OnDeck Capital has created a unit that will provide technology and services for banks lending to small businesses over the internet.
Reuters, citing the company, reported the new company will be called ODX and will expand its business, in which it provides lending software to banks. OnDeck is betting that ODX will make it easier for banks to make their small business lending digital, noted the report. “We felt that given the robust demand we are seeing by the largest banks, it is not a question of if they are moving into online lending, but of when,” Noah Breslow, chief executive of OnDeck, said in an interview with Reuters. “We thought that by creating ODX, we would set ourselves up to take advantage of that opportunity.”
OnDeck, which inked a partnership with JPMorgan Chase at the end of 2015, has named Brian Geary, vice president of OnDeck’s partnership unit, president of ODX. Raj Kolluri, the financial technology executive, was appointed the head of ODX’s product and technology, joining ODX from SS&C Primatics, the software company, noted Reuters.
In August OnDeck reported second-quarter results that showed continued growth in loan originations and improved credit quality metrics. Management stated on a conference call with analysts that the gains in those areas — which in turn boosted top and bottom lines that exceeded Wall Street expectations — came against a backdrop where the firm has been gaining new customers and credit quality has been aided by analytics. The headline numbers: The company reported earnings of $0.13 a share, eight pennies better than consensus, and revenues were $95.6 million, better than the $92 million the Street had expected.
That performance came as the company said that its overall loan originations for the quarter stood at $587 million from last year’s $464 million. On the conference call, management noted the strength of small business lending that has continued against a sanguine macroeconomic environment.