Posted by Bondora, one of the leading Estonian fintech platforms, has just unveiled its financial results for 2024. And there’s a lot to unpack. With ambitious moves toward becoming a fully regulated banking entity, changes in leadership, and impressive growth metrics, this year’s report offers valuable insights for investors.
In this article, I am breaking down the nine most important takeaways from the report, highlighting everything from their strategic direction to portfolio performance.
Whether you are a seasoned Bondora investor or just getting started with Go & Grow, this deep dive will give you the information you need to make a better-informed investment decision.
Ready to explore what’s new with Bondora? Let’s dive in!
Changes to the Supervisory Board for Banking License Requirements
In August 2024, two new members – Richard Groeneveld and Raimondas Berniunas – joined Bondora’s now five-member Supervisory Board. Bondora justified this step by citing the addition of expertise in risk management, banking, and technology companies.
“To further strengthen our governance, we restructured the Supervisory Board in 2024, bringing in a majority of independent directors with deep expertise in risk management, banking, and technology scale-ups.”
In response to my inquiry, Bondora confirmed that the restructuring of the Supervisory Board was also done in preparation for the upcoming application for a banking license, which requires meeting certain criteria set by the European Central Bank.
This includes, for one, that the majority of board members must be “independent” from the company, and that members must have extensive leadership experience in the banking sector.
“The goal was to shape the board in accordance with the licensing process’s requirements and the company’s strategic goals […] All supervisory board members must meet the criteria set by the European Central Bank (ECB).”
Investors have known for some years that Bondora is strategically steering toward becoming a banking institution.
According to Bondora, this step will help provide more stability and build greater trust. It will also facilitate expansion and the launch of new products across Europe.
“For Bondora Group, a banking license will add another layer of trust and stability for all our customers. It will also make it easier for us to expand into new EU markets as a credit provider and introduce new products.”
Bondora did not want to communicate a specific timeline. They only stated that the process is progressing at an “expected speed.”
Bondora Manages EUR 600 Million; Second-Largest P2P Platform After Mintos
In the past, I’ve often criticized Bondora for a certain lack of transparency. Primarily regarding the absence of data on assets under management and how the loan portfolio was actually performing.
Surprisingly, the 2024 annual report included such a reference point for the first time. And it’s a notable one. According to Bondora, the outstanding loan portfolio now stands at EUR 600 million. For context: this would currently make Bondora the second-largest P2P platform in Europe, just behind Mintos with EUR 615 million in outstanding loans.
There was, however, some confusion around the figure for the investment balance, which was stated to be just EUR 567 million. This refers to the total amount of investor funds as of December 31, 2024 – including already invested amounts and idle balances on user accounts.
In response to my query, Bondora explained that this structure is intentional. Investor funds are backed by a larger loan portfolio, which – ultimately – helps explain the often-questioned risk buffer (currently EUR 33 million).
“The loan portfolio is intentionally higher than the investment balance to ensure sufficient risk buffers and diversification within the Go & Grow product. This structure safeguards investor returns.”
Bondora Surpasses One Billion Euros in Funded Loans
In 2024, Bondora crossed the milestone of EUR 1 billion in funded loans – 16 years after the P2P platform began operations.
“Investor confidence in Bondora reached new heights in 2024 with €1 billion invested through Bondora since our launch in 2008.”
The pace of this growth is also evident from the fact that more than one quarter of that total was added just in the past year. In 2024 alone, Bondora funded 147,000 loans worth EUR 262 million. That represents an increase of around 30% compared to the previous year, when 81,000 loans worth EUR 202 million were funded.
20% Revenue Growth; Income Sources Remain Unchanged
Last year, Bondora funded nearly EUR 60 million more in loans than the year before. As a result, revenue increased by almost 20%, reaching EUR 52.6 million.
The proportional breakdown of revenue sources changed very little compared to the previous year. Management fees contributed EUR 26.8 million (51%; previous year: 52%), additional services (including BSecure) brought in EUR 15.1 million (29%; previous year: 30%), and EUR 9.5 million came from brokerage fees for loan origination (18%; previous year: 16%).
From a geographic perspective, the Finnish market saw the highest revenue growth, adding EUR 5.5 million. For the first time, the Scandinavian market as a whole surpassed Bondora’s domestic Estonian market, generating nearly 48% of total revenue, compared to Estonia’s EUR 21.8 million (41.4%). The Netherlands also saw significant growth, quadrupling to EUR 3.5 million in revenue, while Spain experienced a decline of EUR 800,000.
Eight Consecutive Years of Profitability
With a profit of EUR 1.2 million, Bondora has remained profitable for the eighth year in a row. A strong performance that few, if any, other P2P platforms in Europe can match.
When asked about future profitability targets, Bondora stated that it would not be sharing these publicly. The company’s goal is to secure a leading position in the industry, which it defines through both profitability and consistent growth. The aim is to strike a balance between sustainable profitability and steady, organic expansion.
“We do not publicly disclose our profitability targets. However, our strategy is to become an industry leader measured by both profitability and consistent growth. Rather than prioritizing one over the other, we aim to balance sustainable profitability with steady, organic expansion to drive long-term value.”
156% Increase in Doubtful Receivables; Poor Portfolio Quality to Blame?
While Bondora has been profitable for eight consecutive years, the latest annual report requires a more critical interpretation. Especially considering that profit dropped by 64% compared to the previous year.
A closer look at the income statement reveals that this decline is primarily due to a sharp increase in “Expenses from doubtful receivables,” which rose by EUR 8.8 million year-over-year a 156% jump.
This is perhaps the most crucial part of the annual report. After all, this blog has repeatedly warned in the past about Bondora’s lack of transparency and the potentially problematic state of its loan portfolio. But let’s break it down:
The term “Expenses from doubtful receivables” refers to receivables from borrowers where a default is likely. In other words, it reflects impairments on loan contracts where Bondora expects a partial or full loss.
Such impairments can arise due to increased defaults, a more conservative assessment of credit risk, new regulatory requirements, or revised assumptions about repayment likelihood.
From an investor’s point of view, the sharp rise in doubtful receivables can be interpreted in several ways.
First: Growth in Loan Issuance. Bondora funded EUR 60 million (or 30%) more in loans. Naturally, a higher volume will also lead to a proportional increase in loans at risk of default. What’s important, however, is that the ratio of defaults to the total portfolio remains stable.
Second: More Aggressive Risk Modeling. The significant increase in impairments could also point to stricter valuation approaches or tightened risk models. This would actually be a positive signal, suggesting that Bondora is proactively preparing for potentially tougher economic conditions.
Third: Deterioration in Loan Portfolio Quality. This issue has already been addressed several times on this blog and is relatively self-explanatory.
According to Bondora, however, the increase in doubtful receivables is attributed to a one-off accounting adjustment. Specifically, it involved a retrospective recalibration of expected credit losses (ECL) on Bondora’s own fee receivables – not investor loans. This measure was implemented as part of the preparations for the banking license and the transition to an enhanced IFRS 9-based model.
“The increase in doubtful receivables in 2024 is the result of a one-off accounting adjustment. Specifically, the change relates to Bondora’s own fee receivables from borrowers, rather than the loan principal balances, which are held by investors. To align with IFRS 9 standards in preparation for our banking license application, we implemented an enhanced expected credit loss (ECL) model. This new model was applied retroactively across the historical receivables portfolio, leading to a higher one-time provision expense.”
Additionally, Bondora expressed strong confidence regarding more efficient debt recovery processes, especially in the Finnish market, where they have observed a 50% improvement in recovery rates over the past 12 months.
“Bondora’s collection processes became significantly more effective in 2024, particularly in Finland, our largest market. This was evident in both incoming cash flows and the recovery rate on defaulted balances, which improved by more than 50% from the end of 2023 to December 2024 — a 1.5x increase in recovery efficiency.”
According to Bondora, the default rates have also decreased across all markets.
“The defaulted share has been gradually declining, reflecting steady and ongoing improvements in portfolio quality across markets.”
Conclusion: According to reports, there have been no signs of increased credit risks with investor loans. Nevertheless, this trend should serve as a reason to closely monitor the development of default rates and the recovery of funds from debt collection in the coming quarters.
Strong Balance Sheet; Focus on Intangible Assets
As in previous years, Bondora has a very clean and presentable balance sheet. The equity ratio now stands at an impressive 71%, and the debt-to-equity ratio (0.40) has remained consistently low over the years. The liquidity ratio is also strong, with a factor of 3.45, which is very solid.
The only exception is that intangible assets have now risen above 10% for the first time. The reason for this increase, as stated in the annual report, is that Bondora has capitalized the IT costs incurred in the development and improvement of its proprietary loan origination software.
“The Group has capitalised the IT costs incurred to create and improve the software used by the Group to issue loans.”
In response to my inquiry, Bondora further explained that this approach is also part of the broader effort to align their accounting practices with those of regulated banks.
“This approach is also part of our broader effort to align our accounting practices with those of regulated banks, in preparation for the banking license application.”
Bondora Buys Back Shares Worth EUR 1.2 Million
Although Bondora was able to achieve a net profit of EUR 1.2 million last year, its equity position remained almost unchanged compared to the previous year. A closer look at the changes in equity explains why.
Last year, Bondora repurchased EUR 1.2 million worth of shares.
The reason for this is also linked to the application for a banking license. As Bondora explained in response to my inquiry, a smaller and more consolidated ownership structure will help simplify the application and approval process in the future.
“The share buybacks were carried out in preparation for the bank license application process. As the entire consolidation group will fall under the supervision of the Financial Supervisory Authority, having a narrower and more consolidated shareholder base helps streamline the application and approval process.”
The share buybacks were also not directly related to the employee share ownership program. Furthermore, no additional buybacks or similar capital measures are planned for the time being.
Bondora Invests EUR 50,000 in Company Founded by Former Employees
Finally, another interesting observation in the notes regarding “Long-Term Financial Investments.”
According to the report, Bondora Group AS made an investment of EUR 50,000 in the Estonian fintech company FlowstepDesign OÜ in August 2023. As a result, they now hold a 1.32% stake in the company, which specializes in UX design and makes digital products more intuitive and efficient through user-centered design.
The company seemed familiar to me, so I did some further research. It turns out that the CEO and co-founder is Matt Clannachan, a long-time manager at Bondora with whom I’ve had frequent contact in the past.
When asked about the motivation behind this investment, Bondora explained that it is a strategic move aimed at fostering innovation, supporting promising ventures, and advancing entrepreneurial success stories from within their own ranks
“The investment strategically reflects our commitment to supporting innovation, strengthening ties with promising ventures, and fostering entrepreneurial success stories from within its own team.”
Since it is ultimately just EUR 50,000, the actual value of this investment can be considered relatively modest. However, it is interesting to see that Bondora is financially supporting the new projects of its former employees.
Conclusion: Bondora Annual Report 2024
One thing became clear when reviewing Bondora’s 2024 annual report: the Estonian P2P platform is consistently aligning its operations with the requirements of a banking institution.
This shift is evident in changes to the supervisory board, adjustments to the ownership structure, and other regulatory standards that will need to be met in the future. However, Bondora is currently not revealing when this process will be fully completed.
From an investor’s perspective, the developments towards more compliance and greater transparency are positive. The issue of portfolio quality should remain on the radar for many investors who aim to sustainably earn a return of 6% via Bondora Go & Grow.
Additionally, new investors who sign up by June 4th and invest at least EUR 100 have the opportunity to participate in a prize pool of up to EUR 35,000. More information is available in this article.
I’m Denny Neidhardt, the founder of re:think P2P. On this blog, I help retail investors make smarter, well-informed investment decisions in the world of P2P lending. Since 2019, I’ve been publishing in-depth analyses, platform reviews, and risk assessments to bring more transparency to this investment space. My goal is to challenge marketing claims, question developments, and empower investors with honest, independent insights.