Secondary Market activity picks up in September

September was a busier month for the Secondary Market after a slower August, as activity picked up again in September. The total value of transactions increased to €461,996.46. It translates to a decent growth rate of 6.7% for September.

Activity on the Secondary Market showed decent growth in September.

In contrast to August’s figures, only API transactions declined in September. Portfolio Manager and Manual transactions increased by 4.4% and 21.5%, respectively. This increase is a welcome sight after August’s 17.9% and 28.7% decline.

API transactions dipped by 14.7%, but because it only has a 19.1% share of the Secondary Market transactions, it doesn’t affect the overall growth rate of 6.7% too much. With 45.7%, manual transactions still have the biggest market share. Portfolio Manager makes up the rest with 35.2%.

Secondary Market total volume – September

Current loans

Manual transactions still have the biggest market share for current loans, increasing 4.4% from August. Portfolio Manager’s percentage of the transactions decreased slightly to 41.9%, but the total value of transactions grew by 4.4.% to €162,449.41. APIs market share fell by 4% to 21.1% for current loans. Overall, there was a 5.6% growth rate in current loan transactions.

The discount rate for September fell by nearly 6% compared to August. But investors opted to buy and sell loans on par with their original value, as the par category of transactions increased from 56.7% in August to 62.1% in September. Loans at a premium rate remain the same (34.2% of transactions in August v 34.7% in September). Portfolio Manager transactions totaled €162,449.41—a slight increase from August.

Current loans – September

Overdue Loans

The total value of transactions on overdue loans was €30,213.8, which shows a stable increase of 2.1%. The primary source of overdue loan transactions is still manual transactions. Its market share continues to grow as it now takes up 87.4% of the overdue loan transactions—a substantial increase of 6.4%.

Unlike others in the recent quarter, September showed a significant increase in premium rated overdue loan transactions. It rose from 4.5% of the total number of transactions in August to 34.2% in September. In contrast, discounted overdue loans market share fell by 27.4% to 49.8%, equaling €15,036.06 of the transactions.

Overdue loan transactions – September

Defaulted Loans

For the first time in three months, the defaulted loan category is not going in the opposite direction. After see-sawing every month since May, it’s now continuing its increasing trend we started to see in August when it sky-rocketed 56.9% to €35,929.16. In September, it increased by 21.4% to a total of €43,633.44.

Quite unexpectedly, discounted rates fell to the lowest rate since January 2020. Discounted rates took up only 65.6%, whereas it usually makes up nearly the entire category (94.9% in June, 95.0% in July, and 98.5% in August). In contrast, premium defaulted loan transactions increased to an unprecedented rate of 32.0%. That’s the largest market share for premium transactions in this category we’ve seen since February 2020, when it had a 40.3% market share.

API transactions ended their 3-month growing streak by declining 56.8%. It now accounts for €2,506.96 of transactions.

Defaulted loan transactions – September

Secondary Market picks up  

After August’s dip, it’s pleasing to see a slight increase in activity across September. Manual transactions and Portfolio Manager activity showed promising increases. API transactions were the only category not to increase in September. The total value of transactions increased by 6.7% to a total of €461,996.46.

Remember, investors should not seek higher returns from buying and selling loans on the Bondora secondary market.

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