ashtondav
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Post by ashtondav on Sept 21, 2019 9:28:46 GMT
the weekly emails over the last year or so seem to indicate monthly lending stable at about £80M. No more growth for Zopa p2p? Hence the banking initiative.
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Post by davee39 on Sept 21, 2019 14:55:14 GMT
Low interest rates have destroyed the main benefit of consumer lending P2P. With rates at around 4%, and the lender carrying all the risk, the model no longer works.
I expect the Bank to be competing in the same range as the smaller challenger banks - 1.4% Instant Access and 1.7 - 2% for fixed terms. The P2P will wind down.
Ratesetter face similar problems and seem to be thrashing about tweaking things to make it look as if they are sustainable long term. (They are not).
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aju
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Post by aju on Sept 21, 2019 15:32:41 GMT
Low interest rates have destroyed the main benefit of consumer lending P2P. With rates at around 4%, and the lender carrying all the risk, the model no longer works. I expect the Bank to be competing in the same range as the smaller challenger banks - 1.4% Instant Access and 1.7 - 2% for fixed terms. The P2P will wind down. Ratesetter face similar problems and seem to be thrashing about tweaking things to make it look as if they are sustainable long term. (They are not). Just curious what your long term period is 1, 2, 5 years or worse even less than a year. Mind you I am quite deep into the 5Y's on both platforms, Zopa since almost the start and RS more recently. I've pulled out of invest except SG covered but am quite a bit into ISA with some cover but seriously less than Invest as it all pickup stuff. If Z and RS and I assume FC, the big boys are not sustainable then it speaks volumes for the others not being either. I have a concern that Z and RS may try and pick up some platforms that fall by the wayside and am also considering moving a large amount out in the next few months if my Zopa keeps delivering very low value each month since some considerable sales earlier in the year. Time will tell on that one if it stabilises. My XIRR's though are still holding up and are considerably better than Marcus where I also have some savings well mrs aju does as I pay tax.
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Post by davee39 on Sept 21, 2019 17:01:20 GMT
I have been running down Zopa (safeguard) and RS as loans repay. Neil Woodford was a big backer of RS, but is now out in the cold as his house of cards collapses. I expect to be fully out in about 18 months - still getting 6%. The RS float is off the table due to the FC price collapse and, like Zopa, they are no longer growing so will be unable to mask any stress on the provision fund in the upcoming recession.
FC are (and will continue to be) loss making & will not be able to raise extra equity with shares having fallen 75%. They do not have a long term future, but at least the founders have taken out their millions.
My Assetz funds are all in quick access (Apart from the catastrophic GBBA loan 227). Again their model has not been tested in a recession and the access accounts depend on some clever financial engineering which may not be robust.
I am invested in FSCS backed 1 & 2 year bonds through Hargreaves Lansdown's saving option. I also have a substantial S & S holding invested mainly in Unit and Investment trusts yielding 5 to 7%. The smaller SIPP element is in Corporate bonds yielding 2 - 3% but fairly safe.
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benaj
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Post by benaj on Sept 21, 2019 18:51:35 GMT
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aju
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Post by aju on Sept 21, 2019 22:12:07 GMT
benaj , But doesn't simple extrapolation of the 1st 3 months give a value of just shy of £6B - that's not that much of a drop for the whole year perhaps. I assume Jan to April meant 1st Qtr (Jan-Feb-Mar) a bit odd to use Jan-Apr though. Not that i'm a financial wizard by any means but at least when I was in work I could read the finance reports of my employer and they used to be in qtrs. I must read the whole doc though looks very interesting. Edit: So it seems that in the document That does not seem to be a drop off to me especially as they estimate 20% increase. I think that may be a bit optimistic look at the tail off in recent years. Edit2: Section 3: Investor returns is quite an interesting section and their returns figures do seem to born out in my own experience with our Zopa at least. I've not been in RS long enough as yet I feel. The interesting thing is I have been in zopa for nearly 10 years but Mrs AJ has only been in for 3/4 years and their analysis is very close for her experience too in that her book is not quite so fruitful as Mine is. Mind 2 lenders is not really a good sample.
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zlb
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Post by zlb on Sept 22, 2019 10:31:00 GMT
In the end, non-FSCS investment will be limited - so that's a good reason for the yet to materialise banking offer from Z.
Or a more cynical view, related to the P2P general thread about P2P being worst investment decision question - it's apparent that some people flip platforms as much as loans - my rough or general impression from reading this forum over time, that some investors know that financial instruments can fail as much as an individual loan.
I see some of the newer models such as Loanpad being structured as a result of learning what went wrong elsewhere.
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