LendingClub (NYSE: LC), once a marketplace lender and now a digital bank, is reporting that it has topped 4 million “members” adding that the milestone arrives a bit over a year since it morphed into a regulated bank.
Amber Carroll, Senior Vice President of Membership & Lifecycle Marketing at LendingClub, issued the following statement on the news:
“Every day our members come to us to improve their financial health and we help them leverage their money so they can earn more when saving and pay less when borrowing. Our members are some of retail banking’s most profitable customers, it’s just working out better for the banks than their customers and we’re working to redefine banking so our interests are aligned with theirs.”
LendingClub clarifies that “members” means users who have received a loan, refinanced an auto loan, a student loan, or a consumer deposit. LendingClub states that it does not consider members as people who have submitted information like an email address. This is actually an important differentiation as some competing neobanks do not provide this degree of clarity.
In January, during LendingClub’s Q4 earnings report, the company reported 3.9 million members indicating that the digital bank has grown by just 100,000 users in the past two months or so. This highlights a challenge for the Fintech and a trade-off between aggressive growth and generating a profit. LendingClub benefits from the fact it is one of just a handful of true digital banks but the world of neobanks (Fintechs providing bank-like services without being a federally chartered bank) is vast. LendingClub must focus on generating new customers by applying limited resources to a strategy that generates sustainable growth. LendingClub should be releasing Q1 2022 earnings around the beginning of March which may shed more light as to how LendingClub will drive the number of members higher.
Shares in LendingClub currently trade around $17.00 well off its 52 week-high of around $49 a share.