OnDeck Expects Double-Digit Originations Growth in 2018


EXCLUSIVE—Online lender OnDeck grew originations and expects even more growth this year, according to its earnings call today.

The New York-based OnDeck expects “originations to grow at double-digit rates” over the next year, company CEO Noah Breslow said during the call this morning. OnDeck recorded a profit for the company’s fourth quarter after posting losses for the first three quarters of 2017, the company announced on its earnings call this morning.

The lender, which like many in its field was struggling with its loans (including growing defaults and investor concerns), grew its originations 3% sequentially to $546 million, according to earnings. This is after the company set aside a $34 million provision for loans in the quarter, an amount which is down nearly 40% YoY.

Breslow also shone light on the importance of the lender’s partnership with JPMorgan Chase, a partnership which had a “record quarter,” he said this morning.

The two extended a previous partnership for Chase Business Quick Capital — the bank’s digital small business lending feature — in August 2017. OnDeck functions as the technology platform for the product. The partnership might be driving some of the lender’s incremental investment, Breslow said today.

“We’re encouraged by the progress of [the parternship with] JPMorgan Chase,” Breslow said on today’s call. “Because of our work with JPMorgan, we have a great reputation as [a firm] who can deliver an enterprise solution for a bank.”

Breslow also noted that “banks and fintechs are getting more comfortable partnering,” as banks realize that fintech partnerships can allow them to both get to partnerships faster as well as build “a better customer experience,” he said.

“Banks are warming up to it,” he said on the growing trend of partnership.

In addition to its profitability, the lender also took cost-cutting measures to improve its performance, including “reducing its real estate footprint” and making a $5 million “incremental investment in technology & analytics in 2018,” according to company statements.

OnDeck shares are currently up more than 12% to $5 per share, as of 9:30am ET today.

To learn more about online lending and fintech partnerships, join us on March 5-6, 2018 at the Parc 55 in San Francisco for Bank Innovation 2018. Click here to register.


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