Nu Holdings Ltd. added 4.8 million customers in Q4’23 and 19.3 million year-over-year (YoY), reaching a total of 93.9 million customers globally by December 31, 2023, compared to 54 million only two years ago, according to the press release announcing the financial results. At a Holding level, Nu posted a Net Income for Q4’23 of $360.9 million for an annualized ROE of 23%, compared to a $58 million profit in Q4’22. For FY’23, the Net Income was $1.0 billion, compared to a $9.1 million Net Loss in FY’22.
This underpins Nu’s position as one of the largest and fastest-growing digital financial services platforms worldwide and the fifth-largest financial institution in Latin America by number of customers.
In Brazil, the customer base reached 87.8 million by December 31, 2023, representing 53% of the country’s adult population. Nu is the fourth-largest financial institution by number of customers in the country, according to Brazilian Central Bank data.
“We are building the largest consumer platform in Latin America, with strong earnings-generating capabilities, having delivered over $8 billion in revenues and $1 billion in net profit in 2023. 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. We are unlocking the untapped opportunity of our secured and unsecured lending portfolio, gaining share in the upmarket segment in Brazil, and strengthening our presence in Mexico and Colombia with new products and features. This proves our ability to accelerate our company-wide flywheel beyond our core market and keep pursuing further opportunities”, said David Vélez – founder and CEO of Nubank.
Below are the Q4 and Full Year ’23 performance highlights of Nu Holdings Ltd.:
Operating Highlights:
Customer growth: Nu added 4.8 million customers in Q4’23 and 19.3 million year-over-year (YoY), reaching a total of 93.9 million customers globally by December 31, 2023, compared to 54 million only two years ago. This underpins Nu’s position as one of the largest and fastest-growing digital financial services platforms worldwide and the fifth-largest financial institution in Latin America by number of customers. In Brazil, the customer base reached 87.8 million by December 31, 2023, representing 53% of the country’s adult population. Nu is the fourth-largest financial institution by number of customers in the country, according to Brazilian Central Bank data.
Engagement and activity rates: Monthly Average Revenue per Active Customer (ARPAC) grew to $10.6 in Q4’23, a 23% expansion YoY on FX neutral basis (FXN), with more mature cohorts already at $27. Nu continues to win principality among its customer base, driving engagement and revenues up. Nu became the primary banking relationship for over 61% of the monthly active customers, and activity rate grew to a new all-time high of 83.1%.
Low-cost operating platform: Monthly Average Cost to Serve Per Active Customer remained virtually unchanged and below the dollar level at $0.9 which, combined with the sustained expansion of ARPAC quarter over quarter, demonstrates the strong operating leverage of Nu’s business model. The company’s efficiency ratio reached 36.0% in Q4’23 and Full Year 2023, improving 19 percentage points compared to the Full Year 2022 and strengthening Nu’s position as one of the most efficient companies in Latin America.
Asset Quality: in Brazil, Nu’s 15-90 NPL ratio decreased slightly to 4.1%, in line with expectations. The 90+ NPL ratio remained stable at 6.1% in line with the expected stacking behavior of the early delinquency buckets from previous periods.
Financial Highlights:
Net & Adjusted Income: At a Holding level, Nu continued to drive increased profitability and posted a Net Income for Q4’23 of $360.9 million for an annualized ROE of 23%, compared to a $58 million profit in Q4’22. For FY’23, the Net Income was $1.0 billion, compared to a $9.1 million Net Loss in FY’22. Adjusted Net Income4 for Q4’23 reached $395.8 million with an annualized adjusted ROE of 26%, compared to an Adjusted Net Income of $113.8 million in Q4’22. For FY’23, Adjusted Net Income reached $1.2 billion, compared to an Adjusted Net Income of $204.1 million in FY’22. Nu is achieving these strong levels of profitability while continuing to make substantial investments in future products and geographic expansion, as the company sees tremendous potential to continue building the largest consumer platform in Latin America.
Revenue: Nu’s revenues in the quarter surged to $2.4 billion, another new record high, which represents a 57% increase FXN from Q4’22. This showcases the company’s unique ability to consistently expand its customer base while accelerating revenue growth and profitability.
Gross Profit: Nu’s gross profit reached another quarterly record high of $1.1 billion, an 87% increase YoY FXN. Gross profit margin expanded once again to 48%.
Capital: Nu strengthened its position as one of the best-capitalized players in the region with Capital Adequacy Ratios (CARs) in the countries in which it operates that are practically 2x the applicable minimum required, still without considering the $2.4 billion in excess cash held by Nu Holdings.
Liquidity: On December 31, 2023, Nu had an interest-earning portfolio (IEP) of $8.2 billion which increased 91% YoY FXN due to the accelerated ramp-up of personal loans and credit card receivables in the past 12 months. Total deposits increased to $23.7 billion, up 38% YoY FXN, while cost of deposits remained stable. This represents a significant step towards Nu’s goal of consolidating one of the region’s strongest local-currency retail deposit franchises, bolstering the ability to support consumer finance operations across the three geographies in which it operates. Nu’s loan-to-deposit ratio stood at 34%, with deposit growth in Brazil and Mexico showing sequential acceleration.
Business highlights:
Performance and Growth in Brazil: Nu’s customer base growth in Brazil has consistently outpaced expectations, with 1.3 million new customers per month and reaching 87.8 million by the end of the quarter. Among the highlights of the Brazil operation during 2023, Nu has been successful in scaling its lending business, both secured and unsecured, by doubling originations in only a year and launching SIAPE and INSS payroll loans, as well as FGTS. This has brought significant contributions to the interest-earnings portfolio and overall results in the country. Moreover, there were significant strides in gaining share of wallet and increasing purchase volume in the upmarket segment.
International Expansion: In Mexico, customer growth keeps accelerating, registering almost 1 million net-adds in the quarter, which contributed to a total of 5.2 million customers in the country. In January ‘24, after the closing of Q4’23, Nu Mexico announced it had surpassed the mark of 5.5 million customers. This growth underscores the effectiveness of the pricing strategy following the launch of Cuenta Nu and proves how Nu has been able to accelerate the company-wide flywheel in new geos. Deposits in Mexico have also soared to surpass $1 billion by the end of the quarter. In Colombia, Nu’s customer base surpassed 800,000 customers, and, similarly to Mexico, the growth trajectory is expected to accelerate with the upcoming launch of the savings product, which was announced in January 2024.
Multi-Product Platform: Nu’s product portfolio keeps growing with credit cards, NuAccounts, and personal loans reaching approximately 41 million, 69 million, and more than 7 million active customers, respectively. There are currently over 1 million active insurance policies, and over 15 million investment active customers. Furthermore, in Brazil, Nu has made substantial progress in the financing space by capitalizing on the increasing adoption of Pix. Nu remains one of the leading providers of Pix services and, as of December 2023, over 35% of the company’s active credit card customers were active users of the Pix financing feature.
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Nu was born in 2013 with the mission to fight complexity to empower people in their daily lives by reinventing financial services. The company is now one of the world’s largest digital financial services platforms, serving almost 94 million customers across Brazil, Mexico, and Colombia.
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
