benaj
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Post by benaj on Jul 19, 2019 17:30:39 GMT
Most helpful graph FC produces is the Lifetime Default Rate profile which they have just updated. Recommend all to take a look and to monitor. The 2017 cohort is taking off like a rocket and at 18 months in is running at about double the default rate for the 2012 to 2015 cohorts. This matches my own defaults which in the year to end of 2018 saw new defaults at 102 almost exactly double the defaults occurring in the yrs to end 2016 (52) and 2017 (53). Posters on this blog have for many months been flagging up the problem hiding in the loan book. As expected it is now floating to the surface. Enjoy. I've learnt that the Lifetime default rate stats doesn't mean much on my FC account performance. Loans can be renewed / refinanced (several times) before an default event, reducing default at least by half. It doesn't mean all defaults are renewal. The only thing gives better indication of how loans performing is the revised figure of Projected annualised return.
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dorset
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Post by dorset on Jul 19, 2019 17:54:42 GMT
The problem with the annualised projected returns is that this is a FC forecast (their view) and not actual defaults.
Confused about the renewals bit (apart from property). I believe that almost none of my (1650 loans mid 2017) were ever paid back and then renewed.
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djay
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Post by djay on Jul 19, 2019 18:54:31 GMT
The problem with the annualised projected returns is that this is a FC forecast (their view) and not actual defaults. Confused about the renewals bit (apart from property). I believe that almost none of my (1650 loans mid 2017) were ever paid back and then renewed. If you look at the financials tab of individual loans it should show previous FC loans. It's not a problem to have a FC loan and subsequently take another, we know that FC has many, it's not a bad thing that there is repeat business-43% of loans are. However if you have a good look at defaulted loans in your portfolio concentrating on those that constitute repeat business, I'm sure you will find some that stick out like a sore thumb-i have picked up a few refinancing with significantly increased loan sizes that default early in the new loan. There are some that have repeatedly taken out new loans- not convinced it is always apparent from the company finances that the goal of the previous loan such as "growth" has been met. There are certainly a number that I wouldn't have lent to the renewal loans given choice looking at the figures.
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blender
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Post by blender on Jul 20, 2019 12:03:36 GMT
Sorry quick add on. Iv'e a feeling some journalists from for example The Times monitor these threads in search of a story. Here is a big story if they wish to dig in. Only the same old story. Exciting start-up has a mission to revolutionise lending. Real priority is for venture capitalists to exit and founders to bank their winnings by maximising the share value at flotation, this to be done by lending as much of the investors cash as possible approaching the time of IPO, and leaving the lenders and new shareholders to take the future risks. Comforting for the financial establishment that the revolutionaries now walk on two legs instead of four. Just a variation on banking.
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Post by shanghaiscouse on Jul 20, 2019 22:09:40 GMT
Most helpful graph FC produces is the Lifetime Default Rate profile which they have just updated. Recommend all to take a look and to monitor. The 2017 cohort is taking off like a rocket and at 18 months in is running at about double the default rate for the 2012 to 2015 cohorts. This matches my own defaults which in the year to end of 2018 saw new defaults at 102 almost exactly double the defaults occurring in the yrs to end 2016 (52) and 2017 (53). Posters on this blog have for many months been flagging up the problem hiding in the loan book. As expected it is now floating to the surface. Enjoy. Yes, that chart is the best, you can click on the years in the legend and it will isolate out any particular time series. And as you say it shows the 2017 and 2018 years with dramatically higher bad debt rates, a very separate trajectory to 2014-2016 and only getting worse. For 2016 loans after 30 months you have 7.1% going bad, but 2017 is on an even higher trajectory, the maximum data point available is 18 months when 2017 had already 4.8% of loans going bad compared to 3.5% for 2016. So if 2017 is 30% worse than 2016 then by 30 months you can expect bad loan rates of 9.5% - 10%. You can't read anything into the 2018 cohort yet because even the worst, crooked borrowers tend to make the first few repayments before holding their board meetings and extraordinary resolutions to wind themselves up whilst setting up a new company to buy the business. But by the end of this year there will be 12 months of data and as it is between months 6-12 that the bad debts start making themselves known then I expect even 2017 to be eclipsed. It is clear that chasing loan growth (which is what their business model incentivises them to do) is a disaster, when it is done to the extent that they write more loans to SMEs than the rest of the entire UK banking system combined (their claim!).
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blender
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Post by blender on Jul 20, 2019 23:00:21 GMT
Hmmm. Perhaps it is (again) time to redesign the statistics page to improve the presentation of information to be more readily accessible and understood by investors. Too much information is confusing, such as the now-removed downloadable loan-book and the breakdown of its performance by risk band.
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Post by shanghaiscouse on Jul 21, 2019 9:53:20 GMT
I check to CH, but I think FC think they will never get paid out by the liquidator, so they go after the Guarantor. Very slowly though.... they also don't have any incentive to pursue criminal action. for example, in my portfolio there are several cases where it is clear that the directors of the company should never have created a new debt because they had no way to repay it, and after taking out a FC loan they make the first 3-6 repayments then put the company into voluntary wind-up. Upon liquidation surprise surprise the cash has disappeared. However, as the directors are also the guarantors, then FC don't take criminal action against them as they want to maximise the chance of a financial settlement. Hence bad behaviour goes unpunished.
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keitha
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2024, hopefully the year I get out of P2P
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Post by keitha on Jul 22, 2019 9:32:34 GMT
I have a couple where the Guarantor having put company into liquidation is then applying for IVA, I accept that stuff happens but to go for IVA within weeks of company going broke makes me think it's dodgy
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Post by shanghaiscouse on Jul 30, 2019 16:00:16 GMT
I have a couple where the Guarantor having put company into liquidation is then applying for IVA, I accept that stuff happens but to go for IVA within weeks of company going broke makes me think it's dodgy yeah you can bet your life the money they lent him has disappeared
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Post by Deleted on Aug 21, 2019 22:55:29 GMT
Question to FC: Why don't you update the loan comments when recoveries stop?
Answer: "the Collections and Recoveries team will provide updates in the event there is a significant change surrounding a recovery or legal avenues taken"
And here's me thinking that recoveries were the most significant thing surrounding a recovery!
I'm just in it for the laughs!
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