Following the ousting of its former CEO Renaud Laplanche, peer-to-peer marketplace Lending Club continues to struggle, posting widening year-on-year losses for Q2 2016.
The San Francisco company’s CFO Carrie Dolan resigned from her role hours before the earnings call, signalling worrying news for investors. She is being replaced by Bradley Coleman as interim CFO.
Lending Club reported a second quarter losses of $81.4m, significantly greater than the $4.1m loss it reported for the same period last year. However, revenue increased 7% year on year to $102.4m.
The results also include a $35.4m write-down of Lending Club’s acquisition of health-care lender Springstone Financial, which it made in 2014.
Loan originations for the company were $1.96bn in Q2 2016, up 7% from Q2 2015. However, this is a 30% drop from $2.75bn in the first quarter of 2016.
Operating a peer-to-peer loans model, Lending Club sells loans to investment firms rather than using deposits to finance lending as a traditional bank would.
Laplanche was removed from the CEO position by the board in May after failing to report a personal stake in an investment fund to which loans were sold.
This resulted in many money managers pausing their purchases of Lending Club’s loans, taking a hefty toll on the firm’s second quarter earnings.
“Our efforts to reengage investors are working, with fifteen of our top twenty largest investors back on the platform today,” said Lending Club’s new CEO and President, Scott Sanborn.
“Despite the unusual disruption to our supply of capital in May, we facilitated nearly $2bn of loans to nearly 170,000 borrowers. While we still have a lot of work ahead, the value that we bring to borrowers and investors is stronger than ever, and we believe we have the resources and resolve to execute on our mission.”
Despite shaking investors’ confidence in peer-to-peer loans, Lending Club’s weak results come as peer-to-peer rival Prosper is reportedly in talks to sell $5bn worth of loans to a round of investment firms over the next five years.
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