Nu Holdings (NYSE: NU), the parent company of the Brazilian digital lender Nubank, reported a 37% increase in its adjusted net profit for the first quarter, slightly falling short of analysts’ expectations.
For the quarter ending in March, Nubank posted an adjusted net profit of $606.5 million. However, analysts surveyed by LSEG had forecasted a profit of $630.5 million. This result also missed the company’s own consensus estimate of $614 million, although it reflected a 62% year-on-year growth on a foreign exchange-neutral basis.
Nubank’s profit was positively influenced by a $47 million revision of fiscal credits before taxes. Despite this, the digital bank’s performance fell just below expectations.
The company’s rapid growth in Brazil, where it has gained a strong position among major banks with its full-digital approach, contributed to the profit increase. However, Nubank’s market value in Latin America was surpassed earlier this year by Brazilian competitor Itau Unibanco.
Nubank’s Chief Financial Officer, Guilherme Lago, attributed the profit rise mainly to higher profitability in Brazil, driven by a larger personal loan portfolio and increased earnings leverage.
The company, which has approximately 119 million customers across Brazil, Colombia, and Mexico, reported total revenue of $3.2 billion for the quarter, marking a 19% year-on-year increase.
Annualized non-adjusted return on equity stood at 27%, up 4 percentage points from the previous year, but down 2 points from the fourth quarter of 2024.
Despite these gains, Citi analysts noted that Nubank faced challenges, citing net interest margin pressure and weak performance in Colombia as factors weighing on revenue and profits.
At the end of the quarter, Nubank’s credit portfolio had grown to $24.1 billion, a 23% increase from the previous year. The company also reported a slight improvement in its early default ratio, which fell to 4.7%, but its over-90-day default ratio rose to 6.5% from 6.3% in the same period last year.
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