New Street: NU US (Buy, TP: $8.3, +90%) Nu Holdings Q3 22 – Quick Take: Financials beat, NPLs and loan book reflect uncertain macro
Nu Holdings reported solid financials after close, beating consensus by 4.5% at revenue and by 12% and 14% at NIM and gross profit, respectively. Loan growth continued to slow, driven by a sequential decrease in personal loans, though yields came in strongly ahead. NPLs on the 15-90 day lead indicator were up 50bps, suggesting a deterioration in asset quality as we have seen elsewhere this quarter. We upgraded NU to a Buy in July on the back of changing deposit remuneration, with a 98% funding cost for Q2 falling to 91% as of September and with much further to go through 2023 we believe.
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