A variety of factors helped LendingClub (LC 10.69%) have a very successful first quarter. In this video clip from the “Future of Fintech” on Motley Fool Live, recorded on May 19, Fool.com contributor Bram Berkowitz gives his quick thoughts on why he is excited about the lending company.
Bram Berkowitz: It’s one of my bigger positions for fintech. I’m still very bullish on it. I thought they had a great first quarter. They upped their guidance, they beat the forecast significantly, they’re increasing the credit quality of the loans they’re originating, and they’re also in the personal loan space like Upstart (UPST 16.77%), but completely different models.
Upstart just got hammered for holding loans because their model is a marketplace, LendingClub is a digital marketplace bank, they got the bank charter, and they actually want to hold loans. They’re actually increasing the amount of loans they are going to be holding, they do about a quarter. But it just goes to show that even though they are in the same space, they have different models, and they both can be successful.
But if LendingClub was ever like, hey, we’re going to stop holding all of our loans, they probably get hammered, and if Upstart was like we’re going to start holding more, as we saw they got hammered. It’s a cool thing to just compare and contrast, and look at the different models, but both operating in the personal loan space. But sorry to ramble, but yes, I am still bullish and if you have further questions, feel free.