Evercore: Apple Will Keep Pursuing Fintech But Won’t Be a Bank

10 JUNE 2022 - I’ve gotta confess - Thursday’s piece on Apple Pay Later maybe being the most important announcement at this year’s WWDC keynote had me worried that I was a tiny bit ahead of myself. I found a note from Evercore analyst Amit Daryanani encouraging, even though he doesn’t think Apple will ever do the full-on being a bank thing. Apple 3.0 ran part of a note he wrote to clients on Thursday. Commenting on the news that Apple has launched an LLC to handle nearly all of the Apple Pay Later process, the note says:

This subsidiary will enable Apple to enter the lending market in a low risk way to begin iterating on its own internal system for credit checks and risk management. We expect that Apple will also announce a long-term, interest bearing BNPL (Buy Now Pay Later) service, but we still expect them to partner with Goldman and potentially other firms for the long-term service. The announcement of Apple Financing LLC will doubtless lead to renewed calls that Apple plans to pursue a bank charter, but we continue to view this as an unlikely outcome. Apple undoubtedly has the balance sheet power to pursue a bank charter, but we think they will continue to walk right up to the line without ever actually crossing into the territory that would require a charter.

It’s interesting. His summation says financial technology “remains a key driver of Services growth,” and that he and his “expect continued announcements in the space” throughout the year… yet he doesn’t think the company that likes to control as much of any given process as it can will go all in.

Time will tell. In the meantime, Daryanani has an “Outperform” rating on Apple shares. His price target on the shares is $210.