the capital coverage gap (assuming 50% investor interest) keeps on narrowing at the rate of £4m every two months then it will look worse. It shouldn't get to that stage though, because RS will presumably then cut investor interest to maintain protection of capital. So, same same but different maybe? If they were to stop interest now, investors will get more (maybe all?) of their capital back. If they don't, there'll be a bit less as you expect. All of this is much less optimistic than the RS stats state at the moment though of course. Their stats currently say that the 50% haircut is sufficient, though that wording change from "will" to "seeks to" is no accident I'm sure.
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Post by RateSetter on Aug 27, 2020 16:26:30 GMT
Good afternoon. We have completed the usual monthly update of data on the statistics page and alongside we have published the monthly Provision Fund commentary RateSetter Notice, copied below for reference:
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beagle
Investor in ratesetter, funding circle, lendy (lesson learnt) and AC
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Post by beagle on Aug 27, 2020 17:37:52 GMT
Good afternoon. We have completed the usual monthly update of data on the statistics page and alongside we have published the monthly Provision Fund commentary RateSetter Notice, copied below for reference: as much as the ratios do not fill me with glee given the 67% on interest coverage I must say the fact that it holds is reassuring. Ratesetter could easily cut interest further and they have no way of forecasting the exact future just like banks and other places. especially with recession looming. this means that their debt management must be pretty good and solid for them to assume the provision fund can hold for longer.
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Post by Deleted on Aug 27, 2020 17:53:44 GMT
I'm not sure I'm as reassured. The interest haircut seeks to return the funding level to 100% by 31 December 2020. I'll be amazed if that happens based on progress to date, but I'd be pleased if it did.
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aju
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Post by aju on Aug 28, 2020 14:45:04 GMT
So comparing some of the numbers in July's "Key Figure" to those from June as reported recently (reductions in red)
Main Total amount lent 26.44m Total amount under management -27.57m Provision Fund cash balance 0.02m Expected Provision Fund Inflows -1.81m Total repayments made by borrowers 52.90m Total repayments made by Provision Fund 4.18m Total repaid to investors 57.07m Total interest returned to investors 2.87m Liquidity provided. i.e. Total Sell Outs 12.42m Total number of matches 6.37m
Other increases Investors 30 Borrowers 4569 Total number of loans 6647
Does anyone know what the "total number of matches" might refer to?
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Post by Ace on Aug 28, 2020 14:59:52 GMT
... Does anyone know what the "total number of matches" might refer to? Matches are presumably when lender funds are matched to a borrower's loan.
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jane
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Post by jane on Aug 28, 2020 16:40:13 GMT
... Does anyone know what the "total number of matches" might refer to? Matches are presumably when lender funds are matched to a borrower's loan. Or maybe they saw some people playing poker for match sticks rather than money and it gave them an idea......
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beagle
Investor in ratesetter, funding circle, lendy (lesson learnt) and AC
Posts: 670
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Post by beagle on Aug 28, 2020 16:50:11 GMT
... Does anyone know what the "total number of matches" might refer to? Matches are presumably when lender funds are matched to a borrower's loan. correct.
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Post by mouldy on Aug 29, 2020 10:27:02 GMT
So comparing some of the numbers in July's "Key Figure" to those from June as reported recently (reductions in red) Main Total amount lent 26.44mTotal amount under management -27.57m Provision Fund cash balance 0.02mExpected Provision Fund Inflows -1.81mTotal repayments made by borrowers 52.90mTotal repayments made by Provision Fund 4.18mTotal repaid to investors 57.07m Total interest returned to investors 2.87mLiquidity provided. i.e. Total Sell Outs 12.42mTotal number of matches 6.37mOther increasesInvestors 30Borrowers 4569Total number of loans 6647Does anyone know what the "total number of matches" might refer to? Couple of questions from me - 1) Provision Fund cash balance - is this a net or gross figure i.e. does it include the repayments made by the provision fund this month and the actual inflows this month? 2) Expected Provision Fund Inflows - has this dropped because RS now thinks it is more likely that some borrowers won't repay?
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beagle
Investor in ratesetter, funding circle, lendy (lesson learnt) and AC
Posts: 670
Likes: 322
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Post by beagle on Aug 29, 2020 10:58:06 GMT
Excellent, calm, unbiased and rational analysis as always r00lish67 . Unlike my own which tends to let too much emotion creep in. My only disagreement is that it generally assumes that current trends continue. I feel (there we go with the emotion again) that it's more likely that the general climate will worsen. So, I'm expecting that trapped investors will likely suffer a smallish capital haircut. Fingers crossed that I'm wrong as usual. Hopefully in the right direction. It's easy to be unemotional when you're no longer invested Anyway, if it's possible, then I agree with your disagreement. Certainly if the capital coverage gap (assuming 50% investor interest) keeps on narrowing at the rate of £4m every two months then it will look worse. It shouldn't get to that stage though, because RS will presumably then cut investor interest to maintain protection of capital. So, same same but different maybe? If they were to stop interest now, investors will get more (maybe all?) of their capital back. If they don't, there'll be a bit less as you expect. All of this is much less optimistic than the RS stats state at the moment though of course. Their stats currently say that the 50% haircut is sufficient, though that wording change from "will" to "seeks to" is no accident I'm sure. You shouldn't be emotional with invested money to start with.
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aju
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Post by aju on Aug 29, 2020 13:02:31 GMT
So comparing some of the numbers in July's "Key Figure" to those from June as reported recently (reductions in red) Main Total amount lent 26.44mTotal amount under management -27.57m Provision Fund cash balance 0.02mExpected Provision Fund Inflows -1.81mTotal repayments made by borrowers 52.90mTotal repayments made by Provision Fund 4.18mTotal repaid to investors 57.07m Total interest returned to investors 2.87mLiquidity provided. i.e. Total Sell Outs 12.42mTotal number of matches 6.37mOther increasesInvestors 30Borrowers 4569Total number of loans 6647Does anyone know what the "total number of matches" might refer to? Couple of questions from me - 1) Provision Fund cash balance - is this a net or gross figure i.e. does it include the repayments made by the provision fund this month and the actual inflows this month? 2) Expected Provision Fund Inflows - has this dropped because RS now thinks it is more likely that some borrowers won't repay?
Somebody hijacked my post, the number of times i've nearly done that myself but started again its easy to do as i've noticed the cursor seems to be dropped in the wrong place occasionally. I used the BBcode option to put it back into it's rightful place. mouldy 1) Those numbers are comparisons between last month (July) and May, the RS stats we are dealing with are always reported at the end of the current month. the original statistics page does state this quite clearly. I think others already mentioned we are always a month behind. I'm not sure if it was a net figure or a gross I suspect it was net I just created the comparisons. 2) It's just dropping I guess as a result of less lending and less interest (The 50% function) who knows you will have to read the original it was taken from it will be available for all to see on RS stats page until its updated for August sometime in the last week of September (Unless its late!)
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