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Post by Harland Kearney on Feb 25, 2019 0:00:31 GMT
I withdrew over 20k (and to transfer it to my ISA, so was reinvested not a withdrawal from the platform) from the 30 days and was done on the 30th day without any problems. I've never experienced problems either before when withdrawing smaller numbers from the 30 days or QAA.
My funds I keep in the 30-day access I prefer over picking the GBBA or property account for my long term investments, therefore I've moved all funds from 30 days to the 90 days for the higher rate since it fits my context and I am very happy AC are providing this. I keep my buffer money in QAA (and more of it in an actual bank folk!)
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pikestaff
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Post by pikestaff on Feb 25, 2019 8:23:01 GMT
The access accounts hold £236,700 in that loan, even a 100% write off would comfortably fit in the provision funds. Pretty much by definition it must comfortably fit in the provision funds; as I understand it, £236,700 of those provision funds is already ringfenced to allow that loan to circulate within the account...? ... No! It would be prohibitively expensive to have 100% coverage and that is not what they do. As chris says here p2pindependentforum.com/post/314943/thread "Trading in suspended loans is only allowed in the access accounts whilst the provision fund has ring fenced funds to cover any expected losses of capital in those loans, i.e. the discretionary decision has been taken and the funds set aside" [emphasis added]. So if AC expect a loss of £50k, for example, that is all that the PF needs to have ring fenced for that particular loan. Likewise across the portfolio as a whole. If experience turns out different from what they expect (which is doubtless kept under review) the variance will either top up or (if the discretionary decision is taken to cover the additional loss) deplete any unallocated balance of the fund. Chris says elsewhere that "The access accounts hold £236,700 in that loan, even a 100% write off would comfortably fit in the provision funds." I take this to mean that the ring-fenced amount, whatever that is, plus the unallocated balance of the fund, comfortably exceeds £236,700. And so it should. They must aim to operate with a reasonably large unallocated balance at all times. However, that is not guaranteed. If there is a bad run the PF could run short. AC are under no obligation to do anything about this. I've no doubt that in the normal course of events AC would hope/expect to top the fund up. However, if things got extremely bad they might choose (or be forced from lack of funds) not to do so. That's our risk.
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sl75
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Post by sl75 on Feb 25, 2019 11:31:29 GMT
Current stats (as of a few minutes ago):
90DAA has £2.79M (compared to 0 yesterday lunchtime) 30DAA has £103.33M (compared to £105.80M yesterday lunchtime) QAA has £57.16M (compared to £57.43M yesterday lunchtime)
Total: £163.27M (compared to £163.23M yesterday lunchtime)
Although an impressive start for the 90DAA, it seems almost entirely to be funds that were already on the platform, and it's not (yet) attracted a significant quantity of "new" funds. It'll be interesting to see how this promotion compares to the £16M pulled in by the last one.
Following the weekend, it's not much better; as of just over half an hour ago:
90DAA: £6.03M 30DAA: £100.82M QAA: £56.32M Total: £163.16M
Despite the promotion intended to attract new funds into the 90DAA, the total invested across these 3 accounts has gone down over the weekend, putting it below the level it had been before the promotion launched!
Analysing the downloads a bit further, this seems to be mostly due to a new £0.2M loan having drawn down, together with additional principal advances totalling £0.5M across 4 other loans, but the QAA has dropped by more than this...
The initial response appears to have been relatively slow; but perhaps will pick up as the end date of the promotion draws nearer and/or people have time to get more funds available? I get the impression that most of the new money that could be attracted by an extra 1% cashback has already been attracted, and that the market is starting to tire of this style of promotion (the previous one didn't reach its £20.19M target).
One point that remains an outstanding question (albeit not as critical as when I'd misunderstood the amount that gets ringfenced), is what balance in the 90DAA the initial £300k of seed capital will support, or whether an unlimited amount could be transferred from 30DAA to 90DAA because ringfenced funds get transferred with the loans requiring them? chris?
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Post by chris on Feb 25, 2019 11:43:49 GMT
sl75 - There was also a large withdrawal by an underwriter which is skewing the figures somewhat. In terms of rebalancing the provision funds - if all the funds in the 30daa left and went into the 90daa then there'd be no purpose to keeping the 30daa provision fund. As such my expectation is that we will rebalance accordingly if funds move across. Beyond that you'll need to speak to customer services for an official and better informed view, I'm only really here to discuss and support the technical aspects of the system.
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sl75
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Post by sl75 on Feb 25, 2019 12:36:18 GMT
In terms of rebalancing the provision funds - if all the funds in the 30daa left and went into the 90daa then there'd be no purpose to keeping the 30daa provision fund. As such my expectation is that we will rebalance accordingly if funds move across. Beyond that you'll need to speak to customer services for an official and better informed view, I'm only really here to discuss and support the technical aspects of the system. Thanks.
If there was a process to automatically move the ring-fenced funds from 30DAA to 90DAA along with the loans when the balance was transferred, I figured that would be a technical aspect of the system you'd know about, and be able to confirm more quickly than I was able to frame the question for a customer services person out of the context of this thread, hence tagging you!
I'd guess that the admin/risk people might want to consider manually moving an appropriate portion of the funds that have been released from ring-fencing in the 30DAA as a result of transfers to the 90DAA, but I think you've confirmed this doesn't happen automatically. I'll contact customer services if this becomes pertinant to a later decision rather than just a point of general interest (in posting, I've also highlighted it as a potential issue to verify for any others who may consider it pertinent to their own decision).
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Post by chris on Feb 25, 2019 12:49:17 GMT
sl75 - at present there's nothing automatic, but I'm sure that'll be reviewed over time.
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Post by danielbird193 on Feb 25, 2019 16:14:07 GMT
I certainly welcome the introduction of the 90DAA and will move some money from GBBA2 and perhaps another P2P site in order to take advantage of the promotion.
What I really can't understand is how they can offer 5.75% when the majority of new loans being listed in recent months have been at 6% or below. My understanding is that the spread goes into the PF, but there won't be much of a spread unless borrower rates start to creep back up!
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bod
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Post by bod on Feb 25, 2019 17:39:48 GMT
Funds moved from GBBA2 don't qualify. It has to be new funds.
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jlend
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Post by jlend on Feb 25, 2019 17:42:28 GMT
I certainly welcome the introduction of the 90DAA and will move some money from GBBA2 and perhaps another P2P site in order to take advantage of the promotion. What I really can't understand is how they can offer 5.75% when the majority of new loans being listed in recent months have been at 6% or below. My understanding is that the spread goes into the PF, but there won't be much of a spread unless borrower rates start to creep back up! I am assuming the PF coverage ratio will be lower over time in the 90DAA than the QAA/30DAA because of the reduced PF payments. And as sl75 points out the mature loan book of the 90daa will have defaulted loans from day 1. We are obviously compensated with a higher interest rate. We will all just have to decide if this is enough compensation for the increased risk. Hopefully there will not be any unforeseen issues over time as appears to be the case with the GBBA1 and GEIA.
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sl75
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Post by sl75 on Feb 26, 2019 8:43:21 GMT
I certainly welcome the introduction of the 90DAA and will move some money from GBBA2 and perhaps another P2P site in order to take advantage of the promotion. What I really can't understand is how they can offer 5.75% when the majority of new loans being listed in recent months have been at 6% or below. My understanding is that the spread goes into the PF, but there won't be much of a spread unless borrower rates start to creep back up!
"... Due to the 90DAA target interest rate being higher than either the QAA or the 30DAA, the contributions to the 90DAA Provision Fund will be smaller than the contributions to the Provision Funds of those other accounts. This means that the 90DAA Provision Fund will not grow as quickly as the Provision Funds of other accounts which offer a lower target interest rate. The size of any Provision Fund directly affects the coverage which it can provide in the event of loss."
In responding to this post, I've just found out that I can answer part of one of my earlier questions myself too... the 30DAA how it works page states that its fund had £2.5M as at 31 Dec last year, which at that time is stated to have provided 4.23x coverage for the anticipated 0.58% losses on a balance of around £102M. Therefore:
To have the same coverage as the 30DAA had at the end of last year, the initial £300k seed capital would cover over £12.2M in the 90DAA (£102M / 2.5 * 0.3 or £0.3M / 0.0058 / 4.23)
To have a 100% coverage ratio of expected losses assumed to still be 0.58%, the initial £300k seed capital would cover £51.7M in the 90DAA (£0.3M / 0.0058)
Put another way, assuming that the 0.58% corresponds with the level of ringfenced funds required in the account, if AC hadn't put the initial £300k of seed capital in the account, but had ensured that ringfenced funds were transferred with loan units, it would have taken over £50M of transfers of loan units from the 30DAA or QAA to the 90DAA to build up the first £300k (either directly using the "transfer to 90DAA" button in the 30DAA, or indirectly when cash is added to the 90DAA, which it immediately uses to buy loan units from the 30DAA and QAA).
So until the 90DAA balance hits £12.2M, it seems to me that the question of transferring ringfenced funds from the 30DAA to the 90DAA is completely moot as the coverage in either account remains just as good, and that there's plenty of room for expansion to more than £50M before it becomes "critical". However, as noted above, the 90DAA will also stuggle more to build up and maintain a meaningful coverage ratio, so if it is indeed the case that ringfenced funds are NOT being transferred to the 90DAA alongside the loans that require them, this would dilute the already difficult coverage in the 90DAA even further... but directly linking ringfenced funds to otherwise untradeable loans is not the only way to mitigate the issue, so I'll watch out for future developments!
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jlend
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Post by jlend on Feb 26, 2019 10:07:35 GMT
I have mixed views about transferring PF money into the 90DAA.
It is not part of the current terms of the 30DAA and QAA to remove some of the PF and put it in another access account unless I have missed something.
Given the lower interest rates in the QAA and 30DAA accounts I can also see a reason for not touching their PFs.
Also over time now AC are generally writing loans with lower interest rates, the PF contributions to the QAA and 30DAA will also fall over time. I personally think AC need to make sure they keep the PFs in these two accounts as strong as possible in what may be uncertain times generally in the economy.
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sl75
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Post by sl75 on Feb 26, 2019 10:16:24 GMT
Current stats (as of a few minutes ago):
90DAA has £2.79M (compared to 0 yesterday lunchtime) 30DAA has £103.33M (compared to £105.80M yesterday lunchtime) QAA has £57.16M (compared to £57.43M yesterday lunchtime)
Total: £163.27M (compared to £163.23M yesterday lunchtime)
Although an impressive start for the 90DAA, it seems almost entirely to be funds that were already on the platform, and it's not (yet) attracted a significant quantity of "new" funds. It'll be interesting to see how this promotion compares to the £16M pulled in by the last one.
Following the weekend, it's not much better; as of just over half an hour ago:
90DAA: £6.03M 30DAA: £100.82M QAA: £56.32M Total: £163.16M
Despite the promotion intended to attract new funds into the 90DAA, the total invested across these 3 accounts has gone down over the weekend, putting it below the level it had been before the promotion launched! Latest figures for comparison (from about 50 minutes ago as of the time of this post):
90DAA: £6.81M 30DAA: £100.47M QAA: £56.68M Total: £163.96M
So a significant net inflow of funds now - genuinely new funds have indeed been added (undoubtedly AC will be counting as "new" some additional funds that shouldn't really count). How much would have been added even if there hadn't been a promotion (or how much might have been withdrawn but for the promotion) seems unknowable though... but that's now the highest total I've recorded (the previous high I observed for QAA/30DAA was on 16 January, when I recorded a total of £163.85M - it may have been higher a few days earlier, but I'd got a 2.5 month gap in my recorded figures).
Some other statistics that I was curious enough to calculate (part of the reason for the delay in posting the above; I may have made errors - I already did in the first draft of this post, so re-check if you want to rely on them for your own decisions!):
The weighted average interest rate on all loans held by the QAA/30DAA/90DAA currently appears to be just under 7.25%, which at first glance appears to give almost a 1.5% margin for contributions to the provision fund. However, that includes the nominal interest rate on suspended and defaulted loans. If I only count the ones where "Is Suspended" is "No", I get an effective average rate of 6.80%, which still gives just over a 1% margin for contributions to the provision fund, but is starting to feel a bit tight.
Checking the upcoming/pipeline loans, £7.9M of the loans show "TBC" for the interest rate. Of the remaining £33.5M, the weighted average interest rate is currently 6.69% by my calculations; just under a 1% margin to the 90DAA "target capped rate".
Even if it took 100% of all those loans rather than any form of "cherry picking", it could still maintain an adequate margin, but this margin is much tighter than the QAA/30DAA on the same loan book, so we definitely need to heed the warning that the account won't generate a provision fund surplus as quickly as the other access accounts (however, I think the main risk is that it may be unable to pay the headline "capped rate" rather than having any significant risk of actual losses that are not covered any time in the foreseeable future).
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sl75
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Post by sl75 on Feb 26, 2019 11:07:59 GMT
I have mixed views about transferring PF money into the 90DAA. It is not part of the current terms of the 30DAA and QAA to remove some of the PF and put it in another access account unless I have missed something. Given the lower interest rates in the QAA and 30DAA accounts I can also see a reason for not touching their PFs. Also over time now AC are generally writing loans with lower interest rates, the PF contributions to the QAA and 30DAA will also fall over time. I personally think AC need to make sure they keep the PFs in these two accounts as strong as possible in what may be uncertain times generally in the economy. The point, however, is that some of the loans held in the QAA and 30DAA are only permitted to be traded because a portion of the provision fund is ringfenced in order to cover the expected losses from those loans. This is a direct acknowledgement that those loans are no longer worth 100% of their face value, and any transfer of those loans must surely transfer the ringfenced funds with it, as otherwise, the account receiving those loans pays full face value for something acknowledged not to be worth full face value.
Thinking it through a bit further, the implementation I would use would have ringfenced funds associated with a specific loan, and not with a specific account. i.e.:
At the moment that a decision is made that ringfenced funds are required for a specific loan to continue trading within the access accounts (or an increase in the ringfenced amount is deemed necessary), each would make a contribution from its PF in proportion to its current balance. Those funds would be ringfenced for the specific loan, and held separately to the PF. If at a later time, the ringfenced amount is decreased (e.g. the loan repays in full, or new information lowers the expected loss), the funds that are released are returned to the different access accounts in proportion to their holding at that moment, which may be different to their holdings at the time ring-fencing first occurred.
If instead ringfenced funds remain held in the source account (as currently seems to be implied), suppose that £10M of loans are transferred from the 30DAA to the 90DAA in a series of transactions, of which 10% are "bad" loans themselves requiring 10% of their value to be ringfenced (i.e. £100k of funds ringfenced). The act of performing those transfers requires the 90DAA to ringfence £100k of its £300k seed capital to allow the loans to continue trading, leaving only £200k of non-ringfenced funds.
In the meantime, suppose for example that the 30DAA had £1M of funds ringfenced of its £2.5M total, leaving £1.5M of non-ringfenced funds. If it doesn't transfer the ringfenced funds with the loans, it has unfairly benefited, as it would then have only £0.9M of ringfenced funds, giving £1.6M of non-ringfenced funds.
With the ringfenced funds properly transferred with the loans, we would instead maintain the current totals of non-ringfenced funds of £0.3M in 90DAA and (e.g.) £1.5M in the 30DAA. Those amounts would only change as further loans require ringfenced funds, or existing loans release ringfenced funds to the accounts now holding those loans.
An alternative would be to allow transfers between accounts of suspended loans only within a specific account, but when transfers are made from 30DAA to 90DAA, it would transfer only the tradeable loans, leaving the non-tradeable loans behind in the 30DAA... however, that would worsen the liquidity within the 30DAA but give the 90DAA a holding only of the relatively liquid loans - the exact opposite of what AC presumably wish to achieve!
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Post by stuartassetzcapital on Feb 26, 2019 15:58:09 GMT
Given that AC cannot empty my 30-day account in .... 30 days (now 60 days+). I would not be that interested in investing in 90 days. What should I expect, half a year? I think AC needs to calm it all down a bit and be tighter on borrower account control rather than stretch out to get more loans and drag more lenders into this disappointing morass. This I why I love this site, I was deciding if this was a good home for my longer term savings. I will have to look elsewhere. Many thanks for the post bobo. @bobo This is absolutely wrong surely - you cannot have submitted a request for money to be withdrawn from the 30DAA and it didn't pop out exactly when planned - to my knowledge and upon regular enquiry that has never happened to date. You must contact the helpdesk as there is something seriously wrong with your account here and we can't leave such a comment hanging on this thread without an investigation - no-one has ever reported this before ever in £1bn+ of withdrawals - just PM me the account details and will get it checked....
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Post by hammertime on Feb 26, 2019 16:37:33 GMT
Are we not getting the I** loans reports in now .
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