House of Representatives voted on the deal. The neobank's stock price, which is up about 89% so far this year, rose 11% the day before the U.S. The deal between President Biden and House Speaker Kevin McCarthy raised expectations that there could be pent-up demand for refinancing, especially among SoFi's target market of young adults who have relatively high incomes. government in the wake of debt-ceiling negotiations earlier this year, which included an agreement to end the student loan moratorium this fall. "To have it pretty much dormant for the last two or three years has certainly been a challenge for them," said Michael Perito, an analyst at the investment bank Keefe, Bruyette & Woods. Still, student loan refinancing has long been a backbone of SoFi's business - serving as a source of customers for other business lines. SoFi has diversified revenue sources, including mortgages, personal loans, credit cards and investment products. At SoFi, loan origination volume dropped by nearly 61% between the first quarter of 2019 and the same period four years later. The payment pause, which began in 2020, reduced borrowers' incentive to refinance. The San Francisco-based neobank has stuck to the student loan business even as it has lost some luster. And SoFi alone accounts for an estimated 60% of the market. Three companies - SoFi, Ke圜orp and Navient - hold roughly 90% of the market share, according to an estimate by the research firm Oppenheimer. The student loan refinancing market is highly concentrated. "The returns on equity that could be generated in this current interest rate environment are not as high as they were a year or two prior," said Kevin Barker, an analyst at the investment banking company Piper Sandler.
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