rtmark
LearnBonds.com

Fintech pioneer LendingClub snaps up Radius Bank for $185m

LendingClub acquires Radius Bank in $185 Million Deal

LendingClub has bought online bank Radius Bancorp in a $185m deal in cash and stock. The fintech company who pioneered online personal loans is buying the Boston-based bank to expand its operations and have access to a cheaper and stable source of funding.

LendingClub has been involved in the new wave of peer-to-peer lending which connects lenders with borrowers. It began operations in 2006 and has grown steadily in assets and popularity.

Radius, founded in 1987, offers online banking services and has amassed $1.4bn in assets.

LendingClub making history

When the deal concludes, it will be a remarkable achievement as it’s the first time a fintech company in the US has acquired a bank. Other Fintech companies, such as Square and Robinhood, have been seeking a license to move into the banking sector because it would afford them the opportunity of issuing new products such as checking accounts. It will also help them increase their profit margins.

The fintech is regarded as the largest provider of its type providing personal loans in the US. The firm wants to continue in its peer-to-peer lending services, but also wants to move into the banking sector to offer certain banking services.

LendingClub chief executive Scott Sanborn said: “By combining with Radius, we will create a category-defining experience for our members that will dramatically enhance the resilience and earnings trajectory of our business.”

Radius president and chief executive Mike Butler added: “LendingClub has always been a fintech innovator, and I look forward to leveraging the strengths of both of our talented teams as we usher in a new era in banking.”

LendingClub launched the biggest IPO in 2014  hitting a $8.5bn valuation. However, 2016 was its worst year when there were loan practice irregularities. The company’s founder, Renaud Laplanche, was also ousted at the time, and its shares never recovered.

The deal will help the company provide new services to its clients, which will enable it to diversify its earnings.

Sanborn said the move will change the way the company does business. It will also improve the profit potential of the company as more products are offered to clients.

The deal would save $40 million in operational cost

Sanborn also reiterated that when the deal completes, it will help the company save around $40m a year in funding cost and bank fees.

Both companies expect the deal to conclude within 15 months. However, break-even is not expected for two to three years after the close of the deal.

In a related development, mobile bank Varo Money received FDIC approval to float a banking service that will enable it to accept consumer deposits.

Trusted & Regulated Stock & CFD Brokers

What we like

  • 0% Fees on Stocks
  • 5000+ Stocks, ETFs and other Markets
  • Accepts Paypal Deposits

Min Deposit

$200

Charge per Trade

Zero Commission

Rating

64 traders signed up today

Visit Now

75% of investors lose money when trading CFDs.

Available Assets

  • Total Number of Stocks & Shares5000+
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • DAX Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
  • Paypall
  • Skrill
  • Neteller

What we like

  • Sign up today and get $5 free
  • Fractals Available
  • Paypal Available

Min Deposit

$0

Charge per Trade

$1 to $9 PCM

Rating

Visit Now

Investing in financial markets carries risk, you have the potential to lose your total investment.

Available Assets

  • Total Number of Shares999
  • US Stocks
  • German Stocks
  • UK Stocks
  • European Stocks
  • EFTs
  • IPOs
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 $1 - $9 per month
  • NASDAQ $1 - $9 per month
  • DAX $1 - $9 per month
  • Facebook $1 - $9 per month
  • Alphabet $1 - $9 per month
  • Telsa $1 - $9 per month
  • Apple $1 - $9 per month
  • Microsoft $1 - $9 per month

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Ali Raza

A journalist, with experience in web journalism and marketing. Ali holds a master degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications.