- Today’s main news: DBRS takes action on SoFi, Earnest student loan ABS transactions. Goldman intros Private Bank Select. Kroll assigns prelim ratings to Prosper Marketplace Issuance Trust Series 2017-2. Metro Bank has strong first half. Baidu, PayPal partner on overseas payments.
- Today’s main analysis: RateSetter’s wholesale loans have nearly all disappeared.
- Today’s thought-provoking articles: LendingClub Marketplace Insights focus on interest rates. India getting closer to establishing P2P lending norms.
- DBRS takes rating actions on SoFi, Earnest student loan ABS transactions. GP:”Confirmations or upgrades, all great news especially for Ernest.”
- LendingClub rolls out marketplace insights with interest rate focus.
- Goldman Sachs introduces Private Bank Select for the wealthy. GP:”I continue to expect Goldman to enter other online credit opportunities around real estate, small business, in different ways. The spread between their Goldman Sachs Bank capital costs and the yield of these products is extremely attractive. “AT: “Goldman is easily the most innovative of legacy financial institutions.”
- Kroll assigns preliminary ratings to Prosper Marketplace Issuance Trust Series 2017-2.
- RealtyShares acquires Acquire Real Estate. GP:”Probably a cheap purchase of a company who wasn’t among the leaders of the space. I wonder what RealtyShares saw that was worth buying or perhaps the price was so low that it didn’t really matter. “AT: “More consolidations in RECF will make the sector more efficient overall. I think we’ll see more such acquisitions, and some mergers.”
- LendingTree reports record Q2 results. AT: “Congratulations.”
- CircleUp introduces new Credit Advisors program.
- Acorns Partners with Clarity Money.
- iCapital receives funding from Morgan Stanley Investment Management.
- A map of U.S. unicorns.
- Mortgage industry in the hot seat again. GP:”A very interesting charte of customer satisfaction from mortgage originators.”
- RateSetter’s wholesale loans have almost all disappeared.
- Metro Bank has strong first half.
- Assetz Capital joins Bud.
- Prudential the first financial adviser to shun advice allowance.
- Baidu, PayPal partner for overseas payments. AT: “I’m glad to see PayPal stretching its international muscles.”
- Moroku teams up with Temenos to help children financially. AT: “This is an awesome idea.”
- P2P lending norms likely by end of month.
- BSE Institute offers two-year Masters program in fintech.
- Regulation will make P2P lending attractive.
- United States
- DBRS Takes Rating Actions on U.S. Student Loan ABS Transactions (DBRS), Rated: AAA
- LendingClub Marketplace Insights, Summer 2017 (LendingClub), Rated: AAA
- Goldman Sachs Announces Private Bank Select, A New Online Lending Program for Affluent (Crowdfund Insider), Rated: AAA
- Kroll Bond Rating Agency Assigns Preliminary Ratings to Prosper Marketplace Issuance Trust, Series 2017-2 (BusinessWire), Rated: AAA
- RealtyShares Acquires Rival Platform to Accelerate Next Phase of Innovation (BusinessWire), Rated: A
- LendingTree Reports Record 2Q 2017 Results; Increasing Full-Year 2017 Guidance (PR Newswire), Rated: A
- Introducing CircleUp Credit Advisors (CircleUp), Rated: A
- Acorns Partners with Adam Dell’s Clarity Money (BusinessWire), Rated: A
- iCapital Receives Capital Injection from Morgan Stanley Investment Management (Crowdfund Insider), Rated: A
- The United States Of Unicorns: Every US Company Worth $1B+ In One Map (CB Insights), Rated: A
- Mortgage industry under fire again … from younger buyers (CNBC), Rated: A
- United Kingdom
- RateSetter’s wholesale loans have all but disappeared (AltFi), Rated: AAA
- Metro Bank delivers strong half-year results (AltFi), Rated: AAA
- Assetz Capital Joins Financial Account Aggregator & Marketplace Bud To Further Grow Lender Base (Crowdfund Insider), Rated: A
- Prudential becomes first provider to shun advice allowance (FT Adviser), Rated: A
- WeWork launches dedicated business entity in China with US $ 500M (e27), Rated: AAA
- Hongling venture capital within 3 years of liquidation loan chairman said the scale is not profitable (Caixin), Rated: A
- China’s Baidu enters strategic partnership with Paypal to tap Chinese tourists (Reuters), Rated: AAA
- Moroku teams up with banking software giant Temenos to help parents help their children win financially (Moroku Email), Rated: A
- 5 things you need to know in Australian tech today (Business Insider), Rated: A
- Person-to-person lending norms likely by end of month (Times of India), Rated: AAA
- BSE Institute now offers two-year Masters program in Fintech (Money Control), Rated: A
- RBI regulations will make P2P lending attractive for individuals (Techseen), Rated: A
- Billionaire investor calls out ‘questionable’ SoftBank fund fueling possible tech bubble (CNBC), Rated: AAA
- Sunline Convenes Summit to Map Out Leading Companies Financial Future (Asia One), Rated: B
DBRS Takes Rating Actions on U.S. Student Loan ABS Transactions (DBRS), Rated: AAA
DBRS, Inc. (DBRS) has today reviewed seven ratings from two U.S. student loan structured finance asset-backed securities transactions: SoFi Professional Loan Program 2016-C LLC and Earnest Student Loan Program 2016-C LLC. Of the seven outstanding publicly rated classes reviewed, four were confirmed and three were upgraded.
|Issuer||Debt Rated||Rating Action||Rating||Trend||Notes||Published||Issued|
|SoFi Professional Loan Program 2016-C LLC||Post-Graduate Loan Asset-Backed Notes, Class A-1||Confirmed||AAA (sf)||—||Jul 25, 2017||US|
|SoFi Professional Loan Program 2016-C LLC||Post-Graduate Loan Asset-Backed Notes, Class A-2A||Confirmed||AAA (sf)||—||Jul 25, 2017||US|
|SoFi Professional Loan Program 2016-C LLC||Post-Graduate Loan Asset-Backed Notes, Class A-2B||Confirmed||AAA (sf)||—||Jul 25, 2017||US|
|SoFi Professional Loan Program 2016-C LLC||Post-Graduate Loan Asset-Backed Notes, Class B||Upgraded||AA (sf)||—||Jul 25, 2017||US|
|Earnest Student Loan Program 2016-C LLC||Series 2016-C, Class A-1 Notes||Upgraded||AA (sf)||—||Jul 25, 2017||US|
|Earnest Student Loan Program 2016-C LLC||Series 2016-C, Class A-2 Notes||Upgraded||AA (sf)||—||Jul 25, 2017||US|
|Earnest Student Loan Program 2016-C LLC||Series 2016-C, Class B Notes||Confirmed||BBB (sf)||—||Jul 25, 2017||US|
LendingClub Marketplace Insights, Summer 2017 (LendingClub), Rated: AAA
This month, we are launching a new series for investors—LendingClub’s Marketplace Insights—to share periodic insights into how LendingClub’s marketplace works and how it performs. In this first issue of LendingClub Marketplace Insights, we will focus on loan interest rates and their impact on an investor’s total return.
- LendingClub’s goal is to provide value to both sides of the marketplace—access to competitive rates for borrowers, and solid returns for investors.
- Many factors are considered in determining loan1 interest rates on the LendingClub platform, including the supply and demand for credit, the competitive landscape, and the macroeconomic environment.
- Loan interest rates are regularly adjusted and not dependent on a single factor, but a combination of numerous data points, observations, and objectives.
- LendingClub continually monitors the platform’s competitiveness, and a deliberate, prudent approach will continue to be taken as interest rates are adjusted as needed.
Goldman Sachs Announces Private Bank Select, A New Online Lending Program for Affluent (Crowdfund Insider), Rated: AAA
Goldman Sachs (NYSE:GS) announced a new digital service today. The global banking group introduced Goldman Sachs Private Bank Select (or GS Select) – an online lending program that provides financial advisors the ability to offer securities based loans (SBLs) to their clients.
GS Select is described as an expansion of the firm’s existing Private Bank business in PWM (Private Wealth Management), which uses a digital platform to extend the lending services customarily reserved for PWM clients to non-PWM clients.
Kroll Bond Rating Agency Assigns Preliminary Ratings to Prosper Marketplace Issuance Trust, Series 2017-2 (BusinessWire), Rated: AAA
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Prosper Marketplace Lending Issuance Trust 2017-2 (“PMIT 2017-2”). This is a $501.06 million consumer loan ABS transaction that is expected to close on August 9, 2017.
This transaction represents the seventh securitization collateralized by unsecured consumer loans originated through the online marketplace lending platform operated by Prosper Funding LLC (“Prosper” or the “Company”).
RealtyShares Acquires Rival Platform to Accelerate Next Phase of Innovation (BusinessWire), Rated: A
RealtyShares, a leading online marketplace for real estate investing, today announced the acquisition of technology-first, marketplace platform Acquire Real Estate, an innovative rival that has set a bar for product development within the industry.
LendingTree Reports Record 2Q 2017 Results; Increasing Full-Year 2017 Guidance (PR Newswire), Rated: A
LendingTree, Inc. (NASDAQ: TREE), operator of LendingTree.com today announced results for the quarter ended June 30, 2017.
Second Quarter 2017 Business Highlights
- Total loan requests in the quarter of 5.4 million grew 48% compared to second quarter 2016
- Record revenue from mortgage products of $71.5 million represents an increase of 28% over second quarter 2016 primarily driven by growth in purchase revenue, although refinance revenues grew more than 10%.
- Record revenue from non-mortgage products of $81.3 million in the second quarter represents an increase of 112% over the second quarter 2016 and comprised 53% of total revenue.
- Revenue from our credit card offerings grew to $37.0 million, an increase of 377% compared to second quarter 2016, or 43% on a proforma basis.
- Record personal loans revenue of $20.5 million grew 23% over second quarter 2016 and grew 21% sequentially.
- Home equity revenue grew $6.9 million over second quarter 2016 representing growth of more than 100%.
- More than 5.7 million consumers have now signed up for free credit scores and savings alerts through My LendingTree, and the volume of new enrollments is accelerating. Revenue contribution from MyLendingTree grew 60% in the second quarter compared to the prior year period.
Second Quarter 2017 Financial Highlights
- Record consolidated revenue of $152.8 million represents an increase of $58.5 million, or 62%, over revenue in the second quarter 2016.
- GAAP net income from continuing operations of $8.0 million, or $0.59 per diluted share. GAAP net income from continuing operations in 2Q 2017 was impacted by a $9.4 million charge ($5.6 million net of tax) due to an increase in the fair value of contingent consideration associated with the CompareCards acquisition, reflecting the strong performance of that business and the higher probability of achieving earn-out targets. We also recognized a $3.8 million excess tax benefit related to stock-based compensation under the new accounting rules of ASU 2016-09.
- Record Variable Marketing Margin of $48.3 million represents an increase of $14.3 million, or 42%, over second quarter 2016.
- Record Adjusted EBITDA of $27.0 million increased $10.3 million, or 62%, over second quarter 2016.
- Adjusted Net Income per share of $0.90 represents growth of 8% over second quarter 2016.
- On May 31, 2017 the company issued $300 million aggregate principal amount of its 0.625% Convertible Senior Notes due June 1, 2022.
- LendingTree generated $31 million in cash flow from operations in the second quarter, and as of June 30, 2017, maintained an unrestricted cash balance of $356 million.
Introducing CircleUp Credit Advisors (CircleUp), Rated: A
Today we’re excited to announce the launch of CircleUp Credit Advisors, a new affiliate of CircleUp that provides consumer product businesses with the working capital financing they need to grow and thrive.
Many traditional bank lenders won’t even consider providing credit to businesses that are cash flow negative, and often view loan sizes under $1M as too small and high-risk to be worth their time. It is safer for them to market a “small business” credit card, tied to the entrepreneur’s personal FICO score and capped at ~$30K, versus spending the time to truly evaluate the entrepreneur’s underlying business performance and assets. Unfortunately, for growing businesses with revenues in excess of $250K, a small business credit card simply doesn’t move the needle when it comes to easing the working capital cash crunch.
Acorns Partners with Adam Dell’s Clarity Money (BusinessWire), Rated: A
Acorns, the country’s fastest-growing micro-investing app with more than 2 million accounts, today announced its partnership with Adam Dell’s Clarity Money, the personal finance app that acts as the “Champion of your Money.” Through the partnership, Clarity Money customers can easily become Acorns investors and take advantage of Acorns automated investing features. Existing Acorns investors also benefit by being able to see a snapshot of their activity in the Clarity Money app.
iCapital Receives Capital Injection from Morgan Stanley Investment Management (Crowdfund Insider), Rated: A
Morgan Stanley Investment Management (NYSE: MS) has invested in iCapital Network, a fintech platform that aims to democratize alternative investments for high-net-worth individuals and their financial advisors. Morgan Stanley’s investment, together with investments from UBS Financial Services, Inc. (NYSE: UBS) and lead investor BlackRock (NYSE: BLK), brings iCapital’s total funding to date to over $50 million.
The United States Of Unicorns: Every US Company Worth B+ In One Map (CB Insights), Rated: A
The United States is home to 105 unicorn companies valued at $1B+. As of 7/25/2017, six private US companies are worth over $10B. The two most valuable unicorns in the US are Uber ($68B) and Airbnb ($29.3B). Palantir Technologies and WeWork, both valued at $20B, are tied for third.
Mortgage industry under fire again … from younger buyers (CNBC), Rated: A
After arguably the worst decade in history for the mortgage industry — a foreclosure crisis accentuated by predatory lending and forged, “robosigned” documents — things were slowly improving.
The drop in perceptions of the industry was driven primarily by a significant jump in the number of customers saying that their mortgage servicer is focused more on profit than customer experience. At least 10 percent said their time was wasted during interactions with their mortgage servicer. Satisfaction was higher, however, among those who used the servicer’s website or mobile app.
This shift may be more generational than anything else. Lenders are dealing more with millennials now, who are finally entering the housing market and who demand and expect transparency, expertise and, surprisingly, personal interaction.
RateSetter’s wholesale loans have all but disappeared (AltFi), Rated: AAA
AltFi Data Analytics shows peer-to-peer lender has stayed true to its word on phasing out wholesale lending.
RateSetter is currently in the midst of a window during which it will offer fee-free sell-outs to its investor base, provided there is sufficient liquidity in the marketplace to allow for it.
Metro Bank delivers strong half-year results (AltFi), Rated: AAA
The UK’s original challenger bank has had a strong first half of the year. Metro Bank has seen growth across the board, headlined by deposits growing to £9.8bn by the end of June, up 49 per cent on a year-on-year basis. Meanwhile the cost of getting those deposits appears to be falling, from 61bps in the first quarter of the year to 53 in the second.
The bank’s outstanding loanbook grew 67 per cent to £7.8bn in H1, increasing its loan-to-deposit ratio to 79 per cent. Metro has been deploying capital via Zopa’s marketplace lending platform since May 2015, but exactly how much has been deployed through this partnership is unclear. Metro had £201m in outstanding “consumer and other” loans as of 30 June 2017, up from £192m at the end of Q1.
Assetz Capital Joins Financial Account Aggregator & Marketplace Bud To Further Grow Lender Base (Crowdfund Insider), Rated: A
Peer-to-peer finance platform for business Assetz Capital announced on Thursday it has partnered with financial account aggregator and marketplace, Bud, to expand lender base. Bud’s Market+ is described as a service that allows users to connect and interact with a host of third-party services ranging from loans, investment and foreign currency and add them to their personal dashboard for future use.
Prudential becomes first provider to shun advice allowance (FT Adviser), Rated: A
Prudential has become what is believed to be the first major pension provider to rule itself out of the pension advice allowance completely.
It has said demand has been almost non-existent for something which would be so complicated to administer.
WeWork launches dedicated business entity in China with US $ 500M (e27), Rated: AAA
Coworking space chain WeWork launched the formation of its stand-alone China business entity WeWork China, TechCrunch reported.
WeWork currently operates in eight locations across China, particularly in Shanghai, Beijing, and Hong Kong. The company stated that the new funding will be used to expands its presence in the three cities while also expanding to more parts of China.
Hongling venture capital within 3 years of liquidation loan chairman said the scale is not profitable (Caixin), Rated: A
Hongling venture capital announced three years to withdraw from the network loan business, which means that the net loan single asset model and the “just against” model failed.
China’s Baidu enters strategic partnership with Paypal to tap Chinese tourists (Reuters), Rated: AAA
Baidu Inc said on Friday that it has entered a strategic agreement with PayPal Holdings Inc to tap overseas merchants as Chinese tech companies ramp up the fight for overseas payment partnerships.
Under the agreement, Baidu’s payment platform, Baidu Wallet, will be accepted by roughly 17 million PayPal merchants globally, the Chinese firm said in a statement on Thursday.
Moroku teams up with banking software giant Temenos to help parents help their children win financially (Moroku Email), Rated: A
Swiss based Temenos today announce that it is making Moroku’s ChoreScout app available to its banking customers via the Temenos Marketplace to help banks educate the next generation on better money management and invest in long term relationships. The announcement sees ChoreScout integrated with the Temenos core banking platform, whilst marketplace availability means that existing Temenos banks are able to login to the marketplace, review background material, request a free trial and be provided with test accounts.
With over 2,000 firms across the globe, including 41 of the top 50 banks, relying on Temenos to process the daily transactions of more than 500 million banking customers, the agreement gives Sydney based Moroku access to a significant and global customer base and gives Temenos a solution in the increasingly buoyant youth banking market.
ChoreScout is a mobile app for banks to acquire children and their parents as customers. It lets parents set chores around the home. As the children complete the chores they receive their allowances, transferred from mum and dad’s bank account into theirs, which can then be used to save for goals such as skateboards and Lego or converted into cash. The app is deployed to teach fundamental financial literacy skills such as saving and the value of money and to act as a customer acquisition tool for banks.
Aaron Phethean, MarketPlace Product Director, commented, “A recent CYFI study showed that child and youth financial inclusion was a sustainability priority for less than 5% of banks. ”
Having savings accounts in childhood is associated with being two times more likely to own savings accounts, two times more likely to own credit cards, and four times more likely to own stocks in young adulthood, compared to not having savings accounts in childhood. Customers who have banked with a provider throughout their childhood are far more likely to extend this relationship into their student days and beyond when profit contribution increases significantly. Research indicates that only 10% would consider changing banks once their relationship is established, reinforcing the view that youth is the optimum point of market entry.
Moroku’s Chore Scout solution will provide banks with a:
- Relevant mobile banking experience for children
- Customer acquisition strategy for children and parents
- Deposit building strategy in a market of increasing funding challenges
- Corporate and Social responsibility agenda at the heart of the economy and community – families
5 things you need to know in Australian tech today (Business Insider), Rated: A
Sydney fintech Prospa has nabbed a $20 million debt facility from Partners for Growth. The online lender is reportedly going gangbusters, now holding $400 million of loans with small business customers.
Venture capital firm Right Click Capital has released its latest Internet Dealbook report, which shows $481.1 million of investment and acquisition deals had taken place in Australia in the June quarter through 58 publicly revealed transactions.
Low-entry real estate investment startup BrickX has revalued their property portfolio. Business Insider’s Sam Jacobs has taken a look at the new numbers and explains what it means to the average punter. Is it still worth putting in $100 to invest in a Sydney apartment?
Person-to-person lending norms likely by end of month (Times of India), Rated: AAA
The P2P firms, mostly digital startups, expect to be classified as non-banking financial corporations (NBFCs). That will help them gain more credibility as a financial sector player and enable them to work with institutional lenders.
While there are some 40 P2P platforms in India, only around 5-10 have attained any sizeable scale.
RBI is also expected to ask these firms to bring in experts from the financial sector on their boards and make disclosures on default rates. All P2P firms together do around Rs 100 crore in lending. The central bank might set an interest rate range for the segment. Some think it could be 11.5% to 25%.
BSE Institute now offers two-year Masters program in Fintech (Money Control), Rated: A
In a first in India, BSE Institute, the learning solutions arm of Asia’s oldest bourse Bombay Stock Exchange, has launched a Masters program in Financial Technology in association with University of Mumbai with an aim to prepare skilled talent for the booming FinTech industry.
RBI regulations will make P2P lending attractive for individuals (Techseen), Rated: A
Khaderbad: Yes we are planning to raise Pre – Series A funding by the end of 2017 and we plan to utilize the funds for business development, product enhancement and technology. This will further add to the growth of our company and maximize shareholder returns.
Khaderbad: Small and Medium enterprises (SMEs) sector contribute to nearly 45% of country’s GD, growing at an annual rate of 11.5% and employs close to 46 crore people. However, most of these units remain un-served or under-served by regular lending institutions such as Banks and NBFCs due to their stringent lending policy.
Billionaire investor calls out ‘questionable’ SoftBank fund fueling possible tech bubble (CNBC), Rated: AAA
Oaktree Capital’s Howard Marks took to criticizing SoftBank’s Vision Fund in a new memo published on the firm’s website Wednesday, saying that the contours are emblematic of an overheated market.
Marks said SoftBank’s historic, 18-year track record has produced annual returns of 44 percent. But was that “skill or luck?” he asked.
Sunline Convenes Summit to Map Out Leading Companies Financial Future (Asia One), Rated: B
More than 300 delegates comprising of IT and finance leaders convened at the financial summit that is centered on the rise of FinTech, digital banking systems and end-to-end functionalities which have caused a complete restructuring of the global innovation economy.
Market data indicates that Chinese mobile payments in 2016 were 50 times greater than those in the US due to the rapid adoption of “mobile payments”.