One year removed from a scandal that took the wind out of its sails, LendingClub returned to loan growth in the second quarter.
The San Francisco-based marketplace lender originated $2.15 billion in loans between April and June, up 10% from the same period a year earlier, when loan volumes were hurt by revelations that led to the ouster of founder and CEO Renaud Laplanche.
Still, profitability remained elusive in the most recent quarter. LendingClub reported a net loss of $25.4 million, bringing the total red ink in the five quarterly reports since the scandal broke to more than $200 million.
LendingClub 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.
LendingClub went into a tailspin in May 2016, shortly after the firm’s board discovered that certain information that was provided a loan buyer had been falsified.
The firm’s problems were compounded last year by deterioration in the performance of loans it had originated, which hurt demand among loan buyers and led to several rounds of interest rate hikes for borrowers.
During a call with reporters on Monday, LendingClub CEO Scott Sanborn said that loans originated on the company’s online platform in 2017 are in line with its expectations.
Sanborn noted that U.S. consumer debt recently hit an all-time high, and he said that it is important to remain vigilant about borrowers’ ability to manage all of their debts.
But he added, “It’s also worth noting that that represents an opportunity for LendingClub.” As consumers shoulder more credit card debt, there will be more demand for products that enable them to realize savings by refinancing, he said.
Shares in LendingClub rose by more than 10% on Monday during and after regular trading hours. Still, the company’s stock price remained under $6, far below the $15 per share price at its initial public offering in December 2014.
