The news: Nubank posted another quarter of record-breaking revenues in Q3, helping the Brazilian neobank reverse widening losses to turn a profit.
What this means: Surging profit and revenue growth show that Nubank has, so far, successfully bucked the global economic downturn and political turmoil that has rocked Latin America.
The big takeaway: Nubank promotes itself as one of the world’s biggest challenger banks and among the most exciting fintechs in South America. It’s well-positioned to continue growing and its focus on turning a profit will likely quell previous concerns over widening losses.
Acquisitions could also power Nubank’s growth, although in the current climate, it may take the safer route of growing organically in new Latin American markets and by offering additional services. Diversification could help it minimize the increased risk arising from loan defaults amid growing economic uncertainty.
Nubank’s shift in focus suggests that neobanks are turning away from a growth-at-all-costs mindset to try for profit generation. Incumbents should take note that Nubank has achieved sustainable financial growth by attaining high levels of customer satisfaction.
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