LendingClub CEO Scott Sanborn, who was appointed to the post permanently Tuesday morning, told shareholders that debt investors are coming back to the platform, but they're taking their time.
Sanborn addressed the public for the first time since founder Renaud Laplanche was forced to resign as CEO in May due to the improper selling of certain loans to an investor and a conflict of interest with an outside fund. That announcement sent the stock into a tailspin and caused lenders who fund the online loans to put their commitments on hold.
Because of the pullback, originations in the second quarter are expected to drop by one-third from the prior quarter, Sanborn said at LendingClub's annual stockholders' meeting on Tuesday. But the company said that revenue and profit growth should resume in the first half of 2017.
"We need to support investors in their diligence process to bring them back to the platform," Sanborn said. "Banks are taking longer in general and have a longer list of diligence requirements."