LendingClub reports 3Q loss but offers rosier outlook
LendingClub extended its string of losses in the third quarter but signaled that it is on a path to profitability after resolving a series of longstanding regulatory problems.
The online consumer lender reported a net loss of $22.7 million in the quarter, which represented its best three-month performance within the last year. LendingClub, based in San Francisco, lost $6.7 million in the third quarter of 2017.
During the most recent quarter, LendingClub settled a Securities and Exchange Commission probe that dated back to the tenure of former CEO Renaud Laplanche, who departed in May 2016. The fallout from the scandal that led to Laplanche’s sudden exit has dogged the company for two and a half years.
LendingClub said that it is expecting to report a net loss of between $124 million and $129 million for the full year. If that guidance proves accurate, the publicly traded company will announce a smaller loss in the fourth quarter than it did on Tuesday.
In a press release Tuesday, CEO Scott Sanborn referred to a future in which LendingClub is profitable according to generally accepted accounting principles, though he did not provide a specific time frame for reaching that milestone.
LendingClub operates an online marketplace that matches consumers, many of whom want to consolidate credit card debt into lower-rate installment loans, with investors. The latter category includes individuals, banks and other financial institutions.
The company’s third-quarter results were helped by an 18% increase in loan origination volume versus the same period a year earlier. LendingClub originated $2.9 billion in loans during the quarter, its highest total ever, though revenue gains were offset by higher operating expenses.