Digital lender Nubank posts slightly adjusted profit miss in first quarter

By Andre Romani

SAO PAULO, May 13 (Reuters) - Nu Holdings NU.N, the listed entity which runs Brazilian digital lender Nubank, posted on Tuesday a 37% increase in its adjusted net profit from a year earlier, slightly missing analysts' estimates.

Nubank, which counts Warren Buffett's Berkshire Hathaway BRKa.N among its shareholders, reported a $606.5 million adjusted net profit for the quarter ended in March, while analysts in an LSEG poll had expected a $630.5 million profit.

Nubank's result, which was positively impacted by $47 million before taxes due to a revision of fiscal credits, also came in under a company-provided consensus of $614 million. On a FX-neutral basis, it jumped 62% year-on-year.

The company has gained its seat among Brazil's major banks with a full-digital approach during last decade, pushing it to be the most valuable lender in Latin America by market cap, a position the company lost again this year to Brazilian peer Itau Unibanco ITUB4.SA.

Chief Financial Officer Guilherme Lago told Reuters that the profit increase in the quarter was mainly due to greater profitability in its main market Brazil, with a larger personal loan portfolio and greater earnings leverage.

Nubank, which has near 119 million customers in Brazil and its younger markets Colombia and Mexico, said its total revenue came in at $3.2 billion, increasing 19% year-on-year.

Annualized non-adjusted return on equity stood at 27%, increasing 4 percentage points from a year earlier, but dropping two points from the last quarter of 2024.

"A weak print by Nubank," Citi analysts wrote in a note to clients, citing net interest margin pressure and Colombia's weighing on revenue and the bottom line.

Nubank ended the quarter with a $24.1 billion credit portfolio, up 23% from a year earlier.

Meanwhile, its early default ratio fell 0.3 percentage points year-on-year to 4.7%, while the over-90 days ratio reached 6.5%, rising from 6.3% in the same quarter last year.