Nu keeps scaling, but the bar is high
- Nu now serves 139 million customers, with Brazil at 118 million and Mexico above 16 million.
- The model is simple: win customers cheaply, become their main bank, then sell more useful products over time.
- Credit quality bears watching, as Brazil 90-plus day problem loans ticked up to 6.9% in Q2 2026.
- Nu is moving upmarket and into small business, including 6.8 million SME customers built with zero customer acquisition cost.
- The big worry is price: the business is growing fast, but the stock leaves little room for mistakes.
A huge bank, still early
Nu is one of the clearest scale stories in banking. It has 139 million customers, and Brazil alone is above 118 million. Mexico has crossed 16 million customers and received its official banking license, making Nu one of the largest financial institutions in that market by customers.
The bull case is that Nu keeps turning a giant user base into a deeper bank. The company just crossed $1 billion in quarterly net income. Management says 61% of active customers now treat Nu as a primary banking relationship, meaning a large share of money moves through Nu. High-income purchase volume is growing fast, and the company has built 6.8 million SME customers with zero customer acquisition cost.
The bear case is that growth is already expected. Rapid unsecured lending creates large upfront IFRS 9 provisions, which are expected credit loss charges booked before the full revenue arrives. U.S. expansion, return-to-office costs, and AI spending can also pressure efficiency, even though management capped the U.S. drag at less than 100 basis points for 2026 and 2027.
For now, the thesis is positive on execution but careful on price. Nu is proving that a digital bank can scale across Latin America. The stock needs that execution to stay very strong.
Cheap customers, deeper banking
Nu makes most of its money from interest income on credit cards, loans, and other financial assets. In 2025, interest income and gains net of losses on financial instruments were 85.2% of total revenue. Fees and commissions, mostly tied to cards and other services, were 14.8%.
The engine starts with low-cost customer growth. Nu reported customer acquisition cost of US$7.4 per customer in 2025. Once a customer joins, Nu tries to become the main bank, then cross-sells cards, savings, loans, payroll loans, insurance, marketplace products, travel, mobile service, and business credit. In 2026, the company launched Croma, a subscription tier for its best customers.
The cost side is the edge. Nu has no branch network, runs on a digital platform, and reported monthly average cost to serve per active customer of US$0.8 in 2025. That lets the company serve many lower-balance customers while still making the math work.
Credit is where the model can break. Nu is expanding unsecured credit and secured lending, but provisions are front-loaded under IFRS 9. The company is using AI models, including nuFormer, to improve underwriting, but the proof must show up in delinquency and loss data over time.
What Nu sells
Credit and prepaid cards
Cards are the daily-use product that brought many customers into Nu. Nu earns card fees from merchants and interest from customers who revolve or refinance balances. Nu also recently launched Croma, a subscription tier for super core users.
Savings accounts and deposits
Deposits fund credit growth and show customer trust. Nu reported US$41.9 billion of deposits at the end of 2025.
Personal loans
Loans are a major driver of interest income. They also create credit risk, especially when unsecured loan growth is fast.
Secured lending
Nu offers public payroll, INSS, and FGTS loans, but has slowed private payroll lending. Management cited first payment default rates of 10% to 15% in that market, which is high for a product that should be secured.
SME banking and credit
Nu has 6.8 million SME customers and a growing base of SME credit cards. This is a large cross-sell base that management says was built with zero customer acquisition cost.
Marketplace, travel, and mobile service
NuMarketplace, NuTravel, and NuCel give Nu more ways to earn fees and keep customers in the app. These products are still less central than cards, deposits, and loans.
Colombia subscription card
Nu offers a subscription-based credit card in Colombia. The 2025 Form 20-F says it helped increase approval rates while keeping healthy unit economics.
Brazil still pays the bills
The mix uses Nu's 2025 Form 20-F geographic revenue disclosure. Nu reports one operating segment, so these are geographic revenue shares, not separate operating segment profit pools.
What could go wrong
Credit losses rise again
High impact · Medium oddsNu is growing credit cards and loans quickly. Brazil 90-plus day NPLs, meaning loans more than 90 days late, ticked up to 6.9% in Q2 2026. This can worsen if customers weaken or underwriting misses risk. Fast unsecured growth also creates large upfront expected credit loss charges.
Growth eats efficiency
Medium impact · Medium oddsThe low cost base is central to the story. U.S. entry work, AI investment, and return-to-office costs can push expenses higher before revenue arrives. Management says the U.S. drag should stay below 100 basis points on the efficiency ratio, but that cap needs to hold.
Mexico regulation cuts economics
Medium impact · Medium oddsMexico is a key growth market, but regulators and lawmakers can change the rules. Proposed caps on credit and debit card interchange fees would pressure fee income. Nu also faced an extraordinary Prosofipo contribution of about US$25 million as the largest Sofipo in Mexico.
Private payroll lending disappoints
Medium impact · Medium oddsPayroll lending should be safer because payments are tied to wages. Nu is being careful because management saw 10% to 15% first payment default rates in the market. If Nu grows this product too fast, a secured product could still create unsecured-style losses.
The valuation leaves little cushion
High impact · Medium oddsNu has excellent growth, but investors already expect a lot. If customer growth, credit quality, or margins slow at the same time, the stock can reset even if the company remains strong. This is the main reason the public view should be excited about the business but careful about the price.
In one breath
How does Nu Holdings make money?
Nu makes most of its money from interest on credit cards, loans, and financial assets. It also earns fees from card use, late fees, insurance commissions, marketplace activity, and other services.
Is Nu only in Brazil?
No. Brazil is the core market, with more than 118 million customers. Nu also operates in Mexico, where it has crossed 16 million customers, and Colombia, where it serves 5 million customers.
Why do investors worry about Nu credit risk?
Nu lends through cards and personal loans, including unsecured loans. If customers fall behind, Nu must record expected credit losses, and rapid loan growth can make those provisions large before the revenue fully shows up.
What is the U.S. opportunity for Nu?
Nu received conditional OCC approval for a U.S. national bank charter. The U.S. is best viewed as a call option for now, meaning a possible future upside that should not be treated as guaranteed.
Sources and research notes
This page combines Finn's company research with public filings and other cited materials. The thesis is reviewed when material company information changes; Finn Scores use the latest available scoring data.
- Thesis reviewed
- August 30, 2026
- Score data
- September 6, 2026
- Reviewed by
- Shivam Bharuka
Comparable Banks - Regional companies
Companies near Nu Holdings Ltd. in Finn's Banks - Regional industry ranking.
