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Author Topic: Santander exiting Personal Lending Business

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Santander exiting Personal Lending Business
OP: October 28, 2015, 11:00:00 PM
Santander, which currently has an agreement with LC to purchase up to 25% of LC's total loan originations, announced today in their quarterly earnings report that they will be completely exiting the personal lending business and putting all their existing personal loan assets up for sale.

The 25% was a cap, not a target, and I'm not sure if LC had disclosed the % that Santander actually purchased.  Presumably, all of the loans purchased by Santander had been purchased in the whole-loan market. 

What this means for us it seems, is that up to 25% of LC's total loan originations, which had previously not been offered on the regular platform, will now be offered on the platform and will
be available to individual investors.
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Santander exiting Personal Lending Business
#1: October 28, 2015, 11:00:00 PM
Can you post a link with more info?

I'm curious if there's any speculation out there as to why they've ended the arrangement. The fact that they're selling off all of those assets leads me to believe that the program didn't perform as well as they thought it would.
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Santander exiting Personal Lending Business
#4: October 28, 2015, 11:00:00 PM
I agree, maybe this LC note investment didn’t meet their expectations.  I’m curious to know what %, dollar amount, or number or notes that Santander invested in.   Makes you wonder whether the previous streak of anemic loan drop to retail investors was somehow related to Santander’s portfolio.   Wonder when(or if) Santander will liquidate this investment to retail investors and/or other institutions? As per article, “Given the size of Santander's $2.3 billion portfolio”, this could be a considerable quantity of notes/money?
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Santander exiting Personal Lending Business
#6: October 29, 2015, 11:00:00 PM
Thanks Wiseclerk for the data - we understand how much and where Santander's portfolio is likely to go.
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Santander exiting Personal Lending Business
#7: January 28, 2016, 12:00:00 AM
What's up with this? I thought it was "impossible" to lose money on Lending Club. They lost $232 million from Lending Club loans directly? What am I missing here?

Santander reported a fourth-quarter loss of $232 million this week on its unsecured personal loan portfolio, $123 million of which came from borrower defaults and $109 million that was related to market discounts on the loans held for sale, according to company filings.
“In light of the damage that the personal loan portfolio inflicted on Santander’s income statement in 4Q15, we will be relieved when Santander is out of this business,”

http://www.bloomberg.com/news/articles/2016-01-28/santander-said-close-to-selling-1-billion-of-lendingclub-loans
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Santander exiting Personal Lending Business
#9: January 28, 2016, 12:00:00 AM
It would also be highly embarassing for Santander to still be holding onto these (or to admit they were profitable - by breaking them out)
when LC announces its next product line, which may or may not be somewhat competitive with Santander's automobile finance business.

But I'm the suspicious type who doesn't trust PR and tries to read between the lines... ;)
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Santander exiting Personal Lending Business
#10: January 29, 2016, 12:00:00 AM
Sounds like Santander is into "nonprime (601-660), subprime (501-600) or deep subprime (below 500)" borrowers?

Title: How to buy a new car with bad credit
https://www.santanderconsumerusa.com/blog/buy-new-car-bad-credit/
Quote
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Santander exiting Personal Lending Business
#12: January 29, 2016, 12:00:00 AM
Santandar isn't a bank IIRC. . . don't confuse the parent with the sub

SC was most likely playing in LC subprime loans, which we don't have data on.
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