Nu (NU) 13 Nov 242024 Q3 Earnings call transcript

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

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

section Relations If release, posted Center a have copy our you not is in seen the website. our earnings of Investor Results

With Chief Chief Youssef Officer Founder, Velez, Chief Executive Jag Guilherme Officer; Officer. today's Lago, me President Financial and Product and Duggal, Officer; call and on our David our are Lahrech, Operating Chairman; our Chief our

adjusted presenting this press from are These net are information companies. financial call, available FX-neutral IFRS defined a including will may release. similar of financial Throughout for not our but be and otherwise, not as earnings income. year-over-year be important are other Holdings all growth non-IFRS Unless measures conference to measures on basis. measures financial noted by rates the non-IFRS financial are information IFRS comparable information, to we Nu our Reconciliations in financial

forward-looking discussions refer results like also the you to would to include actual forward-looking on And put performance. earnings of should materially uncertainties I are them. in our that not therefore, from are and disclosure could undue and remind today's not numerous statements differ Please subject future our reliance cause guarantees might statements, to These expectations. everyone risks statements which to release.

President which happy our our questions. the highlights Today, Lahrech, for Subsequently, our our take Founder, will our time, Chairman CEO, the and financial Velez, third we be you quarter through quarter. Youssef of XXXX. performance will and main CEO, your David will Lago, operating CFO; discuss After to take Guilherme and

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

today. expanding demonstrated being last and again per for again In our growth, customer, model customer efficient X fundamental its evening, thank Good business has revenue strength. everyone, costs, once with Jorg. in you, anchored the and operating Thank principles, quarter, you us

reflecting by customers the the just We years achieving from the XX customers million million recorded net XXX quarter, end a have consistently XX% surpassed of X addition, expectations increase ago. in

to continued the our customers average to each X.X Strong of million bringing XX.X and fuel million end. an with growth, total customer Brazil additions new at quarter in month

of we customers This over the X.X increasing Moreover, also deposit Mexico in adds strategy of Brazil. the success strong growth our enhancing the country, the yields days, in sustaining mark platform of million positive crossed X quarter, momentum customers. we already the from as total milestone reached and momentum As the further million million reinforces digital Colombia in announced resulting XXX and Mexico. past Nu Cuenta net the financial our experienced customers X.X has in a significant in product. of solidifying million a of leading launch the with

U.S. our solid currencies successful cross-sell up-sell the Now of let's introduction review financial some dollar This with the Lat revenue performance our highlights. depreciation year-over-year of $X.X Despite XX% and to driven efforts, reflects new during billion, against the surged quarter, products. Am key increase. a by our along

XX.X%. year-over-year leading billion, $XXX Net at a annualized Our with gross reaching marking return of gross equity also profit of margin saw a million, income now a XX% an $X.X on growth, robust XX%. stands growth to

with combines These XX% income solid our adjusted achievements XX% expanding on net our million, FX-neutral top an the robust sequentially line which model, and $XXX business year-over-year Additionally, hit profitability. of basis. power underscore growth

will robust relationships, mature to over in digits. our ARPACs revenue ones, as evidenced flywheel to CAGR. including all across cohorts which primary to boosted of engagement, revenue evident all chart, triple this compound effectively drives consistent drives strong demonstrate time. discuss by our On customers. cross-sell This product as on underpins presentation, This by performance more ability customer growth cohorts in for this Increased is display decade up-sell and how all slide, adoption our this is cohorts this we across increasing acquired in Notably, cohorts cohort the the further banking mature we which CAGR trend continue revenues.

to turning profitability. Now

We have several this table quarters for presenting now. been

observed to addition is it to surpassed third in return reach capital achievement Holdings billion the $X.X with time, in and the maintaining that X quarter-after-quarter, level while In yet first robust subsidiaries for on success growth profitability. the level our still important the This robust highlight strategy. accomplished equity the demonstrating Colombia, of holding XX%, Nu quarter, was a at of to Mexico excess of

extremely opportunity our As be existing platform, strategy, we in progress geos have market this and customer huge excited increasing we around make in our the monetizing products, ahead share our base. and our we execute continue against better with core to X expanding

telecom we addressable In new addition, path earlier as starting services, as And in our reality into stated and our strategy of year, the well the NuCel, and had just debuting part market. NuTravel as of Money this NuMarketplace, of the as Recent to a we're getting launches started. in broaden examples verticals growth is developments our become NuPay. total are strategic the Platform

like pass go details into Lago, you, to our more to I'd floor to will on that, the financial results. Lago. who With Guilherme our Over CFO,

and evening, David, you, everyone. Thank good

margins sustained operating and growth, As quarter David profitability. another mentioned, strong by enhanced engagement reported we robust and revenue marked customer

insights look against our achieved closer have to gain Now progress our of third deeper results each the we guiding let's into take at quarter a pillars.

We million We reflecting acquisition. a to strong closed during X.X with quarter, customer year-over-year million customers, new XX% XXX.X experienced our increase. welcoming with Starting platform. customers growth quarter the the

them. to engaging As we retaining customers, our more continue to to add starts focus shift and

by XX% provide customers. Our stands consecutive a a represents XXth at active ability our now year our ago. This increased in in increase to our rate, which proposition the rate, year-over-year, XX.X%, activity up monthly compelling consistently sequential increase activity user XX.X% from to quarterly underscoring another accompanied value by base

expansion. Moving revenue on to

customer a share our This wallet performance on Nu among ability capture base. of established The has customer highlights chart shows strong approximately our active first base. XX with of accounts larger our banking XX% Slide that primary to

are pleased level are an how we see very Additionally, recent at accelerated this principality reaching to cohorts of rate.

of of now the introducing new reinforce middle stands rapidly as of chart customers. By banking slide, even products we more the products successfully our to in as onboard effectiveness highlighting number customer strategy, average this the position the and new primary more we our X, at their our cross-selling active shown in customers, per these As partner.

customer dynamics. favorable deliver performance. chart, as final second The X with first shown of the Significant combined the capabilities, chart the as in shows depicted these expanding increasingly us impact our cross-sell together to in powerful allow chart, engagement,

already of $XX. mature monthly at ARPAC ARPAC average achieving a while monthly our So our are stands more around $XX, cohorts

in worth of is in our dynamics customer also the Mexico that more this Colombia. of the is It acceleration remembering and in slide ARPAC affected recently by base

in are in Nubank, the ARPAC these relatively decade that who growth as very attract strategy the in levels, deposit for a customers our almost this a engage new may is we confident with low initially Cuenta we Brazil yield product geos long-term While that have generates product seen strategy now. only, results for to expected

a customer ability the time. highlighted. confident one spite full We just increase of our new potential ARPAC As it in shown an while on FX-neutral slide, from remain to $X.XX and $XX the of $XX, sequentially left its X% declined geos pickup in up year chart ago of basis, to the XX% to year-over-year, strong and previously ARPAC our grew this on monthly over

chart highlights this higher our new XX% billion, with growth record hit customers, on increase quarter the combined by the $X.X was this The that year-over-year. levels. slide ARPAC of of revenues up side This a right active driven high in

and fueled product credit across comprises categories. and which XX% cards $XX.X year-over-year was This during portfolio, billion. finance reached of an increases total consumer basis, quarter and Our on grew lending, both quarter-over-quarter, FX-neutral growth the a X% both third by XXXX, up of strongly

X% Our basis cards by fueled billion. $XX.X quarter-over-quarter wallet increasing the grow quarter, XX% all segments, to in year-over-year portfolio continued credit on across FX-neutral an expansions customer further to shares the of during and

Now continue previous posted cards continues In from an lending trends to $X.X performance, total credit strong XX% especially performance, demonstrated our growing basis to scaling the originations. allowing quarter-over-quarter of accounts to with for billion. FX-neutral line our us outpace now and and lending quarters, Lending year-over-year credit on portfolio. portfolio XX% XX% cohorts strong

remained card with of shared installments of aligning card expectations our total credit to credit portfolio, at Now Interest-earning our let's quarter. the XX% last turn breakdown portfolio. steady

our more closely PIX to remain eligibility strong, performance perform the demand well, monitor growth term. financing for products have While we quarters. expansions of pace If intentionally resume we coming in the continues near over to slowed the may portfolio the

resilient. to our maintain quality are ensure to is models is remain portfolio demand product additional credit and we Our very for on and safeguard credit clear, supply strategically this The managing data resilience. focus gathering

main billion. Brazil, to credit to growth which BRL our continue previously In have originations XX.X demonstrates increased this generated access ability terms quarter. the by of financial in the making business, lending Unsecured quarter who billion BRL this lending in didn't people inclusion XX.X fostering to XX% remains product. year-over-year our engine, to available This alone

BRL secured reached quarter Now for lending our X.X XXXX, total of billion lending originations. third XX% of during origination accounting the

seeing the as recent pleased We refinances. performance introductions such we new payroll for from and features top-ups are with portability good the are of public loans,

eligibility public major we total these municipalities. a more payroll than will with integration XX% and supporting the of entities XX, Brazilian in growth the Brazil loans the expand X are Forces and of and for have and ongoing. for new addressable of And states market, the continued product eligible we the TAM, or several total once reaching collateral Now TAM Armed agreements into to originations. including The release overall in customers, thus completed, newly tap signed

already in of product loans. This product of our fit performance is for seen we originations currently our loans, and secured channel. originations digital Now of accounts our the the share XX%. equally FGTS-backed over strong of new the market exciting originations fully have market reinforces XX% of This distribution exceeds total

offer primarily in The share is as secured loans. within our reduction risks typically yields originations, of lower secured and increasing of you see this than slide lendings total credit lower lending yields unsecured result in the a

funding. to on moving Now

quarter billion, robust increased X an which we $XX.X Our geos basis. and In X% year-over-year to alone, billion, the an up sequentially expansions in all FX-neutral across deposits Brazil XX% up $XX.X on FX-neutral total operate. deposits of for on reached basis supported by the

our while financial At close strategy we of opportunities economics in customers of reached Mexico more empower lives. operations Mexico delivering In to has depo Colombia Xx results, cross-sell our deposits almost ago. their our deposits, to strong mission in more billion additional to X in and quarters increase improved control $X.X our believe September, us rate for countries unit gain This is and allowing to in also led both expanding the addition, Nubank. than

with we performance lastly, are recent our pleased Now very Colombia. in

$XXX checking after NuColombia's product, expectations. deposits Just consumer our of account launch exceeding the one quarter far reached million,

remained NII on basis, Net in at basis. income, sequential expanded growth flat interest of NII, On increased The X% XX% year-on-year. factors. and an the quarter-over-quarter combination driven billion nominal was or mainly FX-neutral X in dollars a $X.X by slowdown

First, on both card declined, reflecting products improvements in credit and the customer portfolio risk. yields

Second, deposits pressured by in NIM, new net of were XX.X% due And geos. points and lending yields in to This to and strategies depo compressed this previously presentation declined interest quarter. as in line third, secured with the lending. impacted in rate which increasing basis costs margin, XXX mix funding or Colombia mentioned the this ramp-up Mexico our also

as credit geos. we driver deployment liability in NIM rates, we confident as of the of of originations repricing interest new sheet the irrespective as the ongoing look Now our key will the in be that balance franchises local ahead through well of direction and our future capacity growth the for are

rate Mexico, the into above points we XX% above Cajitas dropped launched XXXX, TIIE. By XXX in already year the liquid to as TIIE. basis XXX this XX.X% per had almost example, October Looking per November only year, at XXXX, basis an back points

cost to serve. focus serving that represents strategy, per believe let's of the markets. maintaining customers remain low at expect competitive cost significant $X serve most or the one customer cost-effective our our below platform last to we future. for a Its low this within of We to Now is cost shift foreseeable active the among our and advantage, pillar very in to a firmly our

X% now we with And when to goal successfully on year-over-year quarter at this for per increase in been that the the G&A. to cloud customer impacts related active FX-neutral another achieved $X.XX. cost On a quarter, under XXXX, serve costs customer and and one-offs services had for yet adjusted FX represents to third mostly an basis, reallocated a allocated this data were of

by During same XX%, the grew strong ARPAC of our period, operating and highlights this our business leverage the model.

on profit amounted an gross year-over-year, $X.X Our quarter-over-quarter basis. X% both XX% to reflecting and an increase billion, FX-neutral of

XX.X%, at geos higher the stood as annualized new funding where to spite Now profit of operate, this we gross our the presentation. in closer of XXXX margin anticipated during levels in and cost

aspect of is operational leverage strategy. a Achieving fundamental our

During than more basis was quarter, XX ago. basis even and our XXX by a a XX.X% associated quarter improved increasing this capitalized repositioning Nucoin than the the year with basis, it. This mainly X% for quarter-over-quarter, the one-off related with efficiency costs points impairment sequentially ratio reaching achieved third on points in program to marketing reflecting intangible assets an FX-neutral and of of expenses the better

poised in We and are capitalize operating we expand cross-sell investment achieve the of to new our to features currently are our base, products, Colombia, in which up-sell leverage profitability continue Mexico on customer markets platform's as phases. and introduce and their new

XX%. in of an and million XX% robust And year net profitability, Also, positive business a net high income model. compared income another of year-on-year the results our quarter, $XXX up increasing income the resulted emphasize million. these net to XXX% $XXX adjusted with ago. we margin This success all-time reached our strategy of to Lastly, of for delivered quarter

to Now if third while investments pleased our our even of coming the at short-term continue the we We pursue expense the for strategic to opportunities, come see This quarter a they as profitability over require quarters long-term results, to value do unwavering. number avenues remains we commitment maximize to company. these continue of long-term are short-term may few for quarters. to strategy our expect future with growth new investments a

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

Good Lago. Starting evening, you, NPL everybody. Thank with trends.

metric to XX+ quarter ago have all in quarter. NPLs from to in expectations. rather ratio you behaves X XX+ increased X.X%. stock sense that dropping movement indicator last all Thus, the inventory quarter points also the the Our declined it with ago XX understand quarter's last than NPL to to that that to third XX from line during one to by ago. XX-XX to the the leading a quarter houses again in once in X.X%, way flow way quarter, last points as XX+ the basis from quarter, this basis Recall quarters was in to X XX-XX change trace quarters XX+ to XX-XX back this from

In focusing book our prioritize see we and intentionally down As our and strategically discussed customer that decisions our the in line spectrum we relationships, on calls, the value with short-term NPL growing we credit net optimize past credit are metrics. earnings expanding where lending rather of philosophy, attractive solely of than opportunities. present the lifetime

in asset When with pursuing of growth responsible status that and we identify these behavior, customer areas, with engagement segments up-selling classes increasing compelling actively over promote risk-adjusted cross-selling pursue banking returns with or line strategy primary in we and relationship our time. customer

within greater following it, revenue risk all our slides, more has and with delinquency As rates we resilience, increased that the offsetting will show in this than the higher yielded come strategy appetite.

the receivables. quality XX-XX of NPLs, than both rather and shows on interest-earning asset total this This balances time basis XX+ slide trends,

expenses see trend additional allowance you optimizing credit early to few been our value in of Here, can than million rewarded focus maximizing decision the and growth $XXX risk our strategic on an i.e., delinquency performance, declining taken, demonstrates solely delinquency to for X% stable quarter. lifetime portfolio reinforcing increased loss last the customer that relationships This of we to years. we've basis with credit a FX-neutral on metrics. pace rather this Aligned by the NPV, the have

a basis basis earlier, explained XX point partially risk-adjusted result NIM, as points, Finally, Lago by decrease relationship basis improvement result which lifetime quarter of year-on-year as point risk. a customer was basis NIM XXX XX risk-adjusted NIM XXX value offset a the by in in points the cost increased by our optimizing the basis, decreased underscoring once by again On on the cohorts. in of our focus of of

you much. With very that, questions. Thank your to we're now take ready

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

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

are maybe potentially Congrats us necessarily your a without consensus NuCel. Should thinking basically the be is unit do Or time? the big Are you that model I passing carriers? something a with adds to is profitable like And on How network could a Or renting the Are fraction like? What and is this start economics? numbers. part the be to to revenue the add-on this impacting then creating it? about you your of commission? the charging revenues your over wanted you what the how Can revenue? the just model? this own about could overall be? share Is ask great an on What ecosystem business becoming P&L? sort you that see of material? this financials of

Thank your you David. here question. Jorge, for

little So in the X that industries were Brazilians. remember companies go most listen, of years the around were industries I there Latin back. were the in take When I step disruption classes that America, Brazil a discussing disliked back XX and that by for opportunity we time were in and

ones were first The banks.

the is many many X customers the and of plans around too just different much user footnotes, customers, that There different too too overall for we ones experience. industry. But opportunity consumer changed brought XX maybe to side, we of competition were That the consumers lot over there's still The to has NPS improve experience. different complexity. think their very things telecom is telecoms. a complex. when talk We the because -- second XX too plans, the about low. The most past talk The is like out the on many in more to general bonuses, years. X offering is

us company, mission industry as lines very creates Brazil, people. as hundreds for that a we, consumer in millions see our obviously a with to combined empowering low combination experience, of So fighting has through complexity of be of target that an

So the we've long been time. looking at a for industry

as as have much, is the to complexity MNO mentioned, that the cannibalizing your provider the I the an is especially you're space, people access generally, of entering many because you you you're MVNO, think with if disincentives giving too growing telecom have network.

disclose it took and instead a a able We're that to means So what partner case align be of is we a to Claro, this fully share with have negotiate really revenue. the for try us share is, right in fixed the it's contract. find revenue revenue simply to to to And contract long but deal, incentives. time this a sharing able what situation where we're passing fee, not the just our exactly right

We using are lower we're our our cost efficiency than all of providing and serve infrastructure they consumers at -- can. to a

able serve they And cost. revenue through to are making us, so customers a lower ultimately, at

companies. So it's a for win-win situation both

And If that have. be going product making love, those money is offering less synergies millions huge customers. there our and partner spending consumers more the consumer around of is that serving we a money going succeed obviously, in to amount base of to a is of tens we

are adult over close actually population, Brazilian We Brazilian million the XXX to of customers. getting XX%

very of is amount different There we spend synergies on a and how that for know to on subsegments. huge So efficiently. acquisition money marketing. do have to little customer serving We customers

value for specifically, a of we've where a is verticals. This to us, our a to allows in ecosystems. them. and something -- to propositions that speaking we For more creating That there increase is think big consistently in and financial about go lot value services digital there products give beyond new is to customers quarters build us opportunity services now, -- several the been to increasing

of cross-selling there on in of adding can that lot that. rewards products that every day. And customers synergies adding do a by and XXX% the single we all So is top our of our use something of

launching. So are that's we something that

verticals that value, a plan, going the see entry we're this loyalty how but also beachhead, this first a add of are ton think more that as first the value to proposition NuCel there of tying announced other to travel, terms I to we're come. announcement you and for first as expect is an But going increased products be number and a to here in marketplace how as travel. into come to path this should space. all of customers these together We've we and

terms think I In financial benefit, early of it's tell. to

bring financial segments. what are profit this and about services also We the can pool space this to and other excited

terms more go overall a number credit pretty in So in I a I much that subscription once away won't of adding do less business of diversification fee of is but not of different only revenue. a robust, think nice start business verticals, services, a opportunity withhold much cyclical into having of revenues, financial beyond details you get adds and substantially will substantial I lot but more type more That model and much -- revenue, our revenue, model. the what's to the also there, diversifying distribution and to from terms

it's kind very So and can baby first we're the that direction. first excited logic taking I the just steps think compelling, But of we in the do is -- there. we're very about what

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

term? does your So away there? to how shift right, see seems just it but mix? Because market look you're you regulated risk-adjusted of very that look to I this less loan margins I especially at do a understand, continues we declined, focus like the that's was which on me to When declined you doing at future profitable, your current I of I profitability trying how to it evolution at mix, the the as we in terms. secure given like Let credit also product impact a look And you strategy, to part business. short lending. But points. I than business wondering, interest a of margin, loan net the this right, with more product, the itself, when cards, margin me secure few When rather risk-adjusted a think the right, profitable has continue moving when your in Brazil, look have part the more that as is is I'm that happen, right? nominal prices payroll get in do from basis You're to that right, change on

much your so Mario, Lago. you is Thank this question. for

So asset classes equity look, a of of of less portfolio, look risk are provided our when composed returns, to certainly that with we than us yield business by expected kind different are those they on at returns asset very classes none XX%.

kind first product set the asset yes, both had, economics, card, no we Colombia and those so of well. that of phenomenal Brazil Mexico in credit a moving unit by we And lending has away classes. means are as and And from

We classes diluting that are asset actually adding economics portfolio without necessarily unit the of to the additional prior ones.

In my view, you at balance XX% Mario, we it. loan-to-deposit about of XX%, when on look you take sheet, ratio to a depending a cut have our still how

and So bonds. deposits all by in large, are of X/X idle have we of sitting the treasury that

into as going forward. shift bonds allocations expanding unsecured, and expect you credit both treasury to So see the secured assets, should we from NIMs

margins rationale Number we see X now funding been composition behind our going kind a the things. our to to have risk-adjusted of those think costs the expect pay expanding of And seen and is the countries. of such, rates has higher business NIMs given in it the one, in NIMs has in it I aggressively Mexico of should strategy basis. the Colombia, contraction forward. What You on in increasing quarter consolidated shrunk kind third in as XXXX, deposit

been we as rates Colombia some of and to those quarter-over-quarter. in have forward, we Going bring expect sequentially down do Mexico doing deposit

the thing. So that's first

average the of our lower even the because in the and because lifetime like lending Brazil, gaining within have price But as weight. elasticity, customers. price improve we to The second also credit the more of in been thing maximize with economics seeing yield able optimize elasticity models, to card, rates around down, credit to you play primarily are of go NPV portfolio the secured we allude, mix, we within started and order yes,

in not or do nutshell, movement classes NIMs. expect the contract we So risk-adjusted new NIMs a asset into to

increase the we should expand ratios. it On contrary, loan-to-deposit as

clear. That's Okay.

me I share. Like at you look point, quarter-over-quarter, gaining have Let we TPV, market are a look when been right, you where cards, your at then. up, and when follow it at contracted credit

-- to it cards wanted Brazil, you number understand decline the million then declined volume, added I I Brazil. outstanding at in we million XX.X this why look to quarter, at though has even XXX,XXX, So question like million like when to did purchase by X.X seems of in look quarter-on-quarter? And this do when clients XX also my it right, from it

level hard So gain Are point from this where the be already telling share right market for you share are certain at where that data of we you will to what market is are a me? at you now?

a question, It's Yes. good Mario.

just and I to try overview general raised X me address specifically, try you've credit share think in those market to provide on -- I'll let then a cards. points that

would attention Brazil, I They presentation. purchase of first, And that basis. see Colombia, you mostly FX-neutral your So but Brazil, expanded XX and our in draw Slides to and XX have our not in will earnings volume actually Mexico contracted. an have on

quarter third that material devaluation of the XXXX. FX a in note there should been You has

in been between the has between in and Brazil Mexico The XX% and XX%. devaluation been think X%. X% I has devaluation

at you So PV quarter. And the Nubank if the third up is Brazil, see which for about increased you twice PV do XX%, then highlighted, market an is will means that the Brazil in in the has of if over the about look FX-neutral which that actually growth industry. by you the have, adjustment, gone for PV we Mario, PV has share. That you months, XX past grown of course, in

of the of X terms the in look card receivables card If by at receivables Brazil increase is almost about XX%, industry. receivables, Xx it credit to the of which increased credit you in Nubank

to market the grow. So continues share again,

to in we new the good fairly continue at single the you gain market segment more as we look less total share pace. So market play, when every affluent, share, which affluent at a the as well

card market about XXX over credit of to terms prior basis period. in the that estimates share Our in by has our XX-month grown XXX receivables points Brazil,

the the in So by continue we country. encouraged to share gain are market super ability to

active second the your cards point, to credit number Now yes, down. has of slowing been indeed,

So cards of cards credit been -- has around denominated of the credit PV million at flat number XX cards. credit active in terms

in Brazil grow the to it coming from than years. quarters of and revenues, in XX.X the But years gone million. grew pace up has million terms slower a will prior certainly it XX.X in at In kind of it

take to have the the that's from volume Xx a well of to up on will XX stabilization if by per from seen, what cohorts. active as And you go credit continue the volume here old of the number note However, that XX, as active notwithstanding active about goes strongly. look slides new purchase up within we per average, Slide credit -- cards, months. quite cards on cohorts On both purchase card we you do expect credit

when the So combine in Brazil, Colombia. share to to market cohorts increase in that receivables, maturation have expansions Mexico the grow and the going we're we continue let and to alone you the I expect think of do of

Okay, saw when and Lago, decelerating, cards were you of about purchase I quarter-on-quarter looking -- like the volume was on BRL. clear. in X% right, And growing quarter. talking previous a of credit I was I that's And X% growth

But You're very no, yes, growing higher clear. pace. at your okay, a answer is

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

there. Lago, up and the NIM. pace trying for But mentioned you get of eligibility that you're in to a decline some question, more My intentionally have bit data the following on slowing financing little PIX

get at And as next quarters the let's there? for more what's just Just your headwind asset understand, to say, of last over want are ability caution a bit you've some short-term year? to more it the will pace expand which at for quality? concerned maybe you kind grown about you comfort Is NIM, Just the a least there? you strong giving few be little that

the economics are thanks within family. continue strong. of super enormous, is and this -- card The products the for very excited question. boleto the and product for the Tito, so we with is PIX to this we product unit credit demand Look, be financing

Now class. asset return single a times the optimizations decelerate. risk of in are in we accelerate. of kind straight every which do of strategies so we pursue often line, They are are There which not there times we

most coming of we feature we do they or if those how of slowed offer products intentionally to leverage eligibility many past strengths will a quarters. We in So now continue that our Brazil. of we PIX the see product and have over watch the likely, to and over in customers expansion growth well financing strategic the the as Nubank resume actually perform financing to the of kind kind will of pace down PIX continue And course of as something that they perform. family X the cohorts of one quarters, on have, to

you we every the know, have in go through in about transactions one Nubank. As X PIX country

the enjoy flow and us gives and our products. develop is data the strong new super ability So to and financing customers of

grow the we years. to to quarters and product expect now, do So continue coming this in

performance recent cohorts of pause are taking how perform. to to We just now continue see the overall the a

data like there remuneration with to consider in further the kind Okay. Brazil? Would jumped you October. XX% helpful, bit I either I I grow again. another base. margin in deposit Brazil a strong to then particularly in know you're in then things, rates And I where help had on guess just on loans was Mexico October Mexico because deposits sort That's of in saw the some funding overpaying of maybe higher that you or Lago. reducing the your side that Mexico, follow-up mean in And conversely, growth of

seems in loan it the do Mexico you're about loan outlook here? maybe you like in growth getting How more for book from So think the grow to comfort Mexico.

Yes.

depo to we addressing a or for we not the in just we on, Brazil, balance some very in questions country. Cuenta our are have head very have the that pleased believe We of with the of rates. So proposition good the structure we your do lower value consumers, yields and capital expect

So and kind have by deposits the higher have of more material than more short the substantially that? we our Not we a countries. of seen in cross only we expected, now comes have surprised then we to was raw material whom soon and positively those deposits I that do the cards credit but many marginal cross-sell approval I a deposits. What mix the improvement from avalanche additional brought by an and Colombia, see any with allowed impacts Mexico in customers, but material Mexico such model. deposits case Colombia. secondly, inflows we those the -- eligibility seen with as who in and personal able pace have loans customers also second to to of those have has then mean do in inflow seen in in us other super been order were of increasing of credit that strategy deposits as evolution customers feed and Brazil, the in both change And we products, also of not a foresee also important very term. In our is many customer data expand to of credit rates. And the segmentation underwriting we

value Mexico potentially Colombia. In progressively we will to And At Nubank, yes, launched an in XX% So Tito, of the their deposit in there. deeper back and illustration, of rates liability really it was our quarter paying the the year. deposits XXXX. XXX as, experiences launched to that consider just Mexico, cost the points pleased first that in and, We proposition we the of optimizing rates. Mexico around above time, have basis low interbank think we per in with I improve continue point

growth be the you Mexico. is at prospects and now rates. the to balance the now yesterday regulators, going including have of will with as or yes, that recent well, posted NIMs going are we performing super But numbers, to year, the believe, may we the have It's which down seen resumed today. in increase on benefit sheet. XX.X% the important the deposit actually with we per And of that basis we pleased that the are above in ones have I we we loan we book this most only have is And I fairly Now XXX interbank in think asset expansion have the the side bring forward. points

Great. Perfect. Okay.

of could here. going that like seem be this a So forward driver growth

Yes, absolutely.

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

the X increased on detail of happening that has a credit, The And what's PIX evolving? Stage card you more credit been give on specifically, there? us performance from X.X%. how to X.X% bit portfolio has Can

Youssef. is this Thanks question. the Geoff, for

and hand in that, that evolve what's to of way to X, like for happening a about I think a the kind So short XX+. Stage similar is behave to stock It it's tends tends metric. to correlated very

the the Stage you're more if X metric a the at XX would a Page you at delinquencies, take late-stage points, in in of on trend And look, you to declined both you on with look quarter, indicators, look seeing actually I XX+. When the kind consistent both invite what So take formation. XX formation flow of NPL a and and XX respectively. basis is

with The on question PIX with financing, just on phenomenal. minute we be as your ago, product. So metrics. And X improvement mentioned product that the to pleased a the to for standpoint from are that returns we continue see consumer and of actually both respect Lago that those very economics demand

on adjustments And so of segments. by the in make means on number concern of past technical deceleration kind in customer of we've basis a no that either. business-as-usual a more products the an indication and recent of is It's we done

And our from John of of Coffey next comes Barclays. the question line

have loan-to-deposit maybe be not talking I've any of not makes One is NIM holding theme Is the say, still more? that it your those on lot back noticed that sort might assets having reasons into loans or just I and if Mexico in Or rate rising lot could when you're broadly market, Colombia? of ratio improves, just you back -- these that you convert you're of answers wondering you're that capital to about and your rate which you've that other the said you sense. in was will a perhaps from NIM, holding when testing I what's just you're a able yet think that because your more? there are improve

the thank you. Thanks for John, question.

response So on let in Brazil, one and think, me on into, hand, to Mexico I hand. the Colombia, other the try split between and

has been a the portfolio deposit already we of one Depending side XXX% than by about overall The a asset in consumes you the look, pace. we that the relatively lending se, on good And have franchise. Brazil, year-over-year. has, per assets fact, have sheet to in at about at the credit XX%, XX% balance it more and card the XX% So Brazil, grown growing fairly stable grown side is liability more year-over-year. that which funding,

continue we to assets Brazil's and fast to up. the So expect loan-to-deposits in control go is speed cruise there,

develop cycle. and funding credit product, Colombia, see they entered card intensive Brazil, card, our we recent credit In Mexico that which differently more capabilities. core markets. And was more underwriting credit When due from to our we are continue therefore, was markets, did we those to the

the we de-risk And the local deposits So from thing that raising therefore, on wanted mostly deposits. was business. been the more general public, do of we to first have part to currency retail the funding aggressive

of side sheet, kind you balance Now we book very of the I in And of Mexico left have side and balance of the grow right Brazil, accelerating to up the loan we not our that have the capabilities. left growth that in believe to But sharpen continue healthy certain strong capital. And are to you not strong a and the will continue certainly next only sheet. of to Colombia see will a the and main the the credit started and growth we Mexico to even most -- see extent, this underwriting have improve go as quarters. and likely, also we in the But asset it bottlenecks in side Colombia.

Certainly of not deploy. funding. capital We to have plenty

for those deploy We be to against to to credit have most our underwriting of company. funding cherry-pick plenty now appetite really It's opportunities. our able returns compelling the risk-adjusted

This I more just follow-up. Youssef. be one have for quick might

help On those loans? break XX too pieces Or to that the moving many there NPLs, Is you riskier to breaks are out? XX- from little more really versus bps decrypt to straightforward? more quarter-over-quarter. know I that XX-day exposure bit decreased Can seasonality out it us a how creating

in range assets. basis of is The is honest. seasonal largely typically pretty seasonality It's changes opposed the be in lines points, see XX indicative XX as wholesale straightforward, we any so the what to to of along to

Okay.

down XX to XX normally it's So QX to from QX?

about right. That's

more exposure credit having riskier book. a to like also But you're

expect out netted So I doesn't gone that's up would seem It those almost would or happening. maybe to have X. -- that like

before. No, as we've there offsetting about forces, are talked

you secured have book. of within mix So increased the loans lending

You the have we've through some and you credit of executed tactical in continued have expansions last adjustments quarter. card, then the

on quarter the other. last to that. relative each in seen We've So stability kind offset those tend

And Agarwala of question comes from HSBC. next from our line Neha the

there was one strong in explanation which quick back a look was XX% the a grew this to but on pickup especially pickup numbers, we at strong level. in quarter-on-quarter, quarter, pickup provisions When X% we -- the nominally speaking. originations, only was personal loans, a grew provisioning the the very XQ strong Just the level, the quarter-on-quarter. there When for which in provisioning go in

why quite you could in see largely of explain we stronger please the And sequentially So different did strong? was remained And provisioning, stable. a origination also, this whereas quarter? was what cost not pickup the risk

probably would personal stronger loans, some given to risk up. the in go cost impact from But expect shift I of there's growth mix. So in

zoom helpful. on could that if you that, So would very be in

This Neha. Youssef. Yes, is question. Thanks for the

element about. I out has again, particular, fastest-growing that would lower just at point hence, lending, which lending, you forces I when So some of carries talked secured is very in within the to And the coverage that ratios. little and, offsetting risk look

asset we've than lending, part is better on. in going what And in expected. So that slightly explain unsecured would even quality seen

So you bit a there, see effect of too. an

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

Maybe get David, you Mexico. I if, update us. an could in wanted to help

to within faster better is Brazil. and you you when relevant relevant Brazil, the be your I know next wanted in right, ready to years? did can further expect you had right? it in if in Mexico X compared delivering think But to for future? Mexico should what Or be Do been we you've in that you KPIs, think same the think I the results impact more

you thank the for question. Rosman, Sure.

lower of mean, saturated with penetration, I crack per credit market crack. The as positives capita competitive to as we that Brazil. have versus Mexico Brazil, net-net, is also we was some penetration. for more we positives be And opportunity. bank an code well where unbanked And the many to an that's card a providing much found Brazil higher huge differences I there to But some than So a if are a challenge be card harder advantage that credit you Brazil, would us. could that could -- opportunity competitors. are a it's penetration, a more the income lower XX% credit some country population, another and in listen, be With think,

to we of going or to the reach longer Now And little a it's lot really testing. long here we want quarter, in unbanked, requires it's a don't accelerate. a of just it's methodology, foundational learning credit Brazil unnatural harder. we lot A of a a because run. or are the And do market share the lot anything to levels -- cracking, it the under-banked going for giving bit be it's to that have of that discipline, to of -- how take We quarter, a do to lot we data, probably pause.

Another accelerate de-accelerate. or quarter, we

of rates growth those better see you'll continuously So being around how consistently every that because to zigzagging single us day opportunity. it's underwrite market

amount getting data around in Now excited new started as -- positioning, in XX a we're Brazil, we top you having work we're from X. say, been infrastructure, from -- amount terms now huge which infrastructure. completely huge credit it's than in cash-out think, Mexico to X about both and is are years, faster of we've in our of victory, there's connecting been to a a far, very deposits, been which cards And cash-in, of with so and market -- huge connecting doing, there's to lot I --

a upside Brazil the move a There that these think specifically, but blocking is will needle it get or business needle we're is the X and I not is to it's where as being There a an it But payment moves case longer the relevant us us. move place. question gets Mexico over years. and So needle, base needle us. it infrastructure right Mexico for time be as And digital for in the on for net-net, all will right will where the as big systems your the Mexico case I it's as think And takes upside to us. the Brazil. big definitely and tackling. To doing payment next that all digital move the PIX here, case is path for

JPMorgan. Fernandes question at from And Yuri our next comes

most Well, already of the were strategic asked. questions, they

quarter. When financial line, the it basically, other we see And tax shield. it's we and statement, I to this the to your the other other rate bonds says say, highlight that go that was, a would tax-exempt I'll So go tax things.

So is just third if understand we tax Q to trying seasonality the happened just this with in XXXX. what saw rate, as

I in it -- Bem. last year, think back was Lei back do

just So back if XX%? rate understand this or or to a sustainable is is for XX% returning rates to trying should we tax XX%, level see that

question. Yuri, thanks so much for the

other One highlighting there income were this event. in are statement a is one nonrecurring call. things the in believe a think X that is and the worth quarter, I event, seasonal I our in

quarter would program, This in now we reposition initially. So So way in the pool that decided is discontinue a of loyalty event? the to is to nonrecurring the XXXX, we third Nucoin, what in the that which was of onetime liquidity crypto our absorb absorbed charge that require about $XX shift fully was G&A, allocated to general. program in nonrecurring this million us a in in marketing program and

even completely should additional our nonrecurring. performance. We event, have have this not to impact So not that was for any below onetime efficiency this would XX%. is been it to our If expect ratio

also out, of point, a of believe which coming like in in be the the with So one which in concentration quarter seasonal had similar an a is just And R&D correctly and tax And more in or filings nonrecurring. With income thing is that should quarters second third to happened recurring of on we you've third quarter Brazil, the that than that rate, do years. and is for tax completely thing. third the the quarter it Bem, a continue tax corporate asked I in in pointed effective seasonalities that nonrecurring the should XXXX. have incentive Lei exists XXXX, respect you the we that

And Navarro from Henrique our at Santander. comes question next

growth follow-up I on would between do question the the to understand and mismatch like loans. provisions I rationale. on a the

changing loans. look adding the question forward, more has deteriorating. if the But been environment my we is, personal secured mix, credit You're macro

our higher credit a consider we have under We estimates, model, And to environment expected macro SELIC do provisioning the et the to cetera. calculations. loss need

provisions I need it. there is ahead? mean, between That's a rationale reinforce to what and behavior may this loans? risk the So eventually, for provisions that is, my you question is

Henrique, the this for is question. Youssef. Thanks

So both factors, the effect you say we the mix book. take of we dominant look, account know, provision yes, do many assets is put into setting. scenarios and on the would They that in I assets of are But one macro the the impact as our provision nature of and model. performance

see as in secured, ratio. think estimate mentioned, financial coverage main unsecured. And growth when the And which our so statements best drive reflect to coverage I of been I what in the driver down accelerated you terms probably has of vis-a-vis loans at you look the this tend quarter specifically,

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

to piece. the Sorry to go NIM back

okay? And cards? then book portfolio that call, is this NII part the you part well, have the In players some cap regulatory credit I did side, you of this. on question Mexico. impact now that it as the all interest funding, answer credit of for cost renegotiated to gross season. in you On that fell, why And risk the if to more the accrual of in if is the any First as forward. the the piece you the main easier, NII the mentioned or asset second secured post -- stickier. improve about card mentioned Other But took mix slowdown going also, expect the usually it think NIM mentioned

a would to effect NIM the risk. of prolonged I -- effect compounding post expect more cost do it the with on So have

of to and you're color trying more little get recovery -- really how So that it on this shape a the imagining.

Yes, Pedro.

maybe and chime Youssef Let this, me in share as some then thoughts can on well.

the complexity So a thing quarter of would the behaved this the FX NIM adds has quarter, which respect bit one third in to with how calculation, is of also XXXX. little I highlight, to throughout

appreciated. the average the the average is has the that which you take that end-of-period has is used translate is FX, to items, FX the a is that and If at to and the FX you balance depreciated FX which translate will income used FX, note sheet look the statement, FX end-of-period

statement which now translating higher by in the of amount kind divided balance income actually a have of items, less sheet you're dollars. So dollars

if So say. you you a see NIMs, you much both pronounced as in less the would FX ways, deterioration adjust

that part So I your first think to is question, the Leduc.

in our is increase we book, money and The secured all that in see continue if to we currently cards placing lending. CDI credit just with ] leads in shifting to the part, have lending is bonds at ratio, in unsecured no would lending be is we same which where and second that sitting else loan-to-deposit an secured equal, increase increase and basically secured treasury we it the [

so metrics. agree lead and to of in forth. lead even or to our with of those equity. NIM expansion that net so that all and equal, and expansion But It in lead loan-to-deposits as will expansion should increasing else you else deposits continuous happens, per in portfolio equal never se not The returns it of So secured should of margins risk-adjusted do the growth an is Mexico growth dilution interest actually Colombia to do in in the NIMs so problem an well. both an and notion on we a the all see

And our Tang SIG ]. next question [ comes at of from line the William

has shifting but do from existing providers see you the leaving incredibly lending, when to dynamics secured just secured change have you around front? the the in front, on Can here. you start customers particularly Nubank? market about how well on about think How the unsecured one when Nu competitive Brazil? sticky thinking are I away to for about your mark talk clearly operating you done

had super you study at which encouraging. that have quite a longer This lending, so be so with one that length. journey, the is Thank is experience And we seems for important far we a debate secured No. question to much. and the us,

So within assets. basically there are secured lending, of types X

public have You have loans, FGTS, have loans. the payroll investment-backed you and you

XX% about loans book. of originate and that the the The first of X for we account XX%

that the operations is the our class have is estimated book believe has in of market. majority originations accounted FGTS-backed we today. loans, the already asset origination the FGTS our the account XX% loans majority of of to parity, which is product of and we reached share And which there. So for the about origination our the In fact, for lion's the of for

expect lowest So view on we and it to experience, points. the continue can base does very very best our increase channel. low-cost interface digital-only share a we the user the and and to price to strong, quarters you distribution And our successful market we product best as that and coming direct-to-consumer, the leverage FGTS continue user have -- the in support offer

only payroll ones, INSS which public agreements into collateral we have move X X loans, we been are so as and far, Now the launching SIAPE. largest

have made We recently fairly improvements products. those important in

'XX. XXXX. For collateral November INSS, going we're we SIAPE, agreements in over launch to are refinancing going the And December offer. refinancing the quarters, we've coming launched X to to in then add

some the agreements So launching Forces. the throughout with of the many XXXX, Brazil. Armed And agreements we will expect and we XXXX, largest new municipalities states collateral by that December in with be collateral

competitive we we that there? there. And as because why to loans the UX out think we do are we public the we with expect see We So think have payroll not of kind ramp-up seen success are we have with competitive of do had and better highest so acquisition have much only do FGTS, we we price we much the much serve, points. elasticity but industries lower prices customer which one to fact to into the in cost Brazil best of costs, consumers that consumers, translates that lower have offers direct in UI, the to the

Lago. you, Thank

concluding call. time much today's behalf of team, and very earnings surpassed thank our We and Holdings I now Relations call want in participation we XX are you of Nu have our Investor so for this tonight. to of session, minutes now On your

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

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

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

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

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