Peer2Peer Finance News
The UK's first peer-to-peer finance magazine for investors and the industry
  • Home
  • News
    • Personal Finance News
    • Industry News
    • SME News
    • Global News
  • Property
  • IFISA
    • IFISA Guide
  • Video
  • Open Banking
  • Cryptocurrency
  • Features
    • Joint Ventures and Promoted Content
  • Comment & Analysis
  • What is P2P?
  • Partners
  • Events
    • Past Events
  • P2P Power 50
    • Power 50 2020
    • Power 50 2019
    • Power 50 2018
    • Power 50 2017
  • Sign up to our e-newsletters
  • Magazine
  • Directory
  • Jobs
  • My Account
    • Manage Account
    • Change Password
    • Log In
    • Log Out
data
May 2 2017

RateSetter upgraded transparency to “top-tier” level, says 4th Way

Anna Brunetti Industry News, News 4th Way, arrears, loan book data, loan transparency, Neil Faulkner, P2P credit risk, P2P data, P2P lending, P2P platform default rates, P2P transparency, Ratesetter

RATESETTER’S upgraded data disclosure on its loan book and expected losses has brought its transparency to a top-tier level, according to peer-to-peer lending research firm 4th Way.

The ‘big three’ P2P platform, which recently announced it was upgrading its expected losses methodology with a new dedicated committee and quarterly reporting, published new figures incorporating the changes on Friday, unveiling lower forecast losses and a higher coverage ratio.

Based on the amended methodology, expected cumulative losses now stand at £18.06m, which paired with the current £22.44m provision fund buffer result in a 124 per cent coverage ratio – six per cent higher than last reported.

The firm now calculates separate figures for loans older than nine months and for loans originated less than nine months earlier, grouping the latter based on features such as average score, size, annual percentage rate and early delinquency rates.

Moreover, it will segment loans based on risk grade, term, channel and origination date rather than just on risk levels.

To match the more detailed future loss methodology, the platform also injected a slate of new credit data onto its public performance statistics page – placing itself at the top of the P2P class for transparency, 4th Way said.

Thanks to the sheer number of indicators that its performance table now singles out, “RateSetter now offers top-tier disclosure,” said Neil Faulkner from the P2P comparison website.

“In terms of detailed aggregated statistics on the platforms’ own websites, it is now joint-top with FundingKnight and Bondora. All three offer a lot of details.”

Read more: Industry urges for standard default definition

RateSetter’s data table now provides a clear estimate of the losses expected over the lifetime of its loan book, spelling out the losses that have already materialised and future expected losses for each year of origination, as well as a detailed breakdown of different types of arrears, provision fund adequacy levels, and investors’ expected returns.

However, Faulkner pointed out that platforms’ data disclosure should be gauged for how useful it is to customers rather than on a mere quantitative basis.

“It’s difficult to assess which of these [credit tables] is the most comprehensive, because you can’t just count the number of columns in the loan book,” he said.

“The level of usefulness is subjective and varies depending on what you want to achieve by checking the data.”

For example, RateSetter’s statistics on property development loans and their underlying securities would be less accurate than those offered by property-specialist platforms such as Landbay, Faulkner said.

Read more: Saving Stream updates default and secondary market rules

Funding Circle to shut down forum amid property loan debate Buyer beware: Easy-access P2P accounts may have hidden risks

Related Posts

Justin

Industry News, News, Top 3

P2P lending ‘key part of economic recovery’

Euro Money. euro cash background. Euro Money Banknotes

Global News, Industry News, News, Top 3

European P2P platforms predicted to offer more loans to developing markets

Coin Stack Concept

Industry News, News, Top 3

Future Fund hits £1bn of loans as government scheme prepares to close

Popular posts:

  • Banks begin freezing accounts suspected of bounce…
  • Everything we know about the CBILS successor scheme (so far)
  • RateSetter to return to full interest for investors
  • LendInvest bond value lost £5.8m during pandemic
  • Losses narrowed at Lending Works before Intriva takeover
  • NCA senior officer warns of “substantial” Covid loan…
Back To Top
  • Home
  • Contact
  • About
  • Team
  • Advertising
  • Subscribe
  • Privacy
  • T&Cs
  • Disclaimer

Follow Us on Social Media

© Peer2Peer Finance News 2020
• Additional design by