Bulletins

SoFi says it's taking deposits away from big banks

The company is holding $5 billion in customer cash less than a year after acquiring a banking charter.

SAN FRANCISCO, CALIFORNIA - FEBRUARY 22: A sign is posted in front of SoFi Technologies headquarters on February 22, 2022 in San Francisco, California. SoFi Technologies announced plans to buy cloud-based banking platform Technisys in an all-stock deal valued at $1.1 billion. (Photo by Justin Sullivan/Getty Images)

SoFi has reached $5 billion in customer deposits, the company said.

Photo: Justin Sullivan/Getty Images

SoFi has $5 billion in customer deposits less than a year after the fintech lender acquired the banking charter required to directly hold customer cash.


The news came from a third-quarter earnings report that shot SoFi's share price up by more than 10% Tuesday morning before falling back to a 6% gain later in the day. The San Francisco company's quarterly loss of $0.09 per share and $419 million in revenue for the quarter were both better than analyst expectations.

SoFi in February closed on a deal to acquire Golden Pacific Bancorp., an OCC-chartered bank. The charter allows SoFi to directly hold deposits and lend against them.

The $5 billion in deposits this quarter represents an 86% jump from just three months ago. CEO Anthony Noto said on Tuesday's earnings call that the company is winning customers from big banks.

"The vast, vast majority of what we're seeing is coming from the largest banks in the United States, and we're winning deposit share from them," Noto said. "We do watch the deposit trends more broadly in industry and it's clear that not only are the large banks losing deposits to digital companies like SoFi, fintech companies like SoFi, but they are also losing it to money-market funds."

It helps to offer more money back. For much of the last quarter, SoFi offered more than 2% annual percentage yield on its savings and checking accounts. Its savings account later this week will begin offering 3% APY, compared to a 0.16% national average, according to Bankrate.

LendingClub, another fintech lender that acquired a banking charter, last week reported total deposits of $5.1 billion, up 80% from last year. The company's high-yield savings account recently began advertising an APY of 3.12%.

Online-only banks have been offering significantly higher rates on deposits for savings and other accounts since the Federal Reserve began raising interest rates earlier this year. But it was unclear how much that would drive customers to upstart banks. For perspective, the largest U.S. consumer banks measure their deposits by the trillion.

But winning even a slim fraction of those deposits offers a boost to SoFi's lending business. The banking charter allows SoFi to use the deposits to fund its loans, whereas non-bank lenders typically connect borrowers to banking partners or fund loans through institutional investors.

That model — often called marketplace lending — has come under pressure from rising interest rates.

"By using our deposits to fund loans, we benefit from a lower cost of funding for loans, and that's more profit per loan," Noto said.

SoFi originated about $3.5 billion in loans from July through September, up 2% from the same period last year. A 71% jump in personal loans (which represented the majority of SoFi's lending for the period at $2.8 billion) offset declines in home loans and student loans.

The total revenue from SoFi's lending operations was $301 million, up 43% from a year earlier.

At $5.77 late in the trading day, SoFi's share price is up about 12% in the past 30 days. But it is still climbing out of a hole dug during the broader fintech selloff to start the year, down more than 60% year-to-date. The company's share price peaked at about $25 in January 2021.

Latest Bulletins

Mobile game revenue will decline for the first time in history this year, market research firm Newzoo now says in a revised outlook for the 2022 global games market. While the whole game industry is expected to contract by 4.3% — another first since Newzoo began tracking the market in 2007 — the company is predicting a 6.4% decline in mobile game spending on top of a 4.2% decline in console game spending.

Keep ReadingShow less

Amazon is planning to lay off thousands of employees, Protocol has learned, ahead of what the company has cautioned will be a slow holiday shopping season.

Keep ReadingShow less

Google agreed to pay $391.5 million and make changes to its user privacy controls as part of a settlement with a coalition of 40 state attorneys general. The coalition accused Google of misleading customers about location-tracking practices that informed ad targeting.

Keep ReadingShow less

FTX has filed for bankruptcy and the crypto company also announced that founder Sam Bankman-Fried has resigned as CEO.

Keep ReadingShow less

Salesforce recently updated its internal policies to make it easier for managers to terminate employees for performance issues without HR involvement, Protocol has learned, a move that comes as the software giant looks to shed as many as 2,500 jobs.

Keep ReadingShow less

The Consumer Financial Protection Bureau said fraud and scam reports comprise the top complaint it receives about virtual currencies — and that customers are finding little help from companies when it happens.

Keep ReadingShow less

Elon Musk sent his first email to Twitter staff late Wednesday, warning of a difficult economic road ahead and telling employees they need to be in office for a minimum of 40 hours per week. "Sorry that this is my first email to the whole company, but there is no way to sugarcoat the message," he began, ominously.

Keep ReadingShow less

Binance isn’t buying FTX after all. The crypto giant said Wednesday it has decided that it “will not pursue the potential acquisition” based on a “corporate due diligence” review.

Keep ReadingShow less

On Wednesday, John Kerry unveiled a plan for a new carbon credit program aimed at mobilizing private capital to help middle-income countries transition away from coal and move toward renewable energy.

Keep ReadingShow less

Meta announced it was laying off more than 11,000 employees Wednesday morning, slashing jobs in its recruiting department and refocusing its remaining team on AI discovery, ads, and its investment in the metaverse.

"I want to take accountability for these decisions and for how we got here," Mark Zuckerberg wrote in a message to employees that was also posted online. "I know this is tough for everyone, and I’m especially sorry to those impacted."

Keep ReadingShow less

Al Gore has one mission this week at COP27, and that’s to give climate negotiators what he hopes will be a critical tool to address the crisis at hand: an independent, global inventory of greenhouse gas emissions, down to the individual facility.

The Climate TRACE coalition just released the world’s most detailed inventory of global greenhouse gas emissions, which Gore, a founding member, is unveiling on Wednesday at the United Nations climate summit in Egypt.

Keep ReadingShow less

Way back in March, your friendly Protocol Climate team offered you some tips for writing a climate plan that doesn’t suck. Surely you took that advice. But if for some reason you didn’t, the United Nations has your back.

Keep ReadingShow less

Binance CEO Changpeng “CZ” Zhao said Tuesday the crypto powerhouse signed a deal to acquire rival FTX.

Keep ReadingShow less

Salesforce is preparing for a major round of layoffs that could affect as many as 2,500 workers across the software vendor, Protocol has learned, in a bid to cut costs amid a new activist investor challenge and harsh economic conditions.

Keep ReadingShow less

BlockFi has introduced a new digital assets interest product for accredited investors, after previously agreeing to shut down a yield-paying crypto product that the SEC said was illegal.

Keep ReadingShow less

The Justice Department said Monday it seized $3.4 billion worth of bitcoin stolen in the 2012 hack of the Silk Road dark web marketplace.

Keep ReadingShow less

U.S. election infrastructure is exceedingly secure, and voter fraud here is so rare it’s comparable to your annual chances of getting struck by lightning. Despite this, former President Donald Trump and a long list of allies in the Republican Party have spent the last two years questioning the overall integrity of the U.S. election system. Many of those allies are now candidates themselves, and their coordinated attack on the country’s status as a democracy is not a relic of 2020. Some have already started repeating these “Big Lie” charges ahead of next week’s midterms. And the social platforms that help them spread their message have prepared few measures to stop it.

Keep ReadingShow less

The White House just laid out its climate tech priorities to reach net zero by 2050.

Keep ReadingShow less

Coinbase said Thursday that it lost more users in the third quarter. But the decline wasn’t the disastrous drop that Wall Street was expecting, and that sparked a rally in the crypto company’s shares after-hours.

Keep ReadingShow less

The Biden administration announced $9 billion in funding Wednesday to improve home efficiency, which could help support the installation of up to 500,000 heat pumps. With winter approaching and utilities warning of gas shortages, there are some major challenges facing the technology that money can be used to tackle.

Keep ReadingShow less

Block beat earnings expectations, with strong growth largely fueled by its Cash App business. Traders sent shares up more than 12% after-hours Thursday.

Keep ReadingShow less

Stripe is laying off 14% of its staff, its co-founders said Thursday, as the fintech startup must start "building differently for leaner times."

Keep ReadingShow less

Roku saw its revenue growth slow in Q3, and warned investors Wednesday that things are about to get worse: “A lot of Q4 ad campaigns are being canceled,” said Roku CEO Anthony Wood during the company’s Q4 earnings call. “We’re seeing lots of big categories pull back. Telecom, insurance … even toy marketers are planning on reducing their spending.”

Keep ReadingShow less

Green jobs and corporate climate pledges abound, but skilled sustainability professionals are scarce.

Keep ReadingShow less

Robinhood reported a drop in third-quarter revenue but also a narrower loss on Wednesday, in a sign that it might be stabilizing its business as it attempts to recover from a staggering drop in the stock and crypto trading activity that fueled its growth.

Keep ReadingShow less
Bulletins