The Zhitong Finance App learned that Chime Financial Inc. (CHYM.US) reached an agreement to acquire its long-term partner Stride Bank for $590 million in cash. This move marks a key step in the consolidation of operations for the fintech company.
According to a statement released on Tuesday, Stride will change its name to Chime Bank and become a wholly-owned subsidiary of Chime. Stride has been one of Chime's banking partners for over seven years, but Chime also previously cooperated with Bancorp Bank. After the transaction is completed, Chime said it will integrate all banking operations into Stride and plans to keep the bank's assets below $10 billion in the “foreseeable future.”
Chime has been providing customers with checking accounts and other financial products for many years. By becoming a bank itself, Chime will carry out such business in a lower cost model in the future. Reducing reliance on external partners not only saves Chime some expenses, but also reduces capital costs by absorbing its own deposits, while giving the company greater autonomy over the service process. Chime anticipates that the deal will result in a net synergy of approximately $100 million.
As of press release, Chime's stock price surged 9.3% after the market, while Bancorp's share price fell sharply by 11.5%.
Chime CEO Chris Britt said in an interview: “Although we will have banking license subsidiaries under our umbrella, we have no intention of transforming into a model where traditional banks are highly reliant on fees. We see this as a key milestone in our evolution from challenger to industry leader, and it's a very strategic step.”
Boosted by this, Chime raised its performance guidelines. The third-quarter revenue forecast was raised to US$705 million from the previous US$680 million to US$690 million; the full-year revenue forecast was raised to US$2.76 billion to US$2.77 billion from approximately US$2.73 billion to US$2.75 billion.
Under the Trump administration's more relaxed regulatory environment, many of Chime's rivals are seeking US banking licenses. Just last week, Revolut Ltd., headquartered in the UK, received conditional approval from the Bank of America license. Previously, institutions such as Nu Holdings Ltd. had also taken the lead. In addition, a number of digital asset companies have also submitted bank license applications.
Britt said that compared to applying for a new banking license, direct acquisition of an existing bank will help speed up the pace of entering the banking industry and allow Chime to maintain many of the business processes it has co-built with Stride. Fintech peers SoFi Technologies Inc. and Happen Inc. (formerly LendingClub) have also previously achieved a similar transformation through bank acquisitions.
“Through acquisitions, we can achieve our strategic vision more quickly without going through the tedious approval process and the slow climbing period usually associated with new licenses,” Britt said. He also mentioned that applying for a new license requires a large amount of capital. “We prefer to deploy capital to a bank with mature operations, a credible team, a high return on net assets, and a profitable return on net assets.”
Chime's revenue mainly comes from processing fee revenue generated by customer debit card transactions. Britt said this model will not change as the company plans to keep assets below the critical $10 billion threshold — once this level is breached, banks will face regulatory restrictions on debit card fee caps.
The statement said the deal is expected to be completed in the first half of 2027 and is subject to regulatory approval.