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SOFI Stock’s future is bright with its new banking charter

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Sofi Technologies (NASDAQ:SOFI) offers a one-stop solution for all banking and financial needs. Although it has a strong advantage over other financial technology (fintech) companies, it has had a difficult few months. SOFI stock was trading at $25 in February 2021 and as we get closer to February of this year, it is trading around $13.

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The stock is down more than 14% in the past six months, but the recent announcement of its bank charter approval will help the stock rebound. SoFi had long awaited approval after its acquisition of Golden Pacific Bancorp, and it cleared the final hurdle to become a bank.

This could change the future of the company, and early investors will benefit from the growth of SOFI shares. With that in mind, let’s dig deeper into my investment thesis for SoFi.

The banking charter is a huge step forward

With the banking charter, SoFi will be able to hold deposits and use them to fund loans. This is a big problem for the company because several fintech companies in the industry do not have a banking license, and it is not easy to obtain one.

Upon completion of the deal, the company will have $150 billion in assets, which will help improve operations. Along with other benefits, it will also allow SoFi to have a better framework for keeping loans on its balance sheet.

The business will also have low interest charges. SoFi will be able to save money on the interest it pays on debt to fund its assets like loans.

Once the deal closes in February, SoFi will be able to hold loans on balance sheet and collect interest payments. This will help his bottom line. As long as the loans are not in default, the company will be able to make them more profitable over the years.

SoFi Technologies could be considered a leader in the world of fintech and we could see many such transactions in the years to come. Moreover, the bank charter proves the credibility of the company in the industry. This is a signal that SOFI stocks are trustworthy and still have a long way to go.

Investors should see this news as a positive catalyst, as this fintech company is here to change the way you manage your money. We’ve yet to see how the company holds its loans and makes money from them, but it’s a good start.

The essentials on SOFI shares

It is not easy for a company to obtain a banking charter and SoFi has had to deal with several regulatory issues. However, he finally reached this stage, which has the potential to transform the future of the company. SoFi will have higher revenues and profits in 2022, and that’s just the beginning.

We will soon know more about the company’s projections for the coming year. But for now, SOFI stock looks like a solid bet. It trades at a discount and is a long-term buy and hold.

The stock’s current decline is not company-specific, as several growth companies have seen declines on fears of rising interest rates and inflation. This will impact the business, but each business will handle the situation differently.

When looking at SoFi, consider the business model and its effectiveness in meeting the needs of all types of users. The company could change the way we manage money and investments, and it will only make it easier for users to borrow. Buy the drop in SOFI shares because the year ahead could be huge for the company.

At the date of publication, Vandita Jadeja did not hold (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

Vandita Jadeja is a CPA and freelance financial writer who enjoys reading and writing about stocks. She believes in buying and holding for long term gains. His knowledge of words and numbers helps him write clear stock analyses.

SOFI Stock’s future is bright with its new banking charter

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