Harmoney

[joker]

I for one am seeing an increase in charge-offs as a percentage of interest earned. This is to be expected with no further lending as new loans mask the damage of charge-offs due to the time lapse before new loans go bad. Figures are attached of cumulative charge-offs as a percentage of gross interest earned.
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[Bjauck]

I for one am seeing an increase in charge-offs as a percentage of interest earned. This is to be expected with no further lending as new loans mask the damage of charge-offs due to the time lapse before new loans go bad. Figures are attached of cumulative charge-offs as a percentage of gross interest earned.
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Even before the Covid recession, Interest rates had been reduced for each grade, so even if the charge off rate stayed the same, with reduced income the charge-offs as a percentage of interest earned would increase.

[myles]

From John Ryder Newsletter: "Australian banks are setting up special triage units to prepare for a "tidal wave" of bad debts that could reach $45 billion in three years."

So rises in defaults (charge offs) are likely to be seen soon and in the months to come - these things often take some time to filter through.

It will be interesting to see how other platforms, who are still 'selling' P2P loans, fare and if continued investment in P2P lending is a wise choice in the short-medium term?

[BJ1]

Nothing like scaremongering to reduce credibility. Just like NZ economists predicting up to 15% falls in house prices. Where is the data to support the figures thrown out there. Not saying they may not eventuate but will it become a self fulfilling prophecy, or are the guesses just pie in the sky? We can expect problems to be quite large but quantifying them is foolhardy, if not downright sabotage. On the P2P proposal though, I think we can safely determine that Harmoney has decided to minimise it's risk: I have "suddenly" stopped losing any of my loans to full repayment / refinance.

[myles]

Not clear who you are suggesting is scaremongering - if you dig a little you'll find this is coming from AU banks. Banks need to predict what's coming so it makes sense to listen to their forecast numbers to get ahead of it? Not a discussion for this thread, just putting up the flag so people are prepared for what's likely to be coming.

I've also seen a drop in the amount of auto-withdraw funds (i.e. re-writes as you suggest), so we will most likely feel the brunt as loans appear to be shifting to wholesale at a much slower rate then they have been.

[Bjauck]

Nothing like scaremongering to reduce credibility. Just like NZ economists predicting up to 15% falls in house prices. Where is the data to support the figures thrown out there. Not saying they may not eventuate but will it become a self fulfilling prophecy, or are the guesses just pie in the sky? We can expect problems to be quite large but quantifying them is foolhardy, if not downright sabotage. On the P2P proposal though, I think we can safely determine that Harmoney has decided to minimise it's risk: I have "suddenly" stopped losing any of my loans to full repayment / refinance.

You cannot have people being locked down without incomes across the board being affected. It would be denial to suggest that returns from P2P will not take a big hit. The question is by how much will each p2p or quasi P2P be hit.

Westpac Bank profit has fallen by 50% already.
https://www.rnz.co.nz/news/business/...lf-year-profit

[BJ1]

https://www.rnz.co.nz/news/business/415781/westpac-posts-297m-half-year-profit[/URL]

While ANZ and Westpac, and no doubt others, have reported falls in profit, the falls recorded are not actual as yet. They are the result of accounting conservatism charging the current period with provisions for expected losses in future periods. They are not an indicator of current losses.

[leesal]

I've also seen a drop in the amount of auto-withdraw funds (i.e. re-writes as you suggest), so we will most likely feel the brunt as loans appear to be shifting to wholesale at a much slower rate then they have been.

Loans paid by way of rewrites are way down: I had $611 "paid off loans" in month of April; compared to $2464 in March, $4294 in February. Not sure if any of the April "paid off loans" were rewritten.

In terms of loss - Hardship is the big eye-opener! Although I've only had $400 of extra defaults, and minimal arrears. Hardship has massively ramped up to over $2600 in the space of a month and a half, nearly 4% of the portfolio. I wonder what the collectability on those loans is. The interest I earned in that period was $2491 gross, before any fee's were deducted. So the performance probably going backwards.

On the other hand, the lendingcrowd and squirrel loans I hold are holding up better then the Harmoney ones at this point.

[Bjauck]

While ANZ and Westpac, and no doubt others, have reported falls in profit, the falls recorded are not actual as yet. They are the result of accounting conservatism charging the current period with provisions for expected losses in future periods. They are not an indicator of current losses.

Exactly they would not provide for a write down of assets if there were not anticipating losses as a result of the lockdowns and states of emergency around the World. This is prudent calculated preparation for the consequences and not scaremongering. It would be prudence and not scaremongering to anticipate similar reductions or greater percentage reductions in returns for investors on the various P2P platforms.

Perhaps the Reserve fund for Squirrel and the borrower securities on Lending Crowd may mean investors on those platforms will suffer a lesser percentage reduction in their returns compared to Harmoney?

[CageyB]

5.2% of my outstanding principal is currently listed as "hardship". All things considered, that's acceptable at this stage. Arrears/charge-offs are basically unchanged since the lockdown began.