US-based lender LendingClub narrowed its losses and increased loan originations in the fourth quarter of the year, after an eventful few months.
The US lender, which in February completed its acquisition of digital lender Radius Bancorp and in the lead up to this at the end of last year stopped offering retail peer-to-peer investment, reported a consolidated net loss of $26.7m (£19.1m) in the fourth quarter.
This was an improvement from the third quarter’s $34.3m loss but still down year-on-year from an income of $200,000 in the fourth quarter of 2019.
LendingClub reported that its loan originations reached $912m in the fourth quarter, an improvement of 56 per cent from the third quarter and a drop of 70 per cent from the same period in 2019.
The lender said the origination volume exceeded the high end of previously provided guidance. It added that an improvement in expenses reflected tight control over fixed costs and lower legal expenses related to legacy issues.
These benefits were partially offset by lower net interest income reflecting prior loan sales, as well as positive asset revaluations in the third quarter.
In the last three months of 2020, LendingClub achieved a net revenue of $75.9m, up by two per cent quarter-on-quarter but down 60 per cent year-on-year.
LendingClub put its lower net interest income down to the sale of $470m of loans in the second half of 2020 to accumulate capital in preparation for the company’s acquisition of Radius.
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“I am proud of our accomplishments in 2020, which led us to complete the groundbreaking acquisition of Radius Bank,” said Scott Sanborn, chief executive of LendingClub.
“Combining the award-winning digital bank with LendingClub’s leading online marketplace provides us with substantial advantages over both traditional banks and fintech marketplace lenders.
“Adding deposit capabilities builds on our tech and data advantages as it allows us to better serve our more than three million loyal and highly-motivated members and digitally manage their lending, spending, and savings.
“We are fully aligned with both our customers and shareholders to realise incremental long-term value for decades to come.”
“We are encouraged by the continued growth in loan originations with volume above the upper end of our fourth quarter guidance range,” added Tom Casey, chief financial officer of LendingClub.
“With the addition of bank deposits, we enhance our resiliency and unleash a new recurring revenue stream that will drive significant long-term growth once the bank is fully integrated.”
The improvement from the third to the fourth quarter follows LendingClub’s announcement in November that its third-quarter loan originations and net revenue grew substantially from second-quarter lows.