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SoFi won regulatory approval for a banking charter, related to its purchase of a small community bank. SoFi Technologies Inc. shares are on track for their best day in nearly a year after analysts chimed in with upbeat views on the company’s new banking milestone.Why did Sofi Technologies shares surge after-hours?
Shares of SoFi Technologies Inc. surged in after-hours trading Tuesday after the financial-technology company said that it won regulatory approval to become a bank-holding company.What does Sofi’s regulatory approval mean for the company?
The company’s regulatory approval marks “a major step forward,” according to Dolev, since it will move SoFi “inside the federal bank regulatory framework, where it will be subject to comprehensive supervision and bank regulations-an advantage over competitors.”What does Sofi’s bank charter mean for earnings?
Analysts broadly cheered SoFi’s banking win earlier this week, citing multiple opportunities for the company to boost its earnings by leveraging the capabilities that being a nationally chartered bank would afford. The charter can help lower SoFi’s cost of funding and allow it to hold loans for longer, analysts said.