baldpate
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Post by baldpate on Jan 30, 2019 15:30:07 GMT
I was looking at the loan stats page the other day (https://www.rebuildingsociety.com/stats/) and I noticed that the percentage figures in the Bad Debt Rate column seemed very small. I've attached a snippet below so you can see what I mean. The column in question is the one on the far right
Although I understand how the other figures are calculated, and largely agree with them (based on my own analysis of the historic loanbook, having tracked the performance for some years), I just can't understand the Bad Debt figures. Take for example the figure of 0.18% for year 2015. If one makes the reasonable assumption that this derives from the total value of crystalised losses on 2015 loans (i.e. loan amounts written off as effectively irrecoverable, and so announced by ReBS) as a percentage of the total loans made in that year (£3,931,000 - from the 3rd column), this would imply bad debt losses of only £7,075 (= £3,931,000 x 0.18%)
Yet there are 8/9 loans in the 2015 cohort which have suffered bad debt write off, some quite significant. In just one of theses cases (J** R***** G**** Ltd), where the borrower defaulted after making only one payment, the bad debt was just short of the total loan amount £50,000 - more than 1.2% of the 2015 total for this case alone. Can anyone shed any light on this mystery? Maybe my assumption about the meaning of this figure is wrong, although I would have said it was the most natural interpretation. Perhaps danraj could comment.
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Greenwood2
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Post by Greenwood2 on Jan 30, 2019 16:19:11 GMT
I was looking at the loan stats page the other day (https://www.rebuildingsociety.com/stats/) and I noticed that the percentage figures in the Bad Debt Rate column seemed very small. I've attached a snippet below so you can see what I mean. The column in question is the one on the far right
Although I understand how the other figures are calculated, and largely agree with them (based on my own analysis of the historic loanbook, having tracked the performance for some years), I just can't understand the Bad Debt figures. Take for example the figure of 0.18% for year 2015. If one makes the reasonable assumption that this derives from the total value of crystalised losses on 2015 loans (i.e. loan amounts written off as effectively irrecoverable, and so announced by ReBS) as a percentage of the total loans made in that year (£3,931,000 - from the 3rd column), this would imply bad debt losses of only £7,075 (= £3,931,000 x 0.18%)
Yet there are 8/9 loans in the 2015 cohort which have suffered bad debt write off, some quite significant. In just one of theses cases (J** R***** G**** Ltd), where the borrower defaulted after making only one payment, the bad debt was just short of the total loan amount £50,000 - more than 1.2% of the 2015 total for this case alone. Can anyone shed any light on this mystery? Maybe my assumption about the meaning of this figure is wrong, although I would have said it was the most natural interpretation. Perhaps danraj could comment. Is it the annualised rate, so multiply by elapsed number of years to get total? What does it say if you click on the little ?
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baldpate
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Post by baldpate on Jan 30, 2019 17:09:56 GMT
Is it the annualised rate, so multiply by elapsed number of years to get total? In the case of the 2015 figure , by any reckoning of what 'elapsed' years might mean, the maximum number of years one could reasonably multiply by is 4 (2015 to 2019), which still doesn't make the given 0.18% figure big enough to account for the loss I mentioned on just that single loan. What does it say if you click on the little ? Unfortunately the little help pop-up in the column title disappears under the right-hand green border, so no help there! EDIT: by examining the HTML source, I've just found out what should show in the pop-up : "The value of unrecoverable debt after a borrower has been pursued for bad debts and a settlement has been reached". So no help there, since the displayed figure is a percentage not a value.
Thanks for the suggestions though. I'm beginning to wonder whether ReBS have just got the decimal point in the wrong place - so maybe 0.18% should really be 1.8% (which might be at least in the ball park) EDIT: nope! I've just used the downloadable loanbook to look up the the total outstanding value of 2015 loans marked as "Written Off" (+1 other that isn't, but should be), and the total is in excess of 5% of the value of all 2015 loans. So even 1.8% would be wrong. There's still no way to make sense of that 0.18% !!
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Post by Ace on Jan 30, 2019 22:16:30 GMT
Have you tried assuming them directly for an explanation?
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baldpate
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Post by baldpate on Jan 31, 2019 9:07:10 GMT
Have you tried assuming them directly for an explanation? Not yet - my experience of getting answers/action out of ReBS is poor, unless it's something very straightforward that the front-line member of staff (May) can answer herself. Otherwise, one submits an email to the support desk, and sometimes a support ticket is raised (particulary if you ask explicitly), which is often subsequently closed with the promise of action by back-office : it will then usually take months for anything to happen, if it ever does (I have one repeated request for the same error - which ReBS have accepted as an error - to be corrected, which has still not happened after many months).
This isn't May's fault - it's just that ReBS follow-up procedures are SSLOOOOW - probably because they operate with minimal staff.
In part, that's why I've brought it to the forum, and asked danraj to comment, rather than torturing myself yet again with a support desk query. Also for the outside possibility that some member here has already been round this loop and knows the answer.
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Post by May@ReBS on Jan 31, 2019 10:45:40 GMT
Hi baldpate,
Thanks for initiating this thread. We've read all the comments posted here.
We'll look into the logic on Bad Debt percentage computation on our Stats page and will post an explanation soon.
Apologies about your past experience with support. At times, issues need collaboration between teams to fix which can cause delay. However, we understand the need for timely resolution and we are working on continually improving customer experience and reducing waiting time. Thanks again for your patience.
Kind regards,
May
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Post by Ace on Jan 31, 2019 10:57:27 GMT
While you're at it, could you please fix the issue where the explanation pop-ups disappear under the green border please.
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Post by May@ReBS on Jan 31, 2019 11:17:03 GMT
Hi Ace. Yes, we'll fix that as well. Thanks for pointing it out.
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baldpate
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Post by baldpate on Jan 31, 2019 12:30:09 GMT
In this same context may I refer you to the comment I made in my post #3
where I mentioned in passing that there was one defaulted loan in the 2015 cohort which I believe shows in the downloadable loanbook as having incorrect status, (and I therefore assume is also wrong in your master database).
The loan in question is that to B******* T********y G***p L*****d , which in your loanbook has ID 242674. The status of this loan is still showing as "Recovery", whereas to my certain knowledge it was written off as a bad debt on or around 10th October 2018 (so I believe the status should "Written Off""). Assuming the status field is the driver for any bad debt statistic, the status of this loan should be reviewed and corrected.
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Post by danraj on Jan 31, 2019 20:22:30 GMT
Thanks for the observation, we are overhauling the stats page currently to relay more useful information. This should be ready to go live next week. I will confirm once published.
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Post by danraj on Feb 8, 2019 11:38:36 GMT
The stats page has been updated.
Previously we had three rates: Gross, Default and Bad Debt. These have now been amalgamated into one Net Return rate. The Gross (is now expressed as a flat figure) and the Default + Bad Debt is now expressed as a Loss. We believe this is clearer and easier to understand because it gives lenders an appreciation of that they can expect to receive.
Our plan is to add more information about our recoveries performance for each type of security taken. This will help to inform lenders on how the varying types of security interrelate in terms of recovery performance.
We've also update some key stats.
If there is more you would like to see, that is available on other platforms, please give me examples and I will study them.
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Post by danraj on Mar 18, 2019 12:34:16 GMT
I've added the link to the stats page to the main navigation.
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