Post by james on May 16, 2014 7:04:57 GMT
Here are my numbers after about 18 months.
I only include loans from 2012 and 2013 in this paragraph. 60+ overdue rate for Estonian A 1000 loans is 0.8%. I have no loans from outside Estonia and A 1000 is about 91% of my remaining loan balance for the period. All 60+ overdue borrowers are making payments. I am very active in selling loans that I think may default. For the Estonian A 1000 loans that I have sold the "defaulted capital balance" is 15% of current capital balance, not balance at time of default. "Defaulted capital balance" is balance at loan issue minus capital payments made.
For all of my sold loans, any time, in ABC 600-900 grades, the default capital balance (initial minus repaid) for sold loans is 21.6% of the total default and non-default capital balance minus capital repaid. I currently hold only about 19% of all ABC 600-900 loans that I have successfully bid for. There are no 60+ overdue loans in any of these groups that I have not sold before default. I have done relatively little bidding in these areas.
Even with the difference between 0.8% and 15% it is not certain that my loan selling has been more profitable than not selling because I have lost interest from the sold loans that did not default and recovery money from the ones that did default and make payments.
Much of my loan selling has been for reasons other than default risk so it is likely that the percentage in default of loans that I sold because of risk is much higher than 15%. I did not track this before this year so I have no good data on reason for sale. I may be able to recover that sometime by looking at the loans again. One example of selling for other reasons is just selling low interest rate loans from the low bid wins bidding system. I probably made a small loss on those sales, or maybe a small profit.
Moving on to all lending, not just 2012 and 2013, Bondora reports that my net return is currently about 28.6% but it falls to about 27.5% before the 10th of the month payments happen. My own Euro XIRR calculation that values all defaulted loans at total loss is currently about 17% and increasing over time. I am normally in the top 600-800 of all investors and the top 20 of investors with more than €10000 lent for more than 12 months. The exact position varies during the month.
I'm very satisfied with the low default rates and high returns that I have been achieving.
I only include loans from 2012 and 2013 in this paragraph. 60+ overdue rate for Estonian A 1000 loans is 0.8%. I have no loans from outside Estonia and A 1000 is about 91% of my remaining loan balance for the period. All 60+ overdue borrowers are making payments. I am very active in selling loans that I think may default. For the Estonian A 1000 loans that I have sold the "defaulted capital balance" is 15% of current capital balance, not balance at time of default. "Defaulted capital balance" is balance at loan issue minus capital payments made.
For all of my sold loans, any time, in ABC 600-900 grades, the default capital balance (initial minus repaid) for sold loans is 21.6% of the total default and non-default capital balance minus capital repaid. I currently hold only about 19% of all ABC 600-900 loans that I have successfully bid for. There are no 60+ overdue loans in any of these groups that I have not sold before default. I have done relatively little bidding in these areas.
Even with the difference between 0.8% and 15% it is not certain that my loan selling has been more profitable than not selling because I have lost interest from the sold loans that did not default and recovery money from the ones that did default and make payments.
Much of my loan selling has been for reasons other than default risk so it is likely that the percentage in default of loans that I sold because of risk is much higher than 15%. I did not track this before this year so I have no good data on reason for sale. I may be able to recover that sometime by looking at the loans again. One example of selling for other reasons is just selling low interest rate loans from the low bid wins bidding system. I probably made a small loss on those sales, or maybe a small profit.
Moving on to all lending, not just 2012 and 2013, Bondora reports that my net return is currently about 28.6% but it falls to about 27.5% before the 10th of the month payments happen. My own Euro XIRR calculation that values all defaulted loans at total loss is currently about 17% and increasing over time. I am normally in the top 600-800 of all investors and the top 20 of investors with more than €10000 lent for more than 12 months. The exact position varies during the month.
I'm very satisfied with the low default rates and high returns that I have been achieving.