Nubank's profit crosses $1 billion, beating estimates; shares jump

Brazilian digital lender Nubank reported a quarterly net profit of $1.06 billion for the April-June period, a 49% increase year-on-year and surpassing the $967.2 million estimate from Visible Alpha. Following the news, the lender's shares jumped 9.5% in extended trading to $15.25 each. The profit surge was attributed to higher revenue and improved risk-adjusted net interest margin.

Nubank's revenue rose 39% to $5.88 billion, outpacing the $5.60 billion forecast from Visible Alpha. The risk-adjusted net interest margin climbed to 12.4% from 9.9% a year ago. CFO Rob Livingston mentioned that the current NIM level is sustainable and that the improvement would have happened even without Brazil's Desenrola debt-refinancing program, which accounted for about 5% of the bank's total cost of credit.