Bondora Group defends sharp fall in net profits

Bondora Group has defended reporting a sharp drop in its net profits in its most recent financial results.

The European peer-to-peer lending marketplace recently reported its eighth consecutive year of profitability, but its net profits fell steeply from €3.4m (£2.9m) in 2023 to €1.2m in 2024.

At the time, the firm’s income statement revealed a significant increase in expenses from doubtful receivables, while its payroll expenses and the cost of its goods and services also rose.

Read more: Bondora profits stumble despite surge in loans issued

However, in a fresh statement yesterday (6 May), Bondora said the decline in net profit and the increase in doubtful receivables were both primarily due to a one-off accounting adjustment related to changes to its fee receivable provision model.

It said this specifically relates to Bondora Group’s own fee recievables from borrowers, rather than loan principal balances, which are held by investors.

Read more: Bondora investors earned record returns in December

“To align with IFRS 9 standards in preparation for our banking license application, we implemented an enhanced expected credit loss model,” the company said.

“This new model was applied retroactively across the historical receivables portfolio, leading to a higher one-time provision expense.”

It emphasised that the change “does not indicate a deterioration in the business’s underlying profitability” but rather “reflects a necessary one-off alignment with the regulatory standards of a supervised financial institution”.

Read more: Bondora reports seventh year of profitability

“Bondora remains profitable and financially stable for the eighth year in a row.”