This post was updated at 9:33 a.m. To include comments from Citi.
This post was updated at 5:37 p.m. To include comments from Lending Club.
According to a report in the Wall Street Journal that cites “people familiar with the discussions,” Lending Club is in talks with Citigroup (C) about the bank buying some of the peer-to-peer lender’s loans or otherwise providing additional financing.
“The talks show one way that Lending Club (LC) is seeking to reassure its existing investors while finding new commitments from them to buy loans following the forced resignation of its chief executive, Renaud Laplanche,” according to the report.
Any agreement would represent the continuation of relationship between Citigroup and Lending Club, as the two companies announced a partnership last year to fund loans that would provide affordable credit to underserved communities.
In a statement to Coins2Day, a spokesperson for Lending Club said, “Lending Club’s marketplace model includes a diverse investor base that spans individuals, banks, and institutions. We’ve partnered with banks for years, and banks will continue to be an important part of our marketplace.”
Laplanche left the company he founded earlier this month, after the board discovered that the CEO had not disclosed his interest in a fund that was investing in Lending Club loans, and after complaints emerged that Lending Club had sold loans to investors that did not meet their specifications. The resignation caused shares in the online lender to fall roughly 40%, before recovering some of that this week after it emerged that the Shanda Group, headed by the Chinese billionaire Chen Tianqiao, took an 11.7% stake in the company.
In addition to that stake, Lending Club has hired investment bank Jefferies to help the company sell loans directly to alternative asset managers like Apollo Global Management and Fortress Investment Group.
A representative for Lending Club declined to comment. A spokesperson for Citi said “We are productively engaged with Lending Club on a number of fronts.”