Nu Holdings shares rise as Brazilian fintech reports rapid Latin American customer growth
Nu Holdings, Latin America’s largest fintech bank, saw its shares rise on Tuesday as it grew its customer base in three countries and reported record second-quarter revenue.
Nu Holdings ( NU ) shares rose as much as 13% in premarket U.S. trading. The NU share had risen by 18% compared to the previous day at midday on Tuesday. In the last month, the stock has risen 36%.
The share price in Nu Holdings (NU).
Founded in 2013, Nu Holdings is a digital financial services platform and technology company operating in Brazil, Mexico and Colombia. It offers Nu and Ultraviolet credit and debit cards and mobile payment solutions.
Fintech involves the use of technology to improve financial activities. The use of smartphones for mobile banking, investment and loan services are examples of technologies that aim to make financial services more accessible.
The company’s investors include legendary value investor Warren Buffett’s Berkshire Hathaway (BRKb) and Japan’s Softbank (9984).
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Nu Holding’s result for the 2nd quarter
Now HoldingsFor the second quarter ended June 30, Nu reported net income of $17 million and revenue of $1.2 billion, beating consensus estimates of $1.01 billion.
“We recorded record revenues and are making great strides towards becoming a multi-product and multi-country platform,” said Nu’s founder and CEO David Vélez in a press release.
Nus Vélez studied business at Stanford University before working in investment banking and venture capital.
“Our largest business – Brazil – is now profitable, having recorded a net profit of $13 million in the first half of 2022, driven by customer growth to 65 million and ability to offer and cross-sell new products.”
São Paulo, Brazil-headquartered Nu said deposits rose 87% from a year earlier to $13.3 billion and reached a total of 65.3 million customers, a 57% increase compared to last year’s second quarter.
In Mexico, Nu’s second largest market, the customer base increased more than sixfold to 2.7 million while in Colombia it reached 314,000 customers.
Now Holdings“We are now the number one issuer of new credit cards in both Mexico and Colombia – where we have just received a license approval to continue our expansion,” Vélez added.
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Nu has disrupted Latin America’s banking markets by offering elegant digital experiences and lower fees for products and services.
The company raised $2.6 billion in December during its initial public offering (IPO) on the New York Stock Exchange.
“I prefer the firm’s digital-first approach, and its revenue growth figures are extraordinary, indicating that it is doing something very right. Additionally, while it still has operating losses, those losses are starting to narrow somewhat so far in 2021, analyst Donovan Jones said. Seeking Alpha ahead of Nu’s IPO.
“While the IPO isn’t cheap, given the firm’s growth trajectory, reduced operating losses and apparent Berkshire backing, it’s worth a closer look.”
