Lending Club released Q1 earnings. 4 main points were listed to navigate COVID-19. Keep employees safe, Protect investor returns, support members, and Preserve liquidity. Do you think this strategy will be effective?
Originations
Expected reduction of 90% of loan origination volume in Q2. 30% reduction in staff announced April 2020.
Loan Workouts
11% of loans enrolled in ‘Skip-a-Pay’ program. Skip-a-Pay is a 2-month deferment. Additional, 3-month interest only repayment plan. Long-term workout option being developed.
Collections
Headcount for collections employees increased 30% from Q1 2020. Further adjustments to be made based on volume.
Liquidity & Investor Returns
Expense run rate reduced by $70 mil. From Q4 2019. Temporarily and significantly tightened underwriting standards and increased interest rates. Acquisition of Radius to proceed.