Lending Club, the online consumer lender whose fortunes were hurt by scandal last year, lost $29.8 million in the first quarter amid lower revenues and rising expenses.
In the four quarters since the company’s CEO resigned, Lending Club has reported $170 million in losses.
During the first three months of this year, Lending Club lost seven cents per share, which was worse than the 3-cent loss expected by analysts tracked by FactSet Research Systems. Still, the company’s loss was smaller than it had been in each of the three previous quarters.
The San Francisco firm originated $1.96 billion in loans during the first quarter, which was down by 29% from the same period a year earlier. Net revenue was $124.5 million, a drop of 18%. Operating expenses totaled $154.4 million, a 4% increase from the first quarter of 2016.
But the company said Thursday that it made significant investments during the quarter and predicted that they will pay dividends over the long run.
“We redeployed resources for growth and invested heavily in our technology platform in the first quarter,” CEO Scott Sanborn, who has been in the job since June, said in a press release.
Lending Club specializes in consumer installment loans, and its rapid growth earlier this decade was fueled by borrowers looking to refinance credit card debt at lower interest rates. The company operates an online platform that matches borrowers with savers who fund the loans.
Lending Club went into a tailspin in May 2016, when founder and CEO Renaud Laplanche resigned shortly after the firm’s board discovered that certain information that was provided to a loan buyer had been falsified.
The scandal broke at a time when investor interest in the online lending sector was waning amid concerns that the industry’s loans were starting to go bad at higher rates.
There were some signs of progress in Lending Club’s first-quarter earnings report.
Lending Club said that it expects its full-year loss in 2017 to be $67 million-$77 million, which was down by $2 million-$7 million from its previous projection.
The company also said that it expects net revenue for the year to be $575 million-$595 million, up from an earlier projection of $565 million-$595 million.
