Lending Club: Loan originations drop 90% during COVID-19
The marketplace lender says the decline is in line with expectations, with loan investor demand showing early signs of recovery.
Lending Club saw loan originations of $325.8m in the second quarter of 2020, down 90 per cent year over-year.
The marketplace lending giant, like many other lenders around the world has been deeply affected by the spread of the coronavirus and the subsequent lockdowns and uncertain economic environment.
It says that in the period it took “decisive actions” to reduce cash expenses and preserve liquidity but that ultimately lending fell substantially, hitting revenues.
Lending Club made a net loss for the quarter of $78.5m owing to the fall in originations but emphasised this was in line with our expectations. Net Revenue was $43.9m, down 77 per cent year-on-year.
Lending Club’s CEO Scott Sanborn said the firm was still on target to acquire Radius bank amid a “challenging environment.”
“We are pleased with our ability to maintain strong levels of liquidity, are encouraged by the payment behavior of our members and the resilience of the loan portfolio and remain focused on the acquisition of Radius Bank,” he said.
As of June 30, 2020, Lending Club said it had net cash of $564.1m compared to $690.7m as of June 30, 2019.