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

Brazilian digital bank Nubank reported a quarterly net profit of $1.06 billion in the April-June period, marking a 49% year-on-year increase on a foreign-exchange-neutral basis and surpassing analysts' estimates of $967.2 million. Shares of the lender, which serves over 139 million clients in Brazil, Mexico, and Colombia and is set to expand into the U.S., surged nearly 9.5% in extended trading to approximately $15.25 per share.

Chief Financial Officer Rob Livingston credited higher revenue and improved risk-adjusted net interest margin for the profit boost. Revenue increased by 39% to $5.88 billion, beating analysts' forecast of $5.60 billion, while the risk-adjusted net interest margin rose to 12.4% from 9.9% a year earlier. Livingston stated that this level of risk-adjusted net interest margin is expected to be sustainable in the near future.

The cost of credit, which previously pressured shares, declined to $1.69 billion, though it remains 60% higher than a year ago. Nubank's credit portfolio grew by 37% year-on-year and 5% quarter-over-quarter, reaching $39.4 billion. Early delinquency rates stood at 4.8%, up 0.3 percentage point year-on-year, but down from 5% in the previous quarter.