Credit risk performance update - October 2022
We are pleased to publish our Q3 2022 performance update on our statistics page.
In Q3 2022, we have continued to focus on the impact the cost of living challenges can have on our active loan customers and the overall impact on portfolio performance.
However, both expected annual returns and expected loss rates have remained relatively stable compared to our Q2 2022 update.
We are also pleased to inform you that we are now paying at the target interest rate level for all cohorts.
Expected annual returns
Both expected annual returns and expected annual loss rates have remained broadly stable compared to our Q2 2022 update.
Expected annual losses have been updated to reflect the most recent portfolio performance and the latest economic forecast provided by an independent third party. We continue to closely monitor the impact of the cost of living challenges on the economy, UK consumers and our active loan customers.
Overall expected annual losses on the active portfolio remained relatively stable at c.4.0% in Q3 2022. However, we will continue to monitor it closely due to the external economic environment.
Expected annual returns have remained relatively stable and broadly aligned with the Q2 2022 performance update.
Average returns on past cohorts (2014-2019) are 4.4% p.a. for Growth investments and 3.8% p.a. for Flexible, compared to 4.5% and 3.8% in Q12 2022, respectively.
The 2020 and 2021 cohorts' average returns are 2.5% p.a. and 4.5% p.a. for Growth and 1.8% and 4.0%p.a. for Flexible, respectively, which are relatively stable compared to the Q2 2022 performance update.
We are also pleased to inform you that we are now paying at the target interest rate level for all cohorts.
The Lending Works Shield
The Shield cash balance has remained relatively stable at £1.3m in Q3 2022, compared to £1.12m in Q2 2022. Shield cash utilisation continues to be maximised to pay arrears and default to retail investors.
Next update
Our next statistics page update will be in January 2023.
The Lending Works Shield does not give you a right to a payment so you may not receive a pay-out even if you suffer loss. The Lending Works Trustee has absolute discretion as to the amount that may be paid, including making no payment at all. Therefore, investors should not rely on possible pay-outs from the Lending Works Shield when considering whether or how much to invest. For more information click here.