Lending Club losses increase after tough 2016
US peer-to-peer giant Lending Club made a loss for the third year in a row in 2016, despite new loans picking up slightly in the fourth quarter.
The platform, which saw its founder and chief executive Renaud Laplanche resign last year amid a high-profile corporate governance scandal, reported a net loss of $146m (£117m) in 2016.
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This widened from a $5m loss in 2015, despite revenue increasing from $426.6m to $495.4m over the 12 months.
Spending by the platform increased over the year from $77m on product development in 2015 to $115m in 2016. Administrative expenses increased from $122m in 2015 to $207m in 2016.
On a quarterly basis, losses improved slightly from $36.5m in the third quarter to $32.3m in the final three months of 2016.
The platform is forecasting a net loss of between $69m and $84m in 2017.
Loan originations in the fourth quarter were $1.99bn, up one per cent compared with the $1.97bn reported in the third quarter of 2016, but down 23 per cent year-on-year.
The platform said it has now facilitated $25bn of loans since inception.
Read more: Lending Club’s Laplanche to set up rival firm
Shares in the New York Stock Exchange-listed company were down 1.2 per cent at Tuesday’s close.
“2016 was a year of investment in the company,” said Tom Casey, chief financial officer for Lending Club.
“We developed better internal processes, stronger controls, and a diversified investor base that will help us compete in the future.
“Going forward, we are beginning to redeploy resources into areas of the business that will drive long term growth and value creation.”
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