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LendingClub CEO stands by pure marketplace lending model

LendingClubCorp. will not adopt a hybrid model, but it has other ways to useits balance sheet.

When asked if the company would consider moving toward amore "hybrid" business model by holding loans on its balance sheet,LendingClub President and CEO Scott Sanborn said there are no plans to"pivot" in that direction. Instead, Sanborn said the company'sresilience in the wake of a corporate governance blunder validates the pure marketplace lending model.

"Our announcements had nothing to do with the model,but the model helped us recover quite quickly from the announcements," hesaid in a speech at a marketplace lending and investing conference in New York.

Instead of holding loans, Sanborn said LendingClub hasdiscussed other ways to use its balance sheet. For example, the lender canbridge funding gaps if demand from borrowers and the flow of investor capitaldo not align. The company did that in the second quarter and resold most ofthose loans, he added.

BTIG analyst Mark Palmer in a note to clients sharedhighlights from a recent meeting between LendingClub management and sell-sideanalysts. Executives told the analysts that 16 of the lender's 20 largestinvestors have begun buying loans again. That is up from the 15 out of 20figure given by Sanborn during LendingClub's second-quarter .