LendingClub Loan amounts up 14% Q / Q

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A sign that consumers’ appetite for loan products has held up even during the pandemic – and that borrowers continue to use online platforms to tap these loans, LendingClub’s latest quarterly results on Wednesday (October 27) showed double-digit percentage gains in its core and adjacent businesses.

The LendingClub model, of course, also shows a continued appetite for institutional investors to make these loans. And with its acquisition of Radius Bancorp in the rearview mirror (in February this year), the ability to offer members a range of financial products in a vertically integrated model is gaining ground.

Read more: LendingClub obtains authorization to acquire Radius Bancorp

According to company documents, the company has identified a total addressable market of $ 1,000 billion related to revolving debt.

CEO Scott Sanborn noted on the call that the $ 3.1 billion in loan issuance reflects levels similar to what was seen just before the pandemic. Nonetheless, the higher income rates associated with this lending activity reflect the benefits of the digital banking model, leveraging data flows and vertical integration. About 80% of loans issued have been automated, according to comments on the appeal. During the quarter, he said, the company added 100,000 consumers; the consumer base now stands at 3.8 million.

Management highlighted important opportunities in vehicle financing; Sanborn noted that about two-thirds of LendingClub members have auto loans; the company recorded 85% quarter-over-quarter growth in its automotive refinancing business.

Going forward, the company sees potential in Buy Now, Pay Later (BNPL) loans for larger ticket items; delinquencies, according to comments on the call, perform better than the industry average – a nod to the use of advanced technology for underwriting and risk analysis. Losses due to fraud, management said on the call, amounted to less than five basis points.

The documents showed part of the leverage inherent in the banking model of the market: the bank helped generate additional revenue of $ 57.7 million.

LendingClub’s third-quarter loan issuance jumped 14% quarter-over-quarter to $ 3.1 billion, as the company said its business almost reached pre-pandemic levels – and that its transition to a digital market banking model is progressing rapidly.

As a result, these mounts helped increase market revenue by 15% to $ 174.6 million. Total revenue was $ 246.2 million, up 20% sequentially.

In its additional documents accompanying the earnings report, the company said its loans held for investment were $ 2.5 billion in the third quarter, compared to $ 2.3 billion in the second quarter. . In the most recent period, unsecured personal loans were $ 991 million, compared to $ 512 million in the second quarter; PPP loans held on the balance sheet increased from $ 616 million in the second quarter to $ 437 million in the third quarter. According to comments on the call with analysts, the “runoff” of PPP loans was and is to be expected.

As reported in recent weeks, joint research between PYMNTS and LendingClub shows that personal loans have helped about a third of paychecks to paycheck consumers, who make up the majority (54%) of the population.

Read more: Reality Check: the paycheck to paycheck report

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