Nubank had revenue of US$2.7bil in the three-month period through March. — Reuters
RIO DE JANEIRO: Nu Holdings Ltd, the parent of Brazil-based digital bank Nubank, reported record revenue in the first quarter while acknowledging that its growth is coming with a higher delinquency rate.
Nubank, one of the world’s largest digital banks, had revenue of US$2.7bil in the three-month period through March, it said in a statement.
The firm reported US$378.8mil in net income compared with an average estimate of US$357.3mil in a Bloomberg survey of analysts. Earnings per share came in just short of estimates.
Non-performing loan rates rose in the quarter to 5% from 4.4% in the year earlier for loans of 15 to 90 days and to 6.3% from 5.5% for loans of more than 90 days.
Launched in Brazil in 2013, the company has quickly grown to become one of the largest financial institutions in the country with about 92 million clients as it has expanded its offering from credit cards to an investment platform and insurance policies.
It’s now trying to replicate that same success in Mexico, Latin America’s second-biggest economy, and in Colombia.
“We printed a 23% return-on-equity for Nu Holdings, among best-in-class financial institutions in Latin America, even though our holding company continues to be over-capitalised and our operations in Mexico and Colombia are still in the early phases of getting to profitability,” founder and chief executive officer David Velez said in the statement.
Nubank added 5.5 million customers in the quarter.
Since the quarter ended, Nubank crossed the key metric of 100 million customers across its three geographies of Brazil, Mexico and Colombia, the company said this month.
Mexico represents a huge opportunity for fintechs looking to tap into the population of 130 million people where cash remains king and many people lack access to traditional banking channels. — Bloomberg
