Nubank appoints new president and surpasses Santander in clients

Brazil’s Nubank announced on Monday, August 15, that one of its key executives would accumulate the new position of president, assuming a part of the duties of founder and CEO David Vélez, to whom he will report.

The digital bank said Youssef Lahrech, the company’s chief operating officer for two years, will “directly manage the operation, budget, and performance of key metrics for global products, global platforms, marketplace operations, and corporate functions.”

Other Nubank executives, including Brazil co-founder and president Cristina Junqueira, will report to Lahrech.

“David Vélez will continue to guide and maintain oversight of Nubank’s operational management, leadership, culture, and reputation,” the company said. Vélez “will prioritize long-term strategy, including product development, expansion into new markets and new acquisitions,” the institution added.

With this, the company will create the director of corporate development position, who will report directly to Vélez.

A week after the bank announced the departure of singer Anitta from its board of directors, the announcement came just as Nubank released its second-quarter results, with an adjusted net income of US$17 million. The average forecast of analysts heard by Refinitiv was US$23.3 million.

The group created in 2013, which debuted on Nasdaq last December, has been facing increasing scrutiny from analysts at a time when the combination of high interest rates and inflation has put pressure on household incomes in Brazil and dictated a more skeptical market stance toward high-growth companies.

However, Nubank showed a new round of expansion in the second quarter, both in the customer base and revenue. The bank closed June with 65.3 million users, including Brazil, Mexico, and Colombia, a 57% increase over 12 months.

Total revenue grew 230%, to US$1.2 billion. The average revenue per customer rose 105% year on year, to US$7.80, while the average cost per customer was US$0.80, stable.

In Brazil, its main market, Nubank reached 62.3 million customers at the end of June, up 51% over a year earlier. “This likely positions Nu as the fifth-largest financial institution in Brazil by the number of customers,” the bank said in a statement.

Although it did not name names, Nubank surpasses Santander Brazil, which recently disclosed that it had 56.1 million customers at the end of June.

CREDIT

One of the main points of attention of investors regarding the balance sheets of Brazilian banks in the second quarter and the quality of Nubank’s credit portfolio also showed deterioration, with the rate of defaults over 90 days rising from 3.5% to 4.1%.

According to Vélez, however, as the index of 15 to 90 days was stable at 3.7%, the bank has room to continue expanding credit operations, although it is watching this operation “very carefully”, given the scenario of higher interest rates.

Without citing numbers, Vélez also said that Nubank had had good evolution in fundraising, even after it announced last month that customer deposits would no longer yield during the first 30 days.

“It’s better for the clients and us,” he told Reuters, claiming that the incidence of IOF took a good part of the return of the first 30 days.

With information from Folha de S.Paulo