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New CEO Sanborn upbeat after Lending Club hit with worst quarter, CFO resigns




By Daniel Lanyon on 9th August 2016

https://goo.gl/aorcdi

Scott Sanborn says a difficult quarter and departure of Lending Club's chief financial officer will draw a line under the beleaguered platform's recent wobbles. 

 

US marketplace lending platform Lending Club has suffered its biggest quarterly loss in the second quarter of 2016 prompting its chief financial officer Carrie Dolan to step down.

 

The firm reported a loss of $81.4m, or 21 cents per share, for the second quarter of 2016 compared to a loss of $4.1m, or 1 cent per share, a year ago.

 

In this period Lending Club saw its origination volume decline by nearly 30 per cent compared to Q1 of 2016 although it was still marginally better than the second quarter of 2015.  Loan originations in the second quarter of 2016 were $1.96bn, compared to $1.91bn in the same period last year, an increase of 2 per cent year-over-year. The Lending Club platform has now facilitated loans totalling nearly $21bn since inception.

 

Lending Club origination volumes since launch

Source: Lending Club

 

So far 2016 has been a tumultuous one for the marketplace and p2p lending space. The industry itself has taken a hit from a drop in global confidence but also a slowing of the bull run in growth that it has experienced in recent years. Lending Club as the largest and best known platform was also hit by its own series of bad news.

 

In May, it’s chief executive officer Renaud Laplanche stepped down amid allegations of impropriety, investment bank Jefferies pulled out of a securitisiton deal due to falsification of loan dates and subsequently its share price plummeted.

 

Performance of Lending Club stock price over 1 year

 

Source: Google

 

“The good thing is that it is behind us,” is how Scott Sanborn, Lending Club’s new CEO of Lending Club put it yesterday.

 

“We’ve accomplished quite a bit since May 9th [Laplanche’s departure]. Over the past three months we’ve been focused on re-engaging our investors and we are very pleased with our progress,” he said.  

 

Sanborn says that they have now “stabilised the firm’s investor base with 15 of the top 20 investors now back putting cash into the platform “albeit at lower investment levels.”

 

Lending Club are now back on track, Sanborn argues, evident in strong demand and pricing execution and the securitisation brought back to market by Jefferies, who have completed their due diligence and have resumed purchasing.

 

Dolan has left “to pursue a new opportunity,” LendingClub said with, Bradley Coleman interim CFO, having formerly been corporate controller although he will also retain these duties.

 

Timothy Mayopoulos, president and CEO of mortgage giant Fannie Mae has also been appointed to the Lending Club board as an independent director. Mayopoulos has 30 years of experience in financial services, including top jobs at Bank of America, Deutsche Bank and Credit Suisse First Boston. Sanborn has also joined the board

 

This follows a slew of new hires and fires since Laplanche’s departure. Sameer Gulati joined from McKinsey as chief operating officer in May. Patrick Dunne joined from BlackRock as chief capital officer in June.

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