SAO PAULO (Reuters) -Nu Holdings, the listed entity which runs Brazilian digital lender Nubank, posted on Thursday an increase in its third-quarter net income driven by its Brazilian and Mexican businesses, beating analysts' projections.
The company reported a $783 million net income for the July-September period, up 39% year-on-year on a currency-neutral basis and above the $757 million expected by analysts in an LSEG poll.
Chief Financial Officer Guilherme Lago told Reuters the profit increase was mainly supported by the continuous scale gain in Nubank's main market Brazil, while the company was also able to grow its credit portfolio in Mexico and cut what it pays for deposits in the country.
"The combination of these two things, the operating leverage in Brazil, and the asset liability management in Mexico, led to a large boost to Nubank's consolidated results," Lago said.
The firm's annualized return on equity (ROE), a gauge of profitability, stood at a record 31%, up from 30% in the same quarter last year.
Nubank revenues rose 39% to $4.2 billion, above market estimates of $3.8 billion, with net interest income rising 32% year-over-year. On the other hand, the closely-watched net interest margin contracted about one percentage point in the same comparison to 17.3%.
Nubank, which reached 127 million clients across its operations in Brazil, Mexico and Colombia - and in September announced plans to enter the United States - posted a credit portfolio of $30.4 billion, up 42% year-on-year.
The 15-to-90-day delinquency rate came in at 4.2%, a 0.2 percentage point fall both yearly and quarterly.
The over-90-day delinquency rate stood at 6.8%, a decline from the 7.2% a year earlier but up from the 6.6% in the second quarter, a result the CFO attributed to seasonal effects.
(Reproting by Andre Romani; Editing by Gabriel Araujo)
