Brazil’s Nubank has repeatedly beat market expectations in 2023, posting impressive profits while expanding its client base.  

Its recent bounce back comes after a challenging 2022 for Latin American’s largest digital bank, whose results had been weighed down by generalized market weakness in the wake of its December 2021 stock listing in New York.  

After posting losses of almost $75 million in the first half of 2022, the bank reported profits of $366.6 million in the six months to June 2023 – smashing all expectations along the way.  

Nubank’s profits beat the market consensus by a whopping 42% in the second quarter., according to BTG Pactual. Its performance was boosted chiefly by stronger than forecast growth of the credit portfolio, which reached 63% year-on-year, and tight cost controls. Return on equity, meanwhile, reached 17% in the first half.  

Deposits grew by 48% on an annual basis in what the analysts called “a positive surprise”. And the efficiency ratio dropped from 58.2% to 35.4% in the space of 12 months. 

The growth in its client base has also taken the market by surprise. With the net addition of an average of 1.5 million clients a month, Nubank closed the first half with 77.7 million clients in Brazil, taking the fourth place in the ranking of the country’s largest banks. In Latin America as a whole, the number reached 83.7 million clients after a 18% annual increase. Nubank also has operations in Mexico and Colombia. 

The improved results turned equity investors sanguine on the bank’s prospects. The Nu Holdings stock, which was traded amid much fanfare at $11.85 by the time of its New York IPO, slumped to a nadir of $3.47 in June last year. This year, however, the recovery has been swift, with the stock more than doubling in value to reach $8.23 by mid-October.