- Today’s main news: LendingClub loan origination estimates better than expected, losses widen. Zopa closes 60M GBP in funding. Landbay hits 200M GBP lending landmark. N26 expands in Europe. BBVA, Red Electrica Corporation complete blockchain-based syndicated loan transaction.
- Today’s main analysis: Q3 earnings for GreenSky, LendingClub, OnDeck.
- Today’s thought-provoking articles: How GreenSky is changing financing. LendingTree’s mortgage offers report for October 2018. A peek at Plaid’s financials. Atom’s intensified mortgage push.
- LendingClub profit beats estimates on record loan originations. This is good news for LendingClub with expected earnings for 2018 to outpace original expectations. However …
- Losses widen. Net losses get bigger due to increased expenses.
- LendingClub to expand in Utah.
- How GreenSky is changing financing. This is an awesome, in-depth look at the GreenSky business model.
- Q3 earnings for GreenSky, OnDeck, and LendingClub. An excellent look at all three companies with in-depth charts for OnDeck and LendingClub.
- LendingTree’s mortgage offers report for October 2018. Purchase APRs are steadily rising. Always an interesting look.
- Millennials in the south owe the most on their cars. Especially Texas.
- Outside Financial brings transparency to auto lending.
- A peek at Plaid’s financials. Plaid’s valuation has tripled in the last half year.
- Fighting financial crime without excluding the underbanked.
- Nerdwallet wants to make comparison shopping for financial services easy.
- SoFi is looking for an InfoSec Governance, Risk, and Compliance Manager.
- NRL Mortgage partners with Riivos.
- Judge suspends compliance deadline for CFPB payday rule.
- Zopa closes 60 million GBP in funding.
- Landbay reaches 200 million GBP lending milestone. Congratulations.
- Atom’s intensified mortgage push.
- Older P2P property lenders boast negligible or zero losses.
- LendInvest starts new real estate debt fund with 150 million GBP.
- Jaja Finance secures crowdfunding campaign with huge success.
- BBVA, Red Electrica Corporation complete first blockchain-based syndicated loan transaction.
- Seven businesses that promise digital can be ethical.
- Banks should ally with fintechs on payday lending war.
- AI in fintech.
- PwC assists Cred with stablecoin project.
- Three tech strategies that benefit small to midsized financial institutions.
- Persona, FintruX partner on personal data.
- Europe: N26 expands into Denmark, Norway, Poland, and Sweden.
- Southeast Asia: Funding Societies, Modalku make global 100 leading fintech list.
- Canada: Loop, Equifax partner on free business and consumer credit education platform.
- China: Ping An CEO predicts exponential growth in fintech.
- Canada: Canadians can now use Bitcoin as loan collateral.
- Singapore: Where debt has gone.
- United States
- LendingClub profit beats estimates on record loan originations (Reuters), Rated: AAA
- LendingClub loss widens on higher expenses (Reuters), Rated: A
- LendingClub to expand in Utah (Pulse.com), Rated: B
- How GreenSky, In-House Financing, and Blockchain Are Transforming the World of Credit (Premier Gazette), Rated: AAA
- Roundup of Q3 2018 Earnings: GreenSky, OnDeck, LendingClub (Lend Academy), Rated: AAA
- LendingTree Mortgage Offers Report – October 2018 (Lending Tree), Rated: AAA
- LendingTree Study Finds Millennials in the South Owe the Most on Their Cars (Benzinga), Rated: A
- Outside Financial Brings Much-Needed Transparency to Auto Lending (Digital Journal), Rated: A
- We got a peek at Plaid’s financials, the fintech startup whose valuation has tripled in the past 6 months to as much as $ 3 billion (Business Insider), Rated: AAA
- Fighting financial crime without excluding the underbanked (American Banker), Rated: A
- Nerdwallet Wants To Make Comparison Shopping For Financial Services Simple (Forbes), Rated: A
- InfoSec Governance, Risk, and Compliance Manager (LinkedIn), Rated: B
- NRL Mortgage Selects The Riivos Mortgage Lending Application (PR Newswire), Rated: B
- Judge suspends compliance deadline for CFPB payday rule (American Banker), Rated: B
- United Kingdom
- Zopa, the UK P2P lending company, closes £60M round on path to launching a bank (TechCrunch), Rated: AAA
- Landbay reaches £200m lending landmark (P2P Finance News), Rated: AAA
- Atom is intensifying its mortgage push (Business Insider), Rated: AAA
- Older P2P property lenders boast “negligible or zero losses” (P2P Finance News), Rated: A
- LendInvest seeds newly launched real estate debt fund with £150m (Real Assets), Rated: A
- JAJA SMASHES CROWDFUNDING CAMPAIGN AS IT READIES CREDIT CARD LAUNCH (Fintech Finance), Rated: A
- Chinese tech CEO predicts ‘exponential’ growth in financial technology (CNBC), Rated: A
- European Union
- N26 Expansion: German Challenger Bank Brings Services to Denmark, Norway, Poland, & Sweden (Crowdfund Insider), Rated: AAA
- Banks complete first syndicated loan on blockchain (BBVA), Rated: AAA
- Seven Businesses That Promise Digital Can Be Ethical (Forbes), Rated: A
- Banks should ally with fintechs in battle against payday lenders (PaymentsSource), Rated: A
- Report: AI in Fintech (Diplomatic Courier), Rated: A
- Crypto Power Player PwC is Assisting on Cred Crypto Lending Platform’s New Stablecoin Project (Bitcoin Exchange Guide), Rated: A
- Research reveals three tech strategies that will benefit small and midsized financial institutions (Finastra), Rated: B
- Persona and FintruX announce renewed control over personal data (Leaprate), Rated: B
- Funding Societies | Modalku Included in Global List of 100 Leading Fintech Innovators (Markets Insider), Rated: AAA
- ‘Look at where debt has gone’: MAS chief warns of 3 shifts in global financial risks (Channel NewsAsia), Rated: A
- Loop Partners With Equifax to Launch Canada’s First Free Business and Consumer Credit Education Platform (Newswire), Rated: AAA
- Crypto Loans On The Rise – BTC Used As Collateral For Canadian Dollars (Crypto Disrupt), Rated: A
LendingClub profit beats estimates on record loan originations (Reuters), Rated: AAA
Online lender LendingClub Corp (LC.N) reported an adjusted third-quarter profit that edged past analysts’ estimates and raised its full-year earnings forecast on Tuesday, helped by record loan originations and higher transaction fees.
The company said it now expects 2018 adjusted earnings of between $89 million and $94 million, up from a previous range of $75 million to $90 million.
LendingClub loss widens on higher expenses (Reuters), Rated: A
Online lender LendingClub Corp’s quarterly net loss widened, due to higher expenses for outstanding legacy issues.
The San Francisco-based company’s net loss fell to $22.8 million, or 5 cents per share, in the third quarter ended Sept. 30, from a loss of $6.5 million, or 2 cents per share, a year earlier.
LendingClub to expand in Utah (Pulse.com), Rated: B
The Governor’s Office of Economic Development announced LendingClub Corporation will expand in Utah adding up to 860 jobs, $22 million in new state revenue and an estimated $17.85 million in capital investment over the next 10 years.
How GreenSky, In-House Financing, and Blockchain Are Transforming the World of Credit (Premier Gazette), Rated: AAA
Fifty years ago, if you needed a loan for yourself or your business, you would typically walk into a brick-and-mortar bank, fill out a bunch of paperwork, talk to a loan officer, and wait several days or weeks to find out if you were approved. Today, this story has changed, and it’s going to look even more different in the future.
Borrowers seem to like GreenSky’s new way of obtaining credit. So far, the fintech company has served more than 1.9 million customers, providing them over $13 billion. Perhaps GreenSky’s most promising distinction is that it has also been consistently profitable with its new way of providing loan services. Its transaction volume has grown steadily from $2.1 billion in 2015 to $3.8 billion in 2017. During the same time, it grew its merchant base from 5,000 to nearly 13,000. Clearly, consumers in the 21st century like the new way of borrowing.
GreenSky estimates the home improvement industry, one of its key targets, to be just south of $350 billion annually. At a transaction volume of $3.8 billion, the fintech company has roughly 1% of the market.
The APR’s for GreenSky’s products tend to fall between 5% and 24%, depending on the borrower’s credit profile. Loan terms vary from 42 to 90 months, and customers can borrow up to $55,000. GreenSky does not cater to subprime borrowers.
Late in 2018, GreenSky announced a new partnership with American Express.
Roundup of Q3 2018 Earnings: GreenSky, OnDeck, LendingClub (Lend Academy), Rated: AAA
OnDeck posted gross revenues of $103 million, up 8% from the previous quarter and 23% from the prior year period. OnDeck is benefiting from higher interest income due to rate increases as well as their origination growth while being able to decrease funding costs. Effective interest yield was 36.5%, up from 33.1% last year.
Net income came in at $9.8 million for the quarter, up from a loss of $4.1 million from the prior year period.
- Gross revenue of $392 million to $396 million, up from $380 million to $386 million,
- Net income of $20 million to $24 million, up from $10 to $16 million, and
- Adjusted Net income of $40 million to $44 million, up from $30 million to $36 million.
GreenSky reported record transaction volume in the third quarter of $1.4 billion, up 33% year over year. Revenue increased 29% to $113.9 million year over year. GAAP net income was $45.7 million.
Net revenues were $184.6 million, up 20% from the prior year period and originations were $2.9 billion, up 18% from last year. Applications also reached their highest levels, up 30% year over year.
In Q3 2018 GAAP Consolidated Net Loss was $22.7 million, or $7.3 million if you exclude $15.5 million of expenses related to outstanding legacy issues.
Total loans issued by the company now stands at over $40 billion.
- Net Revenue in the range of $688 million to $698 million.
- GAAP Consolidated Net Loss in the range of $129 million to $124 million, reflecting expenses related to outstanding legacy issues through the third quarter partly offset by higher Adjusted EBITDA guidance.
- Adjusted EBITDA in the range of $89 million to $94 million.
LendingTree Mortgage Offers Report – October 2018 (Lending Tree), Rated: AAA
October’s best mortgage offers for borrowers with the best profiles (the 95th percentile of borrowers) had an average APR of 4.61% for conforming 30-year fixed-rate purchase loans, up from 4.39% in September. The APR on refinance loan offers increased 22 basis points (bps), to 4.62%.
For the average borrower, the purchase APR for conforming 30-year fixed-rate loans offered on LendingTree’s platform was 5.27%, up 18 bps from September. The loan note rate of 5.14% is the highest rate of the year.
Consumers with the highest credit scores (760-plus, representing the 65th percentile of borrowers) received an average APR of 5.12%, versus 5.42% for consumers with scores of 680 to 719. The APR spread of 30 bps between these score ranges is the same as it was in September. For the average purchase loan amount of $233,938, the spread represents over $15,000 in additional costs for borrowers with lower credit scores over 30 years.
For the average borrower, the APR for conforming 30-year fixed-rate refinance loans increased 17 bps from September to 5.26%. The spread between credit score brackets (760-plus and 680 to 719) remained the same as last month, at 24 bps. That amounts to nearly $13,000 in extra costs over the life of the loan for borrowers with lower credit scores, given an average refinance loan of $238,447.
Average proposed purchase down payments fell to $60,361, a decline of about $3,600.
LendingTree Study Finds Millennials in the South Owe the Most on Their Cars (Benzinga), Rated: A
- Even car loans are bigger in Texas. Metros in the Lone Star State dominate the top of the list: McAllen, Houston, El Paso and San Antonio have the highest median auto loan balances for millennials at $23,704, $20,925, $20,544 and $20,521 respectively.
- Car capital of the world has the lowest auto debt. Ironically, Motor City has the lowest levels of millennial auto debt on our list with a median debt of $10,841 as well as the lowest average debt of $14,573.
- Great Lakes area metros shine with the least auto debt. After Detroit, millennials in Rochester, N.Y., Grand Rapids, Toledo, Ohio, and Cleveland carry the lowest median auto debts, at $12,165, $12,429, $12,678 and $12,717 respectively.
- New York and Ogden, Utah. These metros are on opposite ends of the spectrum when it comes to carrying any auto debt at all — New York has the lowest percentage of millennials with auto debt at 41.5 percent while Ogden, Utah has the highest percentage of millennials with auto debt (64.5 percent).
Outside Financial Brings Much-Needed Transparency to Auto Lending (Digital Journal), Rated: A
To prevent the average consumer from being charged more than $1700 in hidden markups on auto loan packages, Outside Financials opens an independent loan marketplace to facilitate transparency in auto lending and auto refinance.
We got a peek at Plaid’s financials, the fintech startup whose valuation has tripled in the past 6 months to as much as $ 3 billion (Business Insider), Rated: AAA
As of October, Plaid told investors it was on track to generate about $70 million over the next 12 months, two people who were briefed on the financials tell Business Insider.
That’s up from the $50 million in revenue the company told investors just one month earlier it was on track to generate, two other people who reviewed Plaid’s financials at the time said.
Fighting financial crime without excluding the underbanked (American Banker), Rated: A
Eugene Ludwig, founder and chief executive officer of IBM’s Promontory Financial Group, said artificial intelligence — already employed to help identify potential anti-money-laundering activity — is getting smarter, and can now be used to identify vulnerable groups of people who have been incorrectly labeled as high risk.
Nerdwallet Wants To Make Comparison Shopping For Financial Services Simple (Forbes), Rated: A
For example, Nerdwallet personal loan product page sorted loans by interest rates.
“All our consumers hated it. They wanted it sorted by monthly payments, which seems odd until you put yourself in their shoes and see what is going on month by month,” Chen said. “We have to meet them where they are. If you start by wagging your finger, that’s a good way to get them to hit the back button on their browser.”
Nerdwallet has three million members and more than 100 million visits each year, Chen said.
InfoSec Governance, Risk, and Compliance Manager (LinkedIn), Rated: B
SoFi is seeking an experienced InfoSec Manager to assist in all aspects of our governance, risk and compliance program.
NRL Mortgage Selects The Riivos Mortgage Lending Application (PR Newswire), Rated: B
Riivos Mortgage, a division of Riivos, Inc., the provider of cloud-based continuous value chain management technology, today announced that NRL Mortgage, an originator serving customers coast to coast, is using the Riivos Mortgage Lending forecasting, planning and reporting application to help them analyze and capitalize on growth opportunities. NRL Mortgage is majority owned by St. Christopher’s Holdings LLC, a privately-owned holding company based in Houston, Texas.
Judge suspends compliance deadline for CFPB payday rule (American Banker), Rated: B
U.S. District Judge Lee Yeakel on Tuesday reversed a previous order from June and granted, in part, the request by acting CFPB Director Mick Mulvaney and two industry trade groups to delay the payday rule’s August 2019 compliance date. They sought a delay to prevent lenders from having to comply with the old rule before the revisions are finalized.
Zopa, the UK P2P lending company, closes £60M round on path to launching a bank (TechCrunch), Rated: AAA
Obtaining a banking license and then launching an actual new retail bank requires capital. A lot of capital. Enter Zopa, the U.K. peer-to-peer lending company that wants to become a bank, which today is announcing that it has closed £60 million in further funding. Only £16 million is actually new new money, having already disclosed £44 million in August, so this is effectively an extension of that earlier fund-raise.
Landbay reaches £200m lending landmark (P2P Finance News), Rated: AAA
LANDBAY has hailed its quality service and strong broker relationships as it reached the £200m lending milestone this week.
The peer-to-peer property platform, which purely focuses on buy-to-let mortgages (BTL), said it had reached the landmark with a track record of zero defaults.
Atom is intensifying its mortgage push (Business Insider), Rated: AAA
Atom has initially introduced 2- and 5-year buy-to-let remortgage products for landlords that have four to 25 properties. Users will have to pay a 1% loan fee, and the maximum loan term is 25 years.
Older P2P property lenders boast “negligible or zero losses” (P2P Finance News), Rated: A
THE LONGEST running peer-to-peer property platforms are providing investors with high returns and “negligible or zero capital losses,” analysis claims.
Research from P2P analysis firm 4th Way has highlighted 11 lenders who now have a track record of four years or more.
LendInvest seeds newly launched real estate debt fund with £150m (Real Assets), Rated: A
LendInvest has launched a new real estate debt fund with £150m (€171.6m) seed capital from a previous fund.
JAJA SMASHES CROWDFUNDING CAMPAIGN AS IT READIES CREDIT CARD LAUNCH (Fintech Finance), Rated: A
Jaja Finance, the company on a mission to simplify the world of consumer finance, announces that it has already reached its fundraising target of £3m on equity crowdfunding platform Seedrs. The company will use the funds to expand its team and launch its digital credit card, Jaja.
N26 Expansion: German Challenger Bank Brings Services to Denmark, Norway, Poland, & Sweden (Crowdfund Insider), Rated: AAA
Germany-based challenger bank N26 is bringing its services to Denmark, Norway, Poland, and Sweden.
“N26 passes on these cost benefits to its customers. N26 partners with the most innovative fintech and traditional financial companies to offer its customers best-in-class products such as TransferWise (foreign exchange), Raisin (savings), Clark and Allianz (insurance), auxmoney (credit) and others.”
Banks complete first syndicated loan on blockchain (BBVA), Rated: AAA
BBVA and Red Electrica Corporation have become the first businesses in the world to deliver a syndicated loan using blockchain. The €150m deal, granted by BBVA, BNP Paribas and MUFG, was reached in record speed using BBVA’s proprietary platform- which is powered by distributed ledger technology.
Seven Businesses That Promise Digital Can Be Ethical (Forbes), Rated: A
In financial services, an industry where trust is a particular issue, Monzo was founded on the idea that there should be an alternative to traditional banking practices. Monzo argues that banks should get rid of punitive fees, do more to ensure customers know exactly what they can expect to pay for an overdraft, and provide greater control over how people spend their money.
Banks should ally with fintechs in battle against payday lenders (PaymentsSource), Rated: A
Bankers who regard payment technology companies such as fintechs as a problem may be missing opportunities.
Alternatives to payday lending are an example. These fintechs provide credit for nonprime customers, such as a recently divorced woman faced with a slew of new expenses. It is pricey credit, but cheaper than payday lenders. Unlike payday lenders, these companies provide credit reporting and reduced rates as a client pays off the loan. Eventually, a successful client qualifies for bank lending and leaves to take advantage of bank interest rates.
Report: AI in Fintech (Diplomatic Courier), Rated: A
FinTech has revolutionized the way that banks and insurance companies function. Rather than prioritizing themselves and their services as in the past, banks must emphasize client needs in today’s new technological era. This focus on personalized financial services manifests itself in FinTech—a financial infrastructure for consumer enablement. As FinTech applies data and technology to financial services in an effort to address industry challenges, artificial intelligence is essential to FinTech’s existence and usage.
To read the full report click here for the digital edition.
Crypto Power Player PwC is Assisting on Cred Crypto Lending Platform’s New Stablecoin Project (Bitcoin Exchange Guide), Rated: A
A division of the worldwide accounting and consulting firm PwCis currently working with a new stablecoin project that aims at developing a U.S. Dollar-based coin. The Hong Kong division will be exploring the best practices for issuing new stablecoinsworking with the Loopring Foundation.
Research reveals three tech strategies that will benefit small and midsized financial institutions (Finastra), Rated: B
A new piece of research, sponsored by Finastraand executed by Mercator Advisory Group, shows that small and midsized financial institutions can derive significant benefits to operational efficiency by pursuing three distinct cost-saving strategies: vendor consolidation, cloud delivery, and artificial intelligence. Based on in-depth interviews with C-level representatives of community banks and credit unions with asset size between $200 million and $5 billion, the research gauges attitudes toward and levels of adoption for each strategy.
- Consolidation of vendors ultimately eliminates the need to maintain and manage multiple systems, and can improve operational efficiency by 20-30%.i
- Cloud delivery brings numerous benefits including the ability to easily scale system capacity to meet demand.
- Artificial intelligence (AI), which is the least adopted of the three strategies to date, promises to make processes smarter, faster and more personalized to the consumer. However, in order to reap these rewards, banks must prioritize their vendor consolidation and cloud delivery road maps.
The white paper, titled Landmark Decisioning: Using Vendor Consolidation, Cloud Computing, and Artificial Intelligence to Improve Operational Efficiency, is available here.
Persona and FintruX announce renewed control over personal data (Leaprate), Rated: B
Persona, the blockchain-based solution for identity management,has just announced its partnership with FintruX, the P2P lending ecosystem, to streamline the onboarding process for customers while ensuring they remain in full control over their personal details.
Persona is the first identity management solution developing its own blockchain, as opposed to other projects being developed as ERC20 tokens over Ethereum.
Funding Societies | Modalku Included in Global List of 100 Leading Fintech Innovators (Markets Insider), Rated: AAA
‘Look at where debt has gone’: MAS chief warns of 3 shifts in global financial risks (Channel NewsAsia), Rated: A
While the fault lines of the last global financial crisis have been mostly addressed, risks remain and have shifted in three ways over the past 10 years, said the Monetary Authority of Singapore’s (MAS) managing director Ravi Menon on Wednesday (Nov 7).
Meanwhile, the extension of credit has shifted from banks to non-banks – one of the areas that have not been given enough attention, said Mr Menon.
Loop Partners With Equifax to Launch Canada’s First Free Business and Consumer Credit Education Platform (Newswire), Rated: AAA
Equifax Canada and Loop today announced the launch of a credit health and monitoring platform for businesses. Launched at the intersection of Small Business Month and Financial Literacy Month, the new platform empowers Canadian small business owners and entrepreneurs alike, to improve their financial and credit health through easy-to-read credit scores, reports and resources.
Crypto Loans On The Rise – BTC Used As Collateral For Canadian Dollars (Crypto Disrupt), Rated: A
It is now possible to attain a loan for Canadian Dollars (CAD) using bitcoin as collateral. The ability to use crypto as a form of collateral for fiat is a sign of further legitimacy for the sector. More providers are expected to follow suit and offer crypto loans, with a wider range of fiat currencies for a larger range of acceptable cryptocurrencies used as collateral.