SoFi Stock Pops On Bank Charter License, Expanded Consumer Lending

Shares in $SoFi Technologies (SOFI.US)$ surged Wednesday after federal regulators approved its application for a bank charter license. Analysts expect upside for SoFi stock from consumer lending and deposit accounts.

The Federal Reserve's Office of the Comptroller of the Currency on Tuesday approved SoFi's purchase of Golden Pacific Bancorp. However, SoFi's bank will not be able to offer any cryptocurrency-related services. San Francisco-based $SoFi Technologies (SOFI.US)$ currently provides home loans, personal loans, in-school loans and credit card services.

"While having a bank charter license helps improve credibility and trust, it first and foremost should help lower SoFi's cost of capital," Mizuho Securities' analyst Dan Dolev said in a note to clients. He added, "We estimate the benefit could potentially be $200 million to $300 million of incremental adjusted EBITDA, mainly due to lower funding costs."

$SoFi Technologies (SOFI.US)$ soared 13.7% to close at 13.71 on the stock market today.

With Wednesday's gain, $SoFi Technologies (SOFI.US)$ is still down about 8% in 2022. In addition, Shares have retreated 36% from a year ago.