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Investors are coming back to Lending Club, the largest personal-loan provider in the US – but slowly, suggesting that the damage from last year’s governance scandal is providing hard to shake off.

The San Francisco-based firm was rocked a year ago by the departure of Renaud Laplanche, its talismanic founder and chief executive, following revelations that the company mis-sold loans to one of its biggest customers. The scandal came at a time of general choppiness in credit markets, prompting big customers such as banks to put buying programmes on hold.

In the first quarter the San Francisco-based company originated $1.96bn of loans, it said on Thursday, down slightly from the $1.99bn of the fourth quarter. Banks bought 40 per cent of the loans, up from 31 per cent in the fourth quarter, indicating that many are now satisfied that the company has ironed out its problems.

But net revenues for the quarter were $125m, down 5 per cent from the fourth quarter. The quarterly net loss was $29.8m, slightly less than the previous period.

“We redeployed resources for growth and invested heavily in our technology platform in the first quarter,” said Scott Sanborn, the company’s president and CEO. “With continued strong investor demand, I am pleased with the acceleration we saw as we exited the quarter.”

Lending Club and others such as Prosper and Avant say they are on a mission to shake up the banking system by making loans more affordable to consumers, while providing investors with access to instruments with relatively high risk-adjusted yields. Hundreds of platforms have sprung up in the past few years, prompting Goldman Sachs, the giant investment bank, to launch a rival venture last October known as Marcus.

But returns to investors have dropped sharply, as competition has forced down interest rates and as charge-offs have risen. According to data from Orchard, a technology provider to the industry, total returns from an index of US consumer loans came to 3.95 per cent last year, down from 8.71 per cent in 2014.

“Quite frankly, the investment story … is not as compelling as it has been in the recent past,” wrote Bill Ullman, Orchard’s chief commercial officer, in a blog post last month. He noted that the downward trend has continued into the first quarter of 2017.

Shares in Lending Club are up about 16 per cent this year, against a flat benchmark. But since the company’s initial public offering in December 2014 the shares are off 60 per cent, against a benchmark up about 11 per cent over that period.

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