Latin America Equity Research
January 2024
Nubank – Deep Dive
Latin America Financials
Yuri Fernandes AC
(1-212) 622-3400
yuri.r.fernandes@jpmorgan.com
J.P. Morgan Securities LLC
Guilherme Grespan
Marlon Medina
Fernanda Sayao
(55-11) 4950-3058
guilherme.grespan@jpmorgan.com
Banco J.P. Morgan S.A.
(52-55) 5283-1665
marlon.medinarobles@jpmorgan.com
J.P. Morgan Casa de Bolsa, S.A.
(55-11) 4950-6588
fernanda.sayao@jpmchase.com
Banco J.P. Morgan S.A.
See the end pages of this presentation for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may
have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision.
Latin America Financials: Valuation Comparables
Brazil
Chile
Mexico
Colombia
Peru
Non-Banks
JPM
JPM
Market Cap.
Last
Price
P/E
P/BV
ROE
EPS growth
Dvd. Yield
Total Return
Analyst
Rating
US$ million
Price
Target
24E
25E
24E
25E
24E
25E
23-25E
24E
24E
Banco do Brasil
Fernandes
Ov erw eight
31,952
55.6
62
4.3x
4.4x
0.8x
0.8x
21%
18%
2%
9%
21%
Santander Brasil
Fernandes
Neutral
22,438
29.9
33
7.6x
6.3x
1.2x
1.1x
16%
18%
32%
7%
17%
Bradesco
Fernandes
Ov erw eight
31,229
15.5
19
6.9x
5.8x
0.9x
0.9x
14%
15%
24%
7%
30%
32.4
33
Itau Unibanco
Fernandes
Ov erw eight
59,096
8.0x
7.4x
1.6x
1.5x
21%
21%
13%
7%
9%
Nubank
Fernandes
Ov erw eight
42,304
8.9
10
24.4x
16.7x
5.3x
4.0x
24%
28%
58%
0%
12%
Inter
Fernandes
Neutral
1,911
23.7
27
12.4x
10.9x
1.2x
1.1x
10%
11%
62%
0%
14%
ABC
Fernandes
Neutral
1,100
23.1
27
5.5x
5.0x
0.8x
0.7x
15%
15%
9%
7%
24%
Banrisul
Fernandes
Neutral
1,124
13.5
12
5.1x
4.2x
0.5x
0.5x
11%
13%
26%
21%
10%
Banco de Chile
Fernandes
Neutral
11,077
21.9
20
10.2x
9.6x
1.8x
1.7x
18%
18%
-10%
7%
-1%
Santander Chile
Fernandes
Neutral
8,772
18.6
20
10.3x
8.0x
1.6x
1.5x
17%
19%
38%
4%
11%
BCI
Fernandes
Neutral
5,154
23,795
25,000
7.4x
6.2x
0.7x
0.7x
10%
11%
-1%
5%
10%
Itau Corpbanca
Fernandes
Ov erw eight
2,059
8,652
14,300
5.0x
4.5x
0.5x
0.4x
10%
10%
2%
7%
73%
166.9
195
8.4x
7.9x
1.8x
1.7x
22%
23%
8%
9%
26%
45.1
31
9.2x
9.1x
1.1x
1.0x
13%
12%
3%
0%
-31%
GFNorte
Fernandes
Ov erw eight
28,070
GFInbursa
Fernandes
Underw eight
16,059
Gentera
Fernandes
Ov erw eight
2,032
21.9
26.0
6.1x
5.3x
1.2x
1.1x
20%
20%
17%
5%
24%
Banregio
Fernandes
Ov erw eight
2,946
154.0
159
8.2x
7.6x
1.5x
1.4x
19%
19%
9%
6%
9%
31.6
30
3%
Bancolombia ADR
Fernandes
Underw eight
7,887
6.3x
5.9x
0.9x
0.8x
14%
15%
-1%
9%
Grupo Aval ADR
Fernandes
Underw eight
3,063
2.6
-
9.2x
5.6x
0.8x
0.8x
9%
14%
64%
2%
-
Credicorp
Fernandes
Ov erw eight
11,977
150.6
190
8.6x
7.4x
1.3x
1.2x
15%
17%
12%
5%
32%
IFS US
Fernandes
Ov erw eight
2,626
22.8
28
6.7x
5.9x
0.9x
0.9x
14%
15%
33%
7%
30%
Cielo
Fernandes
Neutral
2,520
4.6
6
6.7x
7.0x
0.9x
0.9x
15%
13%
-6%
5%
24%
12.8
12
PagSeguro
Fernandes
Neutral
4,226
10.6x
11.2x
0.3x
0.2x
13%
13%
11%
0%
-10%
Stone
Fernandes
Neutral
5,446
17.3
17
13.8x
13.0x
1.7x
1.5x
13%
12%
25%
0%
-2%
DLocal
Fernandes
Neutral
4,940
17.1
18
21.6x
17.7x
7.0x
5.0x
39%
33%
30%
0%
3%
XP
Fernandes
Ov erw eight
13,971
25.5
30
14.0x
12.1x
3.2x
2.7x
24%
24%
21%
3%
21%
BTG
Fernandes
Neutral
28,378
36.9
33
11.0x
9.8x
2.4x
2.0x
24%
23%
17%
3%
-8%
BB Seguridade
Grespan
Neutral
13,903
34.6
38
8.7x
8.3x
6.4x
5.7x
76%
73%
5%
10%
20%
IRB
Grespan
Underw eight
625
37.8
38
10.0x
6.0x
0.7x
0.6x
7%
11%
92%
0%
0%
Porto Seguro
Grespan
Neutral
3,589
27.7
33
8.1x
8.1x
1.4x
1.3x
18%
17%
-1%
6%
25%
Wiz
Grespan
Neutral
207
6.5
9
6.5x
5.8x
1.7x
1.5x
29%
27%
20%
4%
36%
Bolsa Mexicana
Fernandes
Ov erw eight
1,105
33.3
44
12.3x
11.9x
2.5x
2.5x
21%
21%
5%
7%
40%
B3
Fernandes
Neutral
15,279
13.5
17
14.7x
13.4x
3.8x
3.8x
26%
28%
11%
7%
33%
Vinci
Fernandes
Ov erw eight
581
10.8
14
12.3x
11.9x
2.1x
2.2x
17%
19%
6%
7%
37%
Patria
Fernandes
Neutral
2,104
14.2
17
13.6x
10.3x
4.1x
4.1x
30%
40%
39%
7%
27%
Ov erw eight
20,292
9.9
11
6.4x
6.1x
1.3x
1.2x
26%
26%
13%
9%
20%
Itausa
Fernandes
Source: J.P. Morgan. Note: Priced as of January 22, 2024.
2
Nubank: Quick Summary and Tentative Questions
Questions
ROE. You delivered solid 21% ROE in 3Q23, now running above Itaú’s retail operation at ~19%. Should this upward trend continue? What is your long-term ROE goal?
Margins. NIMs expanded ~800bps Y-o-Y to 17% in 3Q23, mostly explained by increased penetration of your PIX financing product. How much more could NIM move up?
How will payroll and other safer products affect NIM? For 2024, should top line continue outpacing loan growth?
Loan growth. Loans were up 59% Y-o-Y in 9M23, below the ~72% pace in 2022. What’s a reasonable level to assume for loan growth in 2024 and in the midterm? You
recently launched payroll loans. What are the growth expectations for this product?
Asset quality. How do you see stage 3 loans and formation evolving throughout 2024, and what measures are you taking to mitigate asset quality issues? What is the cost of
risk of PIX product? How does cost of risk compare vs. expected loss in this short duration product?
High-income. Could you comment on your strategy in this segment? Do you believe it will be necessary to develop new products to enhance your value proposition?
Capital. Can you remind us how are your current capital requirements and the new capital rules to enter in place in July? How much can you grow with current capital base?
Costs. You have a strong competitive advantage in costs, which leaves room for pricing differentiation and higher ROEs. Do you believe it is possible for incumbent banks to
adjust their cost structure and pursue similar efficiency levels as Nubank, or do you believe they are destined to continue losing market share for years to come?
Investments, insurance, and marketplace. Can you give an update on those other fee segments? What else can you add to NU’s platform?
Mexico and Colombia. Can you share your main targets for Mexico and Colombia operations in terms of growth, asset quality, and profitability? In Mexico, you recently
increased deposit remuneration to 15%, well above reference rates – can you comment on your strategy and how you perceive competition? Considering rate caps in
Colombia, do you agree it could be harder to compete there?
Nubank market share across products (3Q23)
16%
Summarized P&L (US$ mn)
14%
14%
11%
12%
10%
8%
6%
6%
4%
2%
2%
2%
0%
0%
Cards TPV
(Brazil)
Credit cards - Consumer loans
Brazil (Loans)
(Brazil)
Credit card Mexico
Total deposits
Payroll
Nubank
2021
2022
2023e
2024e
2025e
Net interest income
679
2,007
4,389
6,410
8,157
LLP
(481)
(1,405)
(2,388)
(3,371)
(4,060)
Net fees
534
1,061
1,378
1,725
2,137
Non-interest expenses
(903)
(1,616)
(1,912)
(2,286)
(2,600)
Income taxes
5
(56)
(446)
(743)
(1,090)
Effective tax rate
3%
119%
30%
30%
30%
Recurring net income
(165)
(9)
1,022
1,735
2,543
ROE
-6.8%
-0.2%
18.4%
24.4%
27.5%
Cost of risk
9.7%
15.8%
16.8%
16.8%
15.4%
Classified loans
6,605
11,762
18,843
25,333
32,600
Source: Company reports, BCB, CNBV and J.P. Morgan. For cards TPV in Brazil assuming ~5% is in Mexico. For card loans in Brazil adjusted to remove ~US$700mn from Mexico.
Mexican market share based on October 2023 figures. Total deposits as of 2Q23.
3
Nubank Has More Active Credit Clients than Bradesco and ~5.5
Accounts per SSN
Account penetration in Brazil increased materially…
1,000
788
800
5.5x
600
457
Account to SSN ratio
# Accounts (mn)
Dec-23
Dec-22
Dec-21
Dec-20
Dec-19
Dec-18
Dec-17
Dec-16
Dec-15
Dec-14
Dec-13
0
214
197
177
165
8.3
8.6
9.4 10.4 10.7
0.0
4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23
200
154
7.7
23.7 25.5 26.4 27.5
Nubank - Financial company
20.0
2.6x
2.1x
21.7
18.3 19.9
15.1 16.4
20.0
4.0x
352
317
2.1x
400
30.0
10.0
Millions
10.0
5.0
0.0
# registered SSN (mn)
14.6
15.0
0.0
0.1
0.3
0.1
1.1
3.0
2.2
4.1
5.0
6.4
7.9
9.6
11.3
4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23
Penetration at ~90% of total population & ~100% of adults
Nubank and other fintechs explain part of this growth
Number of individual accounts / total population
% share of clients with credit exposure above ~US$40
95%
90%
84% 85%
88%
20%
90%
18%
16%
85%
80%
75%
70%
65%
57%
59%
64%
69%
76%
14%
78%
12%
12%
10%
10%
08%
08%
06%
06%
04%
Itau
Bradesco
Santander
Banco do Brasil
1Q23
4Q22
3Q22
2Q22
1Q22
4Q21
3Q21
2Q21
1Q21
4Q20
3Q20
4Q19
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
50%
2Q20
02%
55%
1Q20
60%
62%
67%
71% 72%
74%
16.9
2Q23
Million accounts to SSN
1,167
1,200
Millions
Nu Pagamentos (mostly transactor)
Brazil crossed the 1.2bn active accounts imply in over 5.5 accounts per SSN
Nubank*
Source: Central Banks of Brazil, company reports, and J.P. Morgan Estimates. Nubank* considering only NuPagamentos (ex-financial company) to avoid potential double counting. Considering both companies Nubank has
some ~14% market share above Itau-Unibanco.
4
Nubank Now Leads as Primary Bank Relationship
Nubank was the most common name in our survey…
… and now also leads as primary bank, well-above Itau
In which banks do you have an account open?
Which is your primary bank?
27%
60%
46%
42%
37%
35%
32%
34%
31%
29%
31%
27%
25%
23%
14%
Nubank
Caixa
Itau
Bradesco PagBank Banco do Santander
Brasil
2021
16%
15%
15%
25%
19%
Inter
13%13%
15%
13%
12%
11%
9% 8%
19%
16%
Other
Nubank
Itau
Bradesco Banco do
Brasil
2023
Caixa
2021
10%
6% 5%
Santander
Inter
6%
3% 4%
PagBank
Other
2023
Total Active Clients
BZ – Closing the gap
MX – Still Lagging Incumbents
Active clients in million
Google Trends since 2018 searches (last 4 weeks trends)
Google Trends based in past 5 years search (last 4 weeks trends)
80
80
60
60
Active clients, mn
as % of total
0
~4x
20
Nubank
Avg. Itau and Bradesco
Source: J.P. Morgan estimates and Survey Monkey.
5
Nubank
Sep-23
Jan-23
May-23
Sep-22
Jan-22
May-22
Sep-21
Jan-21
May-21
Sep-20
May-20
Jan-20
Sep-19
Jan-19
May-19
0
Oct-23
74%
1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23
May-23
0
~1.2x
Jul-22
10
20
Dec-22
76%
40
~10x
Feb-22
78%
78%
40
Apr-21
80%
Sep-21
83%
Jun-20
82%
80%
30
20
82%
82%
Nov-20
40
82%
84%
Jan-20
82%
64.9
Aug-19
50
46.5
52.3
61.2
86%
Oct-18
60
57.4
73.8
Mar-19
70
68.8
May-18
80
Avg. Banorte and BBVA Bancomer
Nubank: Market Share (Brazil)
Cards vs. Peers
Consumer and Cards
Deposits (includes commercial)
Est. Credit TPV Market Share (3Q23)
Est. Nu – Consumer Share (3Q23)
Nubank Market Share (2Q23)
30%
7.0%
6.1%
6.0%
3.9%
2.4%
1.0%
1.0%
0.4%
0.4%
0.1%
0.2% 0.0% 0.1%
11.4%
12.0%
2.2%
2.8%
Dec-22
Jun-22
Dec-21
Jun-21
Jun-20
Dec-19
Jun-19
Jun-23
Jun-23
Sep-23
Mar-23
Mar-22
Mar-21
Mar-20
Mar-19
Sep-22
Itau
Sep-21
Bradesco
62%
Sep-20
Nubank
68%
68%
66%
Sep-19
BB
69%
64%
Sep-18
Santander
71%
70%
3.9% 4.3%
0.0%
0.0%
72%
72%
2.0%
5.0%
74%
74%
Dec-22
4.0%
8.2%
5.2%
3.3%
76%
Jun-22
9.1%
11.4%
78% 78%
Dec-21
10.0%
10.7%
79%
76%
6.3%
6.0%
80% 79%
78%
9.6%
7.3%
80%
Jun-21
15.0%
Sep-23
82%
8.0%
13.8%
Mar-23
14.0%
10.0%
20.0%
Sep-22
Mar-22
Sep-21
Mar-21
Sep-20
Mar-20
Sep-19
Mar-19
Top 5 Banks Market Share (2Q23)
Jun-20
25.0%
Est. Nu – Credit Card Share (3Q23)
Dec-19
25.1%
0.2%
Jun-19
30.0%
0.5%
0.0%
Sep-18
0.0%
Credit Card Loans Market Share (3Q23)
0.4%
Dec-18
0%
0.8%
Dec-18
2%
0.7%
0.6%
2.0%
5%
0.9%
1.0%
3.0%
10%
10%
1.2%
4.0%
14%
1.3%
1.4%
Jun-18
13%
4.4%
Jun-18
13%
15%
1.6%
1.6%
4.9%
5.0%
20%
1.8%1.8%
1.8%
Dec-20
25%
2.0%
Dec-20
27%
Source: J.P. Morgan estimates, ABECS, and Central Bank of Brazil. TPV share based in credit card only. Credit card for 3Q23 excluding $750mn from Mexico as per regulatory figures. For consumer loans assuming Q-oQ growth a proxy of consumer growth. Top 5 retail banks include Itau-Unibanco, Bradesco, Banco do Brasil, Caixa Economica and Santander Brasil.
6
Brazil: Debt Service Trending Lower, But ~45% of Adult Population
with Negative Credit Score
Debt Service
Debt Service by income brackets
30%
35.2
33.0
27.2%
26%
24.6%
21.7
31.9
28.5
28.0
23.3%
22%
Oct-06
Oct-07
Oct-08
Oct-09
Oct-10
Oct-11
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-23
18%
71
Jun-23
Dec-22
Jun-22
Dec-21
16.0
12.5
29.3
30.7
15.1
15.1
11.9
11.4
11.5
11.4
25.1
22.4
23.2
22.4
25.4
21.7
10.3
9.9
11.5
10.3
9.1
8.9
2019
2020
2021
2022
Jun-23
Payroll
Auto
Other
Personnal
Up to 2 min. wages
2-5 min. wages
5-10 min. wages
+10 min. wages
Mortgage
Credit Card
… this represents ~45% of adult population in Brazil
45%
71.8
Desenrola had no major impact on SSN numbers
24.4
14.4
16.4
14.6
2018
Brazil reached 70mn of individuals with negative credit…
73
Jun-21
Dec-20
Jun-20
Dec-19
20.1%
Jun-19
Dec-18
13.0
19.4%
14.0
15.9
14.2
18.1
12.5
14.3
15.4
18.0
20.6
23.6
13.0
23.0
24%
46%
35%
38.0
28.4%
28%
44%
43.9%
43%
69
42%
67
41%
65
40%
63
As % of adult population
# Individuals with Negative Credit Score
Source: Central Bank of Brazil and Serasa.
7
Sep-23
Dec-22
Mar-22
Jun-21
Sep-20
Dec-19
Mar-19
Jun-18
Mar-16
Sep-23
Dec-22
Mar-22
Jun-21
Sep-20
Dec-19
Mar-19
Jun-18
35%
Sep-17
36%
55
Dec-16
37%
57
Mar-16
38%
59
Sep-17
39%
61
Dec-16
20%
Debt service by product
Spreads: Overall, Nubank Is Running Below Peers on Most Products
Payroll – INSS
Payroll – Public Employees
2.10
2.00
2.00
1.90
1.90
1.80
1.80
1.70
1.70
1.60
1.60
1.50
1.50
1.40
1.40
SANB
NU
CEF
BBDC
ITUB
Source: Central Bank of Brazil. Credit card financing and credit card revolving based on last 4 weeks trailing average rates.
8
BBAS
INTR
ITUB
29-Dec
29-Dec
15-Dec
1-Dec
ITUB
17-Nov
3-Nov
SANB
NU
15-Dec
1-Dec
17-Nov
3-Nov
20-Oct
SANB
NU
20-Oct
8-Sep
25-Aug
11-Aug
28-Jul
29-Dec
14-Jul
10.00
30-Jun
1.30
15-Dec
11.00
1-Dec
3.30
17-Nov
12.00
3-Nov
5.30
20-Oct
13.00
6-Oct
7.30
22-Sep
14.00
8-Sep
9.30
25-Aug
15.00
11-Aug
11.30
28-Jul
16.00
14-Jul
13.30
30-Jun
Credit Card – Revolving
BBAS
INTR
6-Oct
BBAS
INTR
Credit Card – Financing
CEF
BBDC
22-Sep
8-Sep
25-Aug
11-Aug
CEF
BBDC
6-Oct
ITUB
28-Jul
30-Jun
29-Dec
15-Dec
1-Dec
17-Nov
SANB
NU
22-Sep
BBAS
INTR
3-Nov
20-Oct
6-Oct
22-Sep
8-Sep
25-Aug
11-Aug
28-Jul
14-Jul
30-Jun
CEF
BBDC
14-Jul
1.30
1.30
Credit Card: High Rates, High Losses
Credit card - 90-Days NPL
60%
16%
14%
12%
Revolving
8%
Revolving
Financing
Total Revolving + Interest bearing installments balance
Nov-23
0%
May-23
0%
Nov-22
4%
May-22
2%
Nov-21
10%
May-21
6%
Nov-20
4%
May-20
20%
Nov-23
May-23
Nov-22
May-22
Nov-21
May-21
Nov-20
May-20
Nov-19
May-19
Nov-18
0%
40%
Nov-19
5%
10%
9.7%
6%
8%
8%
12%
30%
10%
10%
50%
May-19
15%
53.0%
Nov-18
17%
Revolving NPL (%)
20%
Financing 15-89 PDL (%)
Revolving 15-89 PDL (%)
25%
Financing NPL (%)
Revolving Early Delinquency (15-90 Days)
Financing
Installment gained relevance over revolving lately
160
100%
140
80%
120
100
60%
80
60
40%
40
20%
20
Revolving Portfolio (R$bn)
0%
Nov-12
May-13
Nov-13
May-14
Nov-14
May-15
Nov-15
May-16
Nov-16
May-17
Nov-17
May-18
Nov-18
May-19
Nov-19
May-20
Nov-20
May-21
Nov-21
May-22
Nov-22
May-23
Nov-23
Nov-23
Nov-22
Nov-21
Nov-20
Nov-19
Nov-18
Nov-17
Nov-16
Nov-15
Nov-14
Nov-13
Nov-12
0
Installments Portfolio (R$bn)
Revolving, as % of IEA balance
Source: Central Bank of Brazil.
9
Installment, as % of IEA balance
Nubank Asset Quality: Mix Adjusted in Line with Most Peers
Est. New NPL formation as % of total loans
15%
14%
13%
13%
11%
11%
5.8%
3.7%
3.0%
2Q22
9.0%
7.5%
6.6%
6.2%
4.0%
3.4%
3.6%3.1%
3.2%3.2%
3Q22
Itau
4Q22
1Q23
Banco do Brasil
Bradesco
4.1%
3.3%
9% 9%
9%
9%
14%
13%
11%
10%
11%
10%
11%
2Q23
4.1%
3.5%
2Q22
3Q23
Nubank
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
3Q21
4Q21
1Q22
2Q22
3Q22
4Q22
1Q23
2Q23
0.0%
1Q23
BB - mix adjusted
2Q23
3Q23
Bradesco - mix adjusted
Installment as % of cards
3Q21
4Q21
1Q22
2Q22
3Q22
4Q22
1Q23
2Q23
3Q23
3.5%
4Q22
Nubank
Higher-than-industry share of installment and lower share of revolving
18%
16%
15%
14% 14%
16%
13%
14%
12%
10%
8%
6%
7% 7% 7% 7% 7%
4% 6% 6% 6%
5%
2%
0%
4.0%
3Q22
Itau - mix adjusted
Revolving as % of cards
4.5%
System
13%
7.4%
Nubank – Credit Card - 15-89 days NPL
Nubank
13%
System
Nubank
IEA as % of cards
21%
22%
17%
30%
25% 21%
16%
23%
26%
9%
7%
9%
10% 12%
8%
5%
2% 5%
-3%
10%
26%
23%
15%
11%
27%
28%
20%
12%
17%
14%
11%
0%
3Q21
4Q21
1Q22
2Q22
3Q22
4Q22
1Q23
2Q23
3Q23
9%
14%
13% 13%
11%
10%
15%
15%
15%
14%
System
Nubank
3Q21
4Q21
1Q22
2Q22
3Q22
4Q22
1Q23
2Q23
3Q23
13%
Est. Retail mix adjusted new NPL formation as % of loans
System
Nubank
Source: Central Bank of Brazil and Company reports. For New NPL formation considering active portfolio sales to estimate new NPL formation. Mix adjusted considering only retail or individual loan ex-mortgage and
payroll. 15-89 NPL for cards considering consumer finance – 4Q19 constant product mix.
10
Comparing Card Provisions in Brazil: Nu’s CoR Similar to Peers
Nubank’s CoR is equal to or higher than most peers
… and so are balance sheet reserves
Est. Cost of risk for credit cards (provisions / avg. loans)
Est. Allowance-to-loans for credit cards
20.0%
20.0%
18.0%
16.0%
17.2%
17.7%
18.0%
15.7%
16.0%
14.0%
14.0%
12.7%
13.7%
14.1%
12.0%
12.0%
10.0%
10.0%
7.9%
8.0%
8.3%
6.8%
8.0%
6.1%
6.0%
6.0%
4.0%
4.0%
2.0%
2.0%
0.0%
0.0%
Nubank - Cards
(1H23)
Inter
(1H23)
Itau
(2011-17)
Itaucard
(2019-21)
Nubank - Cards
(1H23)
Bradesco*
(1H23)
Inter
(1H23)
Cost of risk cards and personal loans evolution
Evolution of charge-offs
Cost of risk by product
U$ million and as % of total loans
23%
24%
22%
2,500
23%
8%
15%
16%
10%
5%
6%
16%
4%
2021
Cards
4%
1,000
7%
4%
2020
2%
2022
2023e
6%
1,389
1,500
13%
700
2%
500
2024e
121
132
2020
2021
-
Personal loans
Source: J.P. Morgan estimates and Survey Monkey.
11
10%
2,265
8%
2,000
20%
Bradesco*
(1H23)
10%
30%
30%
0%
Itaucard
(2019-21)
3,000
35%
25%
Itau
(2011-17)
0%
2022
2023e
2024e
Nubank: Almost 10% of Loans Are Renegotiated - About Half Is Not
Past-due at the Time of the Renegotiation
Nubank Renegotiated Loan Balance in Brazil (R$mn)
Renegotiated as % of Total vs. Selected Peers (2022)
New Series
5x
7,000
10.0%
6,485
9.0%
6,000
7.0%
4,593
408%
4,000
3,000
6.0%
3,447
361
325
2H19
1H20
809
1.0%
0.0%
2H20
1H21
2H21
1H22
2021
2022
Nubank
1H23
ann.
Inter
4.5%
4.7%
3.4%
3.0%
2.6%
BB BB - adj.
individuals Individuals*
5.5%
6.7%
7.0%
BB
6.5%
8.2%
7.6%
8.0%
Itau
7.5%
9.7%
9.0%
Santander Bradesco
Brasil
Incumbent Banks - Renegotiated as % of Total
New Series
3.0%
3.2%
2.0%
1,208
679
10.0%
2.9%
3.7%
3.0%
Evolution of Renegotiated as % of Total (BCB criteria)
5.0%
4.1%
4.0%
-
6.0%
5.3%
5.2%
5.0%
2,374
2,000
4.0%
7.5%
8.0%
5,000
1,000
9.1%
8.2%
3.5%
2.5%
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
3Q21
4Q21
1Q22
2Q22
3Q22
4Q22
1Q23
2Q23
3Q23
2.0%
1.0%
0.0%
2H19
1H20
2H20
1H21
2H21
1H22
2021
2022
Itau
1H23
ann.
Source: Central Bank of Brazil and J.P. Morgan Estimates.
12
Bradesco
SANB
Banco do Brasil
Major Cost Advantage: Efficiency Already Below Most Incumbents
ARPAC expanding and CTS well behaved at <$1
Efficiency ratio trending below 30%
U$
Cost-to-income ratio
12.0
65%
10.0
60%
55%
8.0
50%
6.0
45%
4.0
40%
35%
2.0
30%
ARPAC
3Q23
2Q23
1Q23
4Q22
3Q22
2Q22
1Q22
4Q21
3Q21
2Q21
1Q21
4Q20
3Q20
2Q20
1Q20
-
25%
1Q22
CTS
2Q22
3Q22
4Q22
Nubank
Itau
Banco do Brasil
Number of employees (3Q23*)
Number of branches (3Q23)
# of employees
# of branches (includes POS)
87,197
86,102
1Q23
2Q23
3Q23
Bradesco
6,938
85,133
5,553
55,739
3,237
2,756
8,050
0
Itau - Brazil
Bradesco
Banco do Brasil
Santander
Nubank
Bradesco
Source: Central Banks of Brazil, company reports, and J.P. Morgan Estimates. *Nubank as of December 2022.
13
Banco do Brasil
Itaú - Brazil
Santander
Nubank
Regulatory Risk: Tension Is Lower, But Brazil Remains With A Unique
Credit Framework – High Rates, Low IEA
BZ banks have one of the highest card rates in the region
But IEA in Brazil the lowest in the region (estimated)
Interest Rate p.m.
Credit Card IEA as % of total
14.0%
70%
12.5%
12.0%
60%
10.0%
50%
8.0%
40%
62%
60%
60%
30%
6.0%
3.9%
4.0%
25%
20%
2.4%
2.0%
2.0%
1.6%
10%
0%
0.0%
Brazil
Peru
Mexico
Chile
Chile
US
Reason is BZ banks offer installment with zero interest
60%
48%
Mexico
US
Peru
Brazil
And TPV from +2 installments represents ~10% of GDP
Installment breakdown by months as % of total TPV
50%
66%
12%
51% 52%
10%
10%
8%
40%
8%
30%
22% 21%
20%
6%
18%
18% 16%
14%
12% 13%
16%
5%
5%
5%
5%
5%
6%
5%
2011
2012
2013
2014
2015
2016
2017
7%
7%
2019
2020
6%
4%
10%
2%
0%
1
2-3
June 2012
4-6
June 2017
+7
0%
June 2022
Source: J.P. Morgan estimates and Central Bank of Brazil.
14
2018
2021
2022
PIX: P2B Surpassed Debit TPV at the Start of 2023
160mn users / ~2/3 of population
TPV Breakdown (2023)
Monthly Volumes (R$ billion)
1,800
160
1,600
140
1,400
400
-
200
P2P
35%
PIX P2B surpassed debit TPV
B2B
40%
Nov-23
Sep-23
Jul-23
May-23
Mar-23
Jan-23
Nov-22
Sep-22
Jul-22
May-22
SSNs
Monthly TPV, R$ bn
B2P
13%
-
Jan-22
May-23
Jan-23
Nov-22
Corporate IDs
Nov-23
20
Jul-23
600
Sep-23
40
Mar-23
800
Sep-22
60
Jul-22
1,000
May-22
80
Mar-22
1,200
Jan-22
100
Mar-22
120
P: person
B: business
G: government
P2B
12%
2023 average transaction value
12M TPV, R$ bn
1660
200
180
160
140
120
100
80
60
40
20
0
244
1246
1042
992
964
152
454
PIX P2B
Debit
Dec-23
Apr-23
Aug-23
Dec-22
Aug-22
Apr-22
Dec-21
Aug-21
Apr-21
Dec-20
54
2021
2022
PIX P2B
2023
2021
2022
9M23
Debit
P2B
Source: Central Bank of Brazil, IBGE and J.P. Morgan Estimates.
15
P2P
Debit
What Is the Payroll Opportunity and ROE?
Digital origination can play a big role – Estimating payroll product ROTE
Est. 100% digital
Est. Blended
Est. 100%
Rational
physical
Loan book
100
100
100
Financial income
26.2
26.2
26.2
Considering 2% p.m. or 27% APR (BCB figures) - ex cluding CoR as a prox y for non-accrual loans
Financial ex penses
-13.8
-13.8
-13.8
100% of reference rates
Loan loss prov isions
-2.5
-2.5
-2.5
Cost of risk based on industry NPLs and 100% cov erage - today NPLs running at 2-3%
-0.5
-3.0
Third party comission
0.0
-1.5
% digital origination
100%
50%
0%
3.0%
3.0%
% annual commision
G&A
Cost to income ratio
EBT
Tax es
-4.5
-4.5
-4.5
45%
45%
45%
5.0
3.5
2.0
Assuming 4.65% PIS/Cofins tax es
Up to 15% commission paid pro rata temporis during the term of the contract. Assuming 5 y ear contracts.
Similar efficiency as w e assume for the conglomerate
-2.2
-1.6
-0.9
45%
45%
45%
Net income
2.7
1.9
1.1
RWA
50
50
50
It is 50% for Federal (SIAPE) and INSS
Basel Ratio
7
7
7
Assuming a 14% basel ratio
ROE
39%
27%
16%
Manually add from below (prev ent circ ref) - Assumes IOC still deducts, if no div idend paid, zero shield
Banks with relevant payroll exposure print low-teen ROE
ROE
R$ million
16
187
29%
62%
220
251
29%
62%
31%
34%
37%
38%
36%
30%
62%
61%
59%
57%
57%
58%
2019
384
273
Private
Source: Central Bank of Brazil and J.P. Morgan Estimates. *Data as of November 2023.
337
2018
288
311
2017
2021
9.9%
-3.6%
17.1%
6.8%
17.8%
11.4%
13.9%
10.5%
2016
2022
9.4%
9.0%
16.4%
5.8%
15.4%
8.5%
12.2%
11.0%
2015
Payroll
as % of loans
98%
75%
75%
70%
57%
41%
38%
2014
Gross loans
6,414
10,148
8,006
21,434
10,008
49,122
39,036
2013
Paraná
Agibank
Banpará
BMG
Mercantil
Banrisul
Pan
Average
Payroll
6,258
7,598
5,987
15,091
5,745
20,092
14,979
Payroll is ~30% of consumer ex-mortgage and agro
2012
Effectiv e tax rate (a)
Public
439
38%
514
37%
587
625
38%
39%
57%
57%
55%
54%
2023*
9.9
-0.5
2022
9.9
-0.5
2021
9.9
Tax on rev enues
2020
NII post provisions
INSS
What Is the Payroll Opportunity and ROE?
Origination term increased over time
We estimate Nubank represented 6% of SIAPE payroll origination in 2Q23
Loan origination market share
Avg. term at origination (in months)
Loan balance market share
100
Quartely origination, R$ mn
1Q23
2Q23
Loan balance, R$ mn
6.2
102.4
Nubank
24,706
22,343
Sy stem, public employ ees
Nubank
Sy stem, public employ ees
1Q23
2Q23
6.2
108.6
329,350
334,672
0.46%
Market share
0.00%
0.03%
Est. SIAPE (~7.5% of total)
1,853
1,676
Est. SIAPE (~7.5% of total)
24,701
25,100
60
Adj. Market Share for SIAPE
0.34%
6.11%
Adj. Market Share for SIAPE
0.03%
0.43%
50
80
74
83
78
64
70
0.03%
82
77
80
Market share
91
90
90
68
78
68
65
56
Public
Nov-23
Nov-22
Nov-21
Nov-20
Nov-19
Nov-18
Nov-17
Nov-16
Nov-15
Nov-14
Nov-13
Nov-12
Nov-11
40
Social Security (INSS)
Payroll is usually defensive product...
… NPLs well below other consumer
Big banks lost share but still relevant
90 days NPL ratio
90 days NPL ratio
Market Share of Largest 5 retail banks combined
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
-
80%
Public
Social Security (INSS)
74%
Consumer NPL ex-payroll
Source: Central Bank of Brazil.
17
Nov-23
72%
Dec-15
Jun-16
Dec-16
Jun-17
Dec-17
Jun-18
Dec-18
Jun-19
Dec-19
Jun-20
Dec-20
Jun-21
Dec-21
Jun-22
Dec-22
Jun-23
Payroll NPL (excluding private segment)
Nov-22
Nov-21
74%
Nov-20
Dec-23
Dec-22
Dec-21
Dec-20
Dec-19
Dec-18
Dec-17
Dec-16
Dec-15
Dec-14
Dec-13
Dec-12
Dec-11
1.0
76%
Nov-19
2.0
1.9
1.8
1.8
78%
2.0
Nov-18
1.5
2.0
2.4
2.3
2.0
Nov-17
2.2
Nov-16
2.2
Nov-15
2.5
7.3
Nov-14
2.3
Nov-13
2.8
3.0
Nov-12
3.0
Nov-11
3.5
Top 5 banks
Nubank: Mexico Channel Check and Funding Costs
Newcomers pay more for deposits…
… and Nubank is gaining share
Mexico - Best-in-class funding mix
Annual Yields on Deposits per Bank
US$ million
As % of total deposits
15% 15% 15%
12%
7%
6%
0.11% 0.12%
500
0.10%
400
0.08%
300
0.06%
0.00%
Nubank Deposits (US$ mn)
Banxico Rate
0.04%
0.02%
133 153 172
Oct-23
Jun-23
Apr-23
Mar-23
Feb-23
May-23
51 85 113
0
Time Deposits
Deposits Annual Yield
0.00%
0.00%
Jan-23
Banorte 2**
BBVA
Santander
Banorte 1
Banamex
Hey Pro
Ualá
Stori
Nubank
100
0.03%
0.01%
488
0.04%
Nov-23
3%
Sep-23
3%
200
Demand Deposits
100%
90%
80%
33%
37%
44%
70%
58%
60%
Jul-23
4%
600
Aug-23
11%
Cetes Directo*
16%
14%
12%
10%
8%
6%
4%
2%
0%
50%
40%
30%
67%
63%
56%
20%
42%
10%
Mexico
Peru
Colombia
Demand + Savings Deposits
Market Share
Chile
And deposits fully fund loan book
Demand deposits as % of total
100%
System deposits as % of GDP
80%
71%
Deposit to Loans Ratio
80%
70%
67% 70% 68% 67%
63% 65% 65% 63% 63%
60%
50%
40%
30%
52%
48% 47%
43% 43% 41%
39%
20%
34% 32%
20%
10%
0%
2015 2016 2017 2018 2019 2020 2021 2022 2023*
Brazil
41%
45%
40%
18%
30%
15%
93%
38%
13%
34%
91%
25%
23%
22%
17%
Colombia
Peru
Mexico
0%
40%
76%
59%
20%
85%
79%
40%
60%
8%
30%
114%
80%
34%
30%
10%
Mexico
100%
60%
50%
40%
120%
Brazil
Time Deposits
Deposit penetration is low in Mexico
70%
32%
0%
Demand Deposits – Mexico vs. Brazil
90%
68%
57%
46%
27%
33%
Brazil
Chile
51%
0%
Chile
Brazil
Time Deposits to GDP
Demand + Savings Deposits to GDP
Mexico
Peru
Time Deposits to Loans
Colombia
Demand + Savings Deposits to Loans
Source: J.P. Morgan. *Cetes Directo yield is for demand deposit like product (e.g. 1 day), but can have different yields for different maturities. **Banorte 2 refers to time deposits that have minimum Ps. 100k balance, hence
we separate it from others as it is not fully comparable. Finally, while Nubank Cajita requires clients to opt for it, we note it has daily liquidity. If we were to compare Nubank yields vs. demand deposits with similar liquidity
the yields banks offered run around 0.5-2.5%.
18
Nubank: Mexico Has 3x Higher Cost of Risk than Incumbents
NuMexico CoR is ~3x above peers
NuMexico Charge-offs also higher
Credit card - Cost of risk risk (6M23) - Loan Loss provisions/ avg. loans
Credit card - Charge-offs to avg. loans (6M23)
35%
35%
33%
30%
30%
25%
25%
33%
20%
20%
15%
15%
10%
10%
9%
8%
14%
15%
12%
10%
10%
9%
10%
7%
10%
9%
8%
7%
5%
5%
0%
Banorte
BBVA
Banamex Santander
HSBC
Inbursa
Nubank
System
Banorte
BBVA
Banamex Santander
HSBC
Inbursa
Credit card – Asset quality comparison
Nu’s card balances have been mostly stable
Ps. Million - Figures as of 6M23 / June 2023
US$ million
800
700
Gross loans
13,313
50,317
159,064
118,353
71,662
36,386
13,483
508,260
Market Share
2.6%
9.9%
31.3%
23.3%
14.1%
7.2%
2.7%
100.0%
500
Cost of risk
33%
10%
9%
8%
7%
12%
15%
10%
400
2.4%
2.5%
4.2%
2.4%
1.2%
734
734
745
740
747
2.7%
98%
367%
349%
345%
301%
485%
869%
332%
New NPL as % of
LLPs
98%
99%
114%
92%
171%
75%
94%
102%
Charge-off to avg.
loans
33%
9%
10%
7%
10%
8%
14%
9%
Allowance to loans
12%
10%
8%
9%
13%
11%
10%
10%
19
3.0%
2.8%
2.6%
2.6%
2.7%
2.5%
2.6%
2.5%
2.4%
2.4%
2.4%
200
2.5%
2.4%
100
2.3%
0
2.2%
Nubank Credit Card (US$ mn)
Source: J.P. Morgan, CNBV.
778
2.7%
2.6%
Jan-23
NPL coverage ratio
750
2.9%
300
3.0%
735
2.8%
Aug-23
2.7%
738
Jul-23
11.8%
735
Jun-23
NPL ratio
600
747
Sep-23
System
May-23
Inbursa
Apr-23
Banamex Santander HSBC
Mar-23
BBVA
Feb-23
Nubank Banorte
System
Market Share
Nov-23
Nubank
Oct-23
0%
Select VC/PE historical stake at Nubank
About ~US$9bn worth of shares sold since IPO
as % of class A and class B shares
Est. value sold vs. Avg. share price during the quarters
50.0%
12.0
2,500
45.0%
40.0%
10.0
44.7%
39.9%
35.0%
8.0
2,000
9.8
35.1%
30.0%
30.2%
25.0%
1,500
7.5
6.1
24.6%
20.0%
8.0
6.0
23.5%
22.9%
15.0%
4.0
20.9%
5.1
4.6
4.3
4.5
Dec-22
Mar-23
1,000
500
2.0
14.4%
10.0%
0.0
5.0%
Dec-21
0.0%
IPO
Dec-21
Mar-22
Jun-22
Sep-22
Dec-22
Mar-23
Jun-23
Mar-22
Jun-22
Sep-22
Est. Value Sold - based on avg. price
Sep-23
Jun-23
Sep-23
Avg. Share Price (Quartely)
Historical VC/PE stake
IPO
Dec-21
Out.
Shares
4,608,684
4,608,684
Selected
VC/PE
2,058,188
1,838,184
%
44.7%
39.9%
Mar-22
4,660,405
1,634,418
Jun-22
4,670,972
1,411,197
Sep-22
4,683,835
Dec-22
Mar-23
Jun-23
Sep-23
YTD
Since 2021
Since IPO
Sequoia
790,950
555,446
%
17.2%
12.1%
35.1%
555,446
30.2%
555,446
1,152,352
4,692,626
4,709,505
4,730,272
1,103,074
1,080,550
988,848
4,752,303
682,270
420,804
1,155,914
1,375,919
DST
Tiger
415,539
415,539
%
9.0%
9.0%
250,482
265,982
%
5.4%
5.8%
11.9%
415,539
8.9%
254,789
11.9%
415,539
8.9%
203,013
24.6%
546,382
11.7%
415,539
23.5%
22.9%
20.9%
435,293
414,614
414,276
9.3%
8.8%
8.8%
415,539
415,539
344,539
14.4%
9.1%
25.5%
30.3%
252,320
182,973
303,126
538,630
5.3%
4.0%
6.7%
11.9%
239,208
176,331
176,331
176,331
Source: J.P. Morgan, SEC filings, Bloomberg.
20
Dragoneer
Others
155,035
155,035
%
3.4%
3.4%
446,182
446,182
%
9.7%
9.7%
5.5%
153,629
3.3%
255,014
5.5%
4.3%
28,143
0.6%
209,055
4.5%
8.9%
46,320
1.0%
28,143
0.6%
115,967
2.5%
8.9%
8.8%
7.3%
25,341
25,383
20,326
0.5%
0.5%
0.4%
28,143
28,143
28,143
0.6%
0.6%
0.6%
198,757
196,871
181,564
4.2%
4.2%
3.8%
5.0%
3.8%
4.0%
4.0%
20,367
4,974
245,614
230,114
0.4%
0.1%
5.3%
5.0%
17,863
10,280
137,172
137,172
0.4%
0.2%
3.0%
3.0%
152,511
46,246
293,671
293,671
3.2%
1.0%
6.5%
6.5%
US$ mn
Nubank: VC/PE Overhang Down 2/3 Since IPO
Credit Cards vs. 2018-2019: Brazil Way Above; Peru Still Lagging
Nominal credit card loan growth
Inflation adj. credit card growth
Credit card loans CAGR 2018-23
Y-o-Y
June 2018 = 100
CAGR 2018-23
60%
210
25%
40%
180
20%
150
0%
120
-20%
90
-40%
60
-60%
30
2Q18
2Q19
2Q20
2Q21
Brazil
Mexico
Chile
Peru
2Q22
2Q23
186
15%
13%
10%
109
101
5%
74
0%
8%
7%
6%
2%
1%
0%
-2%
-5%
2Q18
Colombia
20%
20%
2Q19
2Q20
2Q21
Brazil
Mexico
Chile
Peru
2Q22
2Q23
-6%
-10%
Brazil
Colombia
Mexico
Colombia
Inflation Adj.
Chile
Nominal
Credit card loans to GDP
Credit card TPV to GDP
Active cards to population
%
2022
Million
25.0%
4.9%
21.1%
4.6%
4.3%
3.2%
2.0%
14.6%
15.0%
3.1%
1.7%1.8%
8.8%
10.0%
6.5%
6.2%
5.5%
5.0%
Brazil
Chile
Colombia
2018-2019 avg.
Peru
Mexico
0.0%
Brazil
2018
2019
2020
2021
2022
1H23
Active cards
99
119
130
178
209
-
% Y-o-Y
20%
21%
9%
37%
17%
-
Population
199
200
201
202
203
-
% Penetration
50%
60%
65%
88%
103%
-
Active cards
28
29
28
28
30
36
% Y-o-Y
-16%
4%
-3%
1%
6%
20%
Brazil
20.0%
3.0%
2.6%
Peru
Chile
Argentina Colombia
2Q23
Source: Central Bank of Brazil, CNBV, SBS, SFC, CMF and J.P. Morgan estimates.
21
Peru
Mexico
Mexico
Population
125
127
128
129
130
131
% Penetration
22%
23%
22%
22%
23%
27%
Investment Thesis, Valuation & Risks
Nubank (Overweight; Price Target: $10.00)
Investment Thesis
Nubank is Latin America’s most successful Neobank with ~90mn clients. On the positive side we like Nubank’s fast growth, high engagement
with customers and overall operating leverage potential from its branchless distribution model. The company also materially improved its
profitability in past quarters helped by scale and this operational leverage. In our view Nubank created one of the most valuable brands in Brazil
and is benefiting from clients principality driving lower delinquencies and improved ARPAC as the company cross-sells products. Valuation was
always a headwind for a more positive view, but recent correction is a good entry point, in our view. Moreover, though asset quality remains a
risk, we now have a bit more visibility on the credit cycle. All in all, we see Nubank as a long-term winner for retail banking in Brazil with growth
optionality in Mexico, Colombia and future markets.
Valuation
We rate Nubank Overweight. Our Dec-2024 price target of $10 per share is based on a two-stage residual income. Our residual income
assumes 30% LT ROE and 11% CoE in USD. Our model is in US$ and carries FX risks due to the bulk of Nubank’s operations being in Brazil in
BRL.
Risks to Rating and Price Target
As a OW-rated stock, risks are to the downside: (i) lower client monetization than forecast; (ii) unsuccessful LatAm expansion; (iii) growing client
churn; (iv) macroeconomic and currency risk, especially in Brazil; (v) tech sell-off globally driving lower valuation multiples; (vi) credit cycle in
Brazil driven by the already high debt services levels, at ~30% of disposable income close to all-time high; and (vii) regulatory changes (i.e.,
capital, taxation, labor, among others).
Research Team
Yuri Fernandes – Head of Latin America Financials
Yuri Fernandes is J.P. Morgan’s Head of Latin America Financials covering both LatAm Banks and LatAm Non-Bank financials. Yuri joined
J.P. Morgan’s Latin America Financials team in February 2013. Throughout this period, the team has been consistently top ranked by
Institutional Investor and most recently the team was ranked #1 in 2021. Prior to joining the firm, Yuri was a capital markets lawyer in Brazil.
He holds a law degree from Fundação Getulio Vargas.
yuri.r.fernandes@jpmorgan.com
(1-212) 622-3400
Guilherme Grespan – Analyst, Latin America Financials
guilherme.grespan@jpmorgan.com
(55-11) 4950-3058
Marlon Medina – Analyst, Latin America Financials
marlon.medinarobles@jpmorgan.com
(52-55) 5283-1665
Fernanda Sayao – Analyst, Latin America Financials
fernanda.sayao@jpmchase.com
(55-11) 4950-6588
Disclosures
Companies Discussed in This Report (all prices in this report as of market close on 22 January 2024, unless otherwise indicated)
Nubank(NU/$8.92/OW)
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Important Disclosures
• Market Maker: J.P. Morgan Securities LLC makes a market in the securities of Nubank.
• Market Maker/ Liquidity Provider: J.P. Morgan is a market maker and/or liquidity provider in the financial instruments of/related to Nubank.
• Manager or Co-manager: J.P. Morgan acted as manager or co-manager in a public offering of securities or financial instruments (as such term is defined in Directive
2014/65/EU) of/for Nubank within the past 12 months.
• Client: J.P. Morgan currently has, or had within the past 12 months, the following entity(ies) as clients: Nubank.
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provided were non-investment-banking, securities-related: Nubank.
• Client/Non-Securities-Related: J.P. Morgan currently has, or had within the past 12 months, the following entity(ies) as clients, and the services provided were non-securitiesrelated: Nubank.
• Investment Banking Compensation Received: J.P. Morgan has received in the past 12 months compensation for investment banking services from Nubank.
• Potential Investment Banking Compensation: J.P. Morgan expects to receive, or intends to seek, compensation for investment banking services in the next three months from
Nubank.
• Non-Investment Banking Compensation Received: J.P. Morgan has received compensation in the past 12 months for products or services other than investment banking from
Nubank.
• Debt Position: J.P. Morgan may hold a position in the debt securities of Nubank, if any.
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Disclosures
Date
Rating
Price ($)
Price Target
($)
04-Jan-22
N
9.98
10
07-Mar-22
N
7.16
8
23-May-22 N
3.81
5
11-Nov-22 UW
4.55
--
08-Dec-22 N
3.97
--
11-Sep-23 OW
6.81
9
08-Dec-23 OW
8.14
10
The chart(s) show J.P. Morgan's continuing coverage of the stocks; the current analysts may or may not have covered it over the entire period.
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J.P. Morgan Global Equity Research Coverage*
IB clients**
JPMS Equity Research Coverage*
IB clients**
Overweight
(buy)
47%
48%
46%
68%
Neutral
(hold)
39%
43%
42%
63%
Underweight
(sell)
13%
32%
12%
46%
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