Is Lending Club Back? | Bank Innovation

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Better originations, better sales, more revenue: wow, did Lending Club just report a positive quarter?

With the results reported on its earnings call yesterday, it certainly seems as though the marketplace lender has turned back toward growth.

The company recorded about $140 million in total net revenue for the quarter, representing “the second highest revenue in the company’s history,” said CEO Scott Sanborn during yesterday’s call. This is up 12% from last quarter’s revenue, and represents a 35% YoY increase.

These results were a “breakout quarter” for Lending Club, said Sanborn, achieved through a continuing focus on consumer behavior via data analytics.

Observing positive macro trends in credit, like low unemployment and low interest rates, paired with the company’s data and technology platform, allowed the company to narrow its second quarter loss and better returns, according to Sanborn.

Furthermore, the increase in credit card debt represents further opportunity for the marketplace lender to grow, said Sanborn:

Currently, outstanding U.S. credit card balances are approximately $1 trillion. 60% to 70% of our customers are currently taking advantage of our personal loans to pay off their credit card balances and save an average of 24% on their rates while getting themselves on the path to financial success.

Given Lending Club’s size relative to the size of the problem we’re addressing, it leaves plenty of opportunity for us to grow. And the numbers are just as compelling in auto.

The company also reported $2.1 billion in originations for the quarter, representing 10% quarterly increase from the $1.9 billion reported in the first quarter of the year.

These results come after competitor online lender OnDeck reported a 19% QoQ decline in originations during its earnings yesterday. This also represents a sharp shift from Lending Club’s past couple of quarters of declining revenue and stale origination growth (Lending Club has reported a 1% growth in originations for the previous three quarters).

With these results in mind, it seems as though Lending Club is on a upward curve. The stock is up 8% at the time of this reporting, trading at nearly $6 per share.

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