Nu (NU) 13 Aug 242024 Q2 Earnings call transcript

Good afternoon, ladies and gentlemen. Welcome to Nu Holdings conference call to discuss the results for the second quarter of 2024. A slide presentation accompanies today's webcast which is available on Nu's Investor Relations website, www.investor.nu in English and www.investidores.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. like the now Mr. over would Instructions] I to call turn to [Operator Friedemann, Nu at Relations Jorg Officer Holdings. Investor Mr. you Friedemann, may proceed.

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

Financial will actual is our growth which quarter comparable our information, Nu we operating our today's time neutral financial Youssef of Relations Lahrech, and release. might These Holdings, are and noted main Chief everyone will your numerous our and reliance Officer. Throughout our refer to presenting website. With undue an we President Officer; our which call similar statements Youssef and release, happy companies. our seen remind Founder, Velez, to take other Center to and today's as CEO, subject take Investor also highlights our include in These adjusted not Operating for Lahrech, are not on Lago, in earnings our the after future are Lago, materially press David COO, our conference net have our Today, performance and the are questions. IFRS results financial Results measures second you measures this financial that cause President and CFO; IFRS David Subsequently, our from Guilherme you be income. a statements If guarantees the the quarter, non-IFRS our founder, of Duggal, discuss information earnings financial our and to be Officer; through release. differ XXXX. but will defined all not uncertainties information and Chairman; rates to like risks copy Chief should Reconciliations are disclosure to posted measures on financial me for forward-looking the Chief to in section be Chairman and important would of Officer basis. I non-IFRS will Chief Unless earnings Jag Guilherme not forward-looking put available not Velez, of Executive FX year-over-year financial Product from are and statements, by including may otherwise, our performance are you discussion therefore, on expectations. Please could them. call,

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

you Thank us being thank today. Good everyone, and again you, with Jorg. evening, for

customer During QX business XXXX, anchored by and operating customer in our demonstrated formidable accelerating costs fundamental per expansion, three power. model principles: strength its revenue efficient earnings

exceeded XX% million by growth the platform of Mexico, million X.X This adds quarter. end financial reaching Our as the digital Nu growth the the quarter, our million remains experienced leading years customers ago. Customer new average in also bringing an our million solidifying Brazil the total yields success at in recorded monthly, XX net customers X.X the in the Mexico. of strong to of X.X just additions XX.X with strategy expectations, customers. Mexico the net XXX increasing consistently X Meanwhile, million in have in with and deposit end a customer quarter, of increase outstanding momentum boosting from validates million culminating

launch the customer the X.X Cuenta with customers, ending million Additionally, of quarter the following Colombia X surpassed million almost product. successful mark, the

billion increase. successfully to a the currencies to quarter, $X.X against our as to continued XX% depreciating we cross-sell Now and while upsell relevant revenue new highlights. surged the dollar Lat some let's year-over-year U.S. Am products, go Despite introducing financial reflecting during

annualized resulting growth highest of equity a industry. the the reaching to $XXX in $X.X an profit one XX% saw record gross return gross a with year-over-year climbed Net billion, income also marking growth margin of XX.X%. in million, of Our of XX%, significant

and quarter-over-quarter million this slide, $XXX hit of profitability. In financial and however, in line our XX% sustaining achievements underscore solid strong year-over-year. customer business with XXX% model, data effectively metrics. acquisition we our Additionally, our income demonstrate, key top combines strength net momentum growth which adjusted growth while a robust These again with of the expansion flywheel sequential drives

significant subsidiaries and our in and -- excess models Colombia, million, billion profitable. level operational despite at income strengths level yet annualized net an with Holdings Our are achieved a holding Nu second of equity of of In profitability. the $X.X XX%, of capital to in driving maintaining $XXX Mexico an and adjusted with two adjusted be robust on quarter, return

numbers. you pass Now guide to to to like our you, Lago, financial Over Lago. will who through I'd the floor Guilherme our CFO,

and good you, David, evening, everyone. Thank

mentioned, a David engagement growth, we we margins see and deliver revenue increase profitability. operating to continue delivered strong customer as As robust and quarter second enhanced

let's our quarter one the against these with to of second a greater progress deeper into acquisition. results of customer Now the of results gain will understanding I dig the pillars. each begin

million During more platform. customer marking the our the pace total new X.X year-over-year. Once count and engaging XXX.X second customers of reached customers, grew our the end of quarter them joining million, XXXX, XX% increase focus. add strong we our customer at By retaining quarter, with base a a our becomes

this XX.X% consistently Brazil, XX% Mexico base sequential This and by marks value which our just XXth compelling X another a by consecutive active rate, our offer proposition activity year-over-year demonstrating quarterly stands proficiency XX.X%, now the monthly metric, customers increase at followed up to the year and Colombia. Our increase in increased in from ago. in

revenue expansion. Turning to attention our

wallet level of agile chart Moreover, are recent banking Nu relationships achieving active has rapid in pace. increase with cohorts principality this performance established The our solid our primary within base. This XX% around an base. share to manner customer customer increasingly at an the of ability underscores our first highlights the of

chart, customer the solidify many our of As last continue by in increasingly X.X success demonstrated to even chart, number the quickly at strategy positive results. see as capabilities, cross-sell the second active the chart product per illustrating illustrates the by powerful customers partner. The combined products cross-selling onboard banking customers, engagement, effect second having can as is two primary first our our these in their of you growing customer effectively products coupled chart, as new achieved role new in the we of our significant months, shown we to we introducing with dynamics

ARPAC last on our this While contracted $XX.X expanded an basis, to monthly quarter in FX-neutral fact, ARPAC to compared $XX.X quarter X%. by

the a note On generating FX-neutral you mature growth will cohorts ARPAC also an next our slide, are of present rates the can more on we basis, already and $XX. monthly that

$XX.X. reached ARPAC monthly Our

grew and an up on it robust basis, XX% X $X.X However, just X% a from FX-neutral year ago. year-over-year, sequentially

path towards ARPAC to We increase continue full potential. clear see its further to a

new highlights reaching of quarter, The second hit record XX% $X.X an chart increase year-over-year. billion, this that our high a revenues

with ARPAC year was at ago, levels driven a revenues two increase active This year-over-year. higher Just things: billion. our $X.X stood impressive in by customers, combined growth the

of categories. and by growth customer quarter-over-quarter, growth Once increases dollars, across and same X% $X.X consumer Despite was achieved book on encompassing represents quarter, effectively. year-over-year trends cards a and impact total showed both lending scale basis XX% and was contracted, enabling share of Consistent expanded lending $XX.X XX% product quarters, XX% to by dollar portfolio. outpace extremely an from originations growth on reaching X% previous driven basis, our cards our credit us finance Credit quarter-over-quarter performance, billion. show continues cards This cohorts to of now credit our driven all the total of Lending the lending the sequentially. expansion in wallet reaching again, year-over-year FX-neutral credit it by the it quarter-over-quarter segments. a strong increase This billion. This the XX% nominal FX-neutral our well, XX% the across performed growth, portfolio while continue portfolio value an grew and nominal $XX.X reaching billion. strong FX an to in consistent year-over-year growing with

our of XX% let's card balance breakdown needs. move business Interest-earning boletos to now monetization rate return, our financing of products. was portfolio expand represents enabling quarter. card of of fueled last our the type PIX this further up again, an credit expansion while us growth risk-adjusted portfolio. credit meeting and our of of financing Now Once installments the important customer to by from the successful attractive offers total card XX% This credit

validated credit X% by at strategy the of stability remain revolving total which further receivables quarter. receivables, Our this of card is our

expect we begin installments to forward, percentage relevance balance to the of Going stabilize. interest-earning

at reached our to billion growth, this the driver primary highlights BRL lending a our credit remains product. this who lending BRL lacked Unsecured originations XX access billion business, previously of increase. Looking in ability extend quarter, availability XX.X quarter. XX% those reaching This year-over-year to to this originations

XX% originations lending quarter originations. XXXX of secured X.X or of total the second reached Our during billion lending BRL

features top-ups in such the gradual half the we and the year, During of as secured pace a lending anticipate portability as new are increase refinancings of introduced. originations of second

TAM, are in And eligibility helping increase to integrations and major and armed municipalities. agreements customers, collateral new parts six states the further eligible signed newly ongoing. of completed, also some us the release have these the of grow We thus of new product will entities for we Brazilian including originations. The once forces

BRL July alone. which during BRL lending originations billion, total exceeded in fact, X.X month In million the secured of of XXX XXXX,

funding the review let's Now front. progress on the

on our Although terms. Brazilian to dollars $XX.X billion, deposits expanded XX% they in contracted FX-neutral quarter-over-quarter business in nominal

quarter in the deposit of increased XX% second we total primarily by of through By expansion driven growth billion, more year-over-year XXXX, than representing Cuenta in just growth retail America. two end for represents the to Nu. base tripling Our franchise a in the $XX.X in one quarter a Latin significant in The billion Mexico, Mexico surpassed over deposit building Mexico strongest $X of quarters. strong deposits milestone in local currency the significant in

high account Another margins lending over This NII NIM driven than highs. our which to record and noteworthy of another net of in NII, second checking interest collectively quarter $X.X $XXX reaching or or card expanding products Colombia's Net growth million billion. achievement in interest the year-over-year the was credit more by XXXX, deposits, consumer record month and new June. the income, product was XX% by in increased boosting XX% of launch consistent new of our attracted

XX.X%, points basis and interest points of quarter For XXXX, an we XX from year basis X quarter second of from last a delivered ago. increase the net of margin XXX

compared the and we lower to credits. of ahead our for the that continuous capacity of direction returns the will our interest balance sheet much lowest primarily driver in originations loan bonds excess the secured growth. confident today be form of NIMs yield products such public credit are deployment invested rates, deposits the in primary future as regardless yield Looking of

now our overall very Let's low to to of a strategy, pillar serve. maintaining attention the cost our turn last

the its foreseeable XX% successfully to future. achieved competitive for of We this And per grown during has active this when $X most significant one-offs anticipate Our platform customer quarter our the cost strong active the per figure of reimbursements the year-over-year one On serve XX%. a $X.XX. with goal markets. below basis, customer of in we an FX-neutral cost to serve, showcases cost-effective network the expanded with our Mexico the again, by our operating to at adjusted or providing advantage. leverage remains in same at period, once model. second low This business cost a In by this related ARPAC XXXX.

Our approximately gross quarterly year-over-year profit increase. reached XX% a of an billion, $X.X new high

Our of gross rebounded to annualized levels the higher funding XXXX cost despite geos. margin in has new

Colombia been and Brazil, the Mexico our element leverage. of is positive A offset operational in have driving investments XX.X%. trends to in our gross by strategy core effectively achieving margins Our

than stood an quarter of better of points than more the XXXX a the XXXX, year and ratio of second first XX basis efficiency at XXX from quarter ago. Our points XX% basis during improvement

our harness fully in essentially to the features our upsell potential products, base, in we Colombia, customer launch which set new new are achieve are cross-sell operational of investment and profitability Mexico their and expand platform's and as We phases. markets

with an across as Number risk, three, $X have expected, and to respect risk, of as cost XX% level a incumbent positions of of the we significantly on consumer countries the consistently the below And basis four advantages volumes we deposit number gaps was of operate. our one, in incumbent one exceptionally rates at maintaining financial Number on banks Number four, low which on the has our pillars. serve closed XX% cost our the funding and compared to This figure competitors globally. Let's to widened model. to have increased representing another and now be reaching credit services while consumer the at income. of we over worldwide. sustainable one delinquency rates. of the results blended all fintechs. And net and competitive those of review profitability with advantage managed fintechs lowest of acquire outperforming business XXX% effectively funding, interbank cost of finally, banks of remains We quarter approximately stable delivered continues cost of These our finally, an increase to cost This to the underscore previous $X. effectiveness among of year. efficient net apples-to-apples than banks. This strong lower $XXX with cost companies Nu turning strategy income most million, our two, the

Additionally, ago. million, adjusted $XXX quarter XXX% X growing this reached income for net year versus

very approach optimize are encouraged quarter long-term may investments involve short-term the our remains long-term steadfast strategic creation. This opportunities. value our we While to focus second results, by on making

hand Now the I'd credit over key quality our Officer, asset and and will walk you like our portfolio to call Chief Youssef, health. the to Operating highlights through President of who

and Thank evening, you, good everyone. Lago,

Let's our start at by trends. NPL having a look

this to of rise in which seasonality. an first following to for slightly delinquencies, more in has X.X% historical than early-stage decreased the quarter is seasonal XXXX, typical XX First, anticipated NPL quarter, XX it

NPL also XX in in this point a reflection we expectations. NPL quarter XX simply XX line Second, is to ratio X%, increase point in mostly The last XX of the quarter. to XX-plus basis NPL with XX-plus our seasonal increased increase basis saw

of behavior, segments short-term metrics. value discussed and we strategically growth down those and with prioritized past we that line cohorts we spectrum, decisions opportunities. In see present our than As are on we with customer expanding credit When our actually or credit where intentionally the earnings lending returns that promote focusing asset in our growing the net optimize identify risk-adjusted customer credit in responsible compelling philosophy, we areas. classes long-term solely rather pursue calls, relevant book NPL

we in the that the would This show undertaken of other our in finance the greater on NPLs increase these revenue credit expansion than it. slides, that we have more rates To in offsetting hadn't the what in clearly presenting and that NPLs portfolio, product are can our the NPLs impact normalized come has December few largely last the expansions. if these of higher XXXX latest starting will strategy expansions. are next of before words, increased waves we yielded several is delinquency consumer of this quarters you expansions. In the illustrate As shows been credit see analysis the resilience delivered with

to last Brazil to we undertook NPL continues previous additional closely two or have evolution In a loss this per the expectations. we credit revenue quarter, balances and XX significant consumer expenses risk on quality these this This basis. of In the NPLs total This drop expansion XX more receivables the interest-earning risk-adjusted this quarter, stemming this fact, validate like only we've offset XX show stable a that the increased can credit been and this basis. delivered decrease expansion our slight to in both of late conclusion risk our further this we that metrics additional basis, on XX-plus in rather to this clearly the next by strategy asset ForEx-neutral trends declined to at slides. On looking indicates ones under aside trend follow for since slide, we drivers. and X% without different normal result the risk-adjusted Similarly strategy, expansions you additional considering XXXX. show a of than returns. Credit to allowance last remunerated million demonstrate $XXX slide, substantially a XX is the risk than the returns. To in we directly clearly with from seasonal show few QX margins with years RAMs the days. generated value slide we on portfolio the taken. goes the downward see days from ups the to This QX and and saw for have downs on XX-plus

base growth our driver is compared main The first the of growth provisions, in QX in as the QX to can slower see presentation. you this ECL as the is of relatively appendix

than The second historical is early in mentioned quarter, delinquency driver second which previously. better slightly behaved the seasonality as

ago, basis record risk-adjusted and reached a reflecting a a year Lastly, XXX quarter-over-quarter. expansion XX% NIM of a high quarter, increase from this point XXX-basis-point

Now over turn David. call David, to I to would you. over to like the

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of relies these us market double-click key like unique unmatched a success on our While some combination attributes, I'd on position. that place an in factors to

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building the this asset. Additionally, differentiation new we're opportunities on ongoing talent for revolution and focused creates magnet AI very on

I our an Hyperplane. Hyperplane is to solutions financial a Valley-based Silicon highlight acquisition services for the AI wanted example, of power leader As in recently announced space.

a our using excited of who models in we attracted of meaningfully customers world products most gravitate the over services also just has model will offer very data. We're our the In vast see machine financial of data, believe deposit this amount pricing is to impressed As of our of Hyperplane's services, performance most platform Nu's competitive those that this Hyperplane account attracting even in choices, our in focused our growth included tested the on part foundation a by were base market. improve success. learning checking $XXX unstructured we've strategy advanced towards of the future. and of proposition year in This board launched now Colombia value brand, $X.X key product. welcome seek in by underscores retail our service we quarter Mexico, testament own to superior what a over Mexico trust, and our a tree In The is foundation them compelling that's customers already and exceptional winning AI and We launch team on who principle. million as provide. The of and continued the powerful combination our foreseeable products opportunity beloved Cuenta the garnered new the to billion in a in that naturally Colombia, deposits we exactly deposits. since in

because and strategies able aggressive in consumers of even in paying deposits higher more yields combined. XX% Colombia Fintechs the much. across been pursuing we're the your Nu This both pays pricing ultimately, their has are capture other that, are and entire our Nubank launch, over account, proves the players our going all since brand yield questions. that Mexico simply in coming very beyond of to product, savings ready Thank that address are While highest are now and experience user to we whoever to providing. With you

call to Officer. Investor over to Mr. Jorg I Friedemann, Relations would [Operator Instructions] the like turn

Kuri, And operator. of first Jorge you, Stanley. the Morgan Thank comes from our line question

an you the on impressive running top seeing features the quarter, look new mainly competitors? all is run is rate. on is that level the you how us taking provide the very the the acceptance like already originations up? showing color on particularly what strong you're color July. Or with sort coming strong how up. What's days, number share? Congrats That's this the already early Thanks that trending consumers you your Just -- annualizing the is now understand in growth for very Can customers? reaction that the for customers these evidently from payroll help have from for some in shaping results. loan, Are how of are

Lago. so Jorge, this Thanks for much question. is the

in the lending So we So this very with And what ], two loans the two only product, Brazil. and pensioners we approximately the pleased journey, they that collateral are The super federal call in operating [ account we of are we our CIP well for agreements, encompasses the early public both INSS CIP which as XX% with public which right? and servants. payroll INSS are we have [ performance market are retirees for collateral of secured ] today, the agreements as and the part target FGTS. of for still combined,

signed this come to more states around in so the to continue is that in expanded our in, somewhere can six forces and expect additional XX% market to XX% year, to even XX% from XXXX. we of end to be already target some the of have largest Brazil, today's expand by and agreements with expected in municipalities collateral and armed the We

So that's expansion. dimension one of

complete. which second of is new being the products dimension from which the features, are However, still -- of already expansion launch are far and

is it already You missing, that we with out quarter that important did have are second the did the throughout very year. portability, of launched features and some still so point we but [ for players refinancing online XX% those refinancing and portability account the two digital the top-up, more or to can for coupled with features, top-up. And and of related specifically when ]. portability than progressively

play we advantages progressive to a payer have the ramp-up we do structural in seeing So in believe of we that are public segment. kind cost launch,

know, book low loan acquisition we customer Therefore, public with don't have operate a And loan our in for you Brazil. existing the originated cost XX% of payroll who additionally. whatsoever, branches. brokers nearly account XXX% customers we as or total So

we don't total the to our more bowl to fish XX% outside market. again, into of So than fish need of tap

for FGTS, expect not far primarily on So encouraging that we in in will loans early quarters. us, and days growth pick both if public so signs also, peer the coming and up

And Leduc line the second of comes from Pedro question from Itaú. the

would bit I to bad side the credit. pick provision little like a on brains on for expense

haven't Here, how lot expenses. of course, this XQ. was up planned, seen effectively. increase on it well during and cost risk it had a a quarter, lowering conscious of we provision And those you're related now move back your sort discussed of neutral, that FX then, we second risk-taking greater in brought And flattish the for

provision I around portfolios little have to the side. are sense harvest go how seeing bit behaved, probably risk get thoughts So recently around just on originated this, a your the how want we get coming to those in origination

So that's that.

for Youssef. is much the Thanks so question. this Pedro,

QX our I presentation, FX-neutral shows look, correct from CLA Slide you're down. a QX contraction that you is quarter-on-quarter. on believe So our of there slight referring about which an are basis, to to X% XX And

we of IFRS losses, As fact we expected that basis loans For grant to provision I you the about on credits book previously, or X. think have mentioned the when credit right?

credit the happened quarter the our what's so has is actual performance this expectations. played for out And quality,

CLA, that the was with basis So out, slightly relative fact growth relative driving what's part, at decrease QX. I that's fact, less the when portfolio, on a in slight the the to the In QX to better than you in size as coupled XX of pointed in XX, look

you appendix XX, the the loans of of look way is, intuitively our presentation, and both effect ratio Another of it's risk. the and coverage total all to of has the believe ratios up is given expanding at total that Slide loans coverage net on I growth credit if one coverage the it the with plus, expanding credit refer expect to would XX see go basis of continued you as to

delinquencies XXX%. I hovering it the it XX-plus, the little basis just that of Again, mentioned. the be to a fact as based around early bit On on decreased is continues improving,

question the from of America. next of at Mario Bank And the line comes Pierry

was think on this big Let because me surprise I provisions stay there a the this topic quarter. of

up. on, think, Slide show XX You that right XX or originations went your I it's

then So credit you're less. you on the based are more your and provision you originating expected provisioning Like mentioned, losses.

than be see, mean you that why that you have the would before. So losses we on originations right, case? it to going Because NPLs lower And expect the new continue does these up.

my So yes, that's question.

can you going even bit if color up, provisions If a us more give little online originations down. are going

Thanks for question, again. the Youssef

So be the looks of the of so. increased Slide refer by appendix was in XX to the helpful itself, $XXX might which million growth. it to at million presentation, or Since ECL about right? that the ECL $XXX

delinquency performance. in reflected fully And the better-than-expected So terms other slightly the is growth mentioned I a of we early impact then there. had $XXX of million what of factors, mostly

so line we bit line item the just little to grow a this than better loaded our is item, we're QX. front provisions in when continuing in fact, And ECL expectations

your that continue are the you NPLs to Okay. to right, Youssef, forward NPLs. your going expectations expectations. And mentioned But according what for behave

Yes. Good question.

our expect to of the grow it's at play, forward, going continuing to lines book. along terms are in what of much first credit dynamics several of very So all. There

card more to gives better eligible credit is credit book relevance the results, us unsecured and products, cards. of already credit We percentage the and we across continue customers We then test of card to economics, on-net our receivables more loans, have increase the loans to personal then than that as models loans serve a both expand total credit which faster pickup our as us unit we to both and to we're tend more been that both in growing over interest-bearing receivables. Personal higher-risk have within provisions quarters, credit card, several seeing interest-bearing more been personal also content, in get credit able in existing receivables more expand a we've push NPLs and customers But spectrum more last to tends and the up improve data, credit the to have mix lending, what secured as customers. And allows we up. so box. because and a and

philosophy increasing dynamics of NPL we've expect those But the trend including as quarters. And last its to we the on to to increasing to this grow, the again, is over all when we've the I growth over that to all principality, minimize is and cetera, trying in short come NPV There's this trying opportunities, lifetime, lending, returns rather net which that full So also et than increases, lower term. optimize our offsetting we call. to factor, several customer one optimize earlier including are secured we points seeing would illustrated of continue over what NPLs relationship NPLs. related cross-sell been tends the to with try future of which

to seize So see a for when suitable customers NPS, is those grow we that's high that that is quality, high those in we way again, resilient opportunities opportunities.

And to opportunity of lot forward that basis. on so grow we still see going a

lens most secured small XX%. our lower you digits, Brazil. the product single-digit when our -- who XX%, small can the You range. of the in at proportion share Nubank population. Brazil, the through It's their customers like lower of is the we think the about banking you also of about mature cards at it's as example, total In just account. about in it single adult even It's of in loans, total of When have for of XX% credit primary population have look X/X look contrast, in even in loans -- market

to we we on those of -- a still opportunity market basis those the of so already the grow shares base see customer have. And lot

Okay.

you're But this So points XX then we continue acceleration basis NPLs saw Like right? in basically, we you to to an we expect go to go were see deterioration points to points per you're the basis deteriorating saying should you up. to that deterioration, to the before. quarter, summarize, points that did XX expecting? XX XX Is XX Or basis XX back the quarter? basis

Right.

plus XX bucket observing think points. if the the terms plus was would this and we're quarter, it XX, out. in to XX to of merely at way So a basis quarter of -- next what quarter you QX XX points The is happened point that basis XX pickup of what that of you about saw in delinquency. into forward, look go there you about rolling we But impact XX one on I the back seasonal is this

XX a increase QX and and XX XX plus. in points to in increase QX points XX resulted XX in So basis basis about

of the the QX it. XX, quarter that's the which next to mechanics peak kind of to translates delinquency be in peak plus. XX remember, tends increase And a of So just in and XX, then

than I seasonality. think anything more that's So just

line at And our Elliott question from of comes next the Autonomous. Geoff

maybe one past spoken down our taking purchase a volumes But cohort customers. the more if it look that purchase We've to in initiatives market, analysis moving for feels message the here to moving on show, volumes you seems like lower market point almost risk, the about Ultravioleta. you by at newer

that So up Is going shift What's on the still market? what thinking to come? happening there? is Is the that pushback?

lending we think and I Geoff, -- comments let a my and our deviation no growth fast very income as the credit in grow But have intention in I'll high add colleagues on to had try from opposite. my that to suggests means, the cards well. by chime in

in opportunity provides tremendous income of classes share high all asset for it the I think market with consumer credit in relevant as play. in of fairly us Brazil which accounts we the a

of made the within our we pursuit XX of I we income think months, past enrolls now the wallet share our XX good population. increasing to high believe over that fairly into have

a in increase As result years. high income X BRL of with those XX% high us. success high-income have estimate as you the we past a we than share that define have prior Today, our customers more in now had we already pointed out than now earns the we largely in over the income customers as Brazil XX,XXX, wallet, who of calls, opportunity customer acquired to more of if

Over segment past high the as materially the work our NPS within income the purchase awareness, improved Income #X quarters, high December of segment have have the fastest-growing for the volume. XXXX, we materially brand become we player improve within has considerations in high and category, become income brand

And go addicted think on over but [indiscernible]. that drive high are So Even encouraged our as XX% I tier increased is in in compatible of Ultraviolet, are to fairly by PV from is XX has ] months. we base, past a into which doing over the our fairly we we low it the what come [ and referenced, to income. relatively higher steel

would high that among And income, the look like? what principality

share are for here, of -- PBR, we higher The wallet top launch quarter high about have and the So certainly within income the as our gain as principle we within the the of or have we opportunity income and attributes bottom I we quarter now kind improve figures products pyramid. low is is relationship middle our pyramid XX%. as after the higher -- disclosed the income the we income we increased I think features has they overall within income, to and principality don't primary than of segments in the high Brazil. that nor can do we are they within them, brand but of customers. And track banking new

our line the JPMorgan. question Yuri And comes from next of Fernandes,

a that the for beginning question, of have he quarter. the to start in the from to of interest stabilize. in installments everybody the expected call Congrats mentioned I course, cards, assets the Lago

as So I that's like returns and why? this correctly. good you credit you product. heard in this I cards, risk-adjusted boletos confirm always want fixed [ ] on correct, to if good make to is mentioned, Because continue finance a And

see why So basically for confirming stabilization? see stabilization we some cards. could yes, credit that on that should year And if we the

my evolution a from referring think the the for evolving thanks remarks our this in year question. year. interest-earning Slide see are you we XX% XX% to of which about assets And I to #XX, last to Yuri,

high first, outlooks condition hard is, products. for So to extremely innovative draw it

innovation just we experienced an And that unit quarters to adoption. We view this have in that over product right that customer is helped the absolutely pleased Brazil. are believe that the like we past been very the has we to four economics with this you're curve steep. with fairly the So of adoption introduce that we

that for the believe over coming hard same will we to the us velocity quarters. it's adoption see continue So to

that probably in to to growth, but not as percentage, forward, assuming going going same it reduction at the the grew not grow a there's the are the pace in we going quarters. So prior be a slight overall reduction in

clear. super No,

some not same this maybe are penetration, to pace we gain what seeing right? Basically, is at but currently, still say. should you're the So as trying

correct. That's

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

asset A bit on of follow-up quality. a

XX the even Slide does in that the at presentation. here here without look better. will Looking be like It expansions, doing the NPLs

I that very taking us help stages the and on growth maybe still Brazil And Brazil credit you maybe outlook Brazil in there? kind are but the bit? to comfortable? it's mean, Like a just more versus you're can risk alluded think more even So you where this is you help outlook of in feeling quality that early credit ex quality better? Brazil, maybe see that getting you maybe about accelerate

question. for thanks the Tito,

as to any bets So basis. outlook, happen a we macro -- meeting on a going on what's to about from -- any we credit thinking and reminder, to try having going-forward refrain macro

In fact, downturns, history, marked of peers if it is et look Brazil, our starting cetera. you big at in by instability,

whatever take lot And so be right? So from -- growth past. resilience whatever of underwrite a needs the worse withstand kind that able deterioration. significant to we we of be a philosophy stance the future to continues underwrite, than amount to feel demanding of like we will we our And be one the always of

we've hurdle. doubling the risk of and cohorts our be in above still would So as the said withstand typically, what past,

would a to to of that the see so grow. we're it you this seen any your out to point, when operate to improvement into going relative expenses, have so. X.X last stability without or any or forward But over be and to NPLs period years on not banking back we the agnostic been continue able the look the continue expansions forecasts at to about To fairly what be way And we in where what you we we've future. tend

fair. No, Okay. follow-up. maybe a And that's

right, XX, there. the improvement Just risk-adjusted a NIM, on nice Slide

the you continue for to continue to still you room monetize further? do it, to book loan think increase that As grow and there's

question. Yes, a good

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how guardrails the so governance grow And we those of and allow to are all much important down spectrum. ourselves credit

unbounded I opportunity. still term, near imagination. see are the I by stretch think some think numbers in of any the we But don't these

above Youssef would that sheet, mentioned balance The our we banks thing, in out of So to the opportunity that I loan-to-deposit Tito, what to add optimize retail gigantic the a you I point one that would ratio, still whereas XX%, this our below have continue regions also is is most to XXX%. are right?

tailwind this net So alluded expected that just are was as Youssef interest additional ratios, we increase that loan-to-deposit to. expand trend be to an margins our to -- to continue will

question from And Pactual. BTG comes the of our Eduardo at next Rosman line

question a open regarding banking. have I

recently, for changes period. access such get clients important some a the seeing been have We limited as for the to removal of requirement

important say, must the that if been data or to Nu be needs As bank, we've about seeing the well, occurs. other requesting let's shared, important the discussions that far of keep as to as needs the something data also whenever I information granularity client understand provide whether

the you discussions an payroll. have also eliminate We been new this costs seeing to in issue been of articles portability, reimbursement for some that potential case think talking about I on has

So and a things happening important lot of discussion.

would if for Nu. could guys us these be great us it material if could changes So you an know let give update, be

so Brazil. excited Look, regulatory developments of is most much question. your probably one open in thanks for the we with which banking Rosman, are

globally, information.to the in at progressive U.K. It assets in frameworks attrition the attrition the compare or movement moment frameworks India to that banking of opportunity a has if a that for the developed barriers and exchange that both liabilities. tremendous the lower lower of the the movements data for has even adopted have to you now back for the regulatory of lower if seen the you been the It probably If Open of for open in Banking, step most country. with have one of this framework you look and we is been

we the been lot and a quite with very something and time is prospects. investing have are it we So that of energy excited

a more details. the Going little into bit

gain been data to has access many lot gain first over their efforts consent to players consumers past a of the from there to So for years.

into and and of basically XX of customer We approaches and in that Brazil. million consents the better quarter models of X/X that translates are to into second market have -- features ended products million that credit our we into happy feeds additional offer we data say all the consents share that XX consumers. about that segmentation, writing We translates our a can customers in the with to probably XXXX

lot unsecured there exchange -- and secured, months. be indicated to deposits the lower both capital also a the you guidelines the to had Going forward, that liabilities, assets, will markets. been Bank, and assets, see insurance i.e., that assets in X asset And XX exchange we're and thinking to given the now next there's change to Brazilian and credit Central so to also by is -- have funds

to Brazilian be really the So this sector. banking can transformational

fostering We glad been Bank the are the monitoring this Central has industry. that with the are very and cooperation Brazilian among very hard, we

the ambitious that execution would making I industry has add very, open is mentioning. commitment a that The agenda it finance been ambitious as is the very just challenging. very was regulator's work. in been bit and I Rosman, has focused the the But David here. in agenda so

integrate. of there's hired -- been a of players really a to that have lot it's for been been faces So couple

the there's been So couple road, a and been of how terms I in has it the of in bumps time think, executed.

making have happen, consumers, financial conceptually, in able clearly good society, access to so out. much it that we it's to that competition government, in work. from it's to to have the going increase see going I data to the Now aligned consumer that that services And an regulator will are and think for ultimately be the work regulators the very is it's

bumper, been there big Brazilian that a pretty into expected, changes very in of it's of bit -- people the a while bumpy than significant market. think line road So creating sight is or I clear

from coming at the UBS. line question Batista next Thiago our of And

I Thiago difficulties is connect. having to think

to move let's the... So

Hear me?

Yes.

be it main Brazil negative license as started right see to a of and Central it could have I consider today? have do as sense believe Nu Nu license? -- one not S-X question banking S-X And finally, ask any you change CapEx you the would in And positive to is material the in Bank about what make not Brazil. do if bank and now? an Do

Thiago, this Lago. Those is great are questions.

need for So today, we don't Brazil. banking a license acquire apply a or in to see

license that and coupled institutional we financial a SMEs. offer offer allows us called Our to license institution to fairly thing consumers both to [ basically every compelling individuals Financera is ], single our with payment believe provide necessary

it would in i.e., apply in be consolidate all have. What as of at So in cards, legal capital we regulatory our time, a the Over take try terms point disclosure in reporting loans. in of answer terms very we requirements. of extend The that additional terms to no of can that, eventually may to terms regulatory implications we entities capital if can may of do we we the bank get simplification is will or we natural requirements. X deposits, of the simplify we little were some and can and be issue license structure Brazil, then time credit legal in and

see path don't we to So change if any were material pursue this we in and Brazil. when

disclosure an become perspective, in financial that X, question cost. our do implications is, marginally certain that capital no S-X very analysis compliance likely mid institution may country, again, a S-X additional will are and may We institution what XXXX, we it's an from increase the regulatory Your requirements, country. most in whatsoever. to are second it is think by implication that likely have reports, We the the we financial to

completely So overall our given are immaterial regulation. those

opportunities operate. we than our address the growth Now may Central very we more like challenge Bank the collaborate would to with or an of it with joint in name and and importantly to that we where the effectively or try and S-X S-X, concerns to able them, that have license any S-X, countries know Brazilian generate is the if believe efficiently been

from Citigroup. Flores comes question next our And the at line Brian of

hear me? you Can Perfect.

Yes.

your the show from maybe bit second quarter Just of Mexico, information ask saw decrease -- the a wanted ratio. to a in as on we the information loan-to-deposit

your Just things and are brains there. evolving up to see wanted how pick

billion is in from color deposits, deployment going? impressive. You on Any the mentioned appreciated? the Mexico $X.X would which regulator? news of the more really part Any is How be credit

Sure. Thank you question. the for

we're So what mentioned with we're really excited in number seeing deposits that very any surpassed you Mexico. expectations. The

to in savings. the kind rate. The of a really in XX% cost is whatsoever. Mexico any the banks challenge Mexico their yield significant average paid I majority not banks realize risk-free not that of how is the consumers The like there conventional something us consumers market funding and made see in think of are of about that wisdom opportunity

behavior that at back. market to change We idea to competitive behavior we it's so it the changing And a and change think went began that behavior. and moment want go you that very with in very hard consumer yield, to

to of be billion like the $X.X remuneration more higher we need. we see get way their deposits. The are going deposits here to an So in beginning than environment where to for consumers expecting is

as grow. million a from regulator, a back already we've of process the over we other over month to And of Mexico, bank everything think And pay. And know, to be that, We done we've there's opportunities but well Brazil Mexico that credit in year. the also we credit in in in the financial to optimization we that leading balance deposits -- going that in really or else has credit. last good an for quarter. we allocate license. expected. And customer can how institutions and Mexico. those one grow to forever, asked we over of positions for the us going news been really We're last of so. far that -- continues environment so get hopefully, and continue the go really, forth we X as license see continues terms is quality to couple so yield received us sheet as very -- the you We close the apply We've in next which to And good and banking reaccelerated that the as next

GDP far, large XXX people, than XX% opportunity good million feel decades. credit market, over penetration in card very capita with that So per market, Brazil, really higher X we so the only hasn't moved very

that in full different perfect to into place, built, we a excited the we in continuing our So build the pieces growth model about heavily the consumer kind with it's branding base this and are we that disruption for are market. all investing the of falling configuration business and

just And as follow-up. a

terms models, already So risk credit you in terms forward? of comfortable in increasing of are bit credit more portfolio your a your aggressively going

weekly So this literally we at decision. of one credit We on other -- and deaccelerate We the the look market, end daily it's a decision. dynamic data we on different a actively, end. a way cohorts, at we really data. accelerate the we do It see performance look is or

That's passes. launch new straight are are to we of new new in Mexico we've You'll model, see that have a They tend to basically had growth and that our because a tend all curves of Brazil curve the in algorithm. testing phases products be a that phases we we acceleration, data not lines. source, integrate

Mexico, in so And that's happening. what

a now, comfortable. -- of might a if opportunities bit on to might through area at more the numbers bit something little see if works of phase. an good more acceleration I accelerate We think we we we that growth. look we we're we get certain QX, or in right -- some see going if possibly you if But

dynamic really the know these perfecting lends or a increase in and customer -- a low is growth, a that first bit the very bit is for to we we're another that has more. that market something bank our grow much little Brazil and wide in credit. to far in well with more, in really gets XX, low to population with get it, of around that access we've general, limits itself know And little in little XX That are So Mexico market very customer risk days, way the so approach dynamic see methodology open. credit decision. But beginning perfected the process

So optimistic we're that opportunity. about very

at little attractively we trends product bit positively with very credit high right? priced the yield doubling And yield to our quality -- been customers a So originations, high we've is tend look better at number card of a credit quality. What the since Those a the more but much time. When of on in customers enjoy trajectory nearly you we've seeing. come selected just a same card seen, Cuenta also yield. color introduced a customer be to credit the and take in fact, credit

the we actually helps to fact so underwrite And Cuenta add you that get that better. on the us data the

now have days. more You we the early add results, test foundational doing to that since the testing more more in the of the we've fact experience returns market, that from been

quality gives us the Mexico, lot credit year-over-year, underwrite ones our that credit and better own expectations. at significant So to credit than disclose been of as you lately in either improvement look say so continue to we go. and or a better it, would we people And the indicators, I quality has confidence there's grow if otherwise, behaving

about Mexico. optimistic to So be for prospects as excited growth very or David in said, we continue

line Craig And our from next of the Motor FT comes question from Partners.

were down Brazil. taking loans are to who card the versus Mercado consumer in like who's credit evolution to your in card and you're how first winning wanted break aggressive other space. ask and those both viewing nontraditional from market able in share you're wanted growth say Libre, ask secondly, spending from the being finance of Mexico I credit if banks? to And about customers about Maybe the the their where you between competition away I

draw parallel with in card the So don't Craig, if the to And try and Brazil the question. that mind, credit combine you between me credit take a card Mexico. in to because first second good you I'll -- let the markets markets it's

penetration, So payments, credit use financing. people for in so as card as historically, population not of of relatively compared credit card accounts about Brazil percentage nearly of of receivables penetration of and markets in is means the XX% Brazil credit cards cards total to as more credit in Mexico. The of pulled tend in has the use often American that cards conversely, to those of a mature credit consumers In lots IBB Brazil a XX% the about a has financing been XX% in below balance as Mexico, XX%. in means to auto a market total credit over therefore, to XX% means interest-bearing to of receivables tends card on a receivables. higher, the a as the XX% means card then And Brazil IBB in therefore, of of be much credit and payment, total the terms more

there healthier currently are underbanked. is the and credit kind but with unbanked for economics markets. the fairly Whereas get Mexico, the with of of very been So the more related that cards life to offer banking very, very, in Mexican country, in to who financial us. with have population customers different the and have bank, unit and nuances, a higher we the a inclusion already main a upgraded or is we both product. but that of different that Therefore, have another opportunity groomed graduate our we to credit really each historically very customers that of having penetration kind that have for banking XX-plus-percent compelling relationship product given Brazil

Okay.

our So your much very Nu Holdings for are and On our participation behalf want thank call time of I and of concluding Relations we team, Investor now to today. today's call. earnings you in

in development position excited We we are very as our markets continue the our with we strengthening operate.

days, by able questions not tonight. platform. ask Over the up the coming following with we were those that with our received questions and will be to

have reach any not questions. good and you, you out our do to please Thank So if have team hesitate to night. a further

Thank now attending concluded. you Holdings conference call Nu The for today's presentation. has

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