Nu Takes On More Credit Risk as Profit Hits a Record

What happened

Nu Holdings reported record third-quarter net income of $1.09 billion, up 31% on an FX-neutral basis, and revenue rose 37% to $6.26 billion. Its credit portfolio expanded 33% to $41.6 billion, while the 90-day delinquency ratio increased to 7.3% from 6.9% in the prior quarter.

Confirmed

Global impact / market context

Faster lending can support revenue, but rising late payments may increase loan losses and pressure profit per sale. Nu says underwriting changes partly explain the delinquency increase, and 234% coverage of 90-day bad loans provides a buffer, though it does not remove credit risk.

Analyst inference

The results combine strong growth with signs of higher credit risk: deposits rose 19%, while 90-day delinquencies increased and risk-adjusted net interest margin fell to 12.1%. The reported 3.30% premarket rise shows investors initially responded positively to the results.

Analyst inference

What to watch

1. Track whether 90-day delinquencies continue rising and whether bad-loan coverage remains sufficient, since further deterioration could require more loan-loss costs and reduce earnings. Analyst inference
2. Compare future lending growth with overdue payments and the risk-adjusted net interest margin, which measures lending returns after expected credit losses, to judge whether expansion remains profitable. Analyst inference
3. Watch for the fourth-quarter efficiency ratio to rise as Nu expects, and whether its 2026 forecast of 19% to 19.5% remains better than its earlier expectation of about 20%. Confirmed

Evidence

• gurufocus.com