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![EugeneNg_VCap Avatar](https://lunarcrush.com/gi/w:24/cr:twitter::915576521129041920.png) Eugene Ng [@EugeneNg_VCap](/creator/twitter/EugeneNg_VCap) on x 24.5K followers
Created: 2025-05-14 14:17:13 UTC

Nu Holdings $NU 1Q25 Earnings
- Rev $3.3b +19% ↗️🟢
- CLA $973m +38% ↗️🟢 margin XX% +427 bps ✅ CLA / CP X% ➡️🟢
- GP $1.3b +12% ↗️🟢 margin XX% -XXX bps ↘️🔴
- EBIT $795m +37% ↗️🟢 margin XX% +334 bps ✅
- Adj Net Inc $607m +37% ↗️🟢 margin XX% +249 bps ✅
- Net Inc $557m +47% ↗️🟢 margin XX% +331 bps ✅
- Adj ROE XX% ROE XX% BR ROE XX%

Biz Metrics
- Customers 118.6m +19% ↗️🟢
- Active Customers 98.7m +19% ↗️🟢
- Activity Rate XX% ➡️🟢
- Purchase Vol $30.4b +16% FXN ↗️🟢
- MARPAC $XXXX +17% FXN ↗️🟢
- MACSAC $XXX -XX% FXN ↘️🟠
- Credit Portfolio $24.1b +40% FXN ↗️🟢
- Deposits $31.6b +48% FXN ↗️🟢
- Int Earning Portfolio $13.8b +62% FXN

Deposit growth coming from MX+CO
- Deposits (BR) $24.4b +11% ↗️🟢
- Deposits (MX) $5.4b +135% ⤴️🟢
- Deposits (CO) $1.8b -- ⤴️🟢

Credit Portfolio growth more from unsecured loans and secured loans than credit cards
Rising ARPAC versus fixed low Cost to Serve driving operating leverage and declining efficiency ratio (OPEX + Txn Exp divided by NII and Fees and Commission Income)

BR re-expands NIMs and investing for growth in MX and CO which have lower NIMs (for now), risk adjusted NIMs holding steady

Credit delinquency ratios continue to track expectations

BR ROE is 48%, with constant CET1 it would have been 88%, investing in growth in MX and CO, hence lower overall Adj ROE XX% ROE XX%

NU still in early innings in BR and MX

X | Strong quarter

We kicked off 2025 with strong momentum. During the first quarter alone, we added XXX million customers, reaching a total of XXX million across all our markets.

X | Lower NIMs, ¾ due to seasonality, ¼ due to MX and CO, expect NIMs to stable and grow with releveraging of balance sheet

The risk-adjusted margin in the very last quarter, rst quarter of 2025, had a drop of about XXX basis points. About 3/4 of the drop, 3/4 is entirely seasonal.
The other ¼, was basically the result of the contraction of NIM resulting from the investments that we are doing in the deposit base of Mexico and Colombia.

So I think going forward, if you take a look at Brazil specifically, you would expect to see NIMs stable to growing as we re-leverage the balance sheet and with a very attractive risk-adjusted margins that should be largely stable or going up.

X | As Brazil LDR rises, it would be a tailwind for NIMs and profitability

So as our loan-to-deposit ratio in Brazil continues to go up, by which I mean our kind of loan book will continue to outpace our deposits. We believe that the increasing re-leveraging of the balance sheet will be a fairly relevant tailwind for our net interest margins in the country.

which is the evolution of our net interest margins in Brazil, even if they stay at for illustration purpose only, we can still mat

X | Lower Brazil credit card spend driven by credit limit constraints, and had been conservative, being very deliberate, and only increasing after utilisation and good risk behaviour

Yes, as you point out, there's always a fair number of credit card customers that are active from the revenue denition standpoint, but not necessarily from a transacting standpoint. A lot of that can be driven just by a credit limit constraint. As you know, we tend to be very conservative, especially initially with new customers around how we grant credit limits. And so we wait to see both utilization and good risk behavior before we go and expand those credit limits. And what we find is when we expand those credit limits, we then see transacting behavior pickup. So that's not a new phenomenon by any stretch.

X | While Brazil is most scale and mature market, there remains a large opportunity to monetise the customer base through larger usage and more product cross-sell

Brazil is our most scaled and mature market, about XX% of the adult population is our customer, XX% are active and close to XX% of these customers use Nu as their primary bank, translating into a market share of principality of over 30%. And yet our gross pro t market share is just X% as we're in the early stages of monetizing our customer base through larger usage and cross-sell of products.

X | NU just needs to focus on monetising their existing Brazil customer pool

which is the single largest profit pool per se, where our customers, if I take the social security numbers of our customers and take them to the Central Bank database, they now account for nearly XX% of the pro t pool. So that means that we don't need to sh outside of our shbowl to be able to grow our shares in unsecured personal loans by almost 10x, right? So that's a massive growth for us. Then you go into payroll loans, which is the one that you explicitly asked, we still have a market share there of less than 1%.

X | Mexico is next growth frontier, seeing strong growth momentum, just got banking license to accelerate growth and offer more products

Let's turn to Mexico, our next major growth frontier. Mexico is Latin America's second largest banking market, but more importantly, it's one of the most underpenetrated. The bigger opportunity here isn't just to win market share, it's to expand the market itself. Our momentum in Mexico is strong. And I'm also very happy to announce that just a few weeks ago, we were approved to get our banking license in this country, license that is going to enable us to accelerate our growth and provide many more products to our customers.

X | Applying same Brazil playbook to Mexico and Colombia

It is the best proof point of the strength and scalability of our digital banking model, and it is a good preview of where Mexico and Colombia are headed over time. As you look at the evolution of our scale and e ciency in Brazil, the takeaway is clear: the model delivers healthy pro tability even while o ering best-in-class customer experience, wider access to nancial services and below-market pricing.

X | Overall NIMs were temporaraily impacted due to growing Mexico and Colombia

Now in Mexico and Colombia, NIMs were temporarily impacted by our decision to invest in building local deposit franchises. These are deliberate strategic investments aimed at unlocking large-scale, low-cost funding, deepening our customer relationships and enabling sustainable credit growth. It is nothing but the same playbook we have successfully executed in Brazil.

XX | Thinks Mexico unit economics are just as compelling as Brazil, Colombia might have tighter NIMs and lower ROEs, but still strong

We do expect to do so in Mexico and Colombia at some point in time, not necessarily in the next few quarters. And at that point in time, we do expect the pro tability of Mexico to converge towards Brazil. I think Mexico's unit economics of our core products, namely credit cards and lending, are as compelling, if not more attractive than the ones in Brazil. So I wouldn't necessarily discard the scenario in which the pro tability of Mexico can now meet, if not exceed, that of Brazil. I think Colombia has a tighter kind of NIM that I think the pro tability there will likely be lower than in Mexico, but it's still ahead of our kind of minimum XX% ROE threshold

XX | Nubank is not about being a secondary wallet, but being the primary banking relationship, its DAU/MAU ~50% is one of the highest in fintech globally

Nubank isn't just a secondary wallet for ad hoc remittance or occasional purchases, it is the primary banking relationship for most of our active customers who use us every single day. Our DAU/MAU ratio continues close to 50%, one of the highest in the ntech industry globally. This creates signi cant competitive moats, including stronger unit economics and access to richer transactional data.

XX | Continue to expect growing shift from credit card to more unsecured and secured lending

Meanwhile, our lending products, both unsecured and secured continue to grow faster than our credit card portfolio, gaining share within the overall credit mix. We expect this shift in composition to continue over the coming quarters. Now for the past X years, we've been sharing with investors the significant opportunity we see in secured lending.

XX | Huge opportunity with public and private payroll loans that will allow for more data and deeper relationships

Nonetheless, public payroll loans gained further traction, growing over XX% quarter-over-quarter. Now nally, we see the Nu private payroll product in Brazil as a unique opportunity to break into a segment historically dominated by Brazil's top X incumbent banks. Private payroll loans will open the door to customer relationships, customer data and customer collateral that were previously out of reach. We are all in….Just like we did with FGTS, where we've become the market leader, we are building a digital native product from scratch using our cost advantages to deliver the best offer in the market.

XX | Will be looking to grow duration of assets

So we don't expect -- even though we have lots of funding in Brazil, we don't expect that we will aggressively lower our cost of funding. We want to be the place where all Brazilians receive payments, make payments, store value. So we want to be very competitive there. And yes, you are correct that as we grow the duration of our assets,

Having said that, I think, rst, we still have plenty of deposits within our Brazilian franchise, and we still have a lot of medium- to long-term funding from retail deposits in Brazil that is already embedded in our today's cost of funding, and that in itself already enables us to increase in a fairly decent amount, the size of our secured loan book. Remember that our unsecured loan book and our credit card book are very short dated and can be adequately funded without any massive increases in the duration of our liabilities.

XX | Was deliberate in tightening Pix Financing, leading to volume declines, wanted to protect customer experience, have since recalibrated and seeing reacceleration

In the second half of 2024, we saw that among riskier bands, Pix nancing usage began to negatively impact NPS and reduce engagement, posing a risk to principality. We acted quickly, tightening eligibility criteria for those segments. This led to a deliberate decline in volumes in use. But once again, we are not optimizing for linear growth. We are building sustainable, resilient value for both customers and shareholders. The constraint in Pix nancing wasn't lack of demand or unfavorable unit economics, but our choice to protect customer experience and long-term principality. Now since then, we've gradually reexpanded access, improved the net flows and launched new features, leading to record high originations in March. This recovery, achieved without compromising credit quality, highlights our agility, our customer-rst mindset and our long-term orientation.

XX | Thinking about internationalization, could see announcements in the coming years

We are thinking about that potential for internationalization. We are making progress with a small percentage of our allocation. I'm not ready yet to announce when we'll have more data, speci cally about what the strategy there is going to be. And we do think that it's going to be a big part of our story over the next X to XX years. But for now, I think all I can say is we are very, very, very focused on these three markets and a lot of

XX | NU with XX% annualised ROE while $4bn excess capital is the most profitable FI in LATAM

but we still delivered another quarter of very strong bottom line performance. This result translated into a XX% annualized ROE even while holding over $X billion in excess capital across our geos and at the holding company. This places Nu among the most pro table nancial institutions in Latin America.

➡️ Final Takeaways on Nu Holdings $NU:

NU is the “GEICO” of LATAM digital banking. Strong business traction supported by 📶 customers, more/faster cross-sell, leading ↗️ revenues per customer, combined with the significant competitive cost advantage of a lower cost to acquire & serve ➡️, strong risk management, and lower cost of funding (retail) that really drives its long-term highly durable profitable growth.

Continue to watch its expansion into Mexico and Colombia, and its continued building on its strengths in Brazil (secured lending with payrolls, higher credit card spend with the higher income Ultravioleta credit card. Expect NIMs to normalize back higher medium term with Mexico and Colombia and more balance sheet optimization with still low LDR. Thoughtful approach to build its banking platform first and the focus on primary banking relationship before scaling beyond LATAM. Excited to watch this front.

![](https://pbs.twimg.com/media/Gq6mST3XUAIm1If.jpg)

XXXXX engagements

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