Losses at the double for Lending Club
Lending Club has experienced a double blow – with a net loss of $81.4 million and the departure of its CFO.
These latest developments follow in the wake of the recent jobs cuts and reorganisation of its top brass. That was all initiated as the firm is looking to rebuild investor confidence following the untimely resignation of former chairman and CEO Renaud Laplanche.
In terms of financial results, for the second quarter ended 30 June 2016, the net loss of $81.4 million was a contrast to the net loss of $4.1 million in the same period last year.
It says this loss is due to a “Goodwill impairment charge” of $35.4 million related to the 2014 acquisition of Springstone, an increase in professional service fees of $14.9 million, approximately $14 million in incentives paid to investors, and an increase in compensation related costs of $6.5 million associated with severance costs and a retention program.
Lending Club’s CEO and president, Scott Sanborn, says “we still have a lot of work ahead” but the firm has the “resources and resolve to execute on our mission”.
There was better news for loan originations in Q2 2016. These were $1.96 billion, compared to $1.91 billion in the same period last year, an increase of 2% year-over-year. Operating revenue for the quarter was also up – $102.4 million, compared to $96.1 million in the same period last year, an increase of 7% year-over-year.
For Q3 2016, its outlook is an operating revenue in the range of $95 million to $105 million.
In terms of personnel, Lending Club says Carrie Dolan resigned from her role as CFO to “pursue a new opportunity”.
In response, it has appointed Bradley Coleman to principal accounting officer and Interim CFO. Coleman has served as Lending Club’s corporate controller since 2013 and will continue in that role while fulfilling his new duties.
In addition, Timothy Mayopoulos, president and CEO of Fannie Mae, was appointed to the Lending Club board as an independent director.