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Brazil's Nubank aims to triple Brazilian clients, boost profitability

Credit: REUTERS/Ricardo Moraes

By Aluisio Alves

SAO PAULO, Sept 8 (Reuters) - Brazilian digital bank Nubank plans to triple its client base in Brazil organically by focusing on areas in which it can be competitive, Chief Executive David Vélez said in an interview with Reuters on Thursday.

Vélez also confirmed the fintech's interest in acquisitions, two weeks after hiring former Amazon.com Inc executive Alex Ceballos to lead a new mergers and acquisitions division.

Vélez said acquisitions should target complementary businesses, but noted that Nubank does not want large deals and sees organic growth as its main driver.

Nubank has been gradually increasing its offerings, including digital accounts, insurance and investment products.

Revenue per client rose 105% in the second quarter compared to a year earlier, Vélez said. Over the last 12 months, the number of clients rose 51% to 62.3 million, including 50 million who remain active.

Vélez said Nubank has the potential to triple the number of clients, reaching a larger portion of Brazil's 215 million population.

While Nubank plans to increase its assets, the CEO said that could be done through partnerships, such as having Creditas offer auto loans or mortgages to Nubank clients.

Nubank will avoid areas where it is not competitive, Vélez said, such as corporate services, and it does not want to expand beyond Brazil, Mexico and Colombia.

Limiting growth to specific areas will help Nubank reach a profitability similar to that of its retail banking competitors, with returns on equity around 20%, Vélez said. (Reporting by Aluisio Alves; Writing by Tatiana Bautzer; Editing by Richard Chang) ((tatiana.bautzer@tr.com; Tel: +55-11-5644-7756; Mob: +55-119-4210-4173; Reuters Messaging: tatiana.bautzer.thomsonreuters.com@reuters.net)) Keywords: NUBANK OUTLOOK/

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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