Is Lending Club back on track?

By Daniel Lanyon on Tuesday 8 August 2017

Alternative Lending

The largest marketplace and P2P lending platform has reported improving numbers for Q2 of 2017.

Lending Club has seen a pick up in business in the second quarter of 2017, providing a welcome boost to its investors one year from its former CEO and co-founder’s exit. 

While the firm made a net loss of $25.4m for the second quarter of 2017, this represented an improvement of $4.4m compared to the first quarter of 2017 aswell as a $55.9m improvment compared to the same quarter last year. 

The decrease in loss from the first quarter to the second quarter of 2017 was primarily due to a $15.1m increase in revenue, offset by higher general and administrative expenses

Renaud Laplanche, who was ousted from the firm he helped found, grow and eventually list departed in April 2016. The news prompted a challenge period for Lending Club, not to mention a swarm of marketplace lending critics dubbing the Laplanche departure as the beginning of the end for the nascent industry.

"We closed Q2 with the second highest revenue in our company's history and returned to Adjusted EBITDA profitability. Based on the second quarter results and how we are tracking against our initiatives, we are raising our financial outlook for the year," said Tom Casey, Lending Club's CFO.

Loan originations in the second quarter of 2017 were $2.15bn, up 10 per cent from both the first quarter of 2017 and compared to the same quarter last year. Net revenue in the second quarter of 2017 was $139.6m, up 12 per cent sequentially and up 35 per cent compared to the same quarter last year, driven primarily by higher loan volumes.

The San Francisco-based firm's s growth  in originations wasdriven by strong borrower demand and it said credit continues to perform in line with expectations as observed in both vintage and portfolio trends.

"It's great to be back to growth. Our second quarter results demonstrate the power of the LendingClub platform and the capability of our team to execute," said Scott Sanborn, LendingClub new CEO. "We are excited about the momentum building in the business and the massive opportunity that lies ahead."

The period also saw the first self-sponsored securitization from Lending Club, which it says will mean an opening up of new funding as well as expanding the investor base.

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