Brazilian digital lender Nubank's (NU.N) quarterly net profit surpassed $1 billion for the first time, beating analysts' estimates, and sending shares higher late on Thursday.
Nu Holdings posted net profit of $1.06 billion for the April-June quarter, a 49% rise year-on-year on a foreign-exchange-neutral basis and above the $967.2 million Visible Alpha estimate.
Shares in the lender, which serves nearly 139 million clients across Brazil, Mexico and Colombia and is preparing to debut in the U.S., jumped some 9% in extended trading to about $15.25 each.
The profit increase was driven by higher revenue and an improvement in risk-adjusted net interest margin, Chief Financial Officer Rob Livingston, who assumed the role last month, told Reuters.
Net revenue increased 39% to $5.88 billion, beating the $5.60 billion expected in the Visible Alpha consensus, while the credit portfolio stood at $39.4 billion, a 37% growth year-on-year and a 5% rise quarter-over-quarter.
Credit portfolio "did slow a little bit sequentially in terms of the growth rate relative to the first quarter," Livingston said, but noted the move came from an unusually strong recent expansion.
Early delinquency rates came in at 4.8%, up 0.3 percentage point year-on-year, but down from the 5% in the first quarter.
Meanwhile, cost of credit, which weighed on shares last quarter after rising to $1.79 billion, declined to $1.69 billion, though it remained 60% higher than a year earlier.
Livingston said Nubank benefited from Brazil's Desenrola debt-refinancing program, launched this year to help individuals renegotiate debt. However, he said the improvement would have occurred even without the program, citing seasonal factors and noting that Desenrola accounted for only about 5% of the bank's total cost of credit.
