Brazil’s Nubank reports record net income, over 90M clients in Latam

In its second year as a publicly traded company, Brazil’s neobank Nubank continues to move well past break-even, capitalizing on the increasing adoption of Pix and reporting a significant leap in net income.

During the fourth quarter, the Warren Buffett-backed startup recorded a net income of $360.9 million, marking a nearly sixfold increase from the $58 million profit in the same quarter of the previous year. This remarkable growth comes as the company aggressively expands its product offerings and has attracted nearly 20 million new clients over the past 12 months.

“As we work towards surpassing the 100 million customers milestone in 2024, we are investing heavily in new growth avenues to keep transforming potential into profit,” David Vélez, founder and CEO of Nubank, said. Its executives pointed out that novel frameworks such as Pix and Open Finance operate as boosts to the neobank’s business in Brazil and Latin America.

Nubank closes in on 100 million customer threshold

During an earnings call to discuss results, the Colombian founder outlined three pillars of Nubank’s strategy. Firstly, accelerating secured lending in Brazil, a massive market where it serves more than half the entire adult population. Secondly, opening new opportunities in the highest-income segment. Finally, Velez highlighted the focus on strengthening its presence overseas, particularly in Mexico and Colombia. “This proves our ability to accelerate our company-wide flywheel beyond our core market and keep pursuing further opportunities,” he said.

The company has rolled out payroll loans in Brazil during the year as part of a major strategy to drive engagement and expand its market share in the country’s massive loan market. The total loan portfolio grew to 18.2 billion dollars by the end of 2023, up from 11.3 billion in the year-ago quarter. Almost 80% of this is comprised of credit card loans.

“Brazil continues to deliver 1.3 million new customers per month,” its Chief Executive Officer, Guilherme Lago, said.

During the year, the company introduced payroll loans in Brazil as a key component of its strategy to enhance engagement and capture a larger share of the country’s substantial loan market. By the end of 2023, the total loan portfolio had expanded to $18.2 billion, compared to $11.3 billion in the previous year. Notably, nearly 80% of this portfolio consists of credit card loans.

Nubank targets high-income customers in Brazil

David Velez, CEO and co-founder at Nubank.

 With over 85 million clients in Brazil, Nubank is already the fourth-largest financial institution by number of clients in the country, according to Brazilian Central Bank data.

It now wants to make inroads into the coveted premium segment. “We have rolled out numerous features to cater to this segment,” David Velez said, including tailor-made functions for investments and a premium credit card.

Nubank is diligently striving to boost its monthly average revenue per customer, a metric that has shown consistent growth over the past few quarters as the neobank prioritizes profitability. Currently, Nubank generates approximately $10.60 per active customer, compared to $8.20 a year ago.

Scaling Mexico is a “top priority”

Brazilian digital bank Nubank kicked off the year with a strong focus on international expansion, with its stock gaining momentum as the company introduced two significant initiatives in its Latin America operations.

First, it secured a license from the Colombian regulator, marking a crucial step in enhancing its customer acquisition strategy in the country and launching its own. Simultaneously, in Mexico, the bank entered the extensive remittance market, a promising yet largely untapped market for financial technology firms.

Nubank executives emphasized that expanding its footprint in Mexico is their “top priority” for 2024. The digital bank’s efforts in Latin America’s largest market gained momentum after securing a fintech license, enabling the launch of its virtual account. Within just 7 months of its introduction, the bank amassed 1 billion in customer deposits, and it now boasts 5.2 million customers in the country.

In Colombia, Nubank’s customer base has surpassed 800,000 customers, with growth anticipated to accelerate further following the announcement of a savings product in January 2024, mirroring the trajectory seen in Mexico.

  • David Feliba

    David is a Latin American journalist. He reports regularly on the region for global news organizations such as The Washington Post, The New York Times, The Financial Times, and Americas Quarterly.

    He has worked for S&P Global Market Intelligence as a LatAm financial reporter and has built expertise on fintech and market trends in the region.

    He lives in Buenos Aires.