Nu posted its Q4 and Full Year 2023 financial results, once again breaking records across the most important metrics. Our business model continues to prove its effectiveness, with a sustained low-cost operating platform, growing base, monetization, and profitability. 

Revenues for the quarter reached US$2.4 billion and net income grew to US$360.9 million, for an annualized ROE of 23%. Throughout the year, Nu made significant strides in all priorities for 2023, resulting in its first full year of profitability at the holding level, with US$1.0 billion net income. 

Also in this issue: Elita Ariaz joins Nu as the new Chief Legal Officer; our SME customers can now use Tap to Pay on iPhone; and more. 
 

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Nu registered another period of record financial and operational metrics in Q4’23, reaching 93.9 million customers globally, and US$2.4 billion in revenues in the quarter. With a stable cost to serve (US$0.9) and growing ARPAC (US$10.6), the net income for Q4’23 grew to US$360.9 million for an annualized ROE of 23%. 

The company also posted its first full year of profitability at the holding level, with US$1.0 billion net income for 2023. Throughout the year, Nu advanced on its three priorities for 2023: 

1. Scale the lending business in Brazil: We doubled our origination of personal loans YoY, to US$2 billion in Q4’23, and launched our secured personal loans solutions – SIAPE, FGTS, and INSS loans in Brazil during the year;
2. Grow the share of wallet within the upmarket segment: Increase of 104% in credit card purchase volume for the Ultravioleta segment from Q4’22 to Q4’23, doubling the customer base in this segment;
3. Ramp-up local-currency deposits in Mexico and Colombia: within two months, Nu Mexico saw its deposits quadruple in Cuenta Nu, to a total of US$1 billion at the end of 2023, as a result of a strategic increase in yield. The product was announced for Colombia in early 2024 and is expected to propel our growth in the country.

The numbers reinforce the earnings-generating power of Nu’s business model, based on a solid and low-cost digital platform, with a strong focus on customers. This combination translates into better products, a growing base, and increasing engagement (activity rate at an all-time high of 83.1%) and principality (61%, also a record), which boost revenues and increase profit margins, feeding a successful growth flywheel. 

Q4’23 and FY’23 Results Highlights:

Financial:

• Global revenues
  • Q4’23: US$2.4 billion (57% YoY increase FXN)
  • FY’23: US$8.0 billion (63% expansion YoY FXN)
• Net Income
  • Q4’23: US$360.9 million
  • FY’23: US$1.0 billion
• Annualized ROE
  • Q4’23: 23%
  • FY’23: 18%
• Interest-earning portfolio: US$8.2 billion (91% increase YoY FXN)
• Total deposits: US$23.7 billion
  • Loan-to-deposit ratio: 34%

Operational and business

• Customers – 93.9 million
  • 4.8 million added in Q4’23 
  • 19.3 million added in FY’23
• ARPAC – Q4’23: US$10.6, with more mature cohorts at US$27
• Cost to Serve per Active Customer – Q4’23: US$0.9 
• Activity rate – Q4’23: 83.1%
• Primary banking relationship for over 61% of the monthly active customers who have been with Nu for over a year
• Consumer finance asset quality in Brazil – Q4’23: 4.1% for 15-90 NPL ratio | 6.1% for 90+NPL 

New Chief Legal Officer. Elita Ariaz is now officially Nu’s CLO, after completing a garden leave following her tenure at Santander Brazil. With over 20 years of experience in the sector, including previous roles in the US, she will lead Nu’s Legal, Compliance, and Public Policy teams. 

Open Finance leader. Nu closed 2023 with the highest number of consents among financial institutions in Open Finance, a system through which financial institutions in Brazil are allowed to share customers’ financial data with their permission. The data allows Nu to build better products, such as Overdraft Alerts, which has allowed customers to save over US$1.2 million in 10 months by warning them of accounts going into overdraft.

Impact in Mexico. Nu Mexico has improved the lives of over 90% of its customers beyond their finances, according to a local market study conducted by the company. Living and family conditions were the main areas of improvement, followed by health and security. “This information helps us continue designing products tailored to the real needs of our clients” stated Iván Canales, Nu Mexico's GM.

Tap to Pay on iPhone. Nubank’s SME customers in Brazil can now use their iPhones in place of POS terminals, with the launch of Tap to Pay on iPhone. This feature represents up to 30% in savings in fees compared to traditional terminals, with no costs related to joining, renting, or maintenance.

Investment diversification. Investment customers in Brazil have two new options to add to their portfolios. Nu Selic Simples was developed by Nu Asset, and most of its allocation is on post-fixed public bonds from the National Treasury (LFTs – Financial Letters of the Treasury). The second addition, CDB IPCA, is a fixed-rate investment option that helps protect investments against the country’s inflation. 

Portfolio campaign. Actor Leslie David Baker stars Nu’s most recent marketing campaign. The seven-minute comedy short film showcases how our products are designed to make customers’ lives simpler, by following Baker’s quest to find the balance between organizing his financial life and having the time to enjoy retirement in Brazil.

Nu’s record-breaking results for Q4’23 and FY’23 can be attributed to our business earnings-generating formula: growth in the customer base, with an increase in engagement (and consequently ARPAC), combined with an efficient cost structure, explained CFO Guilherme Lago. 

“As we work towards surpassing the 100 million customers milestone in 2024, we are investing heavily in new growth avenues to keep transforming potential into profit”, said David about the expectations for this year.

The strategic increase in the yield of Cuenta Nu in Mexico propelled deposits in the country, which surpassed US$ 1 billion at the end of 2023.

“We’re now in the top five. We see a path towards becoming the leading financial institution in Latin America and one of the leading financial institutions in the world over a number of decades”, said David in an interview with the Financial Times about our growth opportunities and challenges.

Jörg Friedemann, Nu’s Investor Relations Director, talked to IR Magazine about how the IR team is working to transform itself into an internal think tank, carrying out in-depth analyses on different topics that can bring insights to the company.

The waitlist for Cuenta Nu in Colombia is experiencing even faster growth than the impressive figures in Mexico, showcasing the success of our platformization efforts. GM Marcela Torres spoke to El Colombiano in depth about the product and our strategy for the country. Additionally, Marcela was listed by Forbes Colombia as one of the “24 personalities to follow in 2024".

Nu Colombia is the official sponsor of a professional cycling team formed by top athletes, with Rodrigo "Roro" Contreras having already won the Tour Colombia 2.1. “We see in cycling a metaphor for our history and our values. It's the human experience in its highest expression, the daily challenges that push us to challenge the status quo. An individual sport turned into a collective passion", said Marcela.
 

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