J.P. Morgan Chase & Co. has agreed to acquire nearly $1 billion worth of personal loans arranged by LendingClub Corp., people familiar with the deal reported Nasdaq’s Telis Demos. The portfolio, worth just over $900 million and comprising loans made to consumers with an average FICO score of about 700, was sold for a premium to the outstanding balance on the loans.
“The loans had been owned by Santander Consumer USA Holdings Inc., the subprime auto lender, which had acquired them as part of an agreement with Lending Club. Last year, Santander Consumer opted to scale back its personal loan business and initiated a sale of the portfolio,” reported Demos. “There had been some concern that the value of the loans had diminished following Santander Consumer’s markdown last week of some loans it held for sale, which could indicate that fewer borrowers were paying back their loans than expected. But the markdown hadn’t affected the Lending Club loans, people familiar with the matter said. A premium sale is generally considered a positive indicator for the loans.”In December 2015, OnDeck Capital announced its own strategic partnership with JPM, wherein the US’ largest bank will use OnDeck to provide SME loans.