Buffett-backed Nubank’s quarterly profit surges amid robust customer demand

(Reuters) – Nu Holdings Ltd reported a surge in fourth-quarter gross profit on Tuesday, as customers flocked to the core lending products offered by the Warren Buffett-backed digital banking firm.

The Brazilian lender has so far been insulated from the downturn in the global banking industry as consumers in its key domestic Latin American market continue to gravitate towards Nubank’s core offerings, such as credit cards and personal loans.

“Despite the macroeconomic challenges of 2022, Nu was able to beat every key metric: maintained accelerated growth, gained share in products and markets,” said founder and Chief Executive David Vélez in a statement.

Nubank added 4.2 million customers in the fourth quarter ended Dec. 31, and 20.7 million in 2022, closing the year with a total of 74.6 million customers globally.

Monthly average revenue per active customer (ARPAC) increased to $8.2, expanding 37% over the prior year on an FX neutral basis.

The digital lender’s gross profit surged 137% to $578.3 million in the fourth quarter.

Still, Nubank, which listed in New York in a blockbuster market debut in late 2021, saw its shares lose more than half their value last year, amid turmoil in the markets and concerns around the stability of new-age financial firms when faced with harsh macroeconomic headwinds.

Nubank’s total revenue for the fourth quarter was $1.45 billion and a record $4.8 billion for the full year.

On an adjusted basis, the bank reported net income of $133 million in the quarter ended Dec. 31.

(Reporting by Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri)

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