Simply put, the corporate culture and growth potential are good. The acquisition of a bank brings lower and more stable funding costs. Citi analyst Ashwin Shirvaikar maintained a Buy rating and $20 price target for SoFi Technologies (SOFI) after the company received approval from the US Office of the Comptroller of the Currency and the Federal Reserve to become a bank holding company.
Shirvaikar told investors in a research note that SoFi expects the conversion to be officially completed in February. The analyst stated that the banking charter is a key part of SoFi's strategic plan as it allows the company to offer higher returns to expand its retail deposit base. The company will benefit from a longer holding period for assets on its balance sheet, and retail rather than warehouse funding will help control costs. SoFi, a fintech company, is a top player in the golden track.
The fintech industry, which can be called the golden track in North America, had already begun to comprehensively disrupt traditional financial institutions at the start of the pandemic. In 2021, their growth accelerated even further.
From going public via SPAC (a SPAC refers to an already-listed shell company with only cash and no other business, which can acquire a target company to allow it to complete the listing process more easily and quickly, similar to backdoor listings in A-shares) to large-scale venture capital investments, popular startups have seen their valuations soar due to the booming tech market...