(Adds context on LendingClub, interview with CEO)
By Anna Irrera and Sruthi Shankar
May 4 Online lender LendingClub Corp
raised its revenue forecast for the full year as it reported its
fourth straight quarterly loss on Thursday, almost a year after
a scandal involving its business practices.
The San Francisco-based company has been trying to move on
from the issues that emerged in May 2016, including the sale of
loans to a large investor, that led to the ouster of then-Chief
Executive and founder Renaud Laplanche.
On Thursday, LendingClub finance chief Tom Casey forecast
the company would generate full-year revenue of between $575
million and $595 million, up from his earlier forecast of $565
million to $595 million.
Analysts had forecast revenue of $590 million, according to
Thomson Reuters I/B/E/S.
For the first quarter, the company reported a loss of 2
cents per share on an adjusted basis. Analysts had expected a
loss of 3 cents per share, according to Thomson Reuters I/B/E/S.
Net operating revenue fell 18.3 percent to $124.5 million,
above the average analyst expectation of $122.8 million.
LendingClub shares fell 3 percent to $5.90 in after-hours
LendingClub, one of the largest peer-to-peer lenders, runs a
website where consumers apply for loans funded by individual or
Over the past year it has made large investments to fix flaws
and regain the trust of investors, including improvements to its
technology, underwriting and pricing models.
Still, its loan originations fell significantly in the past
quarter as operating expenses grew 4.3 percent to $154.37
The company originated $1.96 billion in loans in the first
quarter, a 29 percent drop from a year earlier, and a 1 percent
fall from the last three months of 2016.
Problems emerged for LendingClub last year when it
acknowledged it altered documentation when selling $22 million
in loans to investment bank Jefferies Group. The loans were
later repurchased by LendingClub.
Banks who had stopped purchasing loans on the platform in
the wake of the scandal have since returned to buying them
through LendingClub, the company said.
Banks funded 40 percent of total originations for the
quarter, up from 31 percent in the last three months of 2016.
Chief Executive Scott Sanborn said in an interview on
Thursday the company expected its recovery efforts to produce
results this quarter.
"We said we were planning to return to growth on the one
year anniversary (from the departure of Laplanche) and we
continue to maintain that plan," Sanborn said.
(Reporting by Anna Irrera in New York and Sruthi Shankar in
Bengaluru; Editing by Maju Samuel and Andrew Hay)