LendingClub Corp., operator of an online system for connecting borrowers with investors, rose the most in three weeks after announcing a partnership with Citigroup Inc. and Varadero Capital.
Shares of LendingClub climbed 3.4 percent to $18.65 at 10:13 a.m. in New York, the biggest intraday gain since March 23. The stock has increased 25 percent since the San Francisco-based company’s initial public offering in December.
LendingClub will work with Citigroup to provide as much as $150 million in affordable loans to underserved borrowers, the companies said Tuesday in a statement. The loans will be issued by WebBank, based in Utah, and purchased by Varadero Capital via a credit facility from New York-based Citigroup.
“It is important that we help increase access to financing alternatives for American families,” said John Heppolette, co-head of Citi Community Capital, the Citigroup unit focused on providing community development loans and investments. “This partnership is a direct response to that need and will help provide a viable source of responsible credit.”
LendingClub and competitors including Prosper Marketplace Inc. are leading a technology-driven push to lower borrowing costs by matching people who need a loan with investors who want to fund them. Less than a decade after bad lending decisions led to a global credit crisis, the firms are advertising returns of as much as 11 percent to banks, individuals and asset managers that are willing to forgo old-fashioned due diligence on borrowers.
Prosper said Tuesday it had negotiated a partnership with On Deck Capital Inc. to help people and businesses find loans. On Deck gained 1.3 percent to $20.12.