Fintech
Brazil’s Nubank’s earnings reach nearly $400 million in the first quarter of 2024
Brazilian digital bank Nubank is off to a great start to 2024. The digital bank reported a net profit of $380 million during the first three months of the year as it accelerated the pace of cross-selling and continued to expand its customer base.
The Latin American fintech flagship, which operates in Brazil, Mexico and Colombia, reported a 167% year-over-year increase in net profit, up from $142 million in the year-ago quarter. While the company reported 99.3 million customers by the end of the quarter, it recently announced that it had surpassed the number of customers 100 million customer threshold starting this month.
Total active customers, those who have generated revenue in the last 30 days, totaled 82.6 million, nearly 20 million more than the same period last year. However, the company’s Brazilian business still accounts for the majority of its customer base, even as it seeks to accelerate its pace of expansion abroad.
“By prioritizing rapid customer growth, as well as increasing revenue per customer and optimizing operating costs, we have achieved exceptional results,” said David Vélez, CEO and co-founder of Nubank. “While our growth rate in Brazil remains robust, we have seen even faster growth in Mexico, with 1.5 million new customers added in the last quarter alone.”
Nubank’s activity in Mexico in the first quarter
In Mexico, it registered less than 7 million customers, or a market share of 5.1% considering a population of approximately 130 million inhabitants. After obtaining a banking license in the country, the fintech wasted no time and quickly expanded its range of financial services. As of March it boasted 3.2 million credit card customers in Latin America’s second-largest economy and 3.1 million active accounts with deposits of $2.3 billion.
“We are entering a new era for Nu in Mexico and we are optimistic about our long-term plans in the country,” noted Ivan Canales, general director of Nu México. In April, the company announced plans to boost Nu Mexico’s equity capitalization by $100 million, bringing its total investment in the country to more than $1.4 billion.
While the company already offers credit cards, digital accounts and personal loans, it launched new features in the quarter. These include the first steps towards facilitating remittances from the United States to Mexico, as well as enabling its implementation cash deposits through the Soriana department store.
Delinquencies rise for Nubank in the first quarter
Nubank’s total revenue increased 64% in the first quarter to $2.7 billion. Fintech is steadily increasing its average revenue per customer, which is still only a fraction of what traditional, established banks report, but at a significantly lower cost.
The digital lender’s portfolio – a large but largely untapped source of revenue for neobanks in Latin America – came in slightly below $20 billion. This marks an annual growth rate of 52%, fueled by credit cards and personal loans. Total deposits amounted to $24.3 billion.
Looking ahead, persistently high interest rates and persistent inflation across Latin America continue to put pressure on delinquency metrics. The fintech reported a slight increase in bad loans, with 90-day ratios in Brazil rising to 6.3% from 5.5% from a year earlier. In response to this, the company expanded its allowance for credit losses to $830.7 million, nearly double the amount compared to the same period last year, reflecting the growth of its portfolio during the period.
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David is a Latin American journalist. He regularly reports on the region for global news organizations such as The Washington Post, The New York Times, The Financial Times and Americas Quarterly.
He worked for S&P Global Market Intelligence as a Latin America financial reporter and gained experience on fintech and market trends in the region.
He lives in Buenos Aires.