Earnings call transcript Q1 2023

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Operator

Good afternoon, ladies and gentlemen. Welcome to Nu Holdings Conference Call to discuss the results for the First Quarter of 2023. A slide presentation is accompanying today's webcast, which is available in Nu’s Investors 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. This call is also available in Portuguese.

press your icon choose Zoom the room. can right the to you Portuguese of side screen, access, the on globe lower enter To and then original After audio. select mute that, participants [Foreign be Language] in advised all Please listen-only will that mode. be

any questions box webcast. submit using the today at may the time You online Q&A on

Officer turn Mr. Holdings. Friedemann, may proceed. like I over Mr. Nu would to now Jorg at to call the Friedemann, Investor Relations you

Jorg Friedemann

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

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

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

the the Additionally, Jag Duggal, our Chief Product session for call. Q&A Officer, us will of join

call defined will including financial Company's Reconciliations measures in for non-IFRS non-IFRS financial conference information are release. income. are not this our are by the information as but available earnings to presenting we financial important press information, These be measures IFRS. the financial IFRS net financial adjusted the Throughout of Company,

statements statements press forward-looking put materially the from differ to subject release. growth not are performance therefore undue expectations. otherwise, discussion all uncertainties everyone to refer on cause you include not them. today's to neutral actual which like to rates would results future noted are the and the on remind that reliance FX in a might statements, These forward-looking basis. numerous guarantees Unless of I are could year-over-year Company's also risks should and Please and disclosure Company's earnings

provide questions. which overview Subsequently, quarter main your through after our CEO, we’ll discuss of XXXX our happy and to you operating for our will take and and results and time Guilherme will Founder Lahrech, CFO, Lago, the performance our operations. take Youssef highlights our COO, of Today financial Velez quarter, Brazilian our the first an President be and David

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

David Velez

you, in remained being we thank everyone, Good and to our concerns you strong Once today. of operate. again, quarter very Jorg. resilience markets a our by in the business activity soundness of evening, indicators and model team. The general for all Thank effectively the quality economic execution financial and attesting marked asset of with the us about our

show will I next So the slides. few in

high combination increasing We first of effect the and to compounded model. increasing rare profitability strong year-over-year. with through and continued platform's $X.X the numbers continue quarter, by profitability deliver expanding to combined the of surpassed our provided growth a demonstrate our growth, market. our downs XX% business ups our of In billion, Revenue

Our XXX% this gross threshold increase $XXX margin since quarter, again and XXXX. the level reached year-over-year a surpassed reaching million, XX% highest gross the our profit

in a reaching expansion quarter's reached net DSA significant gross income enabled revenue million million, rate XXX% an This growth quarter-over-quarter margin $XXX.X adjusted in $XXX.X income. increase net with income, net continued or growth a increase quarter. during Brazil versus last the Adjusted welcomed Meanwhile, quarter-over-quarter. million clip XX.X clients. strong ads were quarter base expand XX% Net with to where strong at customers customer we of continue ending the very our also we X.X

Our and more the of add demonstrating even intense at activity robust customers platform. our engagement as levels remain more XX% capacity we

increase level trends, high to This slide expanding ability recent while our offers revenue, a overview our financial performance highlighting of profits.

revenue in engagement our CAGR years, only implied customers already times XXXX XX years, with XXXX the first triple multiplying the for and end by a early in million resulted strong the two number growth was in of of cross-sell our XX customers platform by X period. by to Nu up-sell customer million base rise revenues to digit of the two quarterly from Over able high almost quarter over associated of this April. surpassed more at XX than in the million the The past double and

The next by profit our total more revenues, times defined underwriting in the than resilient margins with market transactional X even of deducted credit by increased over we months. gross by period credit profit, Quarterly capabilities. operate expenses expanding the this increasing illustrates gross though allowances, the delinquency XX and slide in accordingly which loss chart has funding costs, past

the three combination of growth, periods products on of drivers our over be the coming observed all appreciate quarters, growth of right. in platform. to the particularly for a a initial past early Brazil effect aforementioned our as acceleration increasing platform continue the leverage in resulted in Lastly, with chart moderation net can combined income with should valuable of providing you strong the the over the and in This operating profitability significant compounded

I in of platform. XX% clients own create However, eventual a a opportunity that already for and our a core for adult dig and same population is growth staggering clients. bit customer. think to a where the investors our account total deeper offering we nine the the questions with significantly expand of state have and we Brazil, of years that Colombia, relationships remarkable the In almost is some the get from potential as profitability or for at tremendous we around a have that Mexico to country. one been product two lower, we In want operating years, for been into total It's steady less, our gratifying of population Brazilians growth share Bank and where smartphone lasting our representing time three Nu

far, having adult of years in Colombia. saw the we're penetration three than few Brazil, representing the Lower than population first in a is of that so experience at Mexico With of Mexico years. in what we time. we Brazil million X% country customers, operations and in we than have in X.X the of less Colombia But now had what the more in and positive

expectations. for monetization, countries Mexico So, effectively in all these plans beating to ahead customer metrics and and of Colombia so growth far are and Brazil are from early

into actually our own we room share While our profit the in we customer pool, market substantial significant, each still we that is penetration presence. clear when in Brazil it to delve is have expand

that in Nu XXXX. the three insect on without fact financial impossible build this all chart business underwriting come having from financial it's reasons important services the as Credit credit we profits The of capability. two-thirds the in one a the confirms to region the These markets also start of products. slide large that a is related first approach is First from virtually decided our core to credit services It in with of

then Starting and pivoting with to generally payments carries risk. significant execution credit

mature Today, we across XX% establish we to years, is started deals. four toeholds additional our in cards, where only products share credit in three our past most the purchase new every market have have credit Over segment. volume

and We personal revenue expect to have important resumed driver product of in it lending unsecured earnings growth Brazil be an growth. and in our

but Last lending known quarter, we also Brazil as first our [Brazilian [Indiscernible]. product, in launched is secure Vida] (ph),

about the we're four very early customers excited this and meaningful are or see quarters. We the feedback to from next expect to in eight receiving segment acceleration

additional In to of we're consumer and in platforms size our credit us serve as technology Mexico by also few a supported products able increases over been cost developed and we in core traditionally that to new bring incumbents. of gain internally one customers in capability these by Since fully of platforms extremely also and the We're pursuing largest the already roadmap building cost addition Brazil, but only have market zero digital providing an in acquisition investments, we not allows to them marketplace. to similar the in years, Brazil, and market to at have insurance Colombia virtually bring at quality. addressable verticals launched innovative we serve. the both have speed consumers underserved This and next us efficient share,

an last quarters of we trend the potential demonstrates the important of reaching strategic position, runway Being the is that industry very and the believe a and to the lowest growth generate significant in platform nine we point Brazil. leverage significant ahead, the manufacturer we Beyond cost are profits. its clear have operating in

this most The business or mature our Brazil fact in charts illustrate slide on market. for this

time leverage deliver ratios unit the expanded our Impressive cost start to by been customer mid-XX% In the Meanwhile, we efficiency incumbents, now on in of platform our the for country, and we process. we've provides QX efficiency our left, X.X average the the to income of this best active only have to right to least running evidence unchanged. the operating in at with or Brazilian operating at is the able cost level. monthly QX the On of times our time. ’XX remained the compared whereas ratio show monthly chart over virtually but class enough, been per short between ARPAC revenue ratio or ’XX, serve

ARPAC $XX, for is more The cohort is monthly overall current already ARPAC our monthly mature our average. $XX. twice about And than upwards the of of incumbents

to and in As peers. while believe we our ratio customer, below we're will ARPAC to profit our grow, will and a we the gap profitability pools, we're increase. records targeting multi-cost continue $X efficiency the serve our per new sharing set All close to maintaining

quarter, the our I'd the of can of In metrics and momentum last you by talking evolution we both about this first see for highlight company our key into slide. financial to numbers as the presented returns, like The continued quarter Brazilian holding the on operations.

and Brazilian results compound operational positive accelerated. mature, our is to As continue profitability

of result of ROE income net from in an achieved a required minimum the We first impressive capital XX.X%. $XXX of of the ratio quarter, reached million on XX% XX.X%, a adjusted over top cushion adjusted an in Our this representing regulatory maintaining Brazil XX%. of

company traditional the profits. scale, that of equity are par of to extremely our implies region, the of into and cash it's a in holding the our adjusted already quarter to benefits of note first that we’re levels its of well million current is an in starting incumbent model, capitalized. over holdings on adjusted As that $X leverage profitability billion enjoy to convert net or XX%, important our banks our income with inherent while potential we means $XXX.X Nu excess XGS operating American of Latin many return

continuing year-over-year. future revenues profitability, products significantly Also that remember to showing in XX% growing important while and while level this invest we're of to even by

able the at are scale few revenue Our growth rate, institutions show. to financial

dig very momentum numbers. of pass As with Go like and Lago ahead, the to would into to Lago. to seen, over the now it the deeper in business, partner we're CFO, excited my Guilherme and I

Guilherme Lago

evening, Good everyone. David. Thanks,

by so the KPIs. did strong value be have This guiding As David principles. can quarter generating by that powerful and deliver mentioned, financial strategy a simple, three we strategy few same for now leveraging employed of summarized another years. We we operating

customer we quickly active our into which grow in to in customers continue the converting First, new ones. markets base operate and

against maintaining like Much in each average one cross-selling showcase the quarter customer and execute while prior And or the lowest active we delivering pillars. our growth upselling. revenue these results industry. per expanding through third, of of periods, Second, in continue one first costs ARPAC how both to operating

Let's dive deeper.

During adds our year-over-year. million acquisition of for means the a customers. quarter, solid pace, still XX% our base referrals, majority added In customer we XX.X increased and continued pace lower from a vast monthly million, Brazil, net total at first come which for increase faster X.X almost The which of costs, at X.X million customers activation. a

in accounts up countries. and running also and Cuenta are open likely base even launch of just positively level less happened we where we client evolved already our the a able than XXX,XXX Colombia to in Nu. once after crossed official both checking will has Mexico accounts Our of further This our have in and in Mexico, have accelerate week checking

with us engage first was a add them customers, love goal the success. On to and base, platforms Once activate our we quarter our have fanatically. also is this and

rate activity The to from ninth year quarterly XX.X% a XX.X%, ago. up monthly increase. increased Our consecutive

all are in activity seeing and momentum our increasing of in markets. positive three We

revenue is The second strategy pillar expansion. our in

customers. And customers over which customers happened primary banking the is faster our time. of active active our has Driven the chart. primary our XX% customer and their relationship our at chart income. two to XX% types are of month Nearly banking of us who than relationship customer, already It first factors. active pace primary The every become faster our banking percentage more post-tax of relationship transfer by represents

overall the growing factors, external of digital such banking. as adoption COVID, and First, PIX,

such factors, and high products the internal features. of Second, quality as launching new

chart the we chart, have successfully as cross our The the and to with is new second earn product we be have primary sold cross-sell banking them launched to right products, customers them. relationship our

chart. the it of in in products, compounding who high banking the our growing more account, three our customers, record Now, $X.X. last are expanding and the of chart second have of already Yet, of ARPACs quarter, engagement above product reached and In are ARPAC, our mature ARPAC is monthly ARPACs the personal monthly the our with our monthly $XX. cross-sell credit shown bought core and loans a represents $XX cohorts above card, third customer effect first the chart, shown the the our

have of ahead We a us. runway long

continues On XX% and neutral this an on slide, shows to our year-over-year left grow sequentially the that FX on ARPAC the monthly chart basis. up was

of growth base $X.X to ARPAC with high. year-over-year drove revenues customer a Our together an record in our the expansion billion increase XX% also

This slide more provides on cards. our some details

first For its the quarter cards, fourth strong first our purchase the $XX.X Compared year. on XX% up FX the Higher lower was every year, to in path. quarter are seasonal. volume growth to purchase sustaining billion volumes of neutral quarter in and last of basis an

month Older than volumes The purchase volumes the and spanning right on chart purchase times times of cohorts. X develop continue expand how cohorts X to customers mature. recent higher shows in per as cohorts more to

with card months. customer's for post when been expenditure mentioned have before, three credit than more we a XX they on us As average,

millions We the provide for month spanning volumes. of observed customers ample each maturation of with support in customers along expect growth these the into compounding patterns, adding future new of purchase historically the effect to

Looking XX.X% points both adding quarter-over-quarter. into quarter an credit reported cards, and Nu with last increase ended volumes XX industry, transferred of of a share the basis market around prepaid purchase

grow quarter, loans by seasonality year-over-year, negative consumer total and finance increase and our card credit purchase personal Despite XX% driven the revolution in credit low composed portfolio net sequentially volumes, it of and expansion growth XX% our $XX.X a of billion, This card client expanded receivables year-over-year. methodology. and reached

expanded significantly the More quarter. importantly, in portfolio loan personal our

we with we portfolio our during period. with our later, in cautious late originations XXXX, in of risk steps last the of take as in from expectations terms posture Youssef us A confidence most were through remember, gave resulting loans. increased to personal might perceived bolder you the the exceeded performance, will year, As originations. explain which product Starting

$X.X As book billion. to increased personal a loan our result, XX% quarter-over-quarter

the loans to of our interest breakdown move now portfolio. earning Let's in

loans We share that our of the continue card credit to interest. of increasing pursue a strategy earn

loan selection. our interest of rates adjusted receivables, share, again quarter, less that where XX% risk further see we return once of high earning We allow favorable credit interest attractive us gained prefer return card monetize revolving book. installments higher to card profile where a credit balance This see record business. installments a our representing risk earning we our adverse Over and

the personal the accounted percent card for revolving revolving XX quarter. percent widened credit intentionally of continue of have credit card new receivables at Because the not as of loan over The market. versus months, receivables, the end our third of expanded of quarter. increase consecutive our We first the necessary to several gap the originations. of improved this, conviction as which total cohorts receivables share the loans X last of receivables for performance Where given

our and continues As resilience performance, our appetite risk portfolio show capital, we increase deploying progressively to and profitably consistently. strong

for payroll our in of Our opportunities strategy, growth launch to lending would reinforcing originations. add this

by position. our strong belief our base ample our in supported is liquidity and We confident to underwriting our This capital best-in-class drive are growth responsible in ability lending. platform,

the funding. that while are important deposits fourth deposit growth total quarters year-over-year. It's Supported are inflows, quarters to in our customers' weak. by note Moving seasonally expanded first base, strong seasonally to XX% for

the by of driven of change interbank achieved low the loan-to-deposit Nu the year. Nu of rate, the at of impact Money quarter, optimized In cost use deposit all-time of and levels full in three XX% of seasonally quarter the Our the to recently this dropped the ratio Accounts; funding those factors: remuneration of the higher the of end an of fourth XX% deposits XXXX, showing launched the deposits Box; our the quarter-after-quarter.

the CDI previously, should to upwards cost year. approximately our the of we lay of also three quarters over of XX% had anticipated initial funding As

the In this value strong with expectation of level to the this been are observed that quarter have is XX% shows starting we also in CDI line context, of of unlock franchise build. we liability our and able the to

after less recent launch which than in a its the already week Mexico, launch, With open. surpassed official XXX,XXX Cuenta in Nu accounts of

value our country in strengthen month further and to offering month, individuals in a customers franchise after compelling to deposit for be more more country. are proposition the able the helping We should onboard

We in the Colombia. expect Nu the happen our expansions combination record net our credit the in contributed of growth continued our to levels. NII, normal soon to with margin, the and funding interest net costs interest of The of income, same have portfolio or to NIM, or high

reached NII $XXX.X quarter, impressive Our million an growing this year-over-year. XXX%

points by year-over-year to increased NIM Our X.X percentage quarter-over-quarter percentage points and X.X XX.X%.

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

the XXXX, model. serving the same the the our serve We while we in strong over the In of in active leverage largely first which $X.XX, XX%. is continue efficient platform in cost increased per illustrates cost our to This operate. customers flat ARPAC of to one was markets customer of believe most operating period, our our year-over-year, business quarter

Looking ahead, as quarter. $XXX was and remain below quarter. XXX% with as in last level posted recorded power to or first cost up our operating our us the This leverage expect $X million to the we bargaining compared suppliers. acceleration, said profit scale significant in serve past gives representing growth at gross year-over-year, important quarters, to an we the in We

in margin profit year-over-year, Following percentage in the first trend, consolidating points the of quarter, expansion XXXX. in XX.X% our higher acceleration almost the a of pace similar third X that reached started quarter the gross

with quarter of provisions lending higher of slightly patterns. upfront of achieved last this to seasonal to as mentioned expansion amount result a due quarters, We with originations previous this result the comparison of our cost as a funding in a the and even provisions of portfolio higher

is efficient ratio, the in fifth It to strategy. low illustrated feature already Nu excluding first XX% America. quarter as a or XX.X%, time best see efficiency most continue share-based all-time level one to another consecutive the would compensation. at of our our This for We reach in efficiency of Latin which operating Holdings rank as players leverage improved defining of by the

we base, benefit see upsell Mexico and as run and at of of deficits. platform's this from geos continue only operating customer our flat cross-sell said, That our which to as results we our new expect leverage, Colombia, as to Nu the the products, earning in full we beginning potential launch features, grow still

big most in into as be cost our fact, in only, income already of place it's which the the Brazil among levels in efficient we the stages to of country, would likely although the still In early running the ramp-up. mid-XXs, looking would at us players

posted to of bottom line moving Finally, net performance. income. We quarter another yet improved

Our adjusted net income our and To model. respectively. $XXX.X us, strategy results and are net income and million to business $XXX.X amounted validating these million, encouraging

are in quarter, in that it's manage This encouraged the business value first opportunities. can While short-term the a by we view long-term the to creation. results aimed our our optimizing additional with reinforce long-term important require at investments we towards

same cost a To On different below two that prior reach to highlight like quarter to review acquire, cost to inflation in we the in are scale, business customers serve would X periods. the cost serve, than which despite cost sustainable our I are persistent across maintaining as with more our viewpoint, low we from million operate the advantages in as quarter as added in to performance four to CAC in first On the remains well countries the yet we $X. pillars.

apples. very aiming risk of credit challenging successfully a risk, apples comparing portfolio, continue competitors and cost outperform in the managed we to when On to backdrop our

shortly. deposit gap against widening the had lastly, provide techs. cost We incumbent funding. And gaps negative we positive banks our more and potential Youssef fin of against closing the began the to detail unlock franchise, of will

and about products, and develop have very excited achieve to internationally our to and costs. best-in-class at in we able are operate very confident expand low scale are We what been ability

to Youssef, President some highlights over Officer, like and who quality. I'd turn to Now the walk our our Chief asset Operating will call of through you

Youssef Lahrech

Thank you you, Lago, and all. good evening to

for XXXX. through first portfolio of you take me quarter of the the quality credit and key Let indicators asset health some of

early-stage Seasonally, point with trends. for start a delinquencies. represents NPL first Let's the quarter high

rest our XX Specifically, to QX line data XX points and the average market. in XX historical NPLs QX to of basis based by rise on from on the with going

our XX This increasing a points XX driven XX our the in to result In ratio basis lower NPL QX X.X%, norm the itself our last from than seasonal improvement at XX historical took of personal year, last XXXX, slightly which trend. mainly came basis is in increase lower points loan of actions fourth than year. by was we portfolio by the quarter

normal flow Our XX-plus ratio to X.X%, as through X.X% increased a delinquency buckets. NPL the from result of

is we purging not so not sort past, do discussed time. which since we loans, a not asset than sales, sold artificially get effect lower over dynamic this stacking have NPLs. metric, As in And of and flow you stock do rather the of get the any delinquent would we XX-plus

around credit respect take advantage it's finances. of directly go quarter, loan synchronized. the a at time to With a X% a the they current the coming of stress it very customers to in counted even and to schedule more have edit over them not better of result as Nu us book renegotiations, with their necessarily payment of making and half who and not and control is due from the loan renegotiation, situation. and convenient at them representative first of make This easy those Many and is of active approximately to reported remained that are of though for This app our their customers past renegotiation. feature

the slide on prior represents basis. line loans six we like-for-like continue industry where outperform the series purple a this income the quarters, and The credit like on graphs gray the by time Much the line card industry. band in for show Nu represents to of NPL

to origination we the in volumes X's primarily the of we by quarter, recorded dynamic expected is provisions in the in front-load growth same accordance with losses grow, our when be pronounced. the life quarters. have related expected the increased lower in quarter. portfolio, of continued continues for the IFRS driven loss the directly following increase as methodology. originate in on first comparative bands, in more loans For income prior the our therefore, advantage the based to Provisions even to provisions credit We The

Compared higher of NIM almost XXX a XXXX. high record times levels X of the basis more points our volumes, X.X%, quarter risk-adjusted to Despite quarter-over-quarter. the with risk-adjusted compared to the ago, even reached another improvement is up provision the NIM year of expanding by pronounced first

perspectives data and Velez, asset CEO, credit these let shared call Having now and on quality, me to Founder his back for the and concluding David over turn our remarks.

David Velez

Thanks, Youssef.

This we place. I leave old, combination XX-years we've wrap very been more differentiated up, As skills we're the that future. amass about able to a some week, and wanted thoughts about at with XX-years, excited what's turning Nu. you and In of we couldn't be for position a to ahead us capabilities

our As most fighting on in working mission Brazil a people, in trusted hard result one brands to loved empower the increasingly of and we our of and Mexico have of and built Colombia. complexity extremely

our reached an have have customers enabling pass in of operating products on we Brazil, significant to better prices, scale and We at that allowing to we now accelerating better can reach efficiency us flywheel. lower a level

We significant strategy. data increasingly have our design piece gathered of intelligence artificial sophisticated infrastructure, and which product key is a data

helping underwriting unique use develop We credit our to and profit built capabilities reinvest have in engine services, geographies. will to a that financial in and we services, verticals us

go is for over build have the believe pieces years. optimization a teams important best one see product assembled of technology American think as And unique company. enables next world, are These finally, And we opportunity consumer long for we as its behalf on plan to more ourselves ingredients we Latin there run, to XX now in the an the we money to platform and we what a decide the of of users. the that

new Money named have category We platform. this

of products, help of across as wealth technology their social to core. a that money mission or users at and consumers the social lending be its is from day-to-day texts make of as investing businesses individuals the to photos fully often same platform platform its such The to determined of optimize that charges borrowing, every unnecessary only its core, and single or and has or way in to or decision investing Money spending. behalf small creation usage the Money optimization entire interest society. welfare fees an a videos economic decisions overspending The goods platform's Not on small has costs the financial platform interactions they is can and most poor also, ever whereby These on suboptimal do be but financial businesses intermediaries. to excessive

for additional amount wealth could imagine the the every right always lowest Just every This society quite help AI this purchasing we advances the methodically and we're now, we how excited very be created if but about some to to a pursuing goods generative make been money-related decision, time will seize cost, of for member was including in that investments have is reaching us vision intend accelerate opportunity. of at this the goal optimist. to

digitally scale, seasons: and go partners. provides financial from customers investing, Our parallel, and use to financial battery. strategy in to digital process, purchase enable brand, financial five the spending, we marketplace platform services we protecting have talent our beyond financial to data, get services and And and comprehensive products the fully the our there best is across to a products continue building that saving,

As progresses. early XX-years, that hope Thank we next truly feel about to for very keep to we you days the We questions you as positive it is take now. we much. and your think would this Nu, vision like

Operator

[Operator I Jorg Officer. Mr. to call now investors start Instructions] and to Investor Relations turn will for the would like Friedemann, session We analysts. over the Q&A

Jorg Friedemann

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

Jorge Kuri

you your your the congrats share and either product and can see fantastic ask getting? mostly like congrats maturities on Is beta it workers? far, you sort to of type Is are to your on I this already share you results type you're Good is big for return what the testing you KPIs? seeing a I of a of and you. for doing also be on are the mostly so INSS? your wanted your it afternoon or can if it everyone. we it If rates a that equity? launched. ARPAC government as business seeing payroll are on would understand up, Thank does What ARPAC? cross-selling you wanted of take? numbers And how doing change us What with some XX-year what that to So about customers loan? anniversary. Him, does payroll do that ramps evidently loans, What that

Guilherme Lago

thoughts, much only had. not to to your recent so important loans try that with to it share from perspective. for financial This But my I'll complement payroll you have the perspective, venture, a is thank then strategic super some experience but entering from I'll Jag pass we question. Look, Lago. a also is Jorge, of to a and us

I realize to think, in payroll is and in that have finance first, loan asset step that single have largest class you back Brazil. the you consumer

billion if about numbers accounts Brazil. the XX% pools database, loans our payroll in Brazilian of entire the and in you region. security in Central profit of and to that It loans the one And largest have if the already our customers take the account we about we the for customers, country them BRLXXX of for of social take Bank they

intend to with collateral more started very have to INSS, collateral So CRP, also about don't progressively fish that with we to loans agreement pension intend after loans But that years is learn product. we and we this need will this retirees, we our is and this we we into no public the so fish for payroll offer as of that the servants. tap expand market. do ball agreement. federal to to We announced payroll follow which large of means And very, outside one-third which

and credit our APR, a economics loans X.X% offer smaller loans X% the unit payroll this use about not requirements They requirement. we the will cost us a those therefore, about low range than would ROEs originations, It's for and also month. provide are will we personal regulatory effect direct-to-consumer loans. expect product or unsecured and payroll rates interest consequence you are the a of with in capital XX% of of per at how have we is industry that to loan do not XX% expect cards of delinquency lowest, personal remove us, XX% XX%. of impact we company? for very brokers, the fact conversely, unsecured But if as that overall that we anywhere capital than The this lowest, the will that need compounding to loans. of And between higher the one Jorge? product we to in do economics the the and and to So regulatory What origination the levels

to personal and I progressive on excited let delinquencies we in reduction overall a our happen this of secondly, recent product. comment customers expect experience Jag, things One, economics: in loan overall. how will two the Therefore, our are our the books; But acceleration with you company

Jagpreet Duggal

From the product you, laid and picture. transparent terms in that are We a set product Lago. of Thank for of still big to rolling question, days. out April. simple up that the launched pricing conditions. I'll direct-to-consumer a perspective, Jorge. product mobile you very said and with the formula out Lago it a as he pretty is Nubank followed Thank just a early complement But and very couple of things still is classic a we launching for sign it

us early we fair extremely what range, the and over optimize our to, which cost of can the flow will to delight we with of simplicity wide the we easy have the of a from transparency started testing a customers, engage But particularly it is how alluded product, pricing spectrum pricing, consignado And that customers the wide is the to we to found are advantage, price. is of understand. time. reactive we who fairly consignado, to of set are is customers, who on Lago What sign-up the of genuine leverage CRP hearing in fact a the with give midst as are

mobile that a combination with has along a simple price, exceeded fair product, of in expectations response a early us given rollout. has stages that of So our the

out We in be are to rollout in right, that that product and but so very we couldn't first encouraged get the being product, there. pricing the the stepwise experience and the careful the or we've process month put more

and and those CRP lending employee -- just the -- through on through federal consignado road our beyond. other employees is are of public agreements. this groups employees first we're public of map, systematically mentioned, Lago year working step map our and road sector payroll INSS As

Jorge Kuri

and Thanks congrats a again. lot

Jorg Friedemann

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

Tito Labarta

the my origination very question saw and taking quality And with right? improve? still to congratulations despite asset loans, on just the think this some in this personal is outlook. quarter, question. asset begin quality will year how good know grow and Hi, the is mean, think the quality how initial to there you the call more strong for results. there's product Thank the on about think room throughout evening, strong feel everyone. a you to asset year But that about I We signs, also My accelerate just acceleration potentially very this deteriorating. to I there. seasonality But forward? I may going this continue as comfortable you

Youssef Lahrech

Tito, thanks question. the This for is Hi Youssef.

with point was what last a would yes, personal a that towards unsecured have at see. what origination. year, like, more the sort uncertainty as of pre-COVID we we recall, you decelerated in middle pretty normalization We lot reference a respect were for time looked cautious. unlike to of book, credit around So we bit There loan cards the didn't post-COVID

period we've on just models, products. of our In And of several of originations. in customers terms a data, of we then, the terms more the time pricing, terms data lot more resilience since more across improvements more made accumulated in in

than strong be And result the observed bit actually quite those most so we to whereby in recent fact, you what things, our performance a is cohorts combined see better all we've what of of of and expected.

lot a us grow confidence bit given this quite to that's more reaccelerate segment. so And and in a

explained on by seasonality. rates an delinquency As is the movement completely aside,

a than bit it's seasonality. fact, better little In

would on seasonal our pattern, for I alone. normalized that say So NPLs expectations exceeded

gives us continue of accelerate of so in lending this going unsecured growth quite confidence category. all a the bit that to And to forward,

Tito Labarta

you, That's Thank can Youssef. Great. Okay. helpful. a If follow-up then. I ask

both So credit accelerate also growth had I lending. you're you cards getting payroll as strong into here, mean, continue and to the growth

ROE You in XX% delivered the quarter. about

really and as lending. profitable, assuming in to far? just your you've to have right, be as quality David go should, the been grow as profitability manage that up that asset to assume continue of, kind book, you doing loan As that, you you that you be loan accelerate so growth mentioned, Is it to fair

Guilherme Lago

are your Lago. in provide in showcased that expect do We profitability at the We Brazil sustainable guidance and in question. we be quarters still we a take to is of our for leverage. way you and Brazilian and There we levels invest have don't optimal for be to there, costs Thanks two improvement if this more will that necessarily structure precisely. is future. for room look But of the they far being overall levels. operations, Tito, continue terms in last terms from at the on where

geos in advantage to invest and to returns at three if look very products you new the take of levels continue the related do similar to which expect we of we operate, features. We expenses and But a structure. development leveraging cost have by our cost in relatively

David Velez

no serve now the one Hi, cost at Tito, the model, branches, and times around not more X,XXX David adding XX it's cost. -- it moment the XX here. cross-sell with discussed customers at efficient to one than as for with a a location to to with that from without are as view about I centralized surprise underwrite I lot the we really to we've people additional investors using just million mean, the of serve benefits frank, banking data a be to the efficiency our about consistent traditional come it's business more acquisition effectively here, with customer not banks think, point decade able of it's that of should very over

year-over-year, All of in in able in XXXX, that equity we're lot several XXXX, a those mature still operations where of And growth for will investing factors we still for we're return new this more generating investing finally a verticals into like drive for operation this Brazil. show in an products are revenues to generate several ultimately a is just lot still that growing of XXXX, and while. Brazil are and -- XXX%

itself is significant is that the return think potentially it's model carries on been we equity continue opportunity still of consistent the at very, advantage. those along all we've there levels with So up. to But pretty a and way say, I ahead I think lot said would that cost driving

Tito Labarta

That’s very clear. Thanks, Thanks, David. Lago.

Jorg Friedemann

the comes Suisse. Daniel Credit from our from And line of next question [Indiscernible]

Unidentified Analyst

us Thank share strong you and on the evolution to compared after reaching right, compared a everyone level, cohorts for could asset very potential be quality on and And ARPAC profitability So insights right? the to indeed material stages. and Colombia, and very with and the early see some the impressive it results, we are see Brazil more would Mexico in if high helpful these you Brazil? Brazil XXXX the opportunity still congratulations to on in maybe

the pains. I you listen may, quote Jag's I about was so that on if right determined that to an questions, also, right, to clients interview And should their XXX%, not curious but ask

So has you. I been how the particular considering each countries? know among versus this Mexico Thank Brazil, wanted to in playing areas out

Youssef Lahrech

is Youssef. Hi, Daniel, this

kind of break Brazil, I and it Colombia into parts. benchmarking So three respect would to Mexico with to

products card all, comparing first -- of three cards across credit So credit just the markets.

a to not Colombia, a One borrowing of as but of also and differences just cards tend Mexico the is, use in main consumers both means see credit you vehicle. payment,

get and revolve, in But higher from to in higher. of turn ARPAC they NPLs caused ROA to both of the to tend comparable which be on you produce basis, return be levels a So rates and -- higher ROE.

a Mexico the we've developed I make very launched both when so the Mexico at X.X been anything, we years faster able basis far actually playbook we're in in that we countries launched that's work to years so our Brazil and look in execute Brazil, The on done the all is platforms the experience actually since if both three or we second point and work Colombia, and would in seeing capitalize and Colombia. well we're on to since

and new to of time. NPS at time and So compared in products market, levels we higher of features see launch faster penetration point even to new same faster Brazil and the

us to comments, to Mexico, allow because changer, credit I'll it's in game third to thing, just to as forward. be and a deposit local And going lot us of the customers we product his to better say out to of a to on to to to us is then credit It's alluded Nu. the going beyond products data everyone, grow moving a more allows to who lending to is the underwrite say card Lago introduction those point able now other account and build going Cuenta, to earlier it base the solid a which yes going offer basic started be yes is, allow card and in gather applies to

Unidentified Analyst

Okay, thank you.

Jorg Friedemann

the of Geoffrey, Geoffrey from line from open. And our question Autonomous. is next line Elliott comes your

Geoffrey Elliott

Hello, me now? can you hear

Jorg Friedemann

we Yes, can.

Geoffrey Elliott

changes about capping What's the the potentially of out discussion some been which your if market works the very comes what know anything? to take very, way I be rates, that, high. revolving can There's you. on Thank Brazil, Perfect. credit card in

Guilherme Lago

for involving the Geoff, about Lago. credit And card this the are topic of in XX% those industry discussions question. in Look, because discussions the BRLX amounted credit In because personal the ongoing XXXX, is accounts card your credit the the highly purchase XX% is expenditures one, reviewing country. Number Thanks of reasons. for many industry two of for for over have view GDP and years It then cards over simple my not participants. the of both is trillion. to complex. very And in Brazil of indeed a the government big complex volume the and economics about highly many Brazil. it's consumption been

consequences major country. industry So have one. number any consumption disruption to the can That's to in the this

in to complex Brazil be two, card happens Number also industry. very credit a

know, most of of that networks, and such the receivables the idiosyncrasies not mention stakeholders versus many, issuers interest creates about no As in in XX% consumers. and industry And XX% merchants, number other cross many bear only this subsidies. acquirers, to as you And has also countries. a

puzzle complex fairly cracked. a So be to

interchange had government and industry very Brazilian interest government you constructive cannot other complexities assimilated the rates, with dialogue that levers fully the comprehended fee, changing participants Brazilian exist and we of industry multiple one opportunity have also the the thing the to has interest others. and then credit believe such and change card the economic in Now rates and and technical that as without engage the

the financial gains and no unfold, when unfold in the are the too in will conclusions those discussions point will very expectations they probably have over as put draw very it's though by balanced even time matter country acquired or this there that to past and in decade. will at is any a So inclusion we at and that not premature been to how competition risk confident

Geoffrey Elliott

something I very And look wow, this about Maybe -- sometimes those and number. But problematic at think think a or XX% the discussions, that. in ROE high. impressive really I do getting clearly, XX% returns do should politicians you that quarter, in Brazil, become is could this think,

Guilherme Lago

I think two say. comments I would

So That's that are very returns market I cost our operations superior we returns stand-alone card of wouldn't have comp. that think are of our first foremost, reflective level a result first advantage the and we credit the here are in the less I that say that we in are returns, Brazil posting operations. have. they much

be we to have and super proven is with government constructive. that one the technical The second had have the discussions

or So would dialogue. on returns anyone the two to of quarters I contaminate one surprised be would if anchor

Geoffrey Elliott

very much. Thanks Great.

Jorg Friedemann

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

Pedro Leduc

the credit guys you, loan still for the much very Thank -- book, card bit question. little growing call so A fast. on you're

or higher is If sort clients? of help much could how limits per clients understand and us usage a new bit you on

to taking up tied a Thank perhaps effort actions second quarter some there? An you're seeing a update loan the to your perhaps bit already card we're out you. that move this book question higher credit And and understand income to that. your growth? on little anything that clients Really lay

Youssef Lahrech

sort look on come and the we latest cohort better by they cohorts, at than have cohort when or NPV NPL Youssef. really the growth. portfolio is of would pleased We're really with the and this say you out, I the performance Pedro, strong pointed see, overall our also a basis, both of at credit as we're card, expectations. on continuing Hi to return at slightly even on

growth So we book and forward. performance really remain the pleased of encouraged of by prospects that with going the

in XX% of credit and share We the is And is XX%. oldest we only of in credit out just I now as customers, product, Brazil even card all and if is XX% mature one crossed cards would our have about or so most our adults which point thing purchase volume quarter.

to beyond lot continuing see to customers. of gain runway above share so continue add And we a and to

comment the our efforts upmarket segment. And on Jag I'll let on

Jagpreet Duggal

you you, Thank question. Pedro, thank for the Youssef.

Let me we the building first provide of on a little bit products. context generally of how approach

product look -- always trying at with customer fairly we any we're address So any standard building product approach to or we're segment new a any formula. in

strong want customers. First, with relationship to we build a our

necessarily we rank things we we and principality Second, approach it. generally don't want happen stack our lead to And think sequence. parallel, monetize. work but of third, can in the how happen They that's about position. a and in to gain Those

comes Nubank account as six customers already other segment to particularly that us. Brazil credit customers, and we customers high-income with focus, When of bank high about the are on in it income in have, already Brazil, products card, a XX a have those

so a those starting have relationship customers. great established of point And we with in already terms an

NPS And customers high-income fact, PRISM for we customers. NPS with In recently, published highest is report quite is segment Bain just what where most its QX. the recent have actually our the that of shows that

segment NPS players where a stronger many segments. a have that's relative Now to other

same on in segment lead the roughly our same. high-income It's the on customer But that NPS ballpark. in is love

to work that as a that we're area establishing see in it's based Nubank we're think So customer encouraged starting or that starting customers confident we the whether And increasingly high-income that with credibility believe with and product credit products, to bank getting seeing of we're and segment. where the they can on our we with. others, that activity, they're in are trust are card

so we that suite that several quarters that's of is products. a is the give our full that map progress increased road and with to happen. starting of last lots to can as make and segment work seeing confidence on lead couple always been start are address And over the card product us that years to we of Credit that usually

Pedro Leduc

Thank it. you. Appreciate

Jorg Friedemann

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

Eduardo Rosman

the over on what a of numbers. very follow-up regarding question quality, Here, underwriting -- of think clients have willingness with the right? a on see true able to been asset period a that time you could but you way to lot your to the doing be skills, that's long Jag Congrats best are right, for also as your and I Brazilian, credit cards, better product, with particularly skills? the just you've which your grow as you high job, that very to maybe is have pay everyone. products with do important are I a you and good explained. principality that underwriting the you the create Hi, particularly know average also quality a since Clearly, the

naturally And also catching seeing loans as same in let's still credit see, very a We personal performance can cards, a we're up. loans. follow-up, not personal happening say, still are right, the on good thing

you do product is or of just that, is think So just Thanks. time the different? matter that a

Youssef Lahrech

Hi, is question. Thank Youssef. Rosman, you this for the

try to points raised. me address let the in turn So you

as just the credit the the since data, Obviously, work loans recent our personal look I is would So the more process, the we experience at like unsecured we credit well. than loans, in the we've in when say and cards. inception to cards see personal methodology, tools a -- developed in playbook, governance its lot

gives compare And developed. level that all advantage I of us. it process don't time, loans we to in of categories when those get and unsecured in kind personal similar of think a But it's at from point it governance leap to a relatively fate extend same the we the see beyond methodologies underwriting of leverage and believe we've would that terms we other

see to that relationship look particular, as primary to do To have principality, we some reached was pay, earlier. evidence willingness at we pay when your on account customers in we a that with mentioning status yes, point we've other willingness like advantage, things Lago bank

that some intangible brand, perhaps exists. of to how a service to of that, some so that, loyalty, of to a those phenomenon to product customers, tangible think into go I NPS. of with having having be And but lot do also that we factors there's in has there's with confidence that a terms do lot with having do And things,

Eduardo Rosman

lot. Thanks Great. a

Jorg Friedemann

from BofA. And Mario our comes from question Pierry line of next the

Mario Pierry

Hi, question. Thanks my for taking guys.

funding you question ask Let me deposits. costs a and on

Lago think next in costs stay XX% of around the funding should that the mentioned I few quarters. CDI

if historically, clients before, your number some remunerating the incumbent shouldn't lower be given lower strategy of a if would right, CDI. that of rate environment XXX% term, in XX% have remunerating like of Just funding CDI. at wondering of change in What longer deposits banks -- you're the because this in costs

be we number. think clients mean don't look you'll that come that And if the I about staying deposit some reason is your which rates has XX% I in know But in look fourth seasonality then down. remunerate the deposit There's So do on. I talk quarter. you your it the per been base -- the to why right when Does willing it you at agree when down? client, trending quarter, higher stable

don't So you. remuneration? Thank the balance you if that lower in I do a know of explains is the function change for clients? What think

Guilherme Lago

your Hi, this Thanks question. Mario, for is Lago.

Let take as well. to them turn me try in

by basically coming it composed behavior customer precise because of that -- XX% the is and have Box for demand the around first, Money at customer this around expect XX% observed remain we do which in behavior. can respect deposits that the will super per CDI So se. We don't CDI. products, we CDI. of And the offer is with to results combination offer XX% funding, the we that It and of compounding of be largely quarters, cost we of with on depends funding the on of cost

is by the fourth remain fourth should we such. and quarter observe is respect the XX% savings inflow do opportunity of large, expect their drop next the and as to We the And believe the are year, it offering of throughout the continuously CDI to now that fourth quarters. reflect the as in we reassess to in value this of seasonally customers to of for do at about proposition XXXX. funding in quarter with we But that us our investments. observed too, quarter slight expect there there and deposits four We there in XXXX, because a usually cost a on remain to of each of so high is

we those lower that value funding this in do change us point is have lever do that features although lead not plans any and will there a short-term actually At we net funding cost there. costs, to time, we appreciate If four positive any proposition material actually value to find a the you customers, we change expect over certainly not should be entertain. to when But will be our that the next quarters. to should

part. I that's the So think first

or the in largely customer to say of seasonal in part, second I a see X% seen. slight of about kind based drop. that X% of want we did quarter deposits on first what The per XXXX, we is have

Brazilian the post X%, In demand the changed inflows in of third fact, XX%. XXXX. in of about of mentioned the And about market, the gained shares. first outflows quarter our deposit And prior as at Money of of of or end the as what of our in demand -- whole have deposits of customer continues first introduction during we X%, the of XXXX, the see, look continue deposits result fact, to behave relevant XXXX by remuneration we quarter some it a dropping if seen to Nubank call, expected. the impact dropped we you average so by per system content quarter do the the we the having any as Box not

Mario Pierry

Great, Lago.

Just briefly then on stay deposits.

If deposits you going as duration this payroll change especially such of and you can go talk forward, the products the longer-term about as loans? how you could into

Guilherme Lago

our to That largely question. through primarily That do duration our the offering loan assets. of we average of book, our as deposits to retail tied And average is decrease own our duration time we the to can absolutely. continue expect credit so do of and the ramp-up we will a of payroll deposits No, increase the customers. great to be

Mario Pierry

very Okay, much. thank you

Guilherme Lago

Thank you, Mario.

Jorg Friedemann

Rafael the comes next from line our And of Citi. Frade question from

Rafael Frade

results. Congrats a have book. Good on your on credit guys. I follow-up evening. card Hi, the

a the the you a quarter. increasing the So profitability paying was of of right? had huge receivables increase this relevant in interest, portion And the

this receivables to we that you would sustainable, room close like taking more increase, I understand to go. should a the So think And be you to right, in level interest have a initiatives to been portfolio? about little some the with just are if that more that

just So trying July? what's in Thanks. understand to going on

Guilherme Lago

credit which is provide of earning we exactly Yes, absolutely, can your fact, attention the that the a question. non-revolving I a the about page in draw in great the within you observe, interest card And breakdown the portion grown to interest-earning portfolio would from the total XX, to credit try book card. of what And said, year. you of total as our of has book X% XX% book in to

So a with fairly very increase, performance. that no and we relevant pleased are

gain managing financing credit their performance? capabilities which financing think through can financing. What is products and source PIX now related to are mostly of the and cards, that customers basically develop through, I new actually we to Boleto features financing

I now a highlight interest-earning majority four, over those of in if which the output this went for also features nonrevolving earning interest to at risk flat. portfolio, incremental is what have the our So well, credit financing we pleasing largely And remained is, has think, resulted vast portfolio those past the that from book, increase. you two in us. is for additional part the revolving five would account I our no look learned very quarters XX%, that what as features while And to X%

Rafael Frade

Thank you, Lago.

I'm close to to rate. I what lower interest rates here, Bank, loans cards, wrong, the very have if the not for are X%, I think that personal look is they on while when understand Brazil curious to Just Central that's according a credit

curious question So probably right? why on available to of taking a credit maybe client the So products client not personal already of personal are is it's I'm that installments that? just card you instead the financing is understand through because loans, answered loans? why And part

Guilherme Lago

loans. X% month, calling financing features think I PIX I'm line in cards, Boleto X% financing of what credit to it's the financing, so that or to within important with personal unsecured rates Yes, are those interest note to more closer per much

Rafael Frade

Okay, that’s you. perfect. Thank

Guilherme Lago

you. No, thank

Jorg Friedemann

And Bradesco. Schroden Gustavo our next question at comes from the of line

Gustavo Schroden

understand, which indeed, on switch congrats numbers Hi, or beat the of cost was revenue on the the fast out opportunity we the decrease and expenses, operating operating like expenses. SG&A generation. a then the main side, and bank finalized And costed And the talking see growing discussions year-on-year the I'd non-revenue-linked here like marketing quarter-on-quarter lot good versus is strong and the for to very we could to the core. despite mean, because expenses, I'd -- Thanks especially over expenses evening, a fact our about results. that the to about I in evolution the I'm also everybody. nominal the the

to this the it marketing as attention draws question important especially quarter, is this thesis? was quarter, my it the is expenses, the adjustment some Or that in our investment in understand said, is decreasing expenses I it bank on, non-revenue keep So did and to continue linked very the to coming you. I or Thank sustainable the in SG&A quarters? think

Guilherme Lago

absolutely, statements, your would I by for expenses, your expenses. of I draw those operating that this is XX% who the not seen, our would period, at yet you have largely eight financial bring over you question. No, detailed which think within I note grew will -- breakdown Gustavo, those a Lago. of two you explanatory very for if operating attention that have But look probably Thanks realize those only items. statements to number

over which over XX%, months. the G&A, past and support have grew you operations, the which and basically XX XX You stayed have by customer months, past flat

and And things And to the few things payroll you if within things there a G&A, are are point, few main non-recurring there your are and recurring. there Gustavo, -- a compensation. share-based are there

Let to me try down. break them

us elimination to Just about the cancellation be level share One from of but do to of deltas going to see brings contingent expense over took coming per basically to the something caused of $XX with through company the no the XXXX. those year, is of XXXX. decrease the right? There or coming $XX not the or of in saving, no expect to to non-recurring. of savings. to is relevant over the clear, main years, award, have continue coming We of the do the CSA in we're course, see further million years. CSA, of million expect was XXXX we It the happened which second-half place CSA, flat elimination something impacts that the that largely G&A That

XX is the past largely months. capped that think, slightly we six level if second recurring. is flat, I And The over down headcount basically that not part, to

cost the that take and XX% the grew fraction materially over base efficiency headcount of our overall you the productivity of If And have at the we XX% XX overall, expect grow about do we the technology will months. the the which at this a as course related. look our best-in-class related XX-month that that the months the at We XX increase We base, is to technologies of past next a company past period. and over cost with seen is sustainable? is between velocity believe we XX% will XX and of payroll over is headcount especially sustainable, adoption processes to of

Gustavo Schroden

Okay, okay. Very clear.

on last Just Q -- I quarter. the mean, example, attention, a the $XX year first higher, the in It for follow-up level the much It's year, is see here, and was that mean, also very lower expenses. to we continue marketing marketing with expenses? clear of should last the this also It's G&A Lago. expenses I our draw about this million -- bank

here just versus total regarding I'm total percentage mean, the expenses revenue. -- soft guidance I And a of asking that it's operating the also,

we reasonable a a saw should the Do that is, that quarter mean, was to I past? something that it think This XX%. you as level or increase in

Guilherme Lago

Gustavo, portion inception marketing the MGM. on the of are our happens I been company. operating since of our acquisition Most and relatively of have expenses, think customer they So expenses, a they small through

by Cup, to we in relatively inflated potentially expect also World we maybe have not which had XXXX. we historically XXXX that marketing. the have So in But been investments in a the low made investment do the see numbers

X% to ratio case between XXXX So you that we XXXX. We be landed are being operating and expect see non-sustainable. as case our total levels to we of have that the should in expenses, was don't the expect X% the think in marketing to overall in efficiency as

to are coming think is the quarters. be that frontier. efficiency In efficiency fact, the we There more we achieved of over the nowhere course near

Gustavo Schroden

you. Thank perfect. Alright,

Jorg Friedemann

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

Neha Agarwala

you Hi, on question. thank follow-ups questions the for taking asked. previously Mostly my

on first, cost. So the

is a Or XX%. see to cost the short-term? a this about it reducing could further level at good which should room may going income And licenses for as with in Mexico, you Do maybe to is So this come geos -- the in should a in operate? investments we you you now to Mexico is should right in your lag? Nu require income and we get more you tax as see launched Colombia, -- increase products upfront more monetization increase the

And my on question second the is segment. high-income

to Your lot NPS of the a having not segment. the comments high-income bit offer highest in segment. surprising about a products there because for are the Was high-income

view? personal the Because the What segment are other ultraviolet require requirements capture main it here? much you have are the are allowing are attention. Is many your what to which that missing more it high-income the just products, things more the more some you would experience? offerings they So in imagine the Is we or segment high-income broader, card? I for

be you that, if much. some Thank that can light you So on would shed so great.

Guilherme Lago

then me on your first question -- Jag cash to you efficiency with ask let with take try help Neha. high I'll question your income. to and Great, on

in take of reached And of only. we XX% a presentation So Brazil on as combined you said, XX% seven a efficiency, on you of if on earnings basis. look level a page the

efficiency or consolidated there for is that expect And expect and to surprisingly we kind the additional the the XX% at can basis. best-in-class both in is in not So basis. Brazil is really don't be of that company more Brazil than achieve. we achieved a efficient room do Brazil consolidated XX% We that holding

to regulated. operations become yes, they generate And revenues, fully increase once should lines, have certainly cost are of ratio. our to I expenses lot And products Colombia, that or once to to Mexico related Colombia, and a features and contribute to efficiency its and that Mexico start they and cost fact, Brazil in yet In we'll that are we any generating in continue not and they revenues. think expenses incurring in

and by of preparing expected year, Mexico fully are end has fact, In already regulated, accordingly. become we be regulated the of all sources this Colombia is and fully to our

Jag, to that additional to revenues going that those offset in you're expenses a more believe be and cost I than in you some manner of company. will will have know detrimental would additional will had there be But overall that the the countries high invested you the that have the income. ratio question also to first a I that not thoughts on question. that there? share the efficiency But was

Jagpreet Duggal

to couple a me Yes, happy let steps. to. Great question. Thank in And it you, Lago. try of address

those, we we is when First of have from at segment all, segment. we as measure products improvements found we high-income in certainly what product-by-product that high-income optimize and targeted we see that offer them the as NPS

We that’s have seen credit that view with our ultra card.

at consignado to will expect product that example, segment. as that We see to products future in actually the actually launch employees, federal today we which tends the for more also targeted skew talked about, high We've for income.

that continue So we go to as trend we'd forward. expect

that mass credit card products high-income and of or that transparency core we related features market. [Indiscernible] as all our to product that the these proposition account see with today, of whether fact customers key pieces bank of are resonate of and our core as measurements use pricing, simplicity, product NPS well also it's The have the value however, ease our

experience with segments. customer combined NPS always and are leading position our it's position high-income just other historically what's made as the with that, in to with customers service, leading the so And we've NPS investments to customer our

increase, them As still relatively on early it's our development products but for our expect and days product customers, designed of focus our principality those with further build high-income we traction dedicated to efforts to part. we with increasingly efforts NPS and them specifically

Jorg Friedemann

question And comes Falavina Domingos the our from from JPMorgan. line next of

Domingos Falavina

Hello, for taking well. you guys. question Thank as the

operation little First, on I at trends you but to But million a -- and number to surprising actually did congrats ballpark kind I last we before $XXX Mexico, million bit didn't -- in -- when $XX the very and just And grow question, February, into more top shift right, provisions $XXX come my see is Mexico line. costs mean look similar guess, stabilizing, the I around basically of million actually. in January, $XXX the basis million. month loan

process You from Mexico? accounting vintage of of case levels So is, first before that the average duration for that's question is losses more what's expense? be Thank long, what's the Mexico kind should that for learn this of accelerating? guess the doing for in how So to the you in we're which in the expected you. question. kind on my kind portfolio of And main second holding provisioning plan I that stable driver are your one same growth thinking

Guilherme Lago

Dom, thank for you so much the question.

slightly X.X back three over Mexico achieved think So step we a customers. I just million, Mexico, years million X.X launched And ago. Mexico less than already has

-- a Last that number cards every had in the we and we over of reach basically, has coming in is mentioned credit year, did kind Mexico last a the of one fairly became the customers And the primarily So call, in Cuenta this it card over KPI after steep growth did credit we launch Brazil see phenomenal beating XXX,XXX over the we across growth. single country. We grow as customers. that of have. issuer weeks, Nu,

So Mexico are find pleased we super so far. in what we with

will you books loss GAAP. see you see with Mexican In number we Now credit local books, do. respect expected provisioning provisioning, only one, just that to the consolidated in the will the

not see same will credit You you IFRS that loss provisioning expected the see. will

industry is look you usually at NPLs, once that whereas the presents are is the terms delinquency the one country we XX-plus. you in in as that our second this at NPL in usually results of we ratios XX-plus have present banking The Mexico,

So not comparison. entirely an apples-to-apples

this do be think underlying And the card to is in portfolio how behave What the we question in I Mexico? the may Now losses is unit economics of credit credit to expect ramp-up Mexico in what a Mexico? the overall delinquency We days par unfold few with do especially for to levels this and coming of of business quarters? at Brazil, expect the the not early reasons. over the be the

in launch repayment basically bands. like Number profile we behavior number of once we Mexico, tests and very that a we one, across enter a customer different do country, pass we systematically foundational

of case credit have cards Mexico is Brazil, delinquency in use means levels primarily that they payments, and the therefore, usually than one in Brazil, in do higher much the second is a are as Mexico in balance are that in higher not customers expect cohorts and some time. The financing, we interest-bearing of will as at a as point means

stage delinquency think levels have third, their go usually early down. I levels higher mature, And once cohorts delinquency they

the see So were you of likely levels higher Brazil, to if higher levels or future. in the and compare delinquency levels Mexico even probably will delinquency with Mexico now you in

the of However, cards as unit if in compelling, compelling economics Mexico are credit more Brazil. not in than

expect The we in we return Nu, Cuenta in Mexico as And and principality get we earn we that higher, than cards have at that not par, credit ones to customer more deposits, equity to and assets the more basically if return finally, that on and the have do to continue then customers expect to cards in credit we are country. expect through Brazil. data on ramp up for

Domingos Falavina

like you'll as or will reaccelerate. about stable But book less six there, assume then follow or you Very more clear, the just monthly and loan Lago. we in months what usually, data

or get on to your something. If in were expense you

Guilherme Lago

question, you Sorry. repeat Dom? Can the

Domingos Falavina

your how you Yes. No, or to a about Brazil, to have see look as is that at if of growth. data, more loan guess portfolio months would in again? ready confident long stable six just expect a experience we like this before behavior or I my you quarter as were like you base monthly year do to question you get

Guilherme Lago

throughout cards No, throughout in of Mexico in credit the we will growth be and resuming the the quarter third second year. quarter

country. increase the Mexico, We expect to have, to in no no by means, our we continue penetration slowdown in product and

Domingos Falavina

Very you. Thank clear.

Jorg Friedemann

And question FT from Craig comes Craig, Partners. of your our from next the Maurer open. line line is

Craig Maurer

then Thanks about and cross earlier in taking high-end business more that. offerings on do The expand to medium will -- And the is, with Sorry To your follow-up think for you owners small the how product you on term market? small business your question. Brazil? into can base degree an in the customer consumers. earlier over pursuing what the now questions overlap to question

David Velez

for Hi, Craig, question. David the here. Thank you

base small actually a significant we business So already have owners. of very

they as ends up were what SMEs being over And much in were Brazil. our to would it because the service base. to lot really X.X business was consumers business A initially have small getting that our We saying. institutions where us owners small in internally it's tell very high actually of bad owners we We went traditional started you million related by income. -- really,

business opportunity product of given saw the an We see has potential. the haven't These cross-selling as start lot it but much we So focus that ahead. business small there significant should, and probably to we them. we are growth as a

owners. product a receiving. And business fit. account, a really We product and have reduced have still significant we're starting great roll to a market We've portfolio savings card we small see where -- around very out for product also we really account, detailed launched credit payments a

excited overall, So about the there. very opportunity

Craig Maurer

the you answer. Thank Okay. for

Jorg Friedemann

and any concludes would and you for you us the participating this profitability. to our access today Q&A are and for path more I Relations there call. you learn with of will session And Thank website I to points. of much with growth our pending today. welcome if all us session about the very being thank this Investor in follow-up like

Operator

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

You disconnect. may now

Nu (NU) 15 May 232023 Q1 Earnings call transcript