Nu (NU) 15 Nov 222022 Q3 Earnings call transcript

Good afternoon, ladies and gentlemen. Welcome to Nu Holdings conference call to discuss the results for the Third Quarter 2022. A slide presentation accompanies today’s webcast, which is available in Nu’s Investors Relations website: www.investors.nu in English and www.investors.nu in Portuguese. This conference is being recorded and the replay can also be accessed on the Company’s IR website. This call is also available in Portuguese. can of globe then your enter “Portuguese you lower on choose it, the side right Zoom room”. access press icon the the to To screen, and audio”. original “mute select that, After participants [Foreign will Language] advised Please that be listen-only mode. be in all

Nu any Mr. You today, Q&A Relations Jorg I now Friedemann, using webcast. the turn at time like may Investor the questions to on Holdings. call the online would submit at box over Officer to

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earnings you you call very our much, for Thank today. thank all And joining operator.

have our you earnings on Lago, our a website. Operating If Chairman, Vélez, seen not release, Officer. and Lahrech, Financial Results Chief me Officer David Youssef copy our Chief the Officer, in our our and Center is Executive and Founder, today’s With Investor Guilherme posted call are section Chief of Relations President

Founder therefore are Unless Company’s otherwise, available in Chief be are by guarantees Q&A everyone the conference Additionally, important but that of financial release. information include statements, the Company, Officer, non-IFRS Jag all defined session call, cause might the which COO, expectations. and measures the non-IFRS the are Throughout net CEO, the not and XXXX the statements will forward-looking your David our measures Lahrech, risks will to are the Reconciliations our These of I them. Duggal, and differ highlights quarter Please information earnings our refer our statements for press of FX and These which materially presenting CFO, and we adjusted Vélez, happy and opportunities press financial in not call. of our President us growth performance from like third financial be reliance subject financial through our Company’s to should and will for neutral we our you Youssef including year-on-year to Guilherme undue to remind to financial not disclosure Subsequently, earnings uncertainties income. the this quarter, Lago, Today, IFRS on could future will some rates as operating and take results put basis. join results also release. discuss a noted numerous would to time take for IFRS. will after Company’s forward-looking of you financial actual Product main today’s the ahead. are information, on are questions. performance the discussion

like the David, to I to go turn over call David. please Now, would ahead.

Brazilian to on another in happy being recession of a with seen share XXXX-XXXX, future our impeachment; right-leaning saw but slightly bit and operate. we I’m governments continue during And of intact: and long we net we million a that presidential we shows X% saw $XX.X Thanks, while balance Jorg. level, XXXX, largest a largest position today world. model. and a that to profit you than opportunities our new we Latin company governments services am Today active customers, in number happy earnings of Nu during largest the be lead than million financial that coming capitalizing report mix GDP to a countries the of regions profitability will more thesis third nine-year We Nu quarter, profit customers. growth a breakeven to at lot. are I more the us the the ahead as Latin of see turned the technology one becoming welcoming In Thank Hello creates an posting growth are and the in built our remains of volatile of saw adjusted already for the net appropriately today. year-over-year business environment strengthening have years being This significant fundamentals saw left-leaning America everyone. $X.X companies, and XXX% at opportunity history and in more institution we in brings by in financial strong a also million the of while able have three growing sixth revenue the the contraction caution, America, going which quarter. reported history; that we we holding X by the we term in of across

long and will our to We our reinvest continue creation. fuel to profits term growth value

countries rate we business to We activity new see to progress quarter, million increase our across a all passed continued metrics. high while three among third the per main our customer During seeing XX%. customers our XX.X total of

billion. more while $X.X billion, grew volatile fully-funded XX% grew portfolio XX% the credit our resilience we grow to environment, to for being reaching of able to our still while billion in level have to Brazil. volume market of $XX purchase $XX.X of XX% macro was And underwriting the own account retail credit increased that our a year-over-year already deposits to Our year-over-year share by

our build multi-product, rebundle fully-digital diversified business is multi-country by services a and a current to started multi-segment While and unbundling financial imperative our opportunity through strategy, platform.

by of us Our a now lives that accounts of XX% they entire existing want customers consolidate to with their Nu, Brazil. for to demand rebundling at and population from accelerated adult pace this financial an about actively that progress significant continues base the driven so tell

Let of progress me our fronts. on each these with you share

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double- As you can of tripled-digit chart, see in year-over-year on our growing active users or are all a this products on almost basis.

to post figures. more continue products impressive New even

personal past loans increase year. in active over For a XXX% customers instance, had the

customer grown active NuInvest customers, recently customers a XXX% to And and expanded active Our after this in launch. X our to solve finally, economic is lot products months that year. with by that has Notice million, economy million SMEs driven of than little crypto an trends a reached XXX% growth increase X.X real product pains, less accounts X.X do of year-over-year. of secular and launched the cycle. the have the of digitalization

stages our at We early products platform revenue the of that with accretion. support strategy are our strengthening cross-sell and still will product further our

will and We our will we But to partners whenever the products best-in-class continue manufacture skill own on balance product be their also economics. product to when sheet, applicable. continue we unit to like complement our we believe and leverage sets can manufacturer

tools, have an even savings Mexico make value will platform among launches include forthcoming in proposition accounts our that collateralized Our loans, others, our stronger customers. financial for and planning

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of the both new number X not already any Mexico slowing become sign down. has Colombia, cards in credit growth of the have and and shown issuer We

expected launch is year. deposit-taking road. Although have Once as of happen impressive to change in over and step seen tends this down countries we in in each virality we products increases, accelerate the the already, experience our client growth And both the Brazil. Mexico Colombia, coming of to course change to is customer

heard across segments. The confusion at as all to many fair from third all there pillar customer here is to have once as of of We multiple typical advance pain Nubank highlight is. platform point to into who is our the this a client customer amount we investors segments as wanted

base in strong demographic this inroads segments see slide, current our all customer in can Brazil. breakdown presented across made we As of you demographic from the have

country, In banks fact, those Per distribution roadmap. ARPAC, our further our advance potential as segment incumbent Customer, expand Revenue customer to the our to similar we Average highlighting significant of Active in or is our in

in of experience. upside diversification. metric we Brazilian each banks, average end of which product customer plan is which Net diversification indisputable continue to you almost to good financial and remind This want our is to-date everything the our also macroeconomic We of the to simple ARPAC ARPAC as leadership from product then we our a finally I creates in cycles. built product is base the QX continues to believe We monetization provides institutions Score that also as leading absolute believe and the the the a we category. environment, challenging can one-fifth operate. income customers that This choose of profitability. competitive insight this ‘XX, foundation, all Notice group, markets our for North X% best after metric, of significant more our in decade belongs indicator was captured our started of high that similar for which, best a company. incumbent which very best by As continues Star principle growth, command building Brazil through major other a more our be to in a Promoter of across in

to a important achieved this Nu go proving evolving make digital this base delivered to platform among experience lot experience DAU/MAU most in opportunity We A of strong build marketing through In above the of engenders a Mexico have million ratios our engaged optionalities be be customer We as large to investment. has to and we banking a and ecosystem enables We that across our XX% observed a have Brazil, future can XX offering. leading evolution in of levels as plus chose consumer our demonstrates the Colombia. players, chart. financial media word-of-mouth, effective. mostly clients. This very beyond comprehensive continues formula and XX% well have XX%, we customer view, come have from worked services. consumer customers social our powerful our to to that loyalty unique believe organically,

our years. the these opportunities that, pass results. With over you. the more of will Lago, who coming would We walk are Guilherme you excited through to to roadmap us like details I the floor ahead and Thank our CFO, of with

Good everyone. Many evening, thanks, David.

elements third recap generating quarter on the key our and our of simple, reviewing formula. value results, Before powerful, let’s

our into our expanding converting across chosen acquired active base Colombia, Mexico customer and ones. is customers Brazil, First, markets, quickly and

per expanding revenue ARPAC, second customer, active up-sell. and both average or cross-sell The is through

industry. during continues the while generating see and look With at million how in acquisition, at operating Nu the these adding With is to of the lowest-cost quarter quarter. elements this a value. maintaining third pace, customer customers delivering growth platforms results three grow X.X third let’s Third, well regards to mind, in the are one steady

growth achieving net two the from a over acquisition customers previous with maintaining sustained new But quarters. and in same faster seeing the we simply additions Mexico collecting customers are Importantly, this business Colombia, brought organic we in rates Further, channels in increase. for of the to through accounted together very while this million have not accounts. are This customer XXX,XXX cost, and low approximately year-on-year total XX% customer been which of by mainly quarter. we XX level quarter-end,

drive in year Brazil, cross using to continue ago estimate to succeeding XX%, We active the show monthly average, quarter this On Nu’s effect products. expanding Latin largest financial in the driving largest they ecosystem America further while compounding rose and the of are in consecutive concept. upsell This customers is driving prior financial XX% rates up in to we a sixth customer We institution engagement. customer same evidence XXth quarter. of and engagement higher. Nu marks the to XX% fifth number activity, that slide of the and activity ability of our from now ability and higher On in the our institution

customer in customer cohorts, charts past, engagement driving both have are these and higher stated of of of base namely the a our ARPAC show per the active we number growth. our As increasing products customer that evolution

reached are third we ARPAC already at cohorts in monthly the $XX. of While a mature $X.X quarter,

on customer have contributed more customers over another on expect our and features triple-digit ARPACs revenue sold deliver to to the that engagement our products on active customer mature, reflected can strong annual next drivers and This of customer new combined base. record-high. ARPAC XX% growth. cohorts add as of as higher to levels to year-over-year slide. to and billion, ability neutral compounding an grew neutral year-on-year see effect significant to cross-sell FX been ARPAC expansion product up-sell per expanding grow We of FX XXX% products a monthly as in Nu’s basis, and The of us Revenue quarter revenue $X.X a is and higher to with enabled both monetize growth, growing of Nu’s we continue Higher you ecosystem. an number basis year-on-year

potential. you left way While is has a we go full expanded ARPAC still see there reach the believe ARPAC can our gradually, to to long monthly as in chart,

As growing running the income fraction a David their highlighted clients incumbent resembles from that banks, while previously, distribution customer we have base ARPACs. a of of at

ability Nu product and credit partners. We our and ARPAC products, products by products with the non-credit manufactured increase by with have to our both both offered

Beyond significant and customers our low-cost see the to in us very in with substantial lower still produce upside enables operating keep ARPAC platform the unit economics. ARPAC, serve we our of levels advantages mind healthy that

year-over-year Turning advancing basis cross-sell, billion. card also an reflects more to continued FX on with up and our purchase neutral performance product on to sustained business, XX% we engagement. front customer This this upsell $XX.X volumes strong

XX have complete card acquired months market card while we average average platform spending our as relationship majority doubles total share past and usually vast of our continue spending with driving their credit customers After their usually in triples, the Nu, credit of periods. mature that book backbook, should customers from in cohorts. this gains new we comes Importantly, our is,

fact, once again at already market total of industry. for quarter In volume running XX% the increased share and this approximately our purchase in the is

$X.X loans, which quarter finance comprises credit previous two total credit bringing to year-over-year, cards the headwinds. expanded consumer and our XX% accelerating personal despite versus Our book portfolio, billion,

On FX $XXX book basis, million would our approximately Quarter-over-quarter. neutral figures. by First, or X.X% this credit quarter, impacted have FX the an during negatively balance increased around however,

previous had uncertain resilience, call the in personal for economy. of more in of similar our The continued of of we originations as light to moderation the at quarters, outlook credit Second, earnings in goal strengthening indicated be August. this loans contained levels is previous Brazil’s short-term

the originated period. the loans stable Given the by loans, short-durations of simply being balances yield is because offset the levels volume these origination in similar amortized

credit personal Let’s card of more loans. detail and originations of now evolution our in review the portfolio

and intentional As and in of occurred to the discussed occur strategy IEP, continue should of been gap the our this of or last installments versus quarter, interest. Interest market, Portfolio, we our have closing Earning transactions via has with

on PIX from the sections. observe might risk-adjusted IEP terms purchase margins, outpaced finance revolving chart, will has in from can been this features, those financing arising to paid you off we bank demonstrate credit, related as strategy book, in loans. risk financing add As has but as of slips, IEP installments, growth new such to including our and coming in This

as we performance in the the of to on earnings our is Brazilian economy the Moving our pace our origination originations of previous personal credit the loans loans, tied personal noted in cohorts. call, closely to of for short-term and outlook

our We part continued to healthy and relatively have kept of across quarter, our and economics all unit accrue pricing levels cohorts. originations constant this

customers in closing to in on portfolio. only our own confident franchise deploy base loans for growth lending our robust neutral the Advancing funding personal local ability and of Remind and our Brazil, words, in short-term deposit in for of that with the in initiatives these and remain this market July. total billion of dynamics, conditions took loan-to-deposit other quarter our liquidity a $XX the market, In improve. and important with happened capital the We two balance loan XX% on our plenty personal deposit a year-on-year once to we our expand risk bottleneck credit build we have we of basis, believe strategy credit is Beyond we FX that costs, our by best place ratio an appetite. deposit lower product together to already have the expanded a XX%. currency account one-third

post Money grown deposits strategy can FX deposits, are changes also points. $X.X be of will which of income meaningful no aimed of XX short-term which the successful billion amount goals launch The with remunerated of deposits no remuneration period, Brazilian for be additional month R$X this deposit according or billion the days. the for Boxes launch before interbank and subsequent of would tools if exchange specific and implying quarter-over-quarter, at on XXX% short-term average different repricing the an almost important the roll-out the rate noted in implemented rate attrition customizing to our have withdrawn second, July. yield the longer Money investment-targeting data two options; First, the deposits Boxes, per neutral basis, is at by using the the On

on this can in to of side the you as First, slide, third note the cost left-hand the already quarter. started chart down during funding come

two should In fact, until funding and decline XX%, the this coming average already during normal. continue reached the month during of September, reaches the it a new cost quarters, to

Second, Boxes, metric of approximately of in growth business. another weeks the with than only cost our the created Money tools of funding $XXX rollout, customers almost gradual end two Nubank million total the these completion of the X.X decrease had X.X until million. portfolio, after AuC to the amounting impacts more September, of our with our credit Together important million of

Interest quarter, Our $XXX basis. Net million a or growing Income, XX% NII, quarter-over-quarter, on neutral or FX XX% this reached

our optimize our use and this seen our NIM, expand be chart. or can large low-cost and as credit margin, deposit expand we portfolio, we interest of on As the base net

achieved a X.X% of last third have and this of X.X% the XXXX. during We quarter NIM during XX.X% versus the quarter quarter,

$X.XX, the the key and serve serve. while reached As low platform monthly we our The ARPAC is cost cost $X.X, of our monthly average have of leverage operating out, to XX% its competitive one our very advantages remained strong pointed demonstrating expanded of stable to year-over-year at model.

said bargaining gives to dollar operating partners. our quarters, the be maintained and in scale significant we level past as leverage cost-to-serve below with our ahead, us power the we expect Looking as

an FX-neutral on down profit, delivered basis XX% of to another we P&L, quarter the gross million. $XXX year-over-year up Moving record-high

four to again, percentage profit expanded to compression observe to in X points inflection started a our increase of element Operating leverage XX%. started strategy. our and we quarters margin, of quarter, after is gross an key which This once

we revenues, As our to driving low-cost better platform, operating continue grow dilute profitability. further we

our chart, down As XX.X% ratio XXXX we shown the improved and XX.X% XX.X% over consistently in time, to last from this quarter, on quarter. first quarter efficiency have this of

our compound trend over We total we expect quarters, up personnel-related, driven at business. to we compared fact over when the we pace headcount staffing a our new and This quarters, continue the the expenses scale expand is operating of that slower geos. to coming this be time and majority previous the mostly were should should as the by

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the than and winners financial We the abandon of will long-term firmly is American costs more we a in revenues, services Latin tech-enabled play banking our digital believe be will cost that even industry diligence, that In never to that cost, create of manufacturing pillars like I lowest our time love. advantages. would the highest-rated and cost to context, four which the with at this able competitive consumers same our the revisit products emphasize companies are as

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of modern, than Second, technology scalable that the banks, is conceived company, XX% and being under lean, true lower a cost-to-serve agile of that result a is incumbent platforms. which

ratios risk Fourth, of will rate. a Third, significantly have basis, and products those to at compared that interbank better demonstrate the funded of industry in lower fully On the the the believe we segments than we industry. deposits NPL operate. to Youssef with a are XX% next, as like-for-like retail also cost cost we below

the ahead the ratio, Our in on from the XX% account is launch Colombia. the as of statement and should loan-to-deposit benefits a product we the trust checking as of recent our And we engagement in even become lowest deposits implement one we Boxes, as and the of competitive funding, customers. cost capture savings well Mexico industry, and of repricing of more Money the of

to Now, through Officer, quality I’d who our call to turn Chief asset walk President the over like Youssef, you and performance. our will Operating

Thank you, Lago.

go quality Let over quarter asset health portfolio of indicators the credit me for third of overall key XXXX. and now

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So holds, now let conclude To and across basis. a on segments, growth-adjusted over provisions. conclusion section, the time, us this discuss

loss of accounting Our provisions our principle we we continue life when for to originate We expected losses methodology, provisions base credit. the the grow, our on primarily expected which load driven portfolio. This the practices. credit is front on by growth based of loans, the the core of IFRSX’s

adequately NPLs is and we portfolio. of to note and credit economics in the strong of as price it third unit addition, although all resilient, loan the increased that our personal cohorts have cards sequentially have risk remained important the to In quarter, credit continue

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term Company the thesis, I the would of Thanks, continues managing of like basics for quarter this Youssef. in our that fundamentals. all our efforts to improvements Nu business ensuring To while its and summarize the reinforce long

growing while during revenue year-over-year, excess the the holding third our of and achieving quarter, at XX%, we level. gross First, positive profit in income at net continued XXX%

seeing able continued the While are more our we we price being operating which bit expanded interest higher and also leverage. is risk and volatile in margin, macro a increased also appropriately, to resilience gross shows products, while net we lending

needs our really we players Second, average products experience user that our excellence serve markets in customers’ X show are in incumbent focus to on the Net of in our that Promoter continue the times Scores relentless serve. up and virtually

is a brand. and by of empowerment delivered NPS chose customers. the make investments, to loyalty customer our markets, overall experience our the this Our We statement a customer are customer that that translated strong growth our have we different drove into of among marketing design. and most word customer-centric we that engenders mouth experience important Across

Third, levers all of this was achieved by intact. our maintaining growth

positions our achieved the already relevant multi-product, model. and have multi-segment markets Latin multi-country leadership most business in we fact, In through

We financial LatAm countries number have purchase achieved the three cards become we market top in issuer and institution sixth customers; in new XX% volume; operate. became cards’ the by active of in share of of largest

We much. us achieved very this lies more would of with what your questions ahead even past you of like to and We are take what coming in excited quarter proud we very now. Thank the quarters.

Relations now We start would Instructions] turn Investor the Q&A Friedemann the investors over like Mr. and to Jorg will Officer. session to call I for analysts. [Operator

of from our wait from Stanley. we you, Please comes question first Morgan the Jorge And Thank Kuri collect operator. while questions. the line

looking on quarter? we, acceleration appetite that outside, more What the are is have you. How at from question a Is Thank could increasing? My first loan personal second like quarter, sort year? call are what And are you great it visibility you next half the accelerate? to the origination Congrats you how risk when on or it book. monitor that that? of the the seeing of that KPIs fourth can on results. that of Is of do

question. Jorge, you the Hi so thank much for

quite all we resilient with cohorts of ended personal with robust quarter including and those well, economics. of So, unit our loans very the performing third

credit happen. our investment-backed loans. loans of So, to secured the fourth metrics up we we quite at increase of loans, of portfolio we in have and fast the seen foresee past with the ramp-up to is personal note, in excited payroll still. FGTS prospects XXXX, consumer complementing will remain quarter Jorge, also quarter composed how our to of do secured may portfolios with the It the of begin healthy, if potentially beginning XXXX. origination credit loans business this hard expect But the super these in ramp are as It’s quarter this unsecured we and starting that important XXXX, loans personal

Great. Lago, congrats clear. very was again. that And

question next America. line from from of our Mario the And you. of Thank comes Bank Pierry

well. is Like, results more peers. your would as similar comfortable right, accelerating Because than your in you as My Jorge’s. Congratulations feel question growth? asset on quality better to show, you have the when you

these destroying risk-adjusted that You they on showed -- value. you originating, creating Nu value your are not They’re loans margins. as are you’re

since are I all too advantages? is you now? peers. pricing it to like So, was in these to have more not Why be being And similar me slowing conservative aggressive seems wondering, you down your your

Mario, thanks question. Hey, for the

that develop I trying disciplined are ramp way and basically up think to the in be we new quite we a product.

are demand. by as out, we constrained the not pointed So, you

So than about customers, adult personal now XX% our for market the the more of they country. for which account Brazil, of now population equally X/X of the account in loan

So, demand not a is constraint.

in The the exist conversion of best to healthy. NPSs one seems be has the market, Our out. David pointed that as quite product

So, to equally liquidity convert not factors. deploy are product best-in-class and not our constraint. and a is Capital constraining the ability

credit single largest and with in unsecured factor us the is Brazilian loans of really economy. our for personal So, to the comfort underwriting constraining prospects in the grow our personal loans --

watch quite will it we carefully. now So,

would segment. a We in and better disciplined is, more this when but to point products, to with models slight are our of very investment-backed from believe and better more the for signals, loans. loans, prospects, especially payroll accelerate we with secured, are kind think FGTS the secured be however, do comfortable serve ability deploy credit it at our I time It successfully and different excited us we in this market the sends that

of products credit less underwriting ability our is the not And a concern. constrained by those up dimension. to ramp will think I be that

Okay. if can the to And Lago, your other funding, of question I related then right. ask cost

You that been XX% CDI of has show improving.

that your to a new it remarks next sustainable What that is is What expect looking You reaches said you of to the it couple in continue level the level? you’re during new for? quarters decline level. until

Yes.

So, second. for X back, just stepping Mario,

deploy up did We rollout. in very end by September the to only Nu for the about until NuConta we end XX% So, mid-July mid-July. of reach September. of strategy we carefully started remuneration And the ramped from

It still no felt funding be about CDI. consumers only on will year, costs XX% funding are quarter on will our our XXXX. going the any CDI. to most to of of likely end. to direction third full of down impact quarter relatively the of limited, of in Really us impact the for will XXXX the September, of draw So, to the quarter in I in financial about first depend believe fourth the it results where this largely the The decreased of behavior so high lower in in the hard conviction, the forward. quarter was cost XX%

three have asset So tracking move implications engagement. this the inflows, far, we NPS to dimensions, of been to and

any that. seen not have on impact material We

very not we conviction Mario, our with to So, provide confident this where in on the was and move a you do position, for customers. I’m to also right really the are company guidance for high this that went. But

Do the cost when traditional banks, to funding of like I XX% always be a of to or higher reach funding incumbents? the cost you to you Okay. than is level them, CDI. able should we have of a But at look you should think similar eventually the think closer that

cost of would XX% drop in too funding. a think big I of be our

this for move that I and the funding of expect cost reduction current funding, would think in between our cost. our I of something first

our Tito Sachs. line And from Labarta, next question Goldman comes of the

early question, taking follow-up the Youssef. my the NPLs and bps call, and a the evening, they the Hi. we’ve thinking questions, in a loans they Jorg, the from bit also XX the Good asset up quarter. were David, My NPLs, and But your incumbent strong just quarter, on the in some little you fairly quality the more I market seen well, of looking results. held mean, up stable. considering Last at of were for on peers. congratulations Thank personal but Lago, perspective.

for personal that You loan indicator was asset leading potential the good and had that outlook quality your on portfolio. for a acceleration mentioned

But on impacted more a that of forward? do part NPLs. and And think know the about little bit that. those get color I to origination, Just early of in early slowdown How don’t loans between NPL simply cards and evolving like the credit you you early those because that the you you from the have how Was mentioned, going personal know slower due with here? was impact I sort do color origination? NPLs. if to the think about of it

your Tito, Youssef. Thank this is for question. you

early points were mentioned I the remarks, quarter two the basis thinking and the XX, XX as drivers. they there So, in by NPLs, to about in did increase XX earlier

originations deceleration one market effect. But driver, of to kind have there in As what in seen. similar loan second the denominator driver you so-called deterioration, and other mentioned, personal was was which a was broad-based the players

it was so, the two factors -- And of principally. those combination those

we’re our Now, the markets watching cohorts all to closely. with going our the three the all in in very three And forward, of the portfolios, we respect all macroeconomic operate. which -- there performance backdrop

ability that we’re very cycle the action conviction give Given it’s degree outlook cycles. we quickly and confident that forward high to in with But you conviction a high any navigate prior navigated really our uncertainty going is as to hard, to XXXX. and you can the through, I going we’re tell for take Tito, have for to what monitor, of

in a credit have relatively both portfolio, personal credit and loans. cards short-duration We

will as we’re has the actions. of impact a performance last those confident take over a have the that of And we resilience any X, if those the actions X be And in high increased anything, -- will be quarters portfolios. reflected so, of and result origination our

in see show particular can risk-adjusted results that that presentation. in NIM in increase we the the You in

Youssef. Thanks, That’s helpful. Great.

the it’s if think when mentioned explore short-term or the to further, the peak, be thing long little Because think to you both last. it you is Just growth? are cycle know it. I mean, the monitoring I -- it’s that other could terms to we’ve from next this a of think they of past, worst quarter beyond be just just know loans, incumbents or and could could XQ a the how is hard that bit credit potentially to so cycle in potentially this I be about you don’t year. that loan you’ll on early have in heard maybe able predict, And NPL two? to personal accelerate something very I but may

notoriously to confidence Yes. of with hard -- accuracy. predict Tito, turning it’s level points are any or

in as wouldn’t we have confident quarters. wouldn’t direction I or over see our quickly I I take one when So peak will But ability tell see last personally another, of the you evolving venture action in guess when we’re will things turn. when to can again, the and to as a couple we -- -- we that very things

Tito, David here.

to Youssef. here Just add to

is, loan short-term as I very information-rich. duration, product think of you as personal the very say, advantage credit a high, big very

across what see. performance of to and So, this and the this different daily we monitor pockets portfolio depending get make portfolio of the to or decisions basically really to are on around able we product get acceleration de-acceleration

this has I space volatility in expected. quarter So, think there’s as it’s more much been this

is we that prudence warranted. the so show And

are lookout of the once certain pockets that do we to portfolio to opportunities certainly and ready more seeing in we’re absolutely of in comfortable. accelerate We’re the

And our next question comes from Thiago Batista, UBS.

Yes.

the about bottom on have very segment I question congratulations one segment. the strong or affluent line. So, results, the high-income a

kind shown you How slides, believe if a forward? small this the for this the bank in you relevant change Nu believe presence affluent segment, instance, going segment. Nubank? to banking should be for be Nubank should approach for need not? for have the this advisory As Do Nu very should So, the believe And for in more this if the manager be a of focus segment of or has that maybe, or business? big investments for you

Thanks It a you. Thank Absolutely. is have. big question. for your Yes. we opportunity a lot

one Brazil, A investment X limit the missing wallet pretty too have we for products customer tend around segment. we that attributes, business tend missing segment, that limits, times card side income, lot is the or so a to of or for product product -- a that customer of share low we this sizable over of side. that to which number or credit insurance certain of have is either the the we’re of a missing in don’t is around customers the tend market high percentage see segment. you means XX don’t be we have for million million Right customers X% in now, to As

going been to increase higher lot closing to of for been year, as a share to a that next we the customer a about much for the significantly nice high-income needle for moved and we will take of limits wallet brings those So, later, the out of is trying gaps. income past There’s lot in you key manage the if us to over show pretty a figure actually us has focus diversification how investments for It also. focus population. that portfolio be that the year, up,

keep you bring point us. in yes, to -- time you good for a think focus pretty I big any So,

question next comes Autonomous. from from our Elliott Geoffrey And

by quick could XXX the for just income slides NPL old NPLs think used a for what income individual by would ratio and ratio, have band, clarification. rather I prior due XX-day days the been tell the whole you they cards. on credit than past But methodology us personal write-off First, both The methodology, under that portfolio the loans the band?

is this Geoff, Youssef.

the Those reminder, now this the question. methodology for done and for as you the slides days loans, at we announced old off correct. that the just So, was is are methodology, used write We a to credit that thank at XXX off personal the XXX, delinquent. cards. to principal write between you Yes, write-off old basis difference of similar on write-off and new

XXX methodology the personal is XX months. So, to in methodology basically basis relatively XXX all XX four about XX%, right? personal the quarter. I between think personal through. Lago between quarter the between pool loan XX the XX, metrics two grew write-off basis Why portfolio been the were results our reflection points by would all to points delinquent. that and difference XX XX+ That the to fact the the page change increased and that of have two about days old you loan growth in You in to believe NPLs it’s can increase? ago, the on portfolio as quarters early NPL which up of X made between XXX there’s those your quarters up way as appreciate the little have I in basically in two And and larger up impact is a in the of loans delinquents Because substantially the because similar, were presentation, loans the four ago, went of have delinquencies, would mentioned. question,

merely the higher a book of in of that that increase size the XX+. in reflection increase explain it’s So, the would

broad, cuts, Thanks tax falling, What’s the this in your across unemployment on when for is industry? it’s that clarifying Brazil would deterioration, and confusing appreciate just other And why I what’s it’s stepping then going there that. got happen fuel broader banks. this it’s But the now you’ve at happening of back welfare ways, outside on your [ph] on deterioration increase. take kind payments in some credit

Yes. It’s a great question, Geoff.

the -- view there’s dropped last ago. year of think low about right, been I very so or been year or which There’s from puts might a government There’s peaked the XXXX, it in so. under has in a a of the lot bit changed number new normalization of that XXXX. there’s There’s delinquency assistance And levels been increase takes in some administration. a and in high programs, changes increase and fair inflation. levels again

puts takes different things directions. in that So, of there’s have a lot and moved

hard exactly now right it’s what driver So, observing. to pinpoint is that we’re the

Telles Suisse. And our Marcelo Credit next question from comes from

right, quality specific asset My regards from industry results. strong to is question very those the products. performance the very It’s on Congratulations your quality. rest of interesting the for with to see asset decoupling,

when credit segment in instance, and for So do that or see, Banco Bradesco. the such bit of pulling card from especially Brasil interesting, kind a context players as out the we -- it’s

you accounts you for Thank the can your us, should lot account a so have the you incumbent of think open have about more that also new do have you of clients better So, is the have we data, not it players? that you you. notion really clients, clients reasons who clients, how vis-à-vis you data Is or amount different on to making explain So, is what with transactionality? performance? work how meaning it are banks that think that with that fact

and are our at Great capabilities. underwriting there again explain here. root of question. several that I’d Youssef say factors are It’s Yes. the

is a only account can we their get deposit there has for data personal form already but credit from data. majority majority and the have experience takes transaction vast, which where also customers and not of card the mentioned, cross-sells, account data customers activity. credit us. our vast and from customer of you already XXX% of gather come data richness, and we external card so experience As deposits, data only but credit like observe The our deposit of actual we with the and data on vast their bureaus not loans

that able culture fashion but to rapid new and also of of underwrite. and and over company. So in on discipline big that take able years, that which would built action to use portfolios, process, that and in to information I governance be the in all to gives it. a strong we the cycle. cohorts credit in monitor also lot a to and also of a do very terms lot We’ve deploy of say our our process methodology pipelines us to rapid several a built, a That’s the kind we’ve that, last technology driver rich models be methodology the of certainly

lot maintaining a resilience on focus we discipline and returns. So, of

credit We have multiple of reviews lines and make levels whenever decisions. we

the make sure are of to should of overall And root think combination of a the understand testing, ongoing returns. we drivers that So, say, factors I at of performance and all of it’s we credit causal several that.

that point account one open highlight to mentioned. wanted just I

not important it’s started years of that a to just with since Today, cards customers we really ago, think to highlight really were we say, credit card we to giving are which base product. X, know is let’s credit cross-selling I accountholders. while, here, X a did we

over We million XX about cards. credit in XX have and only Brazil million accountholders

get over using these strategy. the really way we credit get they’re a And lot about They account is players gives the Limits giving with in are we comfortable our understand of the to which grow a a and low. times get that’s PIX manage this a today, just begin XX% in like once they volatility one next customer primary by bit them, We start And financial increase lot with we with paying, get in increase one the -- begins of of that downside the card, X, primary limit that which, with and once you -- of in limit PIX, their the months, dynamically the situations bank more XX risk. a we’re to relationship. a their when starting low we they customers. information start so their Brazil, goes much or this account, salary more largest with not then slowly. limits as of So, we we’re situation way, to become And to up. know their low

selection. really one in really up being think times, we that a different a it today after or So, have going market by product of monoliners at attracting ends that fintechs just lot of adverse and the then are of than the they credit default approach

up just question allow your it’s me, you if think of one you follow When customers, about quite you that tied cross-sell to kind terms this And Very mentioned. in clear. of remarkable. with to product mature

think customers, had in have mature $XX currency an which is ARPAC actually from previous despite an the increase you $XX, quarter-over-quarter. think now, of you I the the depreciation I quarter around Your

just, So, let’s other ARPAC? towards or insurance bigger what $XX to it’s products. credit about have How get usage credit say, the the more or types to or to we this of card that Is you are of cross-sell card mature should of client? it path limits that maybe products getting the think the $XX

super a good that is So, question.

today, yet of when prepaid penetration with we Nu the to ARPACs think have interchange cards credit that personal of small of by loans. you composed majority very look a the I cohorts cards is and basically and those mature

increase a ARPAC with associated Going be forward, loans specific cross-sell. actually I unsecured we as of penetration think this both base, and substantial personal secured, in amount our should

what prepaid upsell we credit the ARPAC primarily investments. accounts today prepaid and as is driven have and So, seen of been expansion cards by and cards has of

be investments, by of SME personal products, cross-sell accounts. marketplace, equally will loans, new and driven insurance, crypto unsecured secured, Going the forward, it

clear. Congrats Very again.

from And Leduc, question Pedro the next Itaú. comes line our of

little credit bit please. cards, A on

a is deceleration your the recall being coverage I about and think to clients, the piece you’re expected your personal loan, better making mostly loss you So, about credit of a adapting? And coverage and bit credit new How shouldn’t that resulting here ratios cards? worse this here data think cards, on model it. credit offered how card think as is coverage should being fed higher probably Thank we in and for as going is worse little bit probably scenario? this with data, ratios a everybody be little about new forward you. it How

So, for question. thanks your Pedro,

have I X.X% bit, have about increases of think of we the individual the also XX.X%. from to notes seen in take have. credit that statements. financial a look in actually ratios coverage in coverage They balances went cards explanatory we you little gone our ratios a if up our And

comfortable forward, loans Nu both are personal with credit going have think we that the I ratios cards. and coverage we for quite

probably so the will ours gone pre-COVID to industry But coverage ratios and NPLs up. ratios XXX% going converge to I XX+ has once And above that the far, are XXX%, overall, the start the card back we As overall XX+ coverage to below NPLs think level. begins stabilize, think credit coverage of stabilize.

line question next the Citibank. the at from of comes Frade Rafael And

question be significant was total portfolio a card the size loans, of provoking are of little card revolver by or little this. credit increase it’s revolving transaction surprised the would on credit lines the by more this the by this understand related is like understand volume like about breakdown the something use or were in breakdown less understand translates have the to to has lines related XX, would the slide to the slide portfolio, about I cards. the more this to show not? if same prepaid need bit that interest-bearing to volume. in And a cards to it’s credit question the XX. I or I you. to transaction In how and you Thank I the clients prepaid would second you a for cards there the design, that a if a total. the

Thanks for the question.

them two. Let in me to split try

here think prepaid XX think probably XX. question evolution what cards the slide So first second of and I But on I cards. credit seen have volumes question, is more related is your think for purchase and both, the slide to the first, to you I

that to over have in up quarters. prepaid catch plus prepaid that with the You volumes can X started credit has outpaced credit cards see cards market cards. or of the debit past our And share X

have cards, for XX.X% in share approached of about market the third we credit terms I the volumes. think XX%, of quarter in purchase

the that purchase why I volume used you think newer than lower slightly the be prepaid the of prepaid cohorts of levels. below catching start quickly cards, up. we volume cards, we on reasons side and average see cards but right-hand slightly slide one that’s is are to purchase the of credit XX The on relatively with lower average that

first So, to I answer think that’s the your question.

portfolio. Just I would the like to understand credit also how this translates for

or related look cards only So to of is credit the when cards? prepaid there’s it portfolio, card part for I credit

is only of no nexus prepaid book credit a credit the credit credit purchase -- and cards. There volume is it of card, think cards. it’s I cards between our

perfect. Okay,

attention Then credit down the break I think portfolio Okay. to buckets, in draw and try you card XX, your I going slide see. would number your to we can question, second as to three

So, non-IEP, And two you IEP. here. are non-revolving the IEP can that there the draw your see would revolving attention things and I

percentage So time. balance, has we and over below that catching of interest-bearing have we first, have industry of a IBB, up been as the portfolio think been that total an I the

increasing revolving not over the Now, balance. time we have up been catching by

that the we has a increase our launched the IBB into PIX boleto X% really customers. that between have to in take take very successfully basically has financing cards XX%. increased to we credit been financing, you features growth pretty card went X% to intentional and Those has that of that What has our from the look, X%. past the have remained basically allows credit driven and features within added of that stable Nu balance usage over revolving if addition been financings portfolio that much quarters So, intentional have credit financing the in a And the and even card the are bill finance. consumers like products

remarks, are versa. even the they credit that Now think opening receivables though as mention, as personal to credit financing his described in there highlighted family, as of so accounted to cards, it’s within are loans transferring no or card from those I Youssef important financing for is features or credit card vice

And next line the question our of Friedman comes SIG. at Jamie from

disclosed some I But might deck. prior principality So, it had would slide detail principality. calls, apologize, be see Lago. missed about in have in it, the useful. on any I may you commentary you don’t have I

Sure.

XX. slide to attention your draw me let think I

on our you slide So, side, banking definition XX, left-hand relationship see customers. in can the primary of

in more of customer. a customer? definition. relationship define when that have a to -- primary we your of a month how to be transfers Nu primary to when customer So first, will banking things she customer our we banking XX% we every chart. bit become her post-tax banking right? And your he more I do his primary you relationship define So, relationship post-tax attention of he our income, than transfers What or or draw us consider two little this So, we XX% income, than

across first, we that cohorts, can of than primary XX% ‘XX So more see the until have January all XXXX, become customers. of our from the starting of January banking you relationship

collecting not are the business social again security in So, we of numbers.

of business the relationship the our of becoming primary banking in are We customers.

If consumers. would this ‘XX months highlight us chart took there, to to get that in The primary us to getting the faster it second about is I we cohort, other less is there. for relationships massive January and of bank for months been digital get faster. January of has that it think one taken than and are more advent for the if is XX Why endogenous. tailwind reasons: adoption the two exogenous, one exogenous The happening? this digital American Latin more one the a happening Brazil has in specifically. is I banking by PIX I think embraced now in XX XX% thing it’s -- banking been

The second reason more endogenous. is

we look to the more launch the customers. this of more banking a right more the slide, we take the chart primary more If of launch as products, relationship as earn you and we features, in middle at be

We have a much more compelling value proposition.

were card. back in would of customer have a you only you one credit product, If XXXX, Nubank

have you Now multiple products.

accounts, cards, You prepaid investments, have insurance. bank cards, credit

So, banking engine that primary take a relationship of the also to our has phenomenal up customers. been

or my your David, lending initiatives. remarks, for you the secured in both Lago for follow-up then prepared And mentioned

Just wondering on be more more and thinking you. as margins the impact Thank roll products. about secured how out should we lending you

I So, highlight, things are two think and product, specifically there loans. the on and consignado on investment-backed that secured lending lending payroll would I

the amount unsecured is we and than foremost, lower payroll upfront to unsecured have constitute provisioning that of build and First -- lending.

from standpoint payback accounting an is our So faster.

is they fairly capital the the are are less on much And personal one second as return compelling the to net The however, well interest that equally capital unsecured secured the right loans, risk-adjusted view as draw personal margins very loans. the It’s than compelling. therefore, expectations. important,

the it’s will the the business ramp-up but and very secured this XXXX, excited ramp-up super launching fast with happen. are of lending throughout We uncertain how

believe the to going So, in we’re loans. that personal we do XXXX will from have that most originations of unsecured remain coming

more a traction I likely starting story year. but half is the of the think in will secured half first get heavily the in second that the personal loans ramp-up

Simuni the next our question Eugene MoffettNathanson. comes of And from line at

this for question margin on talk are And ask tick-up permanent just I presentation. and margin? wanted how up this what you profit is this kind gross quarter. of trajectory relatively tick-up detailed you the the a high-level trajectory little that us this of bit Thank profit Could a the to gross through puts quarter? created this takes the

Absolutely.

by number and number credit two So, been the interest portfolio; this one two the of has velocity the uptick is things had margin we in gross of driven primarily: movements that in growth I is rates. think profit the the

stabilize rates the opens as go the for the compression margins in months, low-XXs. gross their gross So a original profit margin. back the high-XXs, six, room see up you profit And country, to of over as reconverge actually past they in as levels gone interest to have eight rates it interest country, in

of credit credit much secured our The us this gross profit should credit margin increase basically portfolio putting second as of and pressure to our growth equally ramp-up as loans, thing the without improve the personal we allow portfolio. is accelerate unsecured our as to portfolio

it However, questions unsecured the the provisions. asked because loans, to personal if beginning additional frontload basically Mario the put call, again gross we it I accelerate and think of when margins pressure profit us will do the will of we at of believe was and constitution one on Jorge that I have

be that will or will expect will the forward. we be expanded mildly quarters. preserved takes few and coming a this there going So puts And over

to ask Got it, as question, crypto. your follow-up, to comment Very relates to And got wanted you my guys quickly clear. it. strategic then strategy on for Thank you. it

been Nucoin quarter, the fast and the there’s NuCripto last with reaching Over with of users. a X.X announcements about developments of the trajectory couple interesting million

into Just So engagement on revenue? give us maybe brief it it an helpful. source overview acquisition of your of will primarily could a some just you in point, a can if fit at significant ecosystem? or be this Is us points that, a crypto give driver, become very where become When high does it that would driver? user

Sure, absolutely.

crypto So obviously, these of around a noise days. lot

mainly around For support that providing asking product customers in actively and been a engagement are factor customer us, about. a it’s

more months, brokers. crypto to XX -- invest to we even going actually than XX would brokers past see traditional the to investment Over outflows

we’ve amount crypto been a of this winter. And through getting of to just crypto level in users, million our winter X huge surprised so, million actives. X.X is the platform there crypto interest own surpassing about adoption -- And even of this

customers ecosystem. on also our token entire want that to angle we’re be That’s a working customers and we here, related announced this own behind. one. asset are to So, our loyalty that potential an invested with is continuously crypto We’ve across number

Polygon. have large setting marketplace as as We’re still in over go on ultimately it have the about the ecosystem. building our a merchants and XX customers even end with up a big think think increase as that big today. that one small the perhaps hand well start in selling as and we million that on marketplace we we other this beyond But have business million the between different of the are we engagement the customers I lever to really loyalty in across process our And we X.X products all

the -- here to We’ll excited about of behind we’ll excited can using see. about crypto us. enabler technology and as this using are loyalty. opportunities And to that that continue an provide invest the So, we are

[ph] comes question of at line at from next our And the Scott Wurtzel Wolfe.

active should about sort decrease. great into the of to rate it expand. continues of forward, But amounts expand think see really how continues wondering monthly It’s to just XX% level the it above we to users going to non-active this continue just as and

monthly amount of sort Just wondering there’s active actives? you’re trajectory ever-shrinking what in non-active thinking strategy get your to this pondering And -- shift the rate. sort into of you’re who sort users of about monthly of transition of if user any how

a of I’ll Hi Scott, the Jag you Chief This the for Officer A is at stab few I’m thank thoughts. take question. Duggal. Product great Nubank, and your question.

all, monthly rate, as consistent of of our as now active seen. improving multiyear earlier, strong noted we’ve seen trajectory you’ve Lago a First

the how and can see continuously been to it. up to to are how of slow higher hit at difficulty going get as we growth to to to push determined been doubt, and continue continue and to we the But right. the up tick continuing try to it of So, we’ve surprised Frankly, it we is we’ve is no to far higher rate going levels, much able harder. push

back rate so-called highlight to DAU, up. which over monthly asked to earlier active thing and is or noted question on our go a daily of someone active The it’s just actives other bit monthly not our think David I rate continues increasingly goes that would we focus continue levels a whether on engagement, but to deep I MAU

rate, DAU, our relationship our lot and in some the company we And an significant continuously. about to boundaries, up primary as starts hit we think we similarly rate active further even deeper engagement can banking So, head monthly talked up, is XXXX. level as we’ve even to higher continues that’s into edge of which push of a focus MAU

done, we saturation we have pointed been engagement levels, two. our banking to And it’s the doubt their DAU, both out to continue can North the and as believe see there. relationship as level the continue and if and our NPS some and we our our confluence even So baseline we the primary of monthly deeper of continue products be in engagement can and MAU, some whether of is and at our the point, always That’s customers drive whether really at customers as love that’s Lago we provide go the focus frontier we David presentations, will it’s and But no actives forward. deeper in and of engagement as to Star, hit we of up all. will push the

Great. activity had Colombia, seen you sort of relative I of and when of Brazil a That’s your of very new as And and topic. helpful. in to of there, you just in to seeing well? as early Mexico the Brazil early in you’re in follow-up, also it’s sort we geographies, what share anything color-wise days in with a know what what similar sort but at can rates maybe But look you’re sort the relative days geographies in launch terms of seeing those

absolutely. Sure,

of was metric, data that I Colombia is would every at added question are as growth saying that growth. Brazil bit the beating going hard be basically it’s effectively Brazil you just Mexico your -- been beat. than single So, initially rate, higher some X, surprising in name story a on both we But slide really a it, -- countries NPS, and from operating to to see as to level frankly really thought the CAC, both rate we that ARPAC, Brazil at

You examples financial other globally services of through of word don’t a any virally really growing mouth. firm see

so Mexico think product we We taking expecting partly we about were penetration and is that. in these this what’s is a fit And actually that there better is to not thought market Financial when happening Colombia, countries. services lower.

which have is any Promoter the a And Net Score globally. in we example, for of so, of consumer -- product really probably NPS any in Mexico, XX, category highest the

market pain. So, we of the that’s product lack big in fit very, very just is market. access just financial sort this services ultimately And of a to the see

encouraged Still in entire but countries. We -- far, two So about the these a so countries. lot example to our We record track good we’re both playbook, very feel an to savings. release prove. still still need by the of multiproduct need very to launch

question And from last Markgraff KeyBanc. our of line Alex the at comes

thought, just continue on that To last David. to maybe start,

offerings? on timing kind maybe mentioned launching of are launch steps more geos. to provide and can checking waiting your think in the where or products left you the and other specifics of indicate are Any in respect had those those savings of you with you’re process of I some you rough to the what what

Sure.

customers So and we very greenfield the applying they be have Mexico the lot permissions. the a XXXX. a already regulators year at savings QX, XXXX process in quarter, in with larger this for should license the happening next be expect and a accelerating I both plan customers goes delivery year. will ramp-up testing bottlenecks to MVP been We in a of In but we’re of of Colombia both probably product second everything that -- scale. license also if according larger acquired still are for an regulatory definitely, be already of this should and Colombia. testing But countries the Mexico, in really through close. with half next towards

mix those per Super you kind of a credit versus some think, the you of helpful. I look customer per earlier just active describe just slide on, of quick it’s as cohorts? at follow-up the And kind cohort. Can noncredit XX, products

Yes.

are loans, over which is So the penetration a products. the one. the I other of card, two launched But all personal which of credit only, was product first the is with more of credit think noncredit products, past high exception years

as and non-consumer relevant marketplace, the such PIX. products the you chart see cross-sell that Those of slide bank investments, the high most constitute middle So, on are the credit all the XX NuConta, in engagement, that noncredit products. fuel insurance, are account,

attending. call for our And conference this today. concludes you Thank