NU reported numbers after close which, after some heroic recent quarters, had some more moderated trends. Revenue was in-line - or a slight miss depending on which consensus you look at - originations slowed, loans missed expectations, whilst NPLs were up as expected (partly due to seasonality). NII was in-line with our expectations. Notably Mexico continues to run an ever lower loan to deposit ratio, with deposit success far outpacing loan expansion at this stage.
TIM Q2s: As with Claro and Vivo, TIM delivered a robust set of Q2 results. Both revenue and EBITDA beat consensus by ~1% though at EBITDAaL TIM outperformed with a +5% beat, supported by stable Leases compared to Q1. Service revenue maintained consistent growth in-line with previous quarters (~7% y/y) from faster postpaid, and maintained negative prepaid. H1 EBITDA (and revenue) continued to trend slightly above the FY24 guidance. Despite management’s confidence in achieving targets for the year...
Brazil’s Pix is the fastest adopted payment system globally and its Nov 2020 launch was nothing short of revolutionary, practically making cash a thing of the past. By contrast, Japan’s road to a cashless society has been a more winding one. In this article, which considers Japan’s approach in a global context, Lindsay Whipp contrasts the two governments’ top-down strategies for promoting digital payment.
NU reported Q3s after close last night. Financials were generally a touch ahead of formal sell side expectations (revenue 4%, NII 3%) though the market seemed to be geared up for a stronger beat. The net loan book, furthermore, missed by 8% and was a focus of concern on the earnings call; the miss coming from a combination of FX (sell side not seemingly capturing quarter-end BRL weakness), a small accounting change (>1% of the miss), but ultimately the anticipated sequential acceleration not qui...
NU reported strong Q2s after close. Revenue was 6% ahead, driven by better yields on solid loan book expansion. Pricing is stable, and rather the mix effect is favourable – a combination of rising Personal loan contribution, as well as a rising interest bearing component to Credit cards (PIX financing as opposed to revolving).
NU reported Q1s after close. Revenue continues to grow rapidly at 112% y/y (constant FX) and came in 3% ahead of street estimates on rising loan growth and a higher yield than expected (on higher credit card yields and a higher Personal loan mix).
March inflation in Brazil of 4.65% y/y, published this week and coming in below expectations, should be taken well in the beaten up regional Fintech space – most notably for the Payment companies. Our focus in this note is, however, more on the lending side and on Nubank, where we see better momentum on lending into Q1, further upside from Payroll lending (introduced into estimates for the first time) and an attractive relative valuation (2-year forward PE).
NU reported a strong profitability beat in Q4 driven principally by lower than expected funding costs as its new remuneration strategy (“money boxes”) plays out more quickly than we anticipated; this was the principal driver of our upgrade in late Summer-22.
We held a call with NU Head of IR earlier this week. We reflect our thoughts in updated estimates which now also reflect the pre-paid interchange cut from 1 April 2023 (which isn’t new news). Areas in focus include 1/ Yields (up), 2/ Loan book (broadly unchanged), 3/ Fee income down (lower than expected Q4 TPV being flagged by payment companies), 4/ Deposit remuneration (falling as % CDI), 5/ CDI nudged up given the move in forward rates. We have brought net income expectations down, and our tar...
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 c...
Nubank last week announced a change to deposit remuneration, essentially looking to carve out deposits into those which are investment earning (which customers opt into) and those which are float (which will only earn a yield from after 30 days of holding).
We publish today our take on the LatAm Telcos Q1 earnings season. As well as our broader note which picks out key themes and market by market insights, we also publish for the first time a summary of our database which looks at key financials and operational KPIs on a country level basis - see LatAm Telcos Quarterly Databank.
We held a call with Nu Holdings (Nubank) CFO, Guilherme Lago last week. Despite a tough macro backdrop and with Fintech peers easing off the throttle on originations (Inter, PAGS), Guilherme appears more upbeat about 2022 prospects.
Latest data from the Brazilian Central Bank (January) shows prepayment spreads rising. There remains some uncertainty over whether all the payment companies contribute to this data (evidently not) but indicatively it’s moving in a direction which is consistent with the latest commentary from the companies on pricing (we spoke to STNE/PAGS/MELI this week).
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