LendingClub in San Francisco has agreed to buy a roughly $1.1 billion portfolio of personal loans from the parent company of MUFG Union Bank.
The loans, originated through LendingClub’s marketplace, were acquired by MUFG Union Bank. U.S. Bancorp recently bought MUFG Union from Mitsubishi UFJ Financial in Tokyo.
LendingClub is servicing the loans, which have an outstanding principal weighted average FICO score of 729. The price wasn’t disclosed.
“LendingClub utilized its strong balance sheet to support marketplace liquidity while mitigating a slowdown in marketplace revenue by adding a high-quality loan portfolio that will generate attractive returns,” Scott Sanborn, LendingClub’s CEO, said in the release. “This portfolio was acquired through a competitive bidding process and exemplifies a mutually beneficial transaction.”
LendingClub said that expenses tied to the acquisition are expected to be about $4 million, primarily related to the derecognition of the associated servicing asset. The company said the expenses will “be more than offset over time” by interest income.
The deal is expected to close by the end of 2022.