SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 6-K
Report
of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934
For the month of May,
2024
Commission File Number 001-41129
Nu Holdings Ltd.
(Exact name of registrant as specified
in its charter)
Nu Holdings Ltd.
(Translation of Registrant's
name into English)
Campbells Corporate Services
Limited, Floor 4, Willow House, Cricket Square, KY1-9010 Grand Cayman, Cayman Islands
+1 345 949 2648
(Address of principal executive
office)
Indicate by check mark whether
the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F (X) Form 40-F
Indicate by check mark whether the registrant by furnishing
the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes No (X)
Contents
KPMG Auditores Independentes Ltda.
Rua Arquiteto Olavo Redig de Campos, 105, 12º andar - Torre
A
04711-904 - São Paulo/SP - Brasil
Caixa Postal 79518 - CEP 04707-970 - São Paulo/SP - Brasil
Telefone +55 (11) 3940-1500
kpmg.com.br
Independent Auditors’ report on review of Interim Condensed
Consolidated Financial Statements
To Board of Directors and Shareholders of
Nu Holdings Ltd.
Cayman Islands
Introduction
We have reviewed the accompanying interim condensed consolidated
statements of financial position of Nu Holdings Ltd. (“Company”) as of March 31, 2024, the condensed consolidated statements
of profit or loss and comprehensive income or loss for quarter ended, changes in equity and cash flows for the three-month period then
ended, and notes to the interim condensed consolidated financial statements.
Management is responsible for the preparation and presentation
of these interim condensed consolidated financial statements in accordance with IAS 34, ‘Interim Financial Reporting’ issued
by the International Accounting Standards Board (IASB). Our responsibility is to express a conclusion on these interim condensed consolidated
financial statements based on our review.
Scope of review
We conducted our review in accordance with Brazilian and International
Standards on Review (NBC TR 2410 - Revisão de Informações Intermediárias Executada pelo Auditor da Entidade
and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively).
A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
KPMG Auditores Independentes Ltda., uma sociedade simples brasileira, de responsabilidade limitada e firma-membro da organização global KPMG de firmas-membro independentes licenciadas da KPMG International Limited, uma empresa inglesa privada de responsabilidade limitada. |
KPMG Auditores Independentes Ltda., a Brazilian limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. |
Conclusion
Based on our review, nothing has come to our attention that causes
us to believe that the accompanying interim condensed consolidated financial statements as of March 31, 2024, are not prepared, in all
material respects, in accordance with IAS 34, ‘Interim Financial Reporting’.
São Paulo, May 14, 2024.
KPMG Auditores Independentes Ltda.
CRC 2SP-027685/O-0 F SP
Rodrigo de Mattos Lia
Accountant CRC 1SP252418/O-3
KPMG Auditores Independentes Ltda., uma sociedade simples brasileira, de responsabilidade limitada e firma-membro da organização global KPMG de firmas-membro independentes licenciadas da KPMG International Limited, uma empresa inglesa privada de responsabilidade limitada. |
KPMG Auditores Independentes Ltda., a Brazilian limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. |
Unaudited Interim Condensed
Consolidated
Statements of Profit or
Loss
For the three-month period
ended March 31, 2024 and 2023
(In thousands of U.S. Dollars, except
earnings per share)
|
|
Note |
|
03/31/2024 |
|
03/31/2023 |
|
|
|
|
|
|
|
Interest income and gains (losses) on financial instruments |
|
6 |
|
2,280,248 |
|
1,255,454 |
Fee and commission income |
|
6 |
|
455,653 |
|
363,213 |
Total revenue |
|
|
|
2,735,901 |
|
1,618,667 |
Interest and other financial expenses |
|
6 |
|
(660,715) |
|
(440,212) |
Transactional expenses |
|
6 |
|
(62,948) |
|
(52,778) |
Credit loss allowance expenses |
|
7 |
|
(830,719) |
|
(474,795) |
Total cost of financial and transactional services provided |
|
|
|
(1,554,382) |
|
(967,785) |
Gross profit |
|
|
|
1,181,519 |
|
650,882 |
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
Customer support and operations |
|
8 |
|
(150,612) |
|
(107,815) |
General and administrative expenses |
|
8 |
|
(326,052) |
|
(236,881) |
Marketing expenses |
|
8 |
|
(46,827) |
|
(19,272) |
Other income (expenses) |
|
8 |
|
(79,491) |
|
(43,285) |
Total operating expenses |
|
|
|
(602,982) |
|
(407,253) |
|
|
|
|
|
|
|
Profit before income taxes |
|
|
|
578,537 |
|
243,629 |
|
|
|
|
|
|
|
Income taxes |
|
|
|
|
|
|
Current taxes |
|
29 |
|
(415,042) |
|
(205,864) |
Deferred taxes |
|
29 |
|
215,319 |
|
103,986 |
Total income taxes |
|
|
|
(199,723) |
|
(101,878) |
|
|
|
|
|
|
|
Profit for the period |
|
|
|
378,814 |
|
141,751 |
|
|
|
|
|
|
|
Earnings per share – Basic |
|
9 |
|
0.0794 |
|
0.0301 |
Earnings per share – Diluted |
|
9 |
|
0.0775 |
|
0.0294 |
Weighted average number of outstanding shares – Basic (in thousands of shares) |
|
9 |
|
4,773,284 |
|
4,709,505 |
Weighted average number of outstanding shares – Diluted (in thousands of shares) |
|
9 |
|
4,886,361 |
|
4,818,200 |
The accompanying notes are an integral
part of these unaudited interim condensed consolidated financial statements.
Unaudited Interim Condensed
Consolidated Statements of Comprehensive Income
For the three-month period
ended March 31, 2024 and 2023
(In thousands of U.S. Dollars)
|
|
Note |
|
03/31/2024 |
|
03/31/2023 |
|
|
|
|
|
|
|
Profit for the period |
|
|
|
378,814 |
|
141,751 |
|
|
|
|
|
|
|
Other comprehensive income or loss: |
|
|
|
|
|
|
Effective portion of changes in fair value |
|
|
|
45,508 |
|
1,995 |
Changes in fair value reclassified to profit or loss |
|
|
|
(15,498) |
|
(2,874) |
Deferred income taxes |
|
|
|
(3,308) |
|
3,026 |
Cash flow hedge |
|
19 |
|
26,702 |
|
2,147 |
|
|
|
|
|
|
|
Changes in fair value |
|
|
|
2,220 |
|
10,324 |
Deferred income taxes |
|
|
|
(1,539) |
|
185 |
Financial assets at fair value through other comprehensive income |
|
|
|
681 |
|
10,509 |
|
|
|
|
|
|
|
Currency translation on foreign entities |
|
|
|
(71,969) |
|
110,505 |
|
|
|
|
|
|
|
Total other comprehensive income (loss) that may be reclassified to profit or loss subsequently |
|
|
|
(44,586) |
|
123,161 |
|
|
|
|
|
|
|
Changes in fair value - own credit adjustment |
|
20 |
|
(18) |
|
45 |
Total other comprehensive income or loss that will not be reclassified to profit or loss subsequently |
|
|
|
(18) |
|
45 |
Total other comprehensive income (loss), net of tax |
|
|
|
(44,604) |
|
123,206 |
Total comprehensive income for the period, net of tax |
|
|
|
334,210 |
|
264,957 |
The accompanying notes are an integral
part of these unaudited interim condensed consolidated financial statements.
Unaudited Interim Condensed Consolidated
Statements of Financial Position
As of March 31, 2024 and December
31, 2023
(In thousands of U.S. Dollars)
|
|
Note |
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
11 |
|
6,033,658 |
|
5,923,440 |
Financial assets at fair value through profit or loss |
|
|
|
646,131 |
|
389,875 |
Securities |
|
12 |
|
624,731 |
|
368,574 |
Derivative financial instruments |
|
19 |
|
21,076 |
|
20,981 |
Collateral for credit card operations |
|
22 |
|
324 |
|
320 |
Financial assets at fair value through other comprehensive income |
|
|
|
8,801,925 |
|
8,805,745 |
Securities |
|
12 |
|
8,801,925 |
|
8,805,745 |
Financial assets at amortized cost |
|
|
|
25,309,564 |
|
24,988,919 |
Credit card receivables |
|
13 |
|
12,796,677 |
|
12,414,133 |
Loans to customers |
|
14 |
|
3,863,812 |
|
3,202,334 |
Compulsory and other deposits at central banks |
|
15 |
|
7,005,946 |
|
7,447,483 |
Other receivables |
|
16 |
|
1,405,969 |
|
1,689,030 |
Other financial assets |
|
|
|
167,666 |
|
131,519 |
Securities |
|
12 |
|
69,494 |
|
104,420 |
Other assets |
|
17 |
|
567,552 |
|
936,209 |
Deferred tax assets |
|
|
|
1,710,214 |
|
1,537,835 |
Right-of-use assets |
|
|
|
28,954 |
|
30,459 |
Property, plant and equipment |
|
|
|
36,530 |
|
39,294 |
Intangible assets |
|
18 |
|
307,399 |
|
295,881 |
Goodwill |
|
18 |
|
397,570 |
|
397,538 |
Total assets |
|
|
|
43,839,497 |
|
43,345,195 |
Unaudited Interim Condensed Consolidated
Statements of Financial Position
As of March 31, 2024 and December
31, 2023
(In thousands of U.S. Dollars)
|
|
Note |
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Financial liabilities at fair value through profit or loss |
|
|
|
660,425 |
|
242,615 |
Derivative financial instruments |
|
19 |
|
27,488 |
|
28,173 |
Instruments eligible as capital |
|
20 |
|
3,990 |
|
3,988 |
Repurchase agreements |
|
|
|
628,947 |
|
210,454 |
Financial liabilities at amortized cost |
|
|
|
35,230,755 |
|
34,582,759 |
Deposits |
|
21 |
|
24,254,885 |
|
23,691,130 |
Payables to network |
|
22 |
|
9,572,521 |
|
9,755,285 |
Borrowings and financing |
|
23 |
|
1,403,349 |
|
1,136,344 |
Salaries, allowances and social security contributions |
|
|
|
191,544 |
|
166,876 |
Tax liabilities |
|
|
|
320,379 |
|
1,300,845 |
Lease liabilities |
|
|
|
35,676 |
|
36,942 |
Provision for lawsuits and administrative proceedings |
|
24 |
|
13,579 |
|
8,082 |
Deferred income |
|
25 |
|
67,505 |
|
68,360 |
Other liabilities |
|
26 |
|
516,943 |
|
532,331 |
Total liabilities |
|
|
|
37,036,806 |
|
36,938,810 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Share capital |
|
30 |
|
84 |
|
84 |
Share premium reserve |
|
30 |
|
4,974,704 |
|
4,972,922 |
Accumulated gains |
|
30 |
|
1,716,077 |
|
1,276,949 |
Other comprehensive income |
|
30 |
|
111,826 |
|
156,430 |
Total equity |
|
|
|
6,802,691 |
|
6,406,385 |
Total liabilities and equity |
|
|
|
43,839,497 |
|
43,345,195 |
The accompanying notes are an integral
part of these unaudited interim condensed consolidated financial statements.
Unaudited Interim Condensed Consolidated
Statements of Changes in Equity
For the three-month period
ended March 31, 2024
(In thousands of U.S. Dollars)
|
|
Attributable to shareholders of the parent company |
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
Note |
Share capital |
|
Share premium reserve |
|
Accumulated gains |
|
Translation reserve |
|
Cash flow hedge reserve |
|
Financial Assets
at FVTOCI |
|
Own credit revaluation reserve |
|
Total equity |
Balances as of December 31, 2023 |
|
84 |
|
4,972,922 |
|
1,276,949 |
|
135,497 |
|
12,417 |
|
7,998 |
|
518 |
|
6,406,385 |
Profit for the period |
|
- |
|
- |
|
378,814 |
|
- |
|
- |
|
- |
|
- |
|
378,814 |
Share-based compensation, net of shares withheld for employee taxes |
10 |
- |
|
- |
|
60,314 |
|
- |
|
- |
|
- |
|
- |
|
60,314 |
Stock options exercised |
30 |
- |
|
1,782 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
1,782 |
Other comprehensive income, net of tax |
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedge |
|
- |
|
- |
|
- |
|
- |
|
26,702 |
|
- |
|
- |
|
26,702 |
Fair value changes - financial assets at FVTOCI |
|
- |
|
- |
|
- |
|
- |
|
- |
|
681 |
|
- |
|
681 |
Currency translation on foreign entities |
|
- |
|
- |
|
- |
|
(71,969) |
|
- |
|
- |
|
- |
|
(71,969) |
Own credit adjustment |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(18) |
|
(18) |
Balances as of March 31, 2024 |
|
84 |
|
4,974,704 |
|
1,716,077 |
|
63,528 |
|
39,119 |
|
8,679 |
|
500 |
|
6,802,691 |
Unaudited Interim Condensed Consolidated
Statements of Changes in Equity
For the three-month period
ended March 31, 2023
(In thousands of U.S. Dollars)
|
|
Attributable to shareholders of the parent company |
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
Note |
Share
capital |
|
Share
premium
reserve |
|
Accumulated gains (losses) |
|
Translation reserve |
|
Cash flow hedge reserve |
|
Financial Assets
at FVTOCI |
|
Own credit revaluation reserve |
|
Total equity |
Balances as of December 31, 2022 |
|
83 |
|
4,963,774 |
|
64,577 |
|
(108,356) |
|
(7,486) |
|
(22,298) |
|
489 |
|
4,890,783 |
Profit for the period |
|
- |
|
- |
|
141,751 |
|
- |
|
- |
|
- |
|
- |
|
141,751 |
Share-based compensation, net of shares withheld for employee taxes |
10 |
- |
|
- |
|
50,762 |
|
- |
|
- |
|
- |
|
- |
|
50,762 |
Stock options exercised |
30 |
- |
|
2,019 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
2,019 |
Other comprehensive income or loss, net of tax |
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedge |
|
- |
|
- |
|
- |
|
- |
|
2,147 |
|
- |
|
- |
|
2,147 |
Fair value changes - financial assets at FVTOCI |
|
- |
|
- |
|
- |
|
- |
|
- |
|
10,509 |
|
- |
|
10,509 |
Currency translation on foreign entities |
|
- |
|
- |
|
- |
|
110,505 |
|
- |
|
- |
|
- |
|
110,505 |
Own credit adjustment |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
45 |
|
45 |
Balances as of March 31, 2023 |
|
83 |
|
4,965,793 |
|
257,090 |
|
2,149 |
|
(5,339) |
|
(11,789) |
|
534 |
|
5,208,521 |
The accompanying notes are an integral
part of these unaudited interim condensed consolidated financial statements.
Unaudited Interim Condensed
Consolidated
Statements of Cash Flows
For the three-month period
ended March 31, 2024 and 2023
(In thousands of U.S. Dollars)
|
|
Note |
|
03/31/2024 |
|
03/31/2023 |
|
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
|
Reconciliation of profit to net cash flows from operating activities: |
Profit for the period |
|
|
|
378,814 |
|
141,751 |
Adjustments: |
|
|
|
|
|
|
Depreciation and amortization |
|
8 |
|
18,465 |
|
13,179 |
Credit loss allowance expenses |
|
7 |
|
883,498 |
|
491,937 |
Deferred income taxes |
|
29 |
|
(215,319) |
|
(103,986) |
Provision for lawsuits and administrative proceedings |
|
|
|
5,823 |
|
1,239 |
Unrealized losses on other investments |
|
|
|
- |
|
18,298 |
Unrealized losses on financial instruments |
|
|
|
(1,074) |
|
4,437 |
Interest accrued |
|
|
|
41,326 |
|
16,463 |
Share-based compensation |
|
|
|
78,649 |
|
57,857 |
Others |
|
|
|
2,088 |
|
- |
|
|
|
|
1,192,270 |
|
641,175 |
|
|
|
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Securities |
|
|
|
(218,559) |
|
1,968,358 |
Compulsory deposits and others at central banks |
|
|
|
447,155 |
|
103,703 |
Credit card receivables |
|
|
|
(1,740,047) |
|
(1,577,046) |
Loans to customers |
|
|
|
(1,564,023) |
|
(702,670) |
Other receivables |
|
|
|
286,980 |
|
(541,190) |
Other assets |
|
|
|
334,622 |
|
406,972 |
Deposits |
|
|
|
570,928 |
|
(49,611) |
Payables to network |
|
|
|
(156,255) |
|
(178,401) |
Deferred income |
|
|
|
(866) |
|
5,299 |
Other liabilities |
|
|
|
(2,543) |
|
(134,691) |
|
|
|
|
|
|
|
Interest paid |
|
|
|
(36,260) |
|
(18,832) |
Income tax paid |
|
|
|
(987,010) |
|
(404,193) |
Interest received |
|
|
|
1,302,989 |
|
575,419 |
Cash flows (used in) generated from operating activities |
|
|
|
(570,619) |
|
94,292 |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
Acquisition of property, plant and equipment |
|
|
|
(210) |
|
(4,596) |
Acquisition and development of intangible assets |
|
|
|
(26,573) |
|
(41,919) |
Cash flow (used in) generated from investing activities |
|
|
|
(26,783) |
|
(46,515) |
|
|
Note |
|
03/31/2024 |
|
03/31/2023 |
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
Proceeds from borrowings and financing |
|
23 |
|
269,726 |
|
19,713 |
Payments of borrowings and financing |
|
23 |
|
(11,465) |
|
- |
Lease payments |
|
|
|
(1,823) |
|
(1,858) |
Exercise of stock options |
|
30 |
|
1,782 |
|
2,019 |
Cash flows (used in) generated from financing activities |
|
|
|
258,220 |
|
19,874 |
Change in cash and cash equivalents |
|
|
|
(339,182) |
|
67,651 |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
Cash and cash equivalents - beginning of the period |
|
11 |
|
5,923,440 |
|
4,172,316 |
Foreign exchange rate changes on cash and cash equivalents |
|
|
|
449,400 |
|
70,529 |
Cash and cash equivalents - end of the period |
|
11 |
|
6,033,658 |
|
4,310,496 |
Increase (decrease) in cash and cash equivalents |
|
|
|
(339,182) |
|
67,651 |
The accompanying notes are an integral
part of these unaudited interim condensed consolidated financial statements.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
Nu Holdings Ltd.
Notes to the Unaudited Interim Condensed
Consolidated Financial Statements
(In thousands of U.S. Dollars,
unless otherwise stated)
1. OPERATIONS
Nu Holdings Ltd. ("Company" or
"Nu Holdings") was incorporated as an exempted Company under the Companies Law of the Cayman Islands on February 26, 2016. The
address of the Company's registered office is Willow House, 4th floor, Cricket Square, Grand Cayman - Cayman Islands. Nu Holdings
has no operating activities with clients.
The Company’s shares are publicly traded
on the New York Stock Exchange ("NYSE") under the symbol “NU”. The Company holds investments in several operating
entities and, as of March 31, 2024, its significant operating subsidiaries were:
| ● | Nu Pagamentos S.A. - Instituição de Pagamento (“Nu
Pagamentos”) is an indirect subsidiary domiciled in Brazil. Nu Pagamentos is engaged in the issuance and administration
of credit cards and payment transfers through a prepaid account, and participation in other companies as partner or shareholder. Nu Pagamentos
has as its primary products: (i) a Mastercard international credit card (issued in Brazil which allows payments for purchases to be made
in monthly installments), fully managed through a smartphone app, and (ii) "Conta do Nubank", a 100% digital smartphone app,
maintenance-free prepaid account, which also includes features of a traditional bank account, such as electronic and peer-to-peer transfers
("PIX"), bill payments, withdrawals through the 24 Hours ATM network, instant payments, prepaid credit for mobile top ups and
prepaid cards similar in functionality to debit cards. |
| ● | Nu Financeira S.A. – SCFI (“Nu Financeira”)
is an indirect subsidiary also domiciled in Brazil, with personal loans and retail deposits as its main products. Nu Financeira offers
customers in Brazil the possibility to obtain loans that can be customized in relation to amounts, terms and conditions, number of installments
with transparent disclosure of any charges involved in the transaction, fully managed through the above-mentioned smartphone app. Loan
issuance, repayment, and prepayments are available 24/7 through "Conta do Nubank", directly in the app. In addition, Nu Financeira
issues the Bank Deposit Receipt (RDB), with daily liquidity and with a defined future maturity date and offered to the Company's customers
through the "Conta do Nubank". Nu Financeira also grants credit to Nu Pagamentos credit card holders, due to overdue invoices,
bill installments and revolving credit. |
| ● | Nu Invest Corretora de Valores S.A. ("Nu Invest")
is an indirect subsidiary acquired in June 2021, domiciled in Brazil, and is a digital investment broker dealer. |
| ● | Nu Distribuidora de Titulos e Valores Mobiliarios
Ltda. ("Nu DTVM") is an indirect subsidiary that executes securities brokerage
activities in Brazil. |
| ● | Nu México Financiera, S.A. de C.V., S.F.P. ("Nu Financiera")
is an indirect subsidiary domiciled in Mexico. Nu Financiera is engaged in the issuance and administration of credit cards, payment transfers
through a prepaid account and offers customers in México the possibility to obtain loans, in addition to offering "Cuenta
Nu", a 100% digital account in the smartphone app, maintenance-free prepaid account, which also includes features of a traditional
bank account. It commenced operations in the Mexican market in December
2022 and currently offers credit cards and deposits as its main products. |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
| ● | Nu Colombia S.A. (“Nu Colombia”) is an indirect
subsidiary domiciled in Colombia, with operations related to credit cards, which was launched in September 2020. On January 2024, the
Financial Superintendence of Colombia ("SFC") approved the Group's request to incorporate a financing institution in Colombia,
Nu Colombia Compañía de Financiamiento S.A ("Nu Colombia Financiamiento") ("Incorporation License").
"Cuenta Nu" was launched in the country in March 2024. |
The Company and its consolidated subsidiaries
are referred to in these unaudited interim condensed consolidated financial statements as the “Group” or "Nu”.
The Company’s Board authorized the
issuance of these unaudited interim condensed consolidated financial statements on May 14, 2024.
2. STATEMENT OF COMPLIANCE
These unaudited interim condensed consolidated
financial statements do not include all the information required for a complete set of financial statements prepared in accordance with
International Financial Reporting Standards ("IFRS”) as issued by the International Accounting Standard Board (“IASB”).
However, selected condensed explanatory notes are included to explain events and transactions that are significant to understanding the
changes in the Group's financial position and performance since the issuance of its last annual financial statements.
The Group’s unaudited interim condensed
consolidated financial statements have been prepared in accordance with IAS 34 - Interim Financial Reporting issued by IASB. Accordingly,
this report is to be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2023 (the "Annual
Financial Statements”).
a) Functional currency
and foreign currency translation
i) Nu Holding's functional
and presentation currency
The presentation of the functional currency
and foreign currency translation is described below and it is valid for these unaudited interim condensed consolidated financial statements.
The functional currency for Nu Holdings and
the presentation currency of these unaudited interim condensed consolidated financial statements is the U.S. Dollar (“US$”).
The functional currency of the Brazilian operating entities is the Brazilian real, for the Mexican entities, Mexican peso and for the
Colombian entities, the Colombian peso.
The financial statements of the foreign subsidiaries
held in functional currencies that are not US$ are translated into US$, and the exchange differences arising from the translation to US$
of the financial statements denominated in functional currencies other than the US$ are recognized in the consolidated statements of comprehensive
income or loss (OCI) as an item that may be reclassified to profit or loss within “currency translation on foreign entities”.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
b) New or revised accounting
pronouncements adopted in 2024:
The following new or revised standards have
been issued by IASB, were effective for the period covered by these unaudited interim condensed consolidated financial statements and
had no significant impact.
| ● | Disclosures in Financial Statements (Amendments to IAS 1); |
| ● | Non-current Liabilities with Covenants (Amendments to IAS 1); |
| ● | Classification of Liabilities as Current or Non-Current (Amendments to IAS 1); |
| ● | Lease Liability in a Sale and Leaseback (Amendments to IFRS 16); |
| ● | Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7). |
c) Other new standards
and interpretations issued but not yet effective:
| ● | Presentation and Disclosures in Financial Statements (IFRS 18); |
| ● | Lack of Exchangeability (Amendments to IAS 21). |
Management does not expect the adoption of
the amendments described above to have a significant impact, other than additional disclosures, on the Group's unaudited interim condensed
consolidated financial statements.
3. BASIS OF CONSOLIDATION
These unaudited interim condensed consolidated
financial statements include the accounting balances of Nu Holdings and all those subsidiaries over which the Company exercises control,
directly or indirectly. Control is achieved where the Company has (i) power over the investee; (ii) is exposed, or has rights, to variable
returns from its involvement with the investee; and (iii) can use its power to affect its profits.
The Company re-assesses whether it maintains
control of an investee if facts and circumstances indicate that there are changes to one or more of the three above mentioned elements
of control.
The consolidation of a subsidiary begins
when the Company obtains control over it and ceases when the Company loses control over it. Assets, liabilities, income, and expenses
of a subsidiary acquired or disposed of during the reporting period are included in the consolidated statements of profit or loss from
the date the Company gains control until the date the Company ceases to control the subsidiary.
The financial information of the subsidiaries
was prepared for the same period as the Company and consistent accounting policies were applied. The financial statements of the subsidiaries
are fully consolidated with those of the Company. Accordingly, all balances, transactions and any unrealized income and expenses arising
between consolidated entities are eliminated in the consolidation, except for foreign-currency gain and losses on translation of intercompany
loans. Profit or loss and each component of other comprehensive income are attributed to the shareholders of the parent and to the non-controlling
interests, when applicable.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
The subsidiaries below are the most relevant
entities included in these unaudited interim condensed consolidated financial statements:
Entity |
|
Control |
|
Principal activities |
|
Functional currency |
|
Country |
|
03/31/2024 |
|
12/31/2023 |
Nu Pagamentos S.A. - Instituição de Pagamentos (“Nu Pagamentos”) |
|
Indirect |
|
Credit card and prepaid account operations |
|
BRL |
|
Brazil |
|
100% |
|
100% |
Nu Financeira S.A. – SCFI (“Nu Financeira”) |
|
Indirect |
|
Loan operations |
|
BRL |
|
Brazil |
|
100% |
|
100% |
Nu Distribuidora de Titulos e Valores Mobiliarios Ltda. ("Nu DTVM") |
|
Indirect |
|
Securities distribution |
|
BRL |
|
Brazil |
|
100% |
|
100% |
Nu Invest Corretora de Valores S.A ("Nu Invest") |
|
Indirect |
|
Investment platform |
|
BRL |
|
Brazil |
|
100% |
|
100% |
Nu México Financiera, S.A. de C.V., S.F.P. ("Nu Financiera") |
|
Indirect |
|
Multiple purpose financial company |
|
MXN |
|
Mexico |
|
100% |
|
100% |
Nu Colombia S.A. (“Nu Colombia”) |
|
Indirect |
|
Credit card operations |
|
COP |
|
Colombia |
|
100% |
|
100% |
In addition, the Company consolidated the
following investment fund as of March 31,2024 and December 31, 2023, in which the Group’s companies hold a substantial interest
or the entirety of the interests and are therefore exposed, or have rights, to variable returns and have the ability to affect those returns
through power over the entity:
Name of the entity |
|
Country |
Fundo de Investimento Ostrum Soberano Renda Fixa Referenciado DI (“Fundo Ostrum”) |
|
Brazil |
Nu Pagamentos, Nu Financeira, Nu DTVM, Nu
Invest and Nu Pay, Brazilian subsidiaries, are regulated by Central Bank of Brazil (“BACEN”); Nu Financiera, a Mexican subsidiary,
is regulated by both the Mexican Central Bank ("BANXICO") and Mexican National Banking and Stock Commission (“CNBV”);
Nu Colombia Financiamiento, Colombian subsidiary, is regulated by Industry and Commerce Superintendency and by Financial Superintendence
of Colombia ("SFC"); and as such, there are some regulatory requirements that restrict the ability of the Group to access and
transfer assets freely to or from these entities within the Group and to settle liabilities of the other entities of the Group.
4. MATERIAL ACCOUNTING
POLICIES
The significant
accounting policies adopted by the Group in the preparation of these unaudited interim condensed consolidated financial statements are
consistent with those adopted and disclosed in the Annual Financial Statements and therefore should be read in conjunction.
5. SIGNIFICANT ACCOUNTING
JUDGMENTS, ESTIMATES AND ASSUMPTIONS
Use of estimates and
judgments
The preparation of financial statements requires
judgments, estimates, and assumptions from management that affect the application of accounting policies, and reported amounts of assets,
liabilities, revenues, and expenses. Actual results may differ from these estimates, and estimates and assumptions are reviewed on a periodic
basis. Revisions to the estimates are recognized prospectively.
The significant assumptions and estimates
used in the preparation of these unaudited interim condensed consolidated financial statements were the same as those adopted in the Annual
Financial Statements.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
Credit losses on
financial instruments for credit card receivables and loans to customers
The Group recognizes a loss allowance for
expected credit losses on credit cards receivables and loans to customers that represents management’s best estimate of allowance
as of each reporting date.
Management performs an analysis of the credit
card and loan amounts to determine if credit losses have occurred and to assess the adequacy of the allowance based on historical and
current trends as well as other factors affecting credit losses.
Key areas of judgment
The critical judgments made by management
in applying the expected credit losses ("ECL") allowance methodology are:
| b) | Forward-looking information used for the projection of macroeconomic scenarios; |
| c) | Probability weights of future scenarios; |
| d) | Definition of significant increase in credit risk and lifetime; and |
| e) | Look-back period, used for parameters estimation (probability of default - PD, exposure at default - EAD
and loss given default - LGD). |
Sensitivity analysis
On March 31, 2024, the probability weighted
ECL allowance for credit card receivables and loans to customers totaled US$2,934,387 of which US$2,319,493 related to credit card receivables
and US$614,894 to loans to customers. The ECL allowance is sensitive to the methodology, assumptions and estimations underlying its calculation.
One key assumption is the probability weighting of the macroeconomic scenarios between upside, base and downside as the carrying amount
of the credit loss allowance is determined based on the weighted average of these scenarios. Such weightings are a reflection of the management's
perception around the current and future expectations of the macroeconomic environment based on, but not limited to, GDP, Inflation, Unemployment
and Interest Rates in each of the geographies the Group operates in. The table below illustrates the ECL that would have arisen if management
had applied the weighted average of these three macroeconomic scenarios and a 100% weighting to each macroeconomic scenario.
|
|
Weighted average |
|
Upside |
|
Base case |
|
Downside |
|
|
|
|
|
|
|
|
|
Credit card and lending ECL |
|
2,934,387 |
|
2,751,817 |
|
2,914,055 |
|
3,208,082 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
6. INCOME AND RELATED
EXPENSES
a) Interest income and
gains (losses) on financial instruments
|
|
Three-month period ended |
|
|
03/31/2024 |
|
03/31/2023 |
|
|
|
|
|
Interest income – credit card |
|
983,573 |
|
447,696 |
Interest income – lending |
|
655,961 |
|
286,943 |
Interest income – other assets at amortized cost |
|
260,222 |
|
154,163 |
Interest income – other receivables |
|
103,816 |
|
86,971 |
Interest income and gains (losses) on financial instruments at fair value |
|
276,676 |
|
279,681 |
Financial assets at fair value |
|
289,557 |
|
271,194 |
Other |
|
(12,881) |
|
8,487 |
Total interest income and gains (losses) on financial instruments |
|
2,280,248 |
|
1,255,454 |
The interest income presented
above from credit card, lending, other assets at amortized cost and other receivables represents interest revenue calculated using the
effective interest method. Financial assets at fair value comprise interest and the fair value changes on financial assets at fair value.
b) Fee and commission
income
|
|
Three-month period ended |
|
|
03/31/2024 |
|
03/31/2023 |
|
|
|
|
|
Interchange fees |
|
339,703 |
|
265,380 |
Late fees |
|
61,744 |
|
36,359 |
Recharge fees |
|
7,651 |
|
25,050 |
Rewards revenue |
|
5,676 |
|
5,547 |
Other fee and commission income |
|
40,879 |
|
30,877 |
Total fee and commission income |
|
455,653 |
|
363,213 |
Fee and commission income are presented
by fee types that reflect the nature of the services offered by the Group. Recharge fees comprise the selling price of prepaid credit
for mobile top ups to customers, net of acquisition costs.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
c) Interest and other financial
expenses
|
|
Three-month period ended |
|
|
03/31/2024 |
|
03/31/2023 |
|
|
|
|
|
Interest expense on deposits |
|
514,071 |
|
395,116 |
Financial bill expenses |
|
30,521 |
|
5,729 |
Other interest and similar expenses |
|
116,123 |
|
39,367 |
Interest and other financial expenses |
|
660,715 |
|
440,212 |
d) Transactional expenses
|
|
Three-month period ended |
|
|
03/31/2024 |
|
03/31/2023 |
|
|
|
|
|
Bank slip costs |
|
5,100 |
|
6,306 |
Rewards expenses |
|
15,746 |
|
12,116 |
Credit and debit card network costs |
|
15,035 |
|
18,940 |
Financial system expenses |
|
5,467 |
|
3,873 |
Other transactional expenses |
|
21,600 |
|
11,543 |
Total transactional expenses |
|
62,948 |
|
52,778 |
7. CREDIT LOSS ALLOWANCE
EXPENSES
|
|
Three-month period ended |
|
|
03/31/2024 |
|
03/31/2023 |
|
|
|
|
|
Net increase of loss allowance (note 13) |
|
594,326 |
|
382,607 |
Recovery |
|
(39,611) |
|
(13,386) |
Credit card receivables |
|
554,715 |
|
369,221 |
|
|
|
|
|
Net increase of loss allowance (note 14) |
|
289,815 |
|
109,330 |
Recovery |
|
(13,168) |
|
(3,756) |
Loans to customers |
|
276,647 |
|
105,574 |
|
|
|
|
|
Net increase (decrease) of loss allowance (note 16) |
|
(314) |
|
- |
Recovery |
|
- |
|
- |
Other receivables |
|
(314) |
|
- |
|
|
|
|
|
Net increase (decrease) of loss allowance (note 12) |
|
(329) |
|
- |
Recovery |
|
- |
|
- |
Other financial assets |
|
(329) |
|
- |
Total |
|
830,719 |
|
474,795 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
8. OPERATING EXPENSES
|
|
|
|
|
Three-month period ended 03/31/2024 |
|
|
Customer support and operations |
|
General and administrative expenses |
|
Marketing expenses |
|
Other income (expenses) |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
Infrastructure and data processing costs |
|
(58,595) |
|
(47,435) |
|
- |
|
- |
|
(106,030) |
Credit analysis and collection costs |
|
(19,538) |
|
(9,516) |
|
- |
|
- |
|
(29,054) |
Customer services |
|
(30,025) |
|
(1,659) |
|
- |
|
- |
|
(31,684) |
Salaries and associated benefits |
|
(19,529) |
|
(92,301) |
|
(4,741) |
|
- |
|
(116,571) |
Credit and debit card issuance costs |
|
(7,763) |
|
(10,371) |
|
- |
|
- |
|
(18,134) |
Share-based compensation (note 10) |
|
(3,759) |
|
(99,268) |
|
(2,498) |
|
- |
|
(105,525) |
Specialized services expenses |
|
- |
|
(16,089) |
|
- |
|
- |
|
(16,089) |
Other personnel costs |
|
(4,939) |
|
(12,945) |
|
(543) |
|
- |
|
(18,427) |
Depreciation and amortization |
|
(6,431) |
|
(12,034) |
|
- |
|
- |
|
(18,465) |
Marketing expenses |
|
- |
|
- |
|
(39,045) |
|
- |
|
(39,045) |
Taxes on financial income |
|
- |
|
- |
|
- |
|
(81,520) |
|
(81,520) |
Others |
|
(33) |
|
(24,434) |
|
- |
|
2,029 |
|
(22,438) |
Total |
|
(150,612) |
|
(326,052) |
|
(46,827) |
|
(79,491) |
|
(602,982) |
|
|
|
|
|
Three-month period ended 03/31/2023 |
|
|
Customer support and operations |
|
General and administrative expenses |
|
Marketing expenses |
|
Other income (expenses) |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
Infrastructure and data processing costs |
|
(40,167) |
|
(45,949) |
|
- |
|
- |
|
(86,116) |
Credit analysis and collection costs |
|
(17,667) |
|
(9,706) |
|
- |
|
- |
|
(27,373) |
Customer services |
|
(22,257) |
|
(1,926) |
|
- |
|
- |
|
(24,183) |
Salaries and associated benefits |
|
(17,215) |
|
(64,096) |
|
(5,272) |
|
- |
|
(86,583) |
Credit and debit card issuance costs |
|
(4,898) |
|
(14,437) |
|
- |
|
- |
|
(19,335) |
Share-based compensation (note 10) |
|
- |
|
(59,505) |
|
- |
|
- |
|
(59,505) |
Specialized services expenses |
|
- |
|
(3,248) |
|
- |
|
- |
|
(3,248) |
Other personnel costs |
|
(3,598) |
|
(11,591) |
|
(500) |
|
- |
|
(15,689) |
Depreciation and amortization |
|
(1,978) |
|
(11,201) |
|
- |
|
- |
|
(13,179) |
Marketing expenses |
|
- |
|
- |
|
(13,500) |
|
- |
|
(13,500) |
Taxes on financial income |
|
- |
|
- |
|
- |
|
(41,712) |
|
(41,712) |
Others |
|
(35) |
|
(15,222) |
|
- |
|
(1,573) |
|
(16,830) |
Total |
|
(107,815) |
|
(236,881) |
|
(19,272) |
|
(43,285) |
|
(407,253) |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
9. EARNINGS PER SHARE
|
|
Three-month period ended |
|
|
03/31/2024 |
|
03/31/2023 |
|
|
|
|
|
Earnings for the period |
|
378,814 |
|
141,751 |
Weighted average outstanding shares - ordinary shares - basic (thousands) |
|
4,773,284 |
|
4,709,469 |
Adjustment for the basic earnings per shares: |
|
|
|
|
Deferred M&A shares that will be issued solely based on the passage of time |
|
- |
|
36 |
Weighted average outstanding shares - ordinary shares - basic (thousands) |
|
4,773,284 |
|
4,709,505 |
Adjustment for the diluted earnings per share: |
|
|
|
|
Share based payment |
|
110,718 |
|
104,052 |
Business acquisition |
|
2,359 |
|
4,643 |
Total weighted average of ordinary outstanding shares for diluted EPS (in thousands of shares) |
|
4,886,361 |
|
4,818,200 |
Earnings per share – basic (US$) |
|
0.0794 |
|
0.0301 |
Earnings per share – diluted (US$) |
|
0.0775 |
|
0.0294 |
Antidilutive instruments not considered in the weighted number of shares (in thousands of shares) |
|
20,844 |
|
- |
The Company has instruments that will become
common shares upon exercise, acquisition, conversion (SOPs and RSUs described in note 10), or satisfaction of specific business combination
conditions. The effects of the potential antidilutive instruments were calculated using the treasury stock method and are included in
the total weighted average of ordinary outstanding shares for diluted EPS if the effects are considered dilutive. The antidilutive instruments
not considered in the weighted number of shares correspond to the total number of shares that could be converted into ordinary shares.
Instruments are considered antidilutive if the average market value of ordinary shares during the period is less than the average value
of the assumed proceeds (fair value of services that will be recognized as a cost in future periods plus exercise price multiplied by
the number of options and shares to be issued on exercise of the options).
10. SHARE-BASED PAYMENTS
Share-settled awards
The Group’s employee incentives include
share settled awards in the form of stock, offering them the opportunity to purchase ordinary shares by exercising options (Stock Options
– “SOPs”), receiving ordinary shares (Restricted Stock Units – “RSUs”) upon vesting, and receiving
shares upon the achievement of market conditions and passage of time ("Awards").
The cost of the employee services received
with respect to the SOPs and RSUs granted is recognized in the statement of profit or loss over the period that the employee provides
services and according to the vesting conditions. The Group also issued Awards in 2020 that grant shares upon the achievement of market
conditions related to the valuation of the Company. RSUs incentive was implemented in 2020 and is the main incentive since then.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
There were no changes to the terms and conditions
of the SOPs and RSUs after the grant date. The changes in the number of SOPs and RSUs are as follows. WAEP is the weighted average exercise
price and WAGDFV is the weighted average fair value at the grant date.
SOPs |
03/31/2024 |
|
WAEP (US$) |
|
03/31/2023 |
|
WAEP (US$) |
|
|
|
|
|
|
|
|
Outstanding on January 1 |
59,942,062 |
|
1.04 |
|
101,276,327 |
|
0.72 |
Exercised during the period |
(9,802,204) |
|
0.17 |
|
(10,207,564) |
|
0.13 |
Forfeited during the period |
(146,588) |
|
|
|
(1,409,572) |
|
|
Outstanding on March 31 |
49,993,270 |
|
1.21 |
|
89,659,191 |
|
0.78 |
Exercisable on March 31 |
45,597,804 |
|
1.14 |
|
74,708,715 |
|
0.63 |
RSUs |
03/31/2024 |
|
WAGDFV (US$) |
|
03/31/2023 |
|
WAGDFV (US$) |
|
|
|
|
|
|
|
|
Outstanding on January 1 |
66,512,061 |
|
5.66 |
|
72,401,895 |
|
5.46 |
Granted during the period |
23,744,164 |
|
11.15 |
|
29,717,517 |
|
4.52 |
Vested during the period |
(7,289,675) |
|
4.82 |
|
(6,387,171) |
|
4.33 |
Forfeited during the period |
(1,459,175) |
|
|
|
(4,509,435) |
|
|
Outstanding on March 31 |
81,507,375 |
|
7.33 |
|
91,222,806 |
|
5.21 |
The following tables present the total amount
of share-based compensation expense for the three-month period ended on March 31, 2024 and March 31, 2023, and the provision for taxes
as of March 31, 2024 and December 31, 2023.
|
Three-month period ended |
|
03/31/2024 |
|
03/31/2023 |
|
|
|
|
SOP and RSU expenses and related corporate and social security taxes expenses |
123,252 |
|
52,789 |
RSUs and SOPs grant - business combination |
1,607 |
|
7,460 |
Awards expenses and related taxes |
2,975 |
|
4,931 |
Fair value adjustment - hedge of corporate and social security taxes (note 19) |
(22,309) |
|
(5,675) |
Total share-based compensation expenses (note 8) |
105,525 |
|
59,505 |
|
|
|
|
Equity share-based compensation, net of shares withheld for employee taxes |
60,314 |
|
50,762 |
|
03/31/2024 |
|
12/31/2023 |
Liability provision for taxes presented as salaries, allowances and social security contributions |
97,421 |
|
66,075 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
11. CASH AND CASH EQUIVALENTS
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
Voluntary deposits at central banks |
2,594,675 |
|
3,308,040 |
Bank balances |
3,142,202 |
|
1,759,018 |
Short-term investments |
296,708 |
|
854,846 |
Reverse repurchase agreement in foreign currency |
60 |
|
61 |
Other cash and cash equivalents |
13 |
|
1,475 |
Total |
6,033,658 |
|
5,923,440 |
Cash and cash equivalents are held to meet
short-term cash needs and include deposits with banks and other short-term highly liquid investments with original maturities of three-months
or less and with an immaterial risk of change in value.
Short-term investments are mainly in U.S.
dollars and remunerated by a fixed-rate index ranging from 1% to 5.4% per year as of March 31, 2024 and December 31, 2023.
Voluntary deposits at central banks are deposits
made by the Brazilian subsidiaries at the Central Bank of Brazil. The average rate of remuneration as of March 31, 2024 and December 31,
2023, was 100% of the Brazilian CDI rate, with daily maturity.
12. SECURITIES
a) Financial instruments
at fair value through profit and loss ("FVTPL")
|
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
|
|
Maturities |
|
|
Financial instruments at FVTPL |
|
Amortized
Cost |
|
Fair Value |
|
No maturity |
|
Up to 12 months |
|
Over 12
months |
|
Fair Value |
Government bonds |
|
|
|
|
|
|
|
|
|
|
|
|
Brazil |
|
309,717 |
|
309,773 |
|
- |
|
- |
|
309,773 |
|
309,353 |
Total government bonds |
|
309,717 |
|
309,773 |
|
- |
|
- |
|
309,773 |
|
309,353 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds and other instruments |
|
|
|
|
|
|
|
|
|
|
|
|
Bill of credit (LC) |
|
8 |
|
8 |
|
- |
|
- |
|
8 |
|
1 |
Certificate of bank deposits (CDB) |
|
1,705 |
|
1,745 |
|
- |
|
715 |
|
1,030 |
|
5,770 |
Real estate and agribusiness letter of credit |
|
554 |
|
562 |
|
- |
|
50 |
|
512 |
|
186 |
Corporate bonds and debentures |
|
15,757 |
|
15,657 |
|
- |
|
- |
|
15,657 |
|
23,667 |
Equity instrument (i) |
|
12,403 |
|
13,175 |
|
13,175 |
|
- |
|
- |
|
13,199 |
Investment funds |
|
32,239 |
|
32,239 |
|
32,239 |
|
- |
|
- |
|
16,164 |
Notes |
|
250,084 |
|
251,087 |
|
- |
|
251,087 |
|
- |
|
- |
Real estate and agribusiness certificate of receivables |
|
485 |
|
485 |
|
- |
|
- |
|
485 |
|
234 |
Total corporate bonds and other instruments |
|
313,235 |
|
314,958 |
|
45,414 |
|
251,852 |
|
17,692 |
|
59,221 |
Total financial instruments at FVTPL |
|
622,952 |
|
624,731 |
|
45,414 |
|
251,852 |
|
327,465 |
|
368,574 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
|
|
03/31/2024 |
|
12/31/2023 |
|
|
Amounts in |
|
Amounts in |
Financial instruments at FVTPL |
|
Original Currency |
|
US$ |
|
Original Currency |
|
US$ |
Currency: |
|
|
|
|
|
|
|
|
Brazilian Reais |
|
1,777,761 |
|
354,524 |
|
1,681,223 |
|
346,134 |
U.S. Dollars |
|
257,032 |
|
257,032 |
|
9,241 |
|
9,241 |
Others (i) |
|
1,096,272 |
|
13,175 |
|
1,098,602 |
|
13,199 |
Total |
|
|
|
624,731 |
|
|
|
368,574 |
(i) Refers to an investment in
Jupiter, a neobank for consumers in India and an investment in Din Global ("dBank"), a Pakistani fintech company. As of March
31, 2024, the total fair value of these investments corresponded to US$13,175 (US$13,199
on December 31, 2023), classified as level 3 in the fair value hierarchy, as described in note 28.
b) Financial instruments
at fair value through other comprehensive income ("FVTOCI")
|
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
|
|
Maturities |
|
|
Financial instruments at FVTOCI |
|
Amortized
Cost |
|
Fair Value |
|
No maturity |
|
Up to 12 months |
|
Over 12
months |
|
Fair Value |
Government bonds (i) |
|
|
|
|
|
|
|
|
|
|
|
|
Brazil |
|
6,926,698 |
|
6,936,810 |
|
- |
|
439,429 |
|
6,497,381 |
|
7,166,551 |
United States of America |
|
131,763 |
|
131,913 |
|
- |
|
- |
|
131,913 |
|
126,914 |
Mexico |
|
1,495 |
|
1,377 |
|
- |
|
- |
|
1,377 |
|
1,407 |
Total government bonds |
|
7,059,956 |
|
7,070,100 |
|
- |
|
439,429 |
|
6,630,671 |
|
7,294,872 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds and other instruments |
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds and debentures |
|
1,230,391 |
|
1,233,180 |
|
- |
|
82,133 |
|
1,151,047 |
|
1,243,841 |
Investment funds |
|
121,124 |
|
119,997 |
|
31,936 |
|
17,459 |
|
70,602 |
|
54,803 |
Time deposit |
|
362,942 |
|
362,603 |
|
- |
|
193,650 |
|
168,953 |
|
194,390 |
Real estate and agribusiness certificate of receivables |
|
15,851 |
|
16,045 |
|
- |
|
- |
|
16,045 |
|
17,839 |
Total corporate bonds and other instruments |
|
1,730,308 |
|
1,731,825 |
|
31,936 |
|
293,242 |
|
1,406,647 |
|
1,510,873 |
Total financial instruments at FVTOCI |
|
8,790,264 |
|
8,801,925 |
|
31,936 |
|
732,671 |
|
8,037,318 |
|
8,805,745 |
|
|
03/31/2024 |
|
12/31/2023 |
|
|
Amounts in |
|
Amounts in |
Financial instruments at FVTOCI |
|
Original Currency |
|
US$ |
|
Original Currency |
|
US$ |
Currency: |
|
|
|
|
|
|
|
|
Brazilian Reais |
|
37,658,414 |
|
7,509,904 |
|
37,333,260 |
|
7,686,169 |
U.S. Dollars |
|
1,290,644 |
|
1,290,644 |
|
1,118,169 |
|
1,118,169 |
Others |
|
22,801 |
|
1,377 |
|
23,880 |
|
1,407 |
Total |
|
|
|
8,801,925 |
|
|
|
8,805,745 |
(i) Includes US$122,624
(US$23,050 on December 31, 2023) held by the subsidiaries for regulatory purposes, as required by the Central Bank of Brazil. It also
includes Brazilian government securities margins pledged by the Group for transactions on the Brazilian stock exchange in the amount of
US$142,791 (US$130,150 on December 31, 2023). Government
bonds are classified as Level 1 in the fair value hierarchy, as described in note 28.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
The Group has corporate bonds and debentures
classified as FVTOCI, for which ECL measured for March 31, 2024 was US$329, as shown in note
7 and the exposure was classified as Stage 1. There was no transfer between stages during the three-month period ending on March 31, 2024.
c) Financial instruments
at amortized cost
|
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
Maturities |
|
|
Financial instruments at amortized cost |
|
Amortized
Cost |
|
No maturity |
|
Up to 12 months |
|
Over 12
months |
|
Amortized
Cost |
Government bonds |
|
|
|
|
|
|
|
|
|
|
Colombia |
|
28 |
|
- |
|
- |
|
28 |
|
- |
Total government bonds |
|
28 |
|
- |
|
- |
|
28 |
|
- |
|
|
|
|
|
|
|
|
|
|
|
Sovereign bonds and other instruments |
|
|
|
|
|
|
|
|
|
|
Sovereign bonds (i) |
|
52,118 |
|
- |
|
52,118 |
|
- |
|
52,650 |
Corporate bonds and debentures |
|
4,376 |
|
- |
|
- |
|
4,376 |
|
- |
Time deposit |
|
12,972 |
|
- |
|
12,972 |
|
- |
|
51,770 |
Total sovereign bonds and other instruments |
|
69,466 |
|
- |
|
65,090 |
|
4,376 |
|
104,420 |
Total financial instruments at amortized cost |
|
69,494 |
|
- |
|
65,090 |
|
4,404 |
|
104,420 |
|
|
03/31/2024 |
|
12/31/2023 |
|
|
Amounts in |
|
Amounts in |
Financial instruments at amortized cost |
|
Original Currency |
|
US$ |
|
Original Currency |
|
US$ |
Currency: |
|
|
|
|
|
|
|
|
Brazilian Reais |
|
283,289 |
|
56,494 |
|
255,732 |
|
52,650 |
Others |
|
50,172,590 |
|
13,000 |
|
878,640 |
|
51,770 |
Total |
|
|
|
69,494 |
|
|
|
104,420 |
(i) Refers to an investment in
sovereign bonds with the intention to collect contractual cash flows.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
13. CREDIT CARD RECEIVABLES
Composition of receivables
|
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
|
Receivables - current (i) |
|
6,493,596 |
|
6,296,788 |
Receivables - installments (i) |
|
7,516,565 |
|
7,212,775 |
Receivables - revolving (ii) |
|
1,083,566 |
|
978,741 |
Total receivables |
|
15,093,727 |
|
14,488,304 |
Fair value adjustment - portfolio hedge (note 19) |
|
- |
|
32 |
Total |
|
15,093,727 |
|
14,488,336 |
|
|
|
|
|
Credit card ECL allowance |
|
|
|
|
Presented as deduction of receivables |
|
(2,297,050) |
|
(2,074,203) |
Presented as "Other liabilities" (note 26) |
|
(22,443) |
|
(22,066) |
Total credit card ECL allowance |
|
(2,319,493) |
|
(2,096,269) |
Receivables, net |
|
12,774,234 |
|
12,392,067 |
Total receivables presented as assets |
|
12,796,677 |
|
12,414,133 |
(i) "Receivables - current" is
related to purchases, withdrawals, payment slips ("boleto") and PIX (BACEN instant payments) financing made by customers
due on the next credit card billing date. "Receivables - installments” is related to purchases in installments. Credit card
receivables can be paid by Nu's clients in up to 36 monthly installments. The cardholder’s credit limit is initially reduced by
the total amount and the installments become due and payable on the cardholder's subsequent monthly credit card statement. Brazil makes
the corresponding payments to the credit card network (see note 22) following a similar schedule. As receipts and payments are aligned,
the Group does not incur significant financing costs with this product, however it is exposed to the credit risk of the cardholder as
it is obliged to make the payments to the credit card network even if the cardholder does not pay. “Receivables - installments”
also includes the amounts of credit card bills not fully paid by the customers and that have been converted into payments in installments
with a fixed interest rate ("fatura parcelada"), in addition to bill financing, which comprise bills paid in installments
through the credit card, banking payment slips ("boleto") and PIX financing in more than one installment.
(ii) "Receivables - revolving"
is related to the amounts due from customers that have not paid in full their credit card bill. Customers may request to convert these
receivables into loans to be paid in installments. In accordance with Brazilian regulation, revolving balances that are outstanding for
more than 2 months are mandatorily converted into fatura parcelada - a type of installment loan which is settled through the customer’s
monthly credit card bills.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
a) Breakdown by maturity
|
|
03/31/2024 |
|
12/31/2023 |
|
|
Amount |
|
% |
|
Amount |
|
% |
Receivables not overdue due in: |
|
|
|
|
|
|
|
|
<= 30 days |
|
6,517,471 |
|
43.2% |
|
6,263,292 |
|
43.2% |
30 < 60 days |
|
2,531,051 |
|
16.8% |
|
2,485,690 |
|
17.2% |
> 60 days |
|
4,422,588 |
|
29.3% |
|
4,327,880 |
|
29.9% |
Total receivables not overdue |
|
13,471,110 |
|
89.3% |
|
13,076,862 |
|
90.3% |
|
|
|
|
|
|
|
|
|
Receivables overdue by: |
|
|
|
|
|
|
|
|
<= 30 days |
|
429,992 |
|
2.9% |
|
349,263 |
|
2.4% |
30 < 60 days |
|
209,162 |
|
1.4% |
|
170,962 |
|
1.2% |
60 < 90 days |
|
162,453 |
|
1.0% |
|
141,310 |
|
0.9% |
> 90 days |
|
821,010 |
|
5.4% |
|
749,907 |
|
5.2% |
Total receivables overdue |
|
1,622,617 |
|
10.7% |
|
1,411,442 |
|
9.7% |
Total |
|
15,093,727 |
|
100.0% |
|
14,488,304 |
|
100.0% |
Receivables overdue consist mainly of late
balances, and receivables not overdue consist mainly of current receivables and future bill installments ("parcelado").
b) Credit loss allowance
- by stages
As of March 31, 2024, the credit card ECL
allowance totaled US$2,319,493 (US$2,096,269 as of December 31, 2023). The provision is estimated using modeling techniques, consistently
applied, and is sensitive to the methods, assumptions, and risk parameters underlying its calculation.
The amount that the credit loss allowance
represents in comparison to the Group’s gross receivables (the coverage ratio) is also monitored to anticipate trends that could
indicate credit risk increases. This metric is considered a key risk indicator and it is monitored across multiple committees, supporting
the decision-making process and is discussed in the Group's credit forums.
All receivables are classified in stages.
The explanation of each stage is set out in the Company’s accounting policies, as disclosed in the Annual Financial Statements.
|
|
03/31/2024 |
|
|
Gross Exposures |
|
% |
|
Credit Loss Allowance |
|
% |
|
Coverage Ratio (%) |
Stage 1 |
|
12,295,901 |
|
81.5% |
|
767,113 |
|
33.1% |
|
6.2% |
|
|
|
|
|
|
|
|
|
|
|
Stage 2 |
|
1,579,277 |
|
10.5% |
|
545,326 |
|
23.5% |
|
34.5% |
Absolute Trigger (Days Late) |
|
457,819 |
|
29.0% |
|
341,191 |
|
62.6% |
|
74.5% |
Relative Trigger (PD deterioration) |
|
1,121,458 |
|
71.0% |
|
204,135 |
|
37.4% |
|
18.2% |
|
|
|
|
|
|
|
|
|
|
|
Stage 3 |
|
1,218,549 |
|
8.0% |
|
1,007,054 |
|
43.4% |
|
82.6% |
Total |
|
15,093,727 |
|
100.0% |
|
2,319,493 |
|
100.0% |
|
15.4% |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
|
|
12/31/2023 |
|
|
Gross Exposures |
|
% |
|
Credit Loss Allowance |
|
% |
|
Coverage Ratio (%) |
Stage 1 |
|
11,891,823 |
|
82.1% |
|
693,151 |
|
33.1% |
|
5.8% |
|
|
|
|
|
|
|
|
|
|
|
Stage 2 |
|
1,490,067 |
|
10.3% |
|
477,714 |
|
22.8% |
|
32.1% |
Absolute Trigger (Days Late) |
|
364,853 |
|
24.5% |
|
277,035 |
|
58.0% |
|
75.9% |
Relative Trigger (PD deterioration) |
|
1,125,214 |
|
75.5% |
|
200,679 |
|
42.0% |
|
17.8% |
|
|
|
|
|
|
|
|
|
|
|
Stage 3 |
|
1,106,414 |
|
7.6% |
|
925,404 |
|
44.1% |
|
83.6% |
Total |
|
14,488,304 |
|
100.0% |
|
2,096,269 |
|
100.0% |
|
14.5% |
c) Credit loss allowance
- by credit quality vs. stages
|
|
03/31/2024 |
|
|
Gross Exposures |
|
% |
|
Credit Loss Allowance |
|
% |
|
Coverage Ratio (%) |
Strong (PD < 5%) |
|
7,065,821 |
|
46.7% |
|
149,066 |
|
6.5% |
|
2.1% |
Stage 1 |
|
7,045,705 |
|
99.7% |
|
148,755 |
|
99.8% |
|
2.1% |
Stage 2 |
|
20,116 |
|
0.3% |
|
311 |
|
0.2% |
|
1.5% |
|
|
|
|
|
|
|
|
|
|
|
Satisfactory (5% <= PD <= 20%) |
|
4,135,390 |
|
27.5% |
|
315,565 |
|
13.5% |
|
7.6% |
Stage 1 |
|
3,981,119 |
|
96.3% |
|
304,583 |
|
96.5% |
|
7.7% |
Stage 2 |
|
154,271 |
|
3.7% |
|
10,982 |
|
3.5% |
|
7.1% |
|
|
|
|
|
|
|
|
|
|
|
Higher Risk (PD > 20%) |
|
3,892,516 |
|
25.8% |
|
1,854,862 |
|
80.0% |
|
47.7% |
Stage 1 |
|
1,269,077 |
|
32.6% |
|
313,775 |
|
16.9% |
|
24.7% |
Stage 2 |
|
1,404,890 |
|
36.1% |
|
534,033 |
|
28.8% |
|
38.0% |
Stage 3 |
|
1,218,549 |
|
31.3% |
|
1,007,054 |
|
54.3% |
|
82.6% |
Total |
|
15,093,727 |
|
100.0% |
|
2,319,493 |
|
100.0% |
|
15.4% |
|
|
12/31/2023 |
|
|
Gross Exposures |
|
% |
|
Credit Loss Allowance |
|
% |
|
Coverage Ratio (%) |
Strong (PD < 5%) |
|
7,103,018 |
|
49.0% |
|
142,047 |
|
6.8% |
|
2.0% |
Stage 1 |
|
7,081,674 |
|
99.7% |
|
141,720 |
|
99.8% |
|
2.0% |
Stage 2 |
|
21,344 |
|
0.3% |
|
327 |
|
0.2% |
|
1.5% |
|
|
|
|
|
|
|
|
|
|
|
Satisfactory (5% <= PD <= 20%) |
|
3,860,845 |
|
26.7% |
|
294,591 |
|
14.0% |
|
7.6% |
Stage 1 |
|
3,699,167 |
|
95.8% |
|
282,976 |
|
96.1% |
|
7.6% |
Stage 2 |
|
161,678 |
|
4.2% |
|
11,615 |
|
3.9% |
|
7.2% |
|
|
|
|
|
|
|
|
|
|
|
Higher Risk (PD > 20%) |
|
3,524,441 |
|
24.3% |
|
1,659,631 |
|
79.2% |
|
47.1% |
Stage 1 |
|
1,110,982 |
|
31.5% |
|
268,455 |
|
16.2% |
|
24.2% |
Stage 2 |
|
1,307,045 |
|
37.1% |
|
465,772 |
|
28.0% |
|
35.6% |
Stage 3 |
|
1,106,414 |
|
31.4% |
|
925,404 |
|
55.8% |
|
83.6% |
Total |
|
14,488,304 |
|
100.0% |
|
2,096,269 |
|
100.0% |
|
14.5% |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
d) Credit loss allowance
- changes
The following tables show the reconciliations
from the opening to the closing balance of the credit loss allowance by stages of the financial instruments.
|
|
03/31/2024 |
|
|
Stage 1 |
|
Stage 2 |
|
Stage 3 |
|
Total |
Credit loss allowance at beginning of period |
|
693,151 |
|
477,714 |
|
925,404 |
|
2,096,269 |
Transfers from Stage 1 to Stage 2 |
|
(79,501) |
|
79,501 |
|
- |
|
- |
Transfers from Stage 2 to Stage 1 |
|
54,346 |
|
(54,346) |
|
- |
|
- |
Transfers to Stage 3 |
|
(36,194) |
|
(262,407) |
|
298,601 |
|
- |
Transfers from Stage 3 |
|
6,196 |
|
4,018 |
|
(10,214) |
|
- |
Write-offs |
|
- |
|
- |
|
(315,394) |
|
(315,394) |
Net increase of loss allowance (note 7) |
|
142,761 |
|
314,170 |
|
137,395 |
|
594,326 |
New originations (a) |
|
30,860 |
|
619 |
|
351 |
|
31,830 |
Changes in exposure of preexisting accounts (b) |
|
96,843 |
|
425 |
|
(571) |
|
96,697 |
Other movements, primarily net drawdowns/repayments and net remeasurement from movements between stages and between risk bands within each stage |
|
15,058 |
|
313,126 |
|
137,615 |
|
465,799 |
Effect of changes in exchange rates (OCI) |
|
(13,646) |
|
(13,324) |
|
(28,738) |
|
(55,708) |
Credit loss allowance at end of the period |
|
767,113 |
|
545,326 |
|
1,007,054 |
|
2,319,493 |
|
|
03/31/2023 |
|
|
Stage 1 |
|
Stage 2 |
|
Stage 3 |
|
Total |
Credit loss allowance at beginning of period |
|
322,970 |
|
254,181 |
|
473,517 |
|
1,050,668 |
Transfers from Stage 1 to Stage 2 |
|
(40,956) |
|
40,956 |
|
- |
|
- |
Transfers from Stage 2 to Stage 1 |
|
35,909 |
|
(35,909) |
|
- |
|
- |
Transfers to Stage 3 |
|
(16,431) |
|
(137,392) |
|
153,823 |
|
- |
Transfers from Stage 3 |
|
4,095 |
|
2,855 |
|
(6,950) |
|
- |
Write-offs |
|
- |
|
- |
|
(174,938) |
|
(174,938) |
Net increase of loss allowance (note 7) |
|
60,720 |
|
183,162 |
|
138,725 |
|
382,607 |
New originations (a) |
|
19,827 |
|
472 |
|
- |
|
20,299 |
Changes in exposure of preexisting accounts (b) |
|
45,619 |
|
636 |
|
(16) |
|
46,239 |
Changes to models used in calculation (c) |
|
20,204 |
|
8,759 |
|
22,773 |
|
51,736 |
Other movements, primarily net drawdowns/repayments and net remeasurement from movements between stages and between risk bands within each stage |
|
(24,930) |
|
173,295 |
|
115,968 |
|
264,333 |
Effect of changes in exchange rates (OCI) |
|
18,252 |
|
14,280 |
|
25,159 |
|
57,691 |
Credit loss allowance at end of the period |
|
384,559 |
|
322,133 |
|
609,336 |
|
1,316,028 |
The Net increase of loss allowance is distributed
considering the stages at the end of the period, except in (c), which is calculated considering the stages at the beginning of the period.
(a) Considers all accounts originated from
the beginning to the end of the period. ECL effects presented in the table were calculated as if risk parameters at the beginning of the
period were applied.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
(b) Reflects the movements in exposure (both
drawdown and undrawdown limits) of accounts that already existed in the beginning of the period. ECL effects were calculated as if risk
parameters of the exposures at the beginning of the period were applied.
(c) Changes to models that occurred during
the period include, primarily, the calibration of ECL parameters to reflect more recent risk and recovery data, the changes in the Company's
underwriting policies and in the collections strategies in these historic periods.
The following tables present changes in the
gross carrying amount of the credit card portfolio to demonstrate the effects of the changes in the loss allowance for the same portfolio
as presented above. “Net change of gross carrying amount” includes drawdowns, payments, and interest accruals.
|
|
03/31/2024 |
|
|
Stage 1 |
|
Stage 2 |
|
Stage 3 |
|
Total |
Gross carrying amount at beginning of period |
|
11,891,823 |
|
1,490,067 |
|
1,103,907 |
|
14,485,797 |
Transfers from Stage 1 to Stage 2 |
|
(676,470) |
|
676,470 |
|
- |
|
- |
Transfers from Stage 2 to Stage 1 |
|
323,025 |
|
(323,025) |
|
- |
|
- |
Transfers to Stage 3 |
|
(103,901) |
|
(372,042) |
|
475,943 |
|
- |
Transfers from Stage 3 |
|
13,430 |
|
7,998 |
|
(21,428) |
|
- |
Write-offs |
|
- |
|
- |
|
(315,394) |
|
(315,394) |
Net change of gross carrying amount |
|
1,177,986 |
|
144,777 |
|
9,777 |
|
1,332,540 |
Effect of changes in exchange rates (OCI) |
|
(329,992) |
|
(44,968) |
|
(34,256) |
|
(409,216) |
Gross carrying amount at end of the period |
|
12,295,901 |
|
1,579,277 |
|
1,218,549 |
|
15,093,727 |
|
|
03/31/2023 |
|
|
Stage 1 |
|
Stage 2 |
|
Stage 3 |
|
Total |
Gross carrying amount at beginning of period |
|
7,750,270 |
|
917,178 |
|
598,777 |
|
9,266,225 |
Transfers from Stage 1 to Stage 2 |
|
(440,771) |
|
440,771 |
|
- |
|
- |
Transfers from Stage 2 to Stage 1 |
|
199,883 |
|
(199,883) |
|
- |
|
- |
Transfers to Stage 3 |
|
(53,612) |
|
(227,005) |
|
280,617 |
|
- |
Transfers from Stage 3 |
|
5,156 |
|
3,580 |
|
(8,736) |
|
- |
Write-offs |
|
- |
|
- |
|
(174,938) |
|
(174,938) |
Net change of gross carrying amount |
|
850,562 |
|
73,470 |
|
(3,249) |
|
920,783 |
Effect of changes in exchange rates (OCI) |
|
367,435 |
|
44,752 |
|
30,340 |
|
442,527 |
Gross carrying amount at end of the period |
|
8,678,923 |
|
1,052,863 |
|
722,811 |
|
10,454,597 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
14. LOANS
TO CUSTOMERS
|
|
03/31/2024 |
|
12/31/2023 |
Lending to individuals |
|
4,478,706 |
|
3,713,770 |
Loan ECL allowance |
|
(614,894) |
|
(512,134) |
Total receivables |
|
3,863,812 |
|
3,201,636 |
Fair value adjustment - portfolio hedge (note 19) |
|
- |
|
698 |
Total |
|
3,863,812 |
|
3,202,334 |
a) Breakdown by maturity
The following table shows loans to customers
by maturity on March 31, 2024, and December 31, 2023, considering each installment individually.
|
|
03/31/2024 |
|
12/31/2023 |
|
|
Amount |
|
% |
|
Amount |
|
% |
Installments not overdue due in: |
|
|
|
|
|
|
|
|
<= 30 days |
|
659,911 |
|
14.7% |
|
551,677 |
|
14.9% |
30 < 60 days |
|
550,253 |
|
12.3% |
|
520,450 |
|
14.0% |
> 60 days |
|
3,092,901 |
|
69.0% |
|
2,495,650 |
|
67.1% |
Total not overdue installments |
|
4,303,065 |
|
96.0% |
|
3,567,777 |
|
96.0% |
|
|
|
|
|
|
|
|
|
Installments overdue by: |
|
|
|
|
|
|
|
|
<= 30 days |
|
65,426 |
|
1.5% |
|
53,986 |
|
1.5% |
30 < 60 days |
|
41,119 |
|
1.0% |
|
32,469 |
|
0.9% |
60 < 90 days |
|
27,213 |
|
0.6% |
|
23,135 |
|
0.6% |
> 90 days |
|
41,883 |
|
0.9% |
|
36,403 |
|
1.0% |
Total overdue installments |
|
175,641 |
|
4.0% |
|
145,993 |
|
4.0% |
Total |
|
4,478,706 |
|
100.0% |
|
3,713,770 |
|
100.0% |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
b) Credit loss allowance
- by stages
As of March 31, 2024, the loans to customers
ECL allowance totaled US$614,894 (US$512,134 as of December 31, 2023). The provision is estimated using modeling techniques, consistently
applied, which is sensitive to the methods, assumptions, and risk parameters underlying its calculation.
The amount that the credit loss allowance
represents in comparison to the Group’s gross receivables (the coverage ratio) is also monitored to anticipate trends that could
indicate credit risk increases. This metric is considered a key risk indicator and is monitored across multiple committees, supporting
the decision-making process and is discussed in the credit forums.
All receivables are classified in stages.
The explanation of each stage is set out in the Company's accounting policies, as disclosed in the Annual Financial Statements.
|
|
03/31/2024 |
|
|
Gross Exposures |
|
% |
|
Credit Loss Allowance |
|
% |
|
Coverage Ratio |
Stage 1 |
|
3,425,367 |
|
76.5% |
|
173,882 |
|
28.3% |
|
5.1% |
|
|
|
|
|
|
|
|
|
|
|
Stage 2 |
|
784,722 |
|
17.5% |
|
293,835 |
|
47.8% |
|
37.4% |
Absolute Trigger (Days Late) |
|
187,950 |
|
24.0% |
|
154,010 |
|
52.4% |
|
81.9% |
Relative Trigger (PD deterioration) |
|
596,772 |
|
76.0% |
|
139,825 |
|
47.6% |
|
23.4% |
|
|
|
|
|
|
|
|
|
|
|
Stage 3 |
|
268,617 |
|
6.0% |
|
147,177 |
|
23.9% |
|
54.8% |
Total |
|
4,478,706 |
|
100.0% |
|
614,894 |
|
100.0% |
|
13.7% |
|
|
12/31/2023 |
|
|
Gross Exposures |
|
% |
|
Credit Loss Allowance |
|
% |
|
Coverage Ratio |
Stage 1 |
|
2,831,131 |
|
76.2% |
|
145,341 |
|
28.4% |
|
5.1% |
|
|
|
|
|
|
|
|
|
|
|
Stage 2 |
|
648,296 |
|
17.5% |
|
223,982 |
|
43.7% |
|
34.5% |
Absolute Trigger (Days Late) |
|
138,919 |
|
21.4% |
|
113,649 |
|
50.7% |
|
81.8% |
Relative Trigger (PD deterioration) |
|
509,377 |
|
78.6% |
|
110,333 |
|
49.3% |
|
21.7% |
|
|
|
|
|
|
|
|
|
|
|
Stage 3 |
|
234,343 |
|
6.3% |
|
142,811 |
|
27.9% |
|
60.9% |
Total |
|
3,713,770 |
|
100.0% |
|
512,134 |
|
100.0% |
|
13.8% |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
c) Credit loss allowance
- by credit quality vs stages
|
|
03/31/2024 |
|
|
Gross Exposures |
|
% |
|
Credit Loss Allowance |
|
% |
|
Coverage Ratio |
Strong (PD < 5%) |
|
1,623,268 |
|
36.2% |
|
15,572 |
|
2.5% |
|
1.0% |
Stage 1 |
|
1,583,210 |
|
97.5% |
|
14,888 |
|
95.6% |
|
0.9% |
Stage 2 |
|
40,058 |
|
2.5% |
|
684 |
|
4.6% |
|
1.7% |
|
|
|
|
|
|
|
|
|
|
|
Satisfactory (5% <= PD <= 20%) |
|
1,476,338 |
|
33.0% |
|
81,595 |
|
13.3% |
|
5.5% |
Stage 1 |
|
1,319,330 |
|
89.4% |
|
70,932 |
|
86.9% |
|
5.4% |
Stage 2 |
|
157,008 |
|
10.6% |
|
10,663 |
|
13.1% |
|
6.8% |
|
|
|
|
|
|
|
|
|
|
|
Higher Risk (PD > 20%) |
|
1,379,100 |
|
30.8% |
|
517,727 |
|
84.2% |
|
37.5% |
Stage 1 |
|
522,827 |
|
37.9% |
|
88,062 |
|
17.0% |
|
16.8% |
Stage 2 |
|
587,656 |
|
42.6% |
|
282,488 |
|
54.6% |
|
48.1% |
Stage 3 |
|
268,617 |
|
19.5% |
|
147,177 |
|
28.4% |
|
54.8% |
Total |
|
4,478,706 |
|
100.0% |
|
614,894 |
|
100.0% |
|
13.7% |
|
|
12/31/2023 |
|
|
Gross Exposures |
|
% |
|
Credit Loss Allowance |
|
% |
|
Coverage Ratio |
Strong (PD < 5%) |
|
1,437,136 |
|
38.7% |
|
14,129 |
|
2.8% |
|
1.0% |
Stage 1 |
|
1,396,591 |
|
97.2% |
|
13,441 |
|
95.1% |
|
1.0% |
Stage 2 |
|
40,545 |
|
2.8% |
|
688 |
|
4.9% |
|
1.7% |
|
|
|
|
|
|
|
|
|
|
|
Satisfactory (5% <= PD <= 20%) |
|
1,228,949 |
|
33.1% |
|
69,361 |
|
13.5% |
|
5.6% |
Stage 1 |
|
1,081,293 |
|
88.0% |
|
59,291 |
|
85.5% |
|
5.5% |
Stage 2 |
|
147,656 |
|
12.0% |
|
10,070 |
|
14.5% |
|
6.8% |
|
|
|
|
|
|
|
|
|
|
|
Higher Risk (PD > 20%) |
|
1,047,685 |
|
28.2% |
|
428,644 |
|
83.7% |
|
40.9% |
Stage 1 |
|
353,247 |
|
33.7% |
|
72,609 |
|
17.0% |
|
20.6% |
Stage 2 |
|
460,095 |
|
43.9% |
|
213,224 |
|
49.7% |
|
46.3% |
Stage 3 |
|
234,343 |
|
22.4% |
|
142,811 |
|
33.3% |
|
60.9% |
Total |
|
3,713,770 |
|
100.0% |
|
512,134 |
|
100.0% |
|
13.8% |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
d) Credit loss allowance
- changes
The following tables show reconciliations
from the opening to the closing balance of the credit loss allowance by the stages of the financial instruments.
|
|
03/31/2024 |
|
|
Stage 1 |
|
Stage 2 |
|
Stage 3 |
|
Total |
|
|
|
|
|
|
|
|
|
Credit loss allowance at beginning of period |
|
145,341 |
|
223,982 |
|
142,811 |
|
512,134 |
Transfers from Stage 1 to Stage 2 |
|
(44,121) |
|
44,121 |
|
- |
|
- |
Transfers from Stage 2 to Stage 1 |
|
18,002 |
|
(18,002) |
|
- |
|
- |
Transfers to Stage 3 |
|
(11,770) |
|
(123,395) |
|
135,165 |
|
- |
Transfers from Stage 3 |
|
3,472 |
|
5,771 |
|
(9,243) |
|
- |
Write-offs |
|
- |
|
- |
|
(169,733) |
|
(169,733) |
Net increase of loss allowance (note 7) |
|
67,814 |
|
169,271 |
|
52,730 |
|
289,815 |
New originations (a) |
|
272,380 |
|
20,085 |
|
4,897 |
|
297,362 |
Other movements, primarily net drawdowns/repayments and net remeasurement from movements between stages and between risk bands within each stage |
|
(204,566) |
|
149,186 |
|
47,833 |
|
(7,547) |
Effect of changes in exchange rates (OCI) |
|
(4,856) |
|
(7,913) |
|
(4,553) |
|
(17,322) |
Credit loss allowance at end of the period |
|
173,882 |
|
293,835 |
|
147,177 |
|
614,894 |
|
|
03/31/2023 |
|
|
Stage 1 |
|
Stage 2 |
|
Stage 3 |
|
Total |
|
|
|
|
|
|
|
|
|
Credit loss allowance at beginning of period |
|
76,454 |
|
148,233 |
|
75,536 |
|
300,223 |
Transfers from Stage 1 to Stage 2 |
|
(21,812) |
|
21,812 |
|
- |
|
- |
Transfers from Stage 2 to Stage 1 |
|
11,967 |
|
(11,967) |
|
- |
|
- |
Transfers to Stage 3 |
|
(5,451) |
|
(86,237) |
|
91,688 |
|
- |
Transfers from Stage 3 |
|
1,075 |
|
1,631 |
|
(2,706) |
|
- |
Write-offs |
|
- |
|
- |
|
(106,614) |
|
(106,614) |
Net increase of loss allowance (note 7) |
|
17,283 |
|
71,352 |
|
20,695 |
|
109,330 |
New originations (a) |
|
142,123 |
|
7,050 |
|
146 |
|
149,319 |
Changes to models used in calculation (b) |
|
(1,578) |
|
(3,059) |
|
(1,500) |
|
(6,137) |
Other movements, primarily net drawdowns/repayments and net remeasurement from movements between stages and between risk bands within each stage |
|
(123,262) |
|
67,361 |
|
22,049 |
|
(33,852) |
Effect of changes in exchange rates (OCI) |
|
3,365 |
|
6,283 |
|
3,324 |
|
12,972 |
Credit loss allowance at end of the period |
|
82,881 |
|
151,107 |
|
81,923 |
|
315,911 |
The Net increase of loss allowance is distributed
considering the stages at the end of the period, except in (b), which is calculated considering the stages at the beginning of the period.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
(a) Considers all accounts originated from
the beginning to the end of the period. ECL effects presented in the table were calculated as if risk parameters at the beginning of the
period were applied.
(b) Changes to models that occurred during
the period include, primarily, the calibration of ECL parameters to reflect more recent risk and recovery data, the changes in the Company's
underwriting policies and in the collections strategies in these historic periods.
The following tables present changes in the
gross carrying amount of the lending portfolio to demonstrate the effects of the changes in the loss allowance for the same portfolio
as discussed above. “Net change of gross carrying amount” includes drawdowns, payments, and interest accruals.
|
|
03/31/2024 |
|
|
Stage 1 |
|
Stage 2 |
|
Stage 3 |
|
Total |
|
|
|
|
|
|
|
|
|
Gross carrying amount at beginning of the period |
|
2,831,131 |
|
648,296 |
|
234,343 |
|
3,713,770 |
Transfers from Stage 1 to Stage 2 |
|
(396,851) |
|
396,851 |
|
- |
|
- |
Transfers from Stage 2 to Stage 1 |
|
144,714 |
|
(144,714) |
|
- |
|
- |
Transfers to Stage 3 |
|
(26,321) |
|
(163,352) |
|
189,673 |
|
- |
Transfers from Stage 3 |
|
4,005 |
|
6,501 |
|
(10,506) |
|
- |
Write-offs |
|
- |
|
- |
|
(169,733) |
|
(169,733) |
Net increase of gross carrying amount |
|
965,278 |
|
63,452 |
|
32,721 |
|
1,061,451 |
Effect of changes in exchange rates (OCI) |
|
(96,589) |
|
(22,312) |
|
(7,881) |
|
(126,782) |
Gross carrying amount at end of the period |
|
3,425,367 |
|
784,722 |
|
268,617 |
|
4,478,706 |
|
|
03/31/2023 |
|
|
Stage 1 |
|
Stage 2 |
|
Stage 3 |
|
Total |
|
|
|
|
|
|
|
|
|
Gross carrying amount at beginning of period |
|
1,521,040 |
|
351,166 |
|
104,293 |
|
1,976,499 |
Transfers from Stage 1 to Stage 2 |
|
(187,645) |
|
187,645 |
|
- |
|
- |
Transfers from Stage 2 to Stage 1 |
|
72,813 |
|
(72,813) |
|
- |
|
- |
Transfers to Stage 3 |
|
(12,482) |
|
(108,394) |
|
120,876 |
|
- |
Transfers from Stage 3 |
|
1,179 |
|
1,781 |
|
(2,960) |
|
- |
Write-offs |
|
- |
|
- |
|
(106,614) |
|
(106,614) |
Net increase of gross carrying amount |
|
368,482 |
|
6,625 |
|
714 |
|
375,821 |
Effect of changes in exchange rates (OCI) |
|
71,472 |
|
15,450 |
|
4,791 |
|
91,713 |
Gross carrying amount at end of the period |
|
1,834,859 |
|
381,460 |
|
121,100 |
|
2,337,419 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
15. COMPULSORY AND OTHER
DEPOSITS AT CENTRAL BANKS
|
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
|
Compulsory deposits (i) |
|
3,394,981 |
|
3,342,894 |
Reserve at central bank - Instant payments (ii) |
|
2,050,192 |
|
2,953,515 |
Reserve at central bank - Electronic money (iii) |
|
1,560,773 |
|
1,151,074 |
Total |
|
7,005,946 |
|
7,447,483 |
(i) Compulsory deposits are required by BACEN
based on the amount of RDB and CDB held by Nu Financeira. These resources are remunerated at Brazilian SELIC rate (special settlement
and custody system of the BACEN).
(ii) Reserve at central bank - Instant payments
relates to cash maintained in the Instant Payments Account, which is required by BACEN to support instant payment operations, and it is
based on the average of PIX transactions per day based on the last month along with including additional funds as a safety margin. These
resources are remunerated at Brazilian SELIC rate (special settlement and custody system of the BACEN).
(iii) Reserve at central bank - Electronic money
refers to funds kept in a BACEN reserve, which serves as a safeguard to protect customer deposits invested in Nu Pagamentos. These resources
are remunerated at Brazilian SELIC rate (special settlement and custody system of the BACEN).
16. OTHER RECEIVABLES
|
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
|
Other receivables |
|
1,408,209 |
|
1,691,665 |
Other receivables - ECL Allowance |
|
(2,240) |
|
(2,635) |
Total |
|
1,405,969 |
|
1,689,030 |
Other receivables are related
to the acquisition from merchants of their credit card receivables due from acquirers, measured at fair value. The ECL expenses for the
three-month period ended March 31, 2024 was US$314, as shown in note 7. As of March 31, 2024 and December 31, 2023, the total amount of
the Group's exposure was classified as Stage 1 Strong (PD<5%) and there was no transfer between stages for the three-month period ended
on March 31, 2024.
All receivables are classified in stages.
The explanation of each stage is set out in the Company's accounting policies, as disclosed in the Annual Consolidated Financial Statements
as of December 31, 2023.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
17. OTHER ASSETS
|
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
|
Deferred expenses (i) |
|
245,505 |
|
230,676 |
Taxes recoverable (ii) |
|
25,824 |
|
428,742 |
Advances to suppliers and employees |
|
62,540 |
|
96,395 |
Prepaid expenses |
|
148,331 |
|
81,687 |
Judicial deposits (note 24) |
|
3,649 |
|
3,506 |
Other assets |
|
81,703 |
|
95,203 |
Total |
|
567,552 |
|
936,209 |
(i) Refers to credit card issuance costs,
including printing, packing, and shipping costs, among others. The expenses are amortized based on the card’s estimated useful life,
adjusted for any cancellations.
(ii) The current income tax assets and liabilities
are presented offset on March 31, 2024 and did not impact the Consolidated Statements of Profit or Loss.
18. INTANGIBLES ASSETS
AND GOODWILL
| a) | Composition of intangible assets and goodwill |
(i) Intangible assets
|
|
03/31/2024 |
|
12/31/2023 |
|
|
Cost |
|
Accumulated amortization |
|
Net value |
|
Cost |
|
Accumulated amortization |
|
Net value |
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangibles related to acquisitions |
|
107,181 |
|
(48,390) |
|
58,791 |
|
107,181 |
|
(45,547) |
|
61,634 |
Internally developed intangible |
|
272,608 |
|
(34,077) |
|
238,531 |
|
250,236 |
|
(25,538) |
|
224,698 |
Other intangibles |
|
30,481 |
|
(20,404) |
|
10,077 |
|
28,815 |
|
(19,266) |
|
9,549 |
Total |
|
410,270 |
|
(102,871) |
|
307,399 |
|
386,232 |
|
(90,351) |
|
295,881 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
(ii) Goodwill
|
|
03/31/2024 |
|
12/31/2023 |
|
|
Goodwill |
|
|
|
|
|
Easynvest's acquisition |
|
381,298 |
|
381,266 |
Cognitect's acquisition |
|
831 |
|
831 |
Spin Pay's acquisition |
|
5,060 |
|
5,060 |
Olivia's acquisition |
|
10,381 |
|
10,381 |
Total |
|
397,570 |
|
397,538 |
| b) | Changes on intangible assets and goodwill |
|
|
03/31/2024 |
|
|
Goodwill |
|
Intangible assets |
|
|
|
|
Intangibles related to acquisitions |
|
Internally developed intangible |
|
Other Intangibles |
|
Total Intangibles |
Balance at beginning of the period |
|
397,538 |
|
61,634 |
|
224,698 |
|
9,549 |
|
295,881 |
Additions |
|
- |
|
- |
|
27,319 |
|
211 |
|
27,530 |
Disposals |
|
- |
|
- |
|
(2,128) |
|
- |
|
(2,128) |
Amortization |
|
- |
|
(3,635) |
|
(9,386) |
|
(1,285) |
|
(14,306) |
Effect of changes in exchange rates (OCI) |
|
32 |
|
792 |
|
(1,980) |
|
1,602 |
|
414 |
Balance at end of the period |
|
397,570 |
|
58,791 |
|
238,523 |
|
10,077 |
|
307,391 |
|
|
03/31/2023 |
|
|
Goodwill |
|
Intangible assets |
|
|
|
|
Intangibles related to acquisitions |
|
Internally developed intangible |
|
Other Intangibles |
|
Total Intangibles |
Balance at beginning of the period |
|
397,397 |
|
78,047 |
|
85,754 |
|
18,363 |
|
182,164 |
Additions |
|
- |
|
- |
|
38,890 |
|
2,903 |
|
41,793 |
Disposals |
|
- |
|
- |
|
(2,318) |
|
- |
|
(2,318) |
Amortization |
|
- |
|
(4,402) |
|
(2,684) |
|
(1,905) |
|
(8,991) |
Effect of changes in exchange rates (OCI) |
|
89 |
|
- |
|
2,368 |
|
287 |
|
2,655 |
Balance at end of the period |
|
397,486 |
|
73,645 |
|
122,010 |
|
19,648 |
|
215,303 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
19. DERIVATIVE FINANCIAL
INSTRUMENTS
The Group executes transactions with derivative
financial instruments, which are intended to meet its own needs to reduce its exposure to market, currency and interest-rate risks. The
derivatives are classified at fair value through profit or loss, except those in cash flow hedge accounting strategies, for which the
effective portion of gains or losses on derivatives is recognized directly in other comprehensive income. The management of these risks
is conducted through determining limits, and the establishment of operating strategies. The derivative contracts are considered level
1, 2 or 3 in the fair value hierarchy and are used to hedge exposures, but hedge accounting is adopted only for forecasted transactions
related to the cloud infrastructure, intercompany transactions and certain software licenses used by Nu (hedge of foreign currency risk),
to hedge interest of the fixed rate credit portfolio (hedge of interest rate risk of portfolio) and to hedge the future cash disbursement
related to highly probable future transactions and accrued liabilities for corporate and social security taxes at RSU vesting or SOP exercise,
as shown below.
|
|
03/31/2024 |
|
|
|
|
Fair values |
|
|
Notional amount |
|
Assets |
|
Liabilities |
Derivatives classified as fair value through profit or loss |
|
|
|
|
|
|
Interest rate contracts – Futures |
|
222,124 |
|
33 |
|
42 |
Foreign currency exchange rate contracts – Futures |
|
448,461 |
|
2,705 |
|
92 |
Interest rate contracts – Swaps |
|
213,228 |
|
- |
|
19,090 |
Foreign currency exchange rate contracts - Non-deliverable forwards (NDF) |
|
212,257 |
|
2,362 |
|
8,263 |
Warrants |
|
10 |
|
20 |
|
- |
|
|
|
|
|
|
|
Derivatives held for hedging |
|
|
|
|
|
|
Designated as cash flow hedge |
|
|
|
|
|
|
Foreign currency exchange rate contracts – Futures |
|
184,675 |
|
1,138 |
|
1 |
Equity - Total Return Swap (TRS) |
|
258,643 |
|
14,818 |
|
- |
Total |
|
1,539,398 |
|
21,076 |
|
27,488 |
|
|
12/31/2023 |
|
|
|
|
Fair values |
|
|
Notional amount |
|
Assets |
|
Liabilities |
Derivatives classified as fair value through profit or loss |
|
|
|
|
|
|
Interest rate contracts - Futures |
|
758,536 |
|
6 |
|
4 |
Foreign currency exchange rate contracts – Futures |
|
421,306 |
|
1,963 |
|
- |
Interest rate contracts – Swaps |
|
213,568 |
|
- |
|
22,294 |
Foreign currency exchange rate contracts - Non-deliverable forwards (NDF) |
|
114,478 |
|
- |
|
5,875 |
Warrants |
|
10 |
|
20 |
|
- |
|
|
|
|
|
|
|
Derivatives held for hedging |
|
|
|
|
|
|
Designated as cash flow hedge |
|
|
|
|
|
|
Foreign currency exchange rate contracts – Futures |
|
188,748 |
|
1,050 |
|
- |
Equity - Total Return Swap (TRS) |
|
88,193 |
|
17,882 |
|
- |
|
|
|
|
|
|
|
Designated as portfolio hedge |
|
|
|
|
|
|
DI - Future |
|
241,995 |
|
60 |
|
- |
Total |
|
2,026,834 |
|
20,981 |
|
28,173 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
Futures contracts are traded on the B3, having
B3 as the counterparty. The total value of margins pledged by the Group in transactions on the stock exchange is presented in note 12.
Swaps of interest risk contracts are settled
at the maturity date and are traded over the counter with financial institutions as counterparties.
Nu Holdings entered into non-deliverable
forward contracts to hedge loans and intercompany loans with Nu Colombia in U.S. dollars with settlements in June 2024.
Swap TRS contracts are settled only at maturity
and are traded over the counter with financial institutions as counterparties.
Breakdown by maturity
The table below shows the breakdown by maturity
of the notional amounts:
|
|
03/31/2024 |
|
|
Up to 3 months |
|
3 to 12 months |
|
Over 12
months |
|
Total |
Assets |
|
|
|
|
|
|
|
|
Interest rate contracts – Futures |
|
170,061 |
|
- |
|
27,849 |
|
197,910 |
Foreign currency exchange rate contracts – Futures |
|
613,781 |
|
- |
|
- |
|
613,781 |
Interest rate contracts – Swaps |
|
6,945 |
|
- |
|
3,683 |
|
10,628 |
Foreign currency exchange rate contracts - Non-deliverable forwards (NDF) |
|
97,779 |
|
20,000 |
|
- |
|
117,779 |
Warrants |
|
- |
|
- |
|
10 |
|
10 |
Total assets |
|
888,566 |
|
20,000 |
|
31,542 |
|
940,108 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Interest rate contracts – Futures |
|
- |
|
267 |
|
23,947 |
|
24,214 |
Foreign currency exchange rate contracts – Futures |
|
19,355 |
|
- |
|
- |
|
19,355 |
Interest rate contracts – Swaps |
|
- |
|
202,600 |
|
- |
|
202,600 |
Equity - Total Return Swap (TRS) |
|
24,546 |
|
65,722 |
|
168,375 |
|
258,643 |
Foreign currency exchange rate contracts - Non-deliverable forwards (NDF) |
|
94,478 |
|
- |
|
- |
|
94,478 |
Total liabilities |
|
138,379 |
|
268,589 |
|
192,322 |
|
599,290 |
Total |
|
1,026,945 |
|
288,589 |
|
223,864 |
|
1,539,398 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
|
|
12/31/2023 |
|
|
Up to 3 months |
|
3 to 12 months |
|
Over 12
months |
|
Total |
Assets |
|
|
|
|
|
|
|
|
Interest rate contracts – Futures |
|
- |
|
728,473 |
|
13,698 |
|
742,171 |
Foreign currency exchange rate contracts – Futures |
|
610,054 |
|
- |
|
- |
|
610,054 |
Interest rate contracts – Swaps |
|
- |
|
- |
|
10,968 |
|
10,968 |
Foreign currency exchange rate contracts - Non-deliverable forwards (NDF) |
|
- |
|
20,000 |
|
- |
|
20,000 |
Warrants |
|
- |
|
- |
|
10 |
|
10 |
Total assets |
|
610,054 |
|
748,473 |
|
24,676 |
|
1,383,203 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Interest rate contracts – Futures |
|
- |
|
234 |
|
16,131 |
|
16,365 |
Interest rate contracts – Swaps |
|
- |
|
202,600 |
|
- |
|
202,600 |
Equity - Total Return Swap (TRS) |
|
9,388 |
|
78,805 |
|
- |
|
88,193 |
Foreign currency exchange rate contracts - Non-deliverable forwards (NDF) |
|
- |
|
94,478 |
|
- |
|
94,478 |
DI - Future |
|
123,446 |
|
108,808 |
|
9,741 |
|
241,995 |
Total liabilities |
|
132,834 |
|
484,925 |
|
25,872 |
|
643,631 |
Total |
|
742,888 |
|
1,233,398 |
|
50,548 |
|
2,026,834 |
The table below shows the breakdown by maturity
of the fair value amounts:
|
|
03/31/2024 |
|
|
Up to 12 months |
|
Over 12
months |
|
Total |
Assets |
|
|
|
|
|
|
Equity - Total Return Swap (TRS) |
|
9,650 |
|
5,168 |
|
14,818 |
Interest rate contracts – Futures |
|
11 |
|
22 |
|
33 |
Foreign currency exchange rate contracts – Futures |
|
3,843 |
|
- |
|
3,843 |
Foreign currency exchange rate contracts - Non-deliverable forwards (NDF) |
|
2,362 |
|
- |
|
2,362 |
Warrants |
|
- |
|
20 |
|
20 |
Total assets |
|
15,866 |
|
5,210 |
|
21,076 |
Liabilities |
|
|
|
|
|
|
Interest rate contracts – Futures |
|
3 |
|
39 |
|
42 |
Interest rate contracts – Futures |
|
3 |
|
39 |
|
42 |
Interest rate contracts – Swaps |
|
19,090 |
|
- |
|
19,090 |
Foreign currency exchange rate contracts – Futures |
|
93 |
|
- |
|
93 |
Foreign currency exchange rate contracts - Non-deliverable forwards (NDF) |
|
8,263 |
|
- |
|
8,263 |
Total liabilities |
|
27,449 |
|
- |
|
27,488 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
|
|
12/31/2023 |
|
|
Up to 12 months |
|
Over 12
months |
|
Total |
Assets |
|
|
|
|
|
|
Equity - Total Return Swap (TRS) |
|
17,882 |
|
- |
|
17,882 |
Interest rate contracts – Futures |
|
6 |
|
- |
|
6 |
Foreign currency exchange rate contracts – Futures |
|
3,013 |
|
- |
|
3,013 |
DI - Future |
|
60 |
|
- |
|
60 |
Warrants |
|
20 |
|
- |
|
20 |
Total assets |
|
20,981 |
|
- |
|
20,981 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Interest rate contracts – Futures |
|
4 |
|
- |
|
4 |
Interest rate contracts – Swaps |
|
22,294 |
|
- |
|
22,294 |
Foreign currency exchange rate contracts - Non-deliverable forwards (NDF) |
|
5,875 |
|
- |
|
5,875 |
Total liabilities |
|
28,173 |
|
- |
|
28,173 |
a) Hedge of foreign
currency risk
The Group is exposed to foreign currency
risk on forecast transaction expenses, related to the cloud infrastructure, certain software licenses and intercompany expenses. The Group
managed its exposures to the variability in cash flows of foreign currency forecasted transactions to movements in foreign exchange rates
by entering into foreign currency exchange rate contracts (exchange futures). These instruments are entered into to match the cash flow
profile of the estimated forecast transactions and are exchange-traded with fair value movements settled on a daily basis.
The Group applies hedge accounting to the
forecasted transactions related to its main cloud infrastructure contract and other expenses in foreign currency including intercompany
expenses. The effectiveness is assessed monthly by analyzing the critical terms. The critical terms of the hedging instrument and the
amount of the forecasted hedged transactions are significantly the same. Derivatives are generally rolled over monthly. They are expected
to occur in the same fiscal month as the maturity date of the hedged item. Therefore, the hedge is expected to be effective. Subsequent
assessments of effectiveness are performed by verifying and documenting whether the critical terms of the hedging instrument and forecasted
hedged transaction have changed during the period in review and whether it remains probable. If there are no such changes in critical
terms, the Group will continue to conclude that the hedging relationship is effective. Sources of ineffectiveness are differences in the
amount and timing of forecast and actual payment of expenses.
|
|
Three-month period ended |
|
|
03/31/2024 |
|
03/31/2023 |
|
|
|
|
|
Balance at beginning of the period |
|
(8,254) |
|
(2,610) |
Fair value change recognized in OCI during the period |
|
86,466 |
|
(10,365) |
Total amount reclassified from cash flow hedge reserve to the statement of profit or loss during the period |
|
6,811 |
|
2,801 |
to "Customer support and operation" |
|
3,199 |
|
2,352 |
to "General and administrative expenses" |
|
636 |
|
502 |
Effect of changes in exchange rates (OCI) |
|
2,976 |
|
(53) |
Deferred income taxes |
|
(3,308) |
|
3,026 |
Balance at end of the period |
|
81,715 |
|
(7,148) |
The expected future transactions that are
the hedged item are:
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
|
|
03/31/2024 |
|
12/31/2023 |
|
|
Up to 3 months |
|
3 to 12 months |
|
Total |
|
Total |
Expected foreign currency transactions |
|
174,218 |
|
- |
|
174,218 |
|
187,456 |
Total |
|
174,218 |
|
- |
|
174,218 |
|
187,456 |
b) Hedge of corporate
and social security taxes over share-based compensation
The Group's hedge strategy is to cover
the future cash disbursement related to highly probable future transactions and accrued liabilities for corporate and social security
taxes at RSU vesting and SOP exercise from the variation of the Company's share price volatility. The derivative financial instruments
used to cover the exposure are total return swaps ("TRS") in which one leg is indexed to the Company's stock price and the other
leg is indexed to Secured Overnight Financing Rate ("SOFR") plus spread. The stock fixed at the TRS is a weighted average price.
The hedge was entered into by Nu Holdings and therefore there is no income tax effect.
The Group applies the cash flow hedge
for the hedge structure thus the market risk is replaced by an interest rate risk. The effectiveness assessment is performed monthly by
(i) assessing the economic relationship between the hedged item and the hedging instrument; (ii) monitoring the credit risk impact in
the hedge effectiveness; and (iii) maintaining and updating the hedging ratio. Given the possibility of forfeiture impacting the future
cash forecast of the employee benefit plan, the Group manages exposures to keep the hedging level within an acceptable coverage. The derivative
fair value is measured substantially based on the stock price which is also used in the measurement of the provision or payment for corporate
and social security taxes. There is no expectation for a mismatch between the hedged item and hedging instrument at maturity other than
the SOFR.
|
|
Three-month period ended |
|
|
03/31/2024 |
|
03/31/2023 |
Balance at beginning of the period |
|
20,671 |
|
(4,876) |
Fair value change recognized in OCI during the period |
|
(40,958) |
|
12,360 |
Total amount reclassified from cash flow hedge reserve to the statement of profit or loss during the period (note 10) |
|
(22,309) |
|
(5,675) |
to "Customer support and operation" |
|
(1,144) |
|
- |
to "General and administrative expenses" |
|
(20,175) |
|
(5,675) |
to "Marketing expenses" |
|
(990) |
|
- |
Balance at end of the period |
|
(42,596) |
|
1,809 |
Expected cash disbursement
|
|
03/31/2024 |
|
12/31/2023 |
|
|
Up to 1 year |
|
1 to 3 years |
|
Above 3 years |
|
Total |
|
Total |
Considering the reporting date fair value of the hedged item: |
|
|
|
|
|
|
|
|
|
|
Expected cash disbursement for corporate and social contributions |
|
105,619 |
|
162,120 |
|
10,923 |
|
278,662 |
|
110,596 |
Total |
|
105,619 |
|
162,120 |
|
10,923 |
|
278,662 |
|
110,596 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
| c) | Hedge of portfolio's interest rate risk |
As of March 31, 2024, the Company no longer has derivatives
for the hedge of the portfolio's interest rate risk.
|
|
12/31/2023 |
|
|
Hedge object |
|
Fair value adjustment to the
hedge object |
|
Derivative hedge
instrument |
|
|
|
Asset |
|
Liability |
|
Fair value variation |
Interest rate risk |
|
|
|
|
|
|
|
|
Interest rate contracts - Future - portfolio hedge - credit card |
|
5,368 |
|
32 |
|
- |
|
(16) |
Interest rate contracts - Future - portfolio hedge - loan |
|
164,733 |
|
698 |
|
- |
|
(601) |
Total |
|
170,101 |
|
730 |
|
- |
|
(617) |
20. INSTRUMENTS ELIGIBLE
AS CAPITAL
|
|
03/31/2024 |
|
12/31/2023 |
Financial liabilities at fair value through profit or loss |
|
|
|
|
Instruments eligible as capital |
|
3,990 |
|
3,988 |
Total |
|
3,990 |
|
3,988 |
There
were no defaults or breaches of instruments eligible as capital or on any financial liability during the three-month period ended March
31, 2024, and as of December 31, 2023.
In June 2019, Nu Financeira issued a subordinated
financial note in the amount equivalent to US$18,824 at the issuance date, which was approved as Tier 2 capital by the Central Bank of
Brazil in September 2019, for the purposes of calculation of regulatory capital. The note bears a fixed interest rate of 12.8%, matures
in 2029, and is callable on June 14, 2024.
The Group designated the instruments eligible
as capital at fair value through profit (loss) at its initial recognition. The gains of fair value changes arising from its own credit
risk in the amount of US$18 were recorded in other comprehensive income (gains of US$45 in the three-month
period ended March 31, 2023). All other fair value changes and interests in the amount of US$109 (US$2,985 in the three-month period
ended March 31, 2023) were recognized as profit or loss.
|
|
03/31/2024 |
|
03/31/2023 |
|
|
|
|
|
Balance at beginning of the period |
|
3,988 |
|
11,507 |
Interest accrued, net of gain from repurchase |
|
117 |
|
(3,030) |
Fair value changes |
|
(8) |
|
45 |
Own credit transferred to OCI |
|
(18) |
|
(45) |
Repurchase |
|
- |
|
(5,870) |
Effect of changes in exchange rates (OCI) |
|
(89) |
|
325 |
Balance at end of the period |
|
3,990 |
|
2,932 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
21. FINANCIAL LIABILITIES
AT AMORTIZED COST – DEPOSITS
|
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
|
Bank receipt of deposits (RDB) |
|
20,494,261 |
|
21,054,443 |
Deposits in electronic money |
|
3,488,952 |
|
2,388,601 |
Bank certificate of deposit (CDB) |
|
271,672 |
|
248,086 |
Total |
|
24,254,885 |
|
23,691,130 |
Currently, deposits in electronic money in
Brazil include "Conta do Nubank" and also "Conta NuInvest" balances, the latter corresponding to on-demand deposits
of the Groups’ investment brokerage clients. In Mexico, it includes "Cuenta Nu".
"Conta do Nubank" is a prepaid
account in which the amounts deposited by customers are classified as electronic money and must be allocated to government securities
(see note 12b) or in a specific account maintained at the Central Bank of Brazil (see note 15), in accordance with Brazilian regulatory
requirements. "Conta NuInvest" balances also have to be allocated to government securities or maintained in reserves at the
Central Bank of Brazil. Therefore, these types of deposits cannot be used for any other type of investment or as a financing source for
credit operations. Conversely, "Cuenta Nu" balances are not required to be invested in specific assets. Therefore, they can
be used as a financing source for the credit card operations in Mexico.
The RDBs are an investment option inside
"Conta do Nubank" and can have daily liquidity or defined future maturity. Deposits in RDB have guarantees from the Brazilian
Deposit Guarantee Fund (“FGC”). Unlike the deposits in electronic money, Nu is required to follow the compulsory deposits
requirements for RDB deposits (see note 15), however it is not required to invest the remaining resources in government securities or
in specific account maintained at the Central Bank of Brazil - these amounts can be used as a financing source for lending and credit
card operations.
There are also RDBs with a defined future
maturity date, which have a maturity of up to 27 months and a weighted average interest rate of 106% of the Brazilian CDI rate as of March
31, 2024 and December 31, 2023.
The interest paid on both "Conta do
Nubank" and RDB deposits (except fixed term RDBs) is 100% of the Brazilian CDI rate as of the initial date if the balances are kept
for more than 30 days.
For "Cuenta Nu" in Mexico, the
balances deposited in "Cajitas" yield 15% per year as of March 31, 2024.
"Cajitas" has both daily yield accrual and daily liquidity.
Breakdown by maturity
|
|
03/31/2024 |
|
|
Up to 12 months |
|
Over 12
months |
|
Total |
Bank receipt of deposits (RDB) |
|
20,321,765 |
|
172,496 |
|
20,494,261 |
Deposits in electronic money |
|
3,488,952 |
|
- |
|
3,488,952 |
Bank certificate of deposit (CDB) |
|
243,081 |
|
28,591 |
|
271,672 |
Total |
|
24,053,798 |
|
201,087 |
|
24,254,885 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
|
|
12/31/2023 |
|
|
Up to 12 months |
|
Over 12
months |
|
Total |
Bank receipt of deposits (RDB) |
|
20,900,095 |
|
154,348 |
|
21,054,443 |
Deposits in electronic money |
|
2,388,601 |
|
- |
|
2,388,601 |
Bank certificate of deposit (CDB) |
|
213,707 |
|
34,379 |
|
248,086 |
Total |
|
23,502,403 |
|
188,727 |
|
23,691,130 |
22. FINANCIAL LIABILITIES
AT AMORTIZED COST – PAYABLES TO NETWORK
|
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
|
Payables to credit card network (i) |
|
9,516,090 |
|
9,755,285 |
Payables to clearing houses |
|
56,431 |
|
- |
Total |
|
9,572,521 |
|
9,755,285 |
(i)
Corresponds to the amount payable to the acquirers related to credit and prepaid card transactions. Brazilian credit card payables
are settled according to the transaction installments, substantially in up to 27 days for transactions with no installments; 1 business
day for international transactions; and sales in installments ("parcelado") have monthly settlements, mostly, over a
period of up to 12 months. For Mexican and Colombian credit card transactions, the amounts are settled in 1 business day. The segregation
of the settlement is shown in the table below:
Payables to credit card network |
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
|
Up to 30 days |
|
5,313,168 |
|
5,347,665 |
30 to 90 days |
|
2,218,126 |
|
2,361,563 |
More than 90 days |
|
1,984,796 |
|
2,046,057 |
Total |
|
9,516,090 |
|
9,755,285 |
Collateral for credit
card operations
As of March 31, 2024, the Group had US$324
(US$320 on December 31, 2023) of security deposits granted in favor of Mastercard. These security deposits are measured at fair value
through profit (loss) and are held as collateral for the amounts payable to the network and can be replaced by other security deposits
with similar characteristics. The average remuneration rate of those security deposits was 0.40% per month in the three-month period ended
March 31, 2024 (0.40% per month in the year ended December 31, 2023).
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
23. FINANCIAL LIABILITIES
AT AMORTIZED COST – BORROWINGS AND FINANCING
|
|
03/31/2024 |
|
12/31/2023 |
Borrowings and financing |
|
1,403,349 |
|
1,136,344 |
Total |
|
1,403,349 |
|
1,136,344 |
a) Borrowings and financings
Borrowings and financings maturities are as follows:
|
|
03/31/2024 |
|
|
Up to 3 months |
|
3 to 12 months |
|
Over 12
months |
|
Total |
Borrowings and financings |
|
|
|
|
|
|
|
|
Term loan credit facility (i) |
|
- |
|
86,623 |
|
- |
|
86,623 |
Syndicated loan (ii) |
|
3,305 |
|
7,939 |
|
820,304 |
|
831,548 |
Financial letter (iii) |
|
- |
|
- |
|
485,178 |
|
485,178 |
Total borrowings and financings |
|
3,305 |
|
94,562 |
|
1,305,482 |
|
1,403,349 |
|
|
12/31/2023 |
|
|
Up to 3 months |
|
3 to 12 months |
|
Over 12
months |
|
Total |
Borrowings and financings |
|
|
|
|
|
|
|
|
Term loan credit facility (i) |
|
3,832 |
|
94,943 |
|
- |
|
98,775 |
Syndicated loan (ii) |
|
14,820 |
|
- |
|
806,681 |
|
821,501 |
Financial letter (iii) |
|
- |
|
- |
|
216,068 |
|
216,068 |
Total borrowings and financings |
|
18,652 |
|
94,943 |
|
1,022,749 |
|
1,136,344 |
(i) Corresponds to two term loan credit facilities
obtained by Nu Servicios and reassigned to Nu Financiera, both Mexican subsidiaries in Mexican pesos.
(ii) Corresponds to two syndicated credit
facilities. The first, in which Nu’s subsidiaries in Mexico and Colombia are the borrowers
and the Company is acting as guarantor, the total amount of the credit facility is US$650,000, of which US$625,000 is allocated to Nu
Mexico and US$25,000 to Nu Colombia. Out of this facility, Nu Mexico has withdrawn a partial amount of US$435,000 and Nu Colombia, the
entire US$25,000. The second, in which Nu Colombia has been granted a 3-year facility from IFC (International Finance Corporation), the
total amount corresponds to US$265,100 from IFC, also guaranteed by the Company, and was fully withdrawn.
(iii) As of March 31, 2024, the Group had
issued financial letters in Brazilian reais in the amount equivalent to US$468,417 on the
issuance dates and U$198,691 as of December 31, 2023.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
The terms and conditions of the loans outstanding
as of March 31, 2024, are as follows:
|
|
03/31/2024 |
Borrowings and financing |
|
Country |
|
Currency |
|
Interest rate |
|
Maturity |
|
Principal amount in US$ |
|
|
|
|
|
|
|
|
|
|
|
Term loan credit facility |
|
Mexico |
|
MXN |
|
TIIE (2) 182 + 1.0% |
|
July 2024 |
|
70,000 |
Syndicated loan |
|
Mexico |
|
MXN |
|
TIIE (2) 91 + 1.00% |
|
April 2025 |
|
435,000 |
Syndicated loan |
|
Colombia |
|
COP |
|
IBR (1) + 1.6% up to 1.9% |
|
April 2025 |
|
87,500 |
Syndicated loan |
|
Colombia |
|
USD |
|
SOFR (4) + 4.1% |
|
January 2026 |
|
202,600 |
Financial letter |
|
Brazil |
|
BRL |
|
CDI (3) + 1.2% up to 1.8% |
|
From June 2025 up to November 2025 |
|
468,417 |
| (1) | IBR: Colombian Bank Reference Indicator (Indicador Bancario de Referencia). |
| (2) | TIIE: Mexican Bank Reference Indicator (Tasas de Interés Interbancarias). |
| (3) | CDI: Brazilian Bank Reference Indicator (Certificado de Depósito
Interbancário). |
| (4) | SOFR: Secured Overnight Financing Rate. |
Changes to borrowings and financings are as follows:
|
|
03/31/2024 |
|
|
Term loan credit facility |
|
Syndicated loan |
|
Financial Letter |
|
Total |
|
|
|
|
|
|
|
|
|
Balance at beginning of the period |
|
98,775 |
|
821,501 |
|
216,068 |
|
1,136,344 |
New borrowings |
|
- |
|
- |
|
269,726 |
|
269,726 |
Payments – principal |
|
(11,465) |
|
- |
|
- |
|
(11,465) |
Payments – interest |
|
(5,777) |
|
(30,263) |
|
- |
|
(36,040) |
Interest accrued |
|
2,984 |
|
24,978 |
|
9,672 |
|
37,634 |
Transaction costs |
|
- |
|
(181) |
|
- |
|
(181) |
Amortization of transaction costs |
|
- |
|
452 |
|
- |
|
452 |
Effect of changes in exchange rates (OCI) |
|
2,106 |
|
15,061 |
|
(10,288) |
|
6,879 |
Balance at end of the period |
|
86,623 |
|
831,548 |
|
485,178 |
|
1,403,349 |
|
|
03/31/2023 |
|
|
Term loan credit facility |
|
Syndicated loan |
|
Total |
|
|
|
|
|
|
|
Balance at beginning of the period |
|
118,194 |
|
467,374 |
|
585,568 |
New borrowings |
|
- |
|
19,713 |
|
19,713 |
Payments – interest |
|
(4,387) |
|
(14,416) |
|
(18,803) |
Interest accrued |
|
3,527 |
|
15,162 |
|
18,689 |
Transaction costs |
|
- |
|
(783) |
|
(783) |
Amortization of transaction costs |
|
- |
|
46 |
|
46 |
Effect of changes in exchange rates (OCI) |
|
9,493 |
|
37,258 |
|
46,751 |
Balance at end of the period |
|
126,827 |
|
524,354 |
|
651,181 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
Covenants
The credit facilities and syndicated loans
above-mentioned have associated restrictive clauses (covenants) which establish the maintenance of minimum financial indicators resulting
from capital, funding and liquidity (cash) position, as well as profitability metrics and leverage ratios including, but not limited
to, net debt to gross profit, in addition to non-financial indicators according to each contract. The non-compliance with financial covenants
is considered as an event of default and may lead to debt acceleration. There are also cross-default clauses triggered in the event Nu
Holdings and/or some subsidiaries fail to pay any material indebtedness. The covenants are monitored on a regular basis.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
Guarantees
The Company is guarantor to the above-mentioned
syndicated loans and term loan credit facilities from Colombia and Mexico. The sole term loan credit facility that also counted on Nu
Pagamentos as guarantor was prepaid by Nu Financiera in March 2024.
24. PROVISION FOR LAWSUITS
AND ADMINISTRATIVE PROCEEDINGS
|
|
03/31/2024 |
|
12/31/2023 |
Civil risks |
|
12,801 |
|
7,532 |
Labor risks |
|
778 |
|
550 |
Total |
|
13,579 |
|
8,082 |
The Company and its subsidiaries are parties
to lawsuits and administrative proceedings arising from time to time in the ordinary course of operations, involving civil and labor matters.
Such matters are being discussed at the administrative and judicial levels, which, when applicable, are supported by judicial deposits.
The provisions for probable losses arising from these matters are estimated and periodically adjusted by management, supported by external
legal advisors’ opinion. There is significant uncertainty relating to the timing of any cash outflows, if any, for civil and labor
risk.
a) Provision
Civil lawsuits are mainly related to credit
card operations. Based on management’s assessment, and inputs from Nu’s external legal advisors, the Group has provisioned
US$12,801 (US$7,532 on December 31, 2023) considered sufficient to cover estimated losses from civil suits deemed probable.
b) Changes
Changes to provision for lawsuits and administrative
proceedings are as follows:
|
|
03/31/2024 |
|
03/31/2023 |
|
|
Tax |
|
Civil |
|
Labor |
|
Tax |
|
Civil |
|
Labor |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of the period |
|
- |
|
7,532 |
|
550 |
|
15,747 |
|
2,096 |
|
104 |
Additions |
|
- |
|
9,903 |
|
504 |
|
- |
|
1,486 |
|
61 |
Payments/Reversals |
|
- |
|
(4,328) |
|
(256) |
|
- |
|
(281) |
|
(27) |
Effect of changes in exchange rates (OCI) |
|
- |
|
(306) |
|
(20) |
|
676 |
|
121 |
|
5 |
Balance at end of the period |
|
- |
|
12,801 |
|
778 |
|
16,423 |
|
3,422 |
|
143 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
The Group
reviewed the provision methodology during the three-month period ended on March 31, 2024. Therefore, for processes received and not assessed
individually, the provision is constituted using the average of financial losses observed in previous cases considering the characteristics
of the process as the location, instance of judgment and historical percentage of loss. This change had an impact on the additions for
the period, as presented on the table above.
c) Contingencies
The Group is a party to civil and labor lawsuits,
involving risks classified by management and the legal advisors as possible losses, totaling approximately US$11,913 and US$14,506, respectively
(US$14,212 and US$12,333 on December 31, 2023).
d) Judicial deposits
As of March 31, 2024, the total amount of
judicial deposits shown as “Other assets” (note 17) is US$3,649 (US$3,506 on
December 31, 2023) and is substantially attributed to the judicial deposit carried on behalf of the shareholders of Nu Invest, prior to
the acquisition, due to a tax proceeding related to withholding taxes inappropriately deducted from amounts paid to employees.
25. DEFERRED INCOME
|
|
03/31/2024 |
|
12/31/2023 |
Deferred revenue from rewards program |
|
63,317 |
|
62,578 |
Deferred annual fee from reward program |
|
1,227 |
|
2,762 |
Other deferred income |
|
2,961 |
|
3,020 |
Total |
|
67,505 |
|
68,360 |
Deferred revenue from rewards programs is
related to the Group's rewards programs for its credit card customers, called "Nubank+" and "Ultravioleta". The programs
consist of accumulating points according to the use of the credit card in the ratio of R$1.00 (one Brazilian real, equivalent to US$0.20
as of March 31, 2024 and US$0.21 as of December 31, 2023) equal to 0.5 and 1 point in cashback for Nubank+ and Ultravioleta, respectively.
The points do not expire, and there is no limit on the number of Rewards an eligible card member can earn. Deferred annual fees from the
reward program comprise amounts related to the rewards fees which are paid in advance by customers.
The redemption of the points occurs in cash
or when the customers use them in various purchase categories, such as air tickets, hotels, transportation services, and music.
Nu uses financial models to estimate the
redemption rates of rewards earned to date by current card members, and, therefore, the estimated financial value of the points, based
on historical redemption trends and current enrollee redemption behavior, among others. The estimated financial value is recorded in the
statement of profit or loss when the performance obligation is satisfied, which is when the reward points are redeemed.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
26. OTHER LIABILITIES
|
|
03/31/2024 |
|
12/31/2023 |
Payment transactions - other |
|
228,478 |
|
219,426 |
Sundry creditors |
|
177,466 |
|
158,169 |
Credit card ECL allowance (note 13) |
|
22,443 |
|
22,066 |
Insurances |
|
15,655 |
|
14,798 |
Intermediation of securities |
|
10,931 |
|
12,835 |
Other liabilities |
|
61,970 |
|
105,037 |
Total |
|
516,943 |
|
532,331 |
27. RELATED PARTIES
In the ordinary course of business, the Group
issues credit cards or loans to Nu’s executive directors, board members, key employees and close family members. Those transactions,
as well as the deposits and other products, such as investments, occur on similar terms as those prevailing at the time for comparable
transactions to unrelated persons and do not involve more than the normal risk of collectability.
As described in note 3, Basis of consolidation,
all companies from the Group are consolidated in these unaudited interim condensed consolidated financial statements. Therefore, related
party balances and transactions, and any unrealized income and expenses arising from intercompany transactions, are eliminated in the
unaudited interim condensed consolidated financial statements.
As of March 31, 2024 and December 31, 2023,
the Company did not have any transactions with other related parties.
28. FAIR VALUE MEASUREMENT
The main valuation techniques employed in
internal models to measure the fair value of the financial instruments as of March 31, 2024 and December 31, 2023 are set out below. The
principal inputs into these models are derived from observable market data. The Group did not make any material changes to its valuation
techniques and internal models in those periods.
a) Fair value of financial
instruments carried at amortized cost
The following tables show the fair value
of the financial instruments carried at amortized cost as of March 31, 2024, and December 31, 2023. The Group has not disclosed the fair
values of financial instruments such as compulsory and other deposits at central banks, other financial assets at amortized cost, deposits
in electronic money, RDB, time deposit, and borrowings and financing, because their carrying amounts are a reasonable approximation of
fair value.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
|
|
03/31/2024 |
|
12/31/2023 |
|
|
Carrying amount |
|
Fair value |
|
Carrying amount |
Fair value |
|
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit card receivables (i) |
|
12,796,677 |
|
|
|
- |
|
13,654,228 |
|
12,414,101 |
|
|
|
- |
|
12,821,731 |
Loans to customers (i) |
|
3,863,812 |
|
|
|
- |
|
4,048,272 |
|
3,201,636 |
|
|
|
- |
|
3,212,542 |
Compulsory and other deposits at central banks |
|
7,005,946 |
|
|
|
|
|
|
|
7,447,483 |
|
|
|
|
|
|
Other receivables (ii) |
|
1,405,969 |
|
|
|
1,408,370 |
|
- |
|
1,689,030 |
|
|
|
- |
|
1,691,884 |
Other financial assets |
|
167,666 |
|
|
|
|
|
|
|
131,519 |
|
|
|
|
|
|
Securities |
|
69,494 |
|
28 |
|
69,611 |
|
- |
|
104,420 |
|
|
|
104,668 |
|
- |
Total |
|
25,309,564 |
|
28 |
|
1,477,981 |
|
17,702,500 |
|
24,988,189 |
|
- |
|
104,668 |
|
17,726,157 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits in electronic money |
|
3,488,952 |
|
|
|
|
|
|
|
2,388,601 |
|
|
|
|
|
|
Bank receipt of deposits (RDB) |
|
20,494,261 |
|
|
|
|
|
|
|
21,054,443 |
|
|
|
|
|
|
Bank certificate of deposit (CDB) |
|
271,672 |
|
- |
|
271,672 |
|
- |
|
248,086 |
|
- |
|
249,009 |
|
- |
Payables to network |
|
9,516,090 |
|
- |
|
9,459,962 |
|
- |
|
9,755,285 |
|
- |
|
9,605,576 |
|
- |
Borrowings and financing |
|
1,403,349 |
|
- |
|
1,403,882 |
|
- |
|
1,136,344 |
|
- |
|
1,136,978 |
|
- |
Total |
|
35,174,324 |
|
- |
|
11,135,516 |
|
- |
|
34,582,759 |
|
- |
|
10,991,563 |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (i) | For 2023, excludes the fair value adjustment from the hedge accounting. As of March 31, 2024, the Company
no longer has derivatives for the hedge of the portfolio's interest rate risk. |
| (ii) | Fair value methodology consists of discounting the cash flows from acquired credit card receivables, using
observable spreads from the credit card issuers. |
Borrowings and financing include the fair
value calculated by the discounted cash flow method, and also cases in which the fair value is the same amount as the book value (cases
with prepayment clauses at the amortized cost). The fair value of floating rate demand deposits is assumed to be equal to carrying amounts.
The valuation approach to specific categories
of financial instruments is described below.
i) Fair value models and
inputs
Credit
card: The fair values of credit card receivables and payables to the network are calculated using the discounted cash flow
method. Fair values are determined by discounting the contractual cash flows by the interest rate curve and credit spread. For payables,
cash flows are also discounted by the Group's own credit spread.
Loans
to customers: Fair value is estimated based on groups of clients with similar risk profiles, using valuation models. The fair
value of a loan is determined by discounting the contractual cash flows by the interest rate curve and a credit spread.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
Other
receivables: Fair value is calculated by discounting future cash flows by the interest rate curve and a credit spread.
b) Fair value of financial
instruments measured at fair value
The following table shows a summary
of the fair values, as of March 31, 2024, and December 31, 2023, of the financial assets and liabilities indicated below, classified on
the basis of the various measurement methods used by the Group to determine their fair value:
|
|
03/31/2024 |
|
|
Fair value
Level 1 |
|
Fair value
Level 2 |
|
Fair value
Level 3 |
|
Total |
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Government bonds |
|
|
|
|
|
|
|
|
Brazil |
|
7,246,611 |
|
- |
|
- |
|
7,246,611 |
United States |
|
131,913 |
|
- |
|
- |
|
131,913 |
Mexico |
|
1,377 |
|
- |
|
- |
|
1,377 |
|
|
|
|
|
|
|
|
|
Corporate bonds and other instruments |
|
|
|
|
|
|
|
|
Certificate of bank deposits (CDB) |
|
- |
|
1,745 |
|
- |
|
1,745 |
Investment funds |
|
34,983 |
|
48,164 |
|
69,089 |
|
152,236 |
Time deposit |
|
- |
|
362,603 |
|
- |
|
362,603 |
Notes |
|
- |
|
251,087 |
|
- |
|
251,087 |
Bill of credit (LC) |
|
- |
|
8 |
|
- |
|
8 |
Real estate and agribusiness certificate of receivables |
|
417 |
|
16,112 |
|
- |
|
16,529 |
Real estate and agribusiness letter of credit |
|
- |
|
562 |
|
- |
|
562 |
Corporate bonds and debentures |
|
1,126,863 |
|
121,975 |
|
- |
|
1,248,838 |
Equity instrument |
|
- |
|
- |
|
13,175 |
|
13,175 |
Derivative financial instruments |
|
3,876 |
|
17,180 |
|
20 |
|
21,076 |
Collateral for credit card operations |
|
- |
|
324 |
|
- |
|
324 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Derivative financial instruments |
|
135 |
|
27,353 |
|
- |
|
27,488 |
Instruments eligible as capital |
|
- |
|
3,990 |
|
- |
|
3,990 |
Repurchase agreements |
|
- |
|
628,947 |
|
- |
|
628,947 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
|
|
12/31/2023 |
|
|
Fair value
Level 1 |
|
Fair value
Level 2 |
|
Fair value
Level 3 |
|
Total |
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Government bonds |
|
|
|
|
|
|
|
|
Brazil |
|
7,475,904 |
|
- |
|
- |
|
7,475,904 |
United States |
|
126,914 |
|
- |
|
- |
|
126,914 |
Mexico |
|
1,407 |
|
- |
|
- |
|
1,407 |
|
|
|
|
|
|
|
|
|
Corporate bonds and other instruments |
|
|
|
|
|
|
|
|
Certificate of bank deposits (CDB) |
|
- |
|
5,770 |
|
- |
|
5,770 |
Investment funds |
|
- |
|
70,967 |
|
- |
|
70,967 |
Time deposit |
|
- |
|
194,390 |
|
- |
|
194,390 |
Bill of credit (LC) |
|
- |
|
1 |
|
- |
|
1 |
Real estate and agribusiness certificate of receivables (CRIs/CRAs) |
|
234 |
|
17,839 |
|
- |
|
18,073 |
Real estate and agribusiness letter of credit (LCIs/LCAs) |
|
- |
|
186 |
|
- |
|
186 |
Corporate bonds and debentures |
|
1,124,154 |
|
143,354 |
|
|
|
1,267,508 |
Equity instrument |
|
- |
|
- |
|
13,199 |
|
13,199 |
Derivative financial instruments |
|
3,079 |
|
17,882 |
|
20 |
|
20,981 |
Collateral for credit card operations |
|
- |
|
320 |
|
- |
|
320 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Derivative financial instruments |
|
4 |
|
28,169 |
|
- |
|
28,173 |
Instruments eligible as capital |
|
- |
|
3,988 |
|
- |
|
3,988 |
Repurchase agreements |
|
- |
|
210,454 |
|
- |
|
210,454 |
i) Fair value models and
inputs
Securities:
The securities with high liquidity and quoted prices in the active market are classified as level 1. Therefore, all government bonds and
some corporate bonds are included in level 1 as they are traded in active markets. Brazilian securities values are the published prices
by the "Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais" ("Anbima").
For US and Mexico bonds, fair values are the published prices by Bloomberg. Other corporate bonds and investment fund shares, the valuation
of which is based on observable data, such as interest rates and interest rate curves are classified as level 2. Credit Rights Investment
Funds (FIDCs) comprised of fixed rate receivables from retail clients are classified at level 3 of the fair value hierarchy and have their
fair value calculated using the discounted cash flow model, based on the underlying assets of the fund.
Derivatives:
Derivatives traded on stock exchanges are classified as level 1 of the hierarchy. Derivatives traded on the Brazilian stock
exchange are fairly valued using B3 quotations. Interest rate OTC Swaps are valued by discounting future expected cash flows to present
values using interest rate curves and are classified as level 2.
Equity
instrument: For the fair value of the equity instrument, the Group used contractual conditions as inputs that are not directly
observable, and therefore it is classified as level 3.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
Instruments
eligible as capital: If the instrument has an active market, prices quoted in this market are used. Otherwise, valuation techniques
are used, such as discounted cash flows, where cash flows are discounted by a risk-free rate and a credit spread. Instruments eligible
as capital were designated at fair value through profit (loss) in the initial recognition (fair value option).
Repurchase
agreements: The fair value is calculated by discounted cash flow.
c) Transfers between
levels of the fair value hierarchy
For the three-month period ended March 31,
2024 and 2023, there were no transfers of financial instruments between levels 1 and 2 or between levels 2 and 3.
The table below shows a reconciliation from
the opening to the closing balances for recurring fair value measurements categorized within Level 3 of the fair value hierarchy.
|
|
03/31/2024 |
|
|
Equity instrument |
|
Derivative financial instruments |
|
Investment funds |
|
Total |
|
|
|
|
|
|
|
|
|
Financial assets at beginning of period |
|
13,199 |
|
20 |
|
- |
|
13,219 |
Acquisitions |
|
- |
|
- |
|
70,609 |
|
70,609 |
Total gains or losses |
|
(24) |
|
- |
|
(976) |
|
(1,000) |
In profit or loss |
|
(24) |
|
- |
|
151 |
|
127 |
In OCI |
|
- |
|
- |
|
(1,127) |
|
(1,127) |
Effect of changes in exchange rates (OCI) |
|
- |
|
- |
|
(544) |
|
(544) |
Financial assets at end of period |
|
13,175 |
|
20 |
|
69,089 |
|
82,284 |
|
|
03/31/2023 |
|
|
Equity instrument |
|
Derivative financial instruments |
|
Total |
|
|
|
|
|
|
|
Financial assets at beginning of period |
|
22,082 |
|
27,908 |
|
49,990 |
Total gains or losses |
|
131 |
|
(18,298) |
|
(18,167) |
In profit or loss |
|
131 |
|
(18,298) |
|
(18,167) |
Financial assets at end of period |
|
22,213 |
|
9,610 |
|
31,823 |
29. INCOME TAX
Current and deferred taxes are determined
for all transactions that have been recognized in the unaudited interim condensed consolidated financial statements using the provisions
of the current tax laws. The current income tax expense or benefit represents the estimated taxes to be paid or refunded, respectively,
for the current period. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax
basis of assets and liabilities. They are measured using the tax rates and laws that will be in effect when the temporary tax differences
are expected to reverse.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
a) Income tax reconciliation
The
tax on the Group's pre-tax profit differs from the theoretical amount that would arise using the weighted average tax rate applicable
to profits of the consolidated entities. Thus, the following is a reconciliation of income tax expense to profit for the period, calculated
by applying the combined Brazilian income tax rate of 40% for the three-month period ended March 31, 2024 and 2023.
|
|
|
|
Three-month period ended |
|
|
|
|
03/31/2024 |
|
03/31/2023 |
Profit before income tax |
|
|
|
578,537 |
|
243,629 |
Tax rate (i) |
|
|
|
40% |
|
40% |
Income tax |
|
|
|
(231,415) |
|
(97,452) |
|
|
|
|
|
|
|
Permanent additions/exclusions |
|
|
|
|
|
|
Share-based payments |
|
|
|
(4,566) |
|
(6,517) |
Operational losses and others |
|
|
|
(3,422) |
|
(3,812) |
Foreign exchange variation on investments abroad |
|
|
|
- |
|
1,777 |
Effect of different tax rates - subsidiaries and parent company |
|
|
|
8,332 |
|
3,382 |
Interest on capital |
|
|
|
12,845 |
|
- |
Other amounts (ii) |
|
|
|
18,503 |
|
744 |
Income tax |
|
|
|
(199,723) |
|
(101,878) |
|
|
|
|
|
|
|
Current tax expense |
|
|
|
(415,042) |
|
(205,864) |
Deferred tax benefit |
|
|
|
215,319 |
|
103,986 |
Income tax in the statement of profit or loss |
|
|
|
(199,723) |
|
(101,878) |
Deferred tax recognized in OCI |
|
|
|
(4,847) |
|
3,211 |
(i) The tax rate used was the one applicable
to the financial Brazilian subsidiaries, which represents the most significant portion of the operations of the Group. The tax rate used
is not materially different from the average effective tax rate considering all jurisdictions where the Group has operations. The effect
of other tax rates is shown in the table above as “effect of different tax rates – subsidiaries and parent company”.
(ii) Mostly related to the amount of deductions
and incentives.
b) Deferred income taxes
The following tables present significant
components of the Group’s deferred tax assets and liabilities as of March 31, 2024 and 2023, and the changes for both periods. The
accounting records of deferred tax assets on income tax losses and/or social contribution loss carryforwards, as well as those arising
from timing differences, are based on technical feasibility studies which consider the expected generation of future taxable income, considering
the history of profitability for each subsidiary individually. The use of the deferred tax asset related to tax loss and negative basis
of social contribution is limited to 30% of taxable profit per year for the Brazilian entities and there is no time limit to use it.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
|
|
|
|
Reflected in the statement of profit or loss |
|
|
|
|
|
|
12/31/2023 |
|
Constitution |
|
Realization |
|
Foreign
exchange |
|
Reflected in OCI |
|
03/31/2024 |
Provisions for credit losses |
|
1,330,733 |
|
421,991 |
|
(223,692) |
|
(32,617) |
|
- |
|
1,496,415 |
Provision PIS/COFINS - Financial Revenue |
|
(2,108) |
|
- |
|
2,108 |
|
|
|
- |
|
- |
Other temporary differences (i) |
|
192,070 |
|
53,052 |
|
(39,839) |
|
(5,142) |
|
(1,473) |
|
198,668 |
Total deferred tax assets on temporary differences |
|
1,520,695 |
|
475,043 |
|
(261,423) |
|
(37,759) |
|
(1,473) |
|
1,695,083 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax loss and negative basis of social contribution |
|
92,918 |
|
5,285 |
|
(6,815) |
|
(1,346) |
|
- |
|
90,042 |
Deferred tax assets |
|
1,613,613 |
|
480,328 |
|
(268,238) |
|
(39,105) |
|
(1,473) |
|
1,785,125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures settlement market |
|
(11,509) |
|
(107) |
|
3,050 |
|
68 |
|
- |
|
(8,498) |
Fair value changes - financial instruments |
|
(9,332) |
|
(167) |
|
32 |
|
223 |
|
(66) |
|
(9,310) |
Others |
|
(54,937) |
|
(3,298) |
|
397 |
|
735 |
|
- |
|
(57,103) |
Deferred tax liabilities |
|
(75,778) |
|
(3,572) |
|
3,479 |
|
1,026 |
|
(66) |
|
(74,911) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax, offset |
|
1,537,835 |
|
476,756 |
|
(264,759) |
|
(38,079) |
|
(1,539) |
|
1,710,214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value changes - cash flow hedge |
|
(5,375) |
|
29,441 |
|
(26,119) |
|
(14) |
|
(3,308) |
|
(2,067) |
Deferred tax recognized during the period |
|
|
|
506,197 |
|
(290,878) |
|
|
|
(4,847) |
|
|
(i) Other temporary differences are composed
mainly of other provisions and supplier provisions.
|
|
|
|
Reflected in the statement of profit or loss |
|
|
|
|
|
|
12/31/2022 |
|
Constitution |
|
Realization |
|
Foreign
exchange |
|
Reflected in OCI |
|
03/31/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions for credit losses |
|
583,791 |
|
210,688 |
|
(96,465) |
|
31,305 |
|
- |
|
729,319 |
Provision PIS/COFINS - Financial Revenue |
|
6,299 |
|
- |
|
- |
|
270 |
|
- |
|
6,569 |
Other temporary differences |
|
123,103 |
|
37,037 |
|
(35,045) |
|
5,215 |
|
- |
|
130,310 |
Total deferred tax assets on temporary differences |
|
713,193 |
|
247,725 |
|
(131,510) |
|
36,790 |
|
- |
|
866,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax loss and negative basis of social contribution |
|
97,857 |
|
5,197 |
|
(9,392) |
|
4,319 |
|
- |
|
97,981 |
Deferred tax assets |
|
811,050 |
|
252,922 |
|
(140,902) |
|
41,109 |
|
- |
|
964,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures settlement market |
|
(13,739) |
|
(3,043) |
|
4,574 |
|
(196) |
|
- |
|
(12,404) |
Fair value changes - financial instruments |
|
(3,291) |
|
(823) |
|
(114) |
|
(212) |
|
185 |
|
(4,255) |
Others |
|
(24,088) |
|
(1,048) |
|
(4,818) |
|
(1,348) |
|
- |
|
(31,302) |
Deferred tax liabilities |
|
(41,118) |
|
(4,914) |
|
(358) |
|
(1,756) |
|
185 |
|
(47,961) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value changes - cash flow hedge |
|
(1,758) |
|
27,117 |
|
(29,879) |
|
(264) |
|
3,026 |
|
(4,784) |
Deferred tax recognized during the period |
|
|
|
275,125 |
|
(171,139) |
|
|
|
3,211 |
|
|
(i) Other temporary differences are composed
mainly of other provisions and supplier
provisions.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
30. EQUITY
The table below presents the changes in shares
issued and fully paid and shares authorized, by class, as of March 31, 2024 and March 31, 2023.
|
|
03/31/2024 |
Shares authorized and fully issued |
|
Note |
|
Class A
Ordinary shares |
|
Class B
Ordinary shares |
|
Total |
Total as of December 31, 2023 |
|
|
|
3,682,625,012 |
|
1,083,312,142 |
|
4,765,937,154 |
SOPs exercised and RSUs vested |
|
10 |
|
17,091,879 |
|
- |
|
17,091,879 |
Shares withheld for employees' taxes |
|
10 |
|
(2,253,602) |
|
- |
|
(2,253,602) |
Issuance of class A shares - Olivia acquisition |
|
|
|
312,872 |
|
- |
|
312,872 |
Total as of March 31, 2024 |
|
|
|
3,697,776,161 |
|
1,083,312,142 |
|
4,781,088,303 |
|
|
03/31/2023 |
Shares authorized and fully issued |
|
Note |
|
Class A
Ordinary shares |
|
Class B
Ordinary shares |
|
Total |
Total as of December 31, 2022 |
|
|
|
3,602,854,813 |
|
1,091,933,041 |
|
4,694,787,854 |
Conversion of class B shares in class A shares |
|
|
|
590,000 |
|
(590,000) |
|
- |
SOPs exercised and RSUs vested |
|
10 |
|
16,594,735 |
|
- |
|
16,594,735 |
Shares withheld for employees' taxes |
|
10 |
|
(2,046,753) |
|
- |
|
(2,046,753) |
Shares repurchased |
|
|
|
(290,676) |
|
- |
|
(290,676) |
Issuance of class A shares - Olivia acquisition |
|
|
|
5,158,599 |
|
- |
|
5,158,599 |
Total as of March 31, 2023 |
|
|
|
3,622,860,718 |
|
1,091,343,041 |
|
4,714,203,759 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
Shares authorized and unissued |
|
Class A
Ordinary shares |
|
Class B
Ordinary shares |
|
Total |
Business combination - contingent share consideration |
|
- |
|
- |
|
2,591,557 |
Reserved for the share-based payments |
|
- |
|
- |
|
312,104,923 |
Shares authorized which may be issued class A or class B |
|
- |
|
- |
|
43,507,656,427 |
Shares authorized and unissued as of March 31, 2024 |
|
- |
|
- |
|
43,822,352,907 |
|
|
|
|
|
|
|
Shares authorized issued |
|
3,697,776,161 |
|
1,083,312,142 |
|
4,781,088,303 |
Total as of March 31, 2024 |
|
- |
|
- |
|
48,603,441,210 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
a) Other share events
As of March 31, 2024, the Company had authorized
and unissued ordinary shares, which were related to commitments from acquisitions of entities, the issuance due to share-based payment
plans (note 10) and authorized for future issuance without determined nature. These shares could be either class A or class B ordinary
shares.
b) Share capital and
share premium reserve
All share classes of the Company had a nominal
par value of US$0.0000067 on March 31, 2024 and December 31, 2023, and the total amount of share capital was
US$84 (US$84 as of December 31, 2023).
Share premium reserve relates to amounts
contributed by shareholders over the par value at the issuance of shares.
The total of exercised Stock Options (SOP)
was US$1,782 for the three-month period ended on March 31, 2024 (US$ 2,019 for the three-month period ended on March 31, 2023).
c) Accumulated gains
(losses)
The accumulated gains (losses) include the
accumulated profit (losses) of the Group and the share-based payment reserve amount, as shown in the table below.
As described in note 10, the Group's share-based
payments include incentives in the form of SOPs, RSUs and Awards. Further, the Company can use the reserve to absorb accumulated losses.
|
|
03/31/2024 |
|
03/31/2023 |
Accumulated gains (losses) |
|
708,282 |
|
(559,311) |
Share-based payments reserve |
|
1,007,795 |
|
816,401 |
Total accumulated gains (losses) |
|
1,716,077 |
|
257,090 |
d) Shares repurchased
and withheld
Shares may be repurchased from certain former
employees when they leave the Group, as a result of contractual terms of deferred payments on business combinations, or withheld because
of RSUs plans to settle the employee’s tax obligation. These shares repurchased or withheld are canceled and cannot be reissued
or subscribed. During the three-month period ended March 31, 2024 and 2023, the following shares were repurchased:
|
|
03/31/2024 |
|
03/31/2023 |
Number of shares repurchased |
|
- |
|
290,676 |
Total value of shares repurchased |
|
- |
|
- |
Number of shares withheld - RSU |
|
2,253,602 |
|
2,046,753 |
Total value of shares withheld - RSU |
|
18,335 |
|
7,095 |
e) Accumulated other
comprehensive income
Other comprehensive income includes the amounts,
net of the related tax effect, of the adjustments to assets and liabilities recognized in equity through the consolidated statement of
comprehensive income.
Other comprehensive income that may be subsequently
reclassified to profit or loss is related to cash flow hedges that qualify as effective hedges and currency translation that represents
the cumulative gains and losses on the retranslation of the Group’s
investment in foreign operations. These amounts will remain under this heading until they are recognized in the consolidated statement
of profit or loss in the periods in which the hedged items affect it, for example, in the case of the cash flow hedge.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
The own credit reserve reflects the cumulative
own credit gains and losses on financial liabilities designated at fair value. Amounts in the own credit reserve are not reclassified
to profit or loss in future periods.
The accumulated balances are as follows:
|
|
03/31/2024 |
|
03/31/2023 |
Cash flow hedge effects, net of deferred taxes |
|
39,119 |
|
(5,339) |
Currency translation on foreign entities |
|
63,528 |
|
2,149 |
Changes in fair value - financial instruments at FVTOCI, net of deferred taxes |
|
8,679 |
|
(11,789) |
Own credit adjustment effects |
|
500 |
|
534 |
Total |
|
111,826 |
|
(14,445) |
31. MANAGEMENT OF FINANCIAL
RISKS, FINANCIAL INSTRUMENTS, AND OTHER RISKS
Overview
The Group monitors
all the risks that could have a material impact on its strategic objectives, including those that must comply with applicable regulatory
requirements. To efficiently manage and mitigate these risks, the risk management structure conducts risk identification and assessment
to prioritize the risks that are key when pursuing potential opportunities and/or that may prevent value from being created or that may
compromise existing value, with the possibility of impacting on financial results, capital, liquidity, customer relationship and reputation.
Risks that are actively
monitored include Credit, Liquidity, Market, Foreign exchange (FX), Operational, IT and Cyber, Regulatory, Compliance and AML (Anti-money
laundering) and Reputational Risk, Interest Rate Risk in the Banking Book (IRRBB) and Risk from Cryptocurrency business.
Nu considers Risk Management an important
pillar of the Group's strategic management. The risk management structure broadly permeates the entire Group, with the objective of ensuring
that risks are properly identified, measured, mitigated, monitored and reported, in order to support the development of its activities.
Risk Management is related to the principles, culture, structures and processes to improve the decision-making process and the achievement
of strategic objectives. It is a continuous and evolving process that runs through Nu's entire strategy, to support Management in minimizing
its losses, as well as maximizing its profits and underscoring the Group's values.
The Group's risk management structure considers
the size and complexity of its business, which allows tracking, monitoring and control of the risks to which it is exposed. The risk management
process is aligned with management guidelines, which, through committees and other internal meetings, define strategic objectives, including
risk appetite. Conversely, the capital control and capital management units provide support through risk and capital monitoring and analysis
processes.
The Group considers
a risk appetite statement (“RAS”) to be an essential instrument to support risk management and decision making. The
Board reviews and approves the RAS, as guidelines and limits for the business plan and capital deployment. Nu has defined a RAS
(aligned to local regulatory requirements) that prioritizes
the main risks and, for each of these, qualitative statements and quantitative metrics expressed in relation to earnings, capital, risk
measures, liquidity and other relevant measures were implemented, as appropriate.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
Each of the risks described below has its
own methodologies, systems and processes for its identification, measurement, evaluation, monitoring, reporting, control and mitigation.
In the case of financial risks, such as credit,
liquidity, IRRBB and market risk, the measurement is carried out based on quantitative models and, in certain cases, prospective scenarios
in relation to the main variables involved, respecting the applicable regulatory requirements and best market practices. Non-financial
risks, such as operational risk and technological/cyber risks, are measured using impact criteria (inherent risk), considering potential
financial losses, reputational damage, customer perception and legal/regulatory obligations, as well as evaluated in relation to the effectiveness
of the respective structure of internal controls.
There were no significant changes to the
risk management structure that was reported in Annual Financial Statements.
Credit risk
The Group’s
outstanding balance of financial assets and other exposures to credit risk is shown in the table below:
|
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
|
Financial assets |
|
|
|
|
Cash and cash equivalents |
|
6,033,658 |
|
5,923,440 |
|
|
|
|
|
Securities |
|
624,731 |
|
368,574 |
Derivative financial instruments |
|
21,076 |
|
20,981 |
Collateral for credit card operations |
|
324 |
|
320 |
Financial assets at fair value through profit or loss |
|
646,131 |
|
389,875 |
|
|
|
|
|
Securities |
|
8,801,925 |
|
8,805,745 |
Financial assets at fair value through other comprehensive income |
|
8,801,925 |
|
8,805,745 |
|
|
|
|
|
Credit card receivables |
|
12,796,677 |
|
12,414,133 |
Loans to customers |
|
3,863,812 |
|
3,202,334 |
Compulsory and other deposits at central banks |
|
7,005,946 |
|
7,447,483 |
Other receivables |
|
1,405,969 |
|
1,689,030 |
Other financial assets |
|
167,666 |
|
131,519 |
Securities |
|
69,494 |
|
104,420 |
Financial assets at amortized cost |
|
25,309,564 |
|
24,988,919 |
|
|
|
|
|
Other exposures |
|
|
|
|
Unused limits (i) |
|
17,393,059 |
|
16,998,572 |
Credit Commitments |
|
17,393,059 |
|
16,998,572 |
(i) Unused limits
are not recorded in the statement of financial position but are considered in the measurement of the ECL because it represents credit
risk exposure.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
Liquidity risk
Liquidity risk is
defined as:
| ● | the ability of an entity to fund increases in assets and meet obligations as they come due, without incurring
unacceptable losses; and |
| ● | the possibility of not being able to easily exit a financial position due to its size compared to the
traded volume in the market. |
The liquidity risk
management structure uses future cash flow data, applying what Nu believes to be a severe stress scenario to these cash flows, in order
to measure that the volume of high-quality liquid assets that the Group has is sufficient to guarantee its resilience even in very adverse
situations. The liquidity indicators are monitored daily. For funding risk management, the gaps between assets and liabilities in term
buckets are monitored to assure that the profile of assets is consistent with the liabilities.
The Group has a
Contingency Funding Plan for the Brazilian entities that describes possible management actions that should be taken in the event of a
deterioration of the liquidity indicators.
Primary
sources of funding - by maturity
|
|
03/31/2024 |
|
12/31/2023 |
Funding Sources |
|
Up to 12 months |
|
Over 12
months |
|
Total |
|
% |
|
Up to 12 months |
|
Over 12
months |
|
Total |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank receipt of deposits (RDB) (i) |
|
20,321,765 |
|
172,496 |
|
20,494,261 |
|
93% |
|
20,900,095 |
|
154,348 |
|
21,054,443 |
|
94% |
Borrowings and financing |
|
97,867 |
|
1,305,482 |
|
1,403,349 |
|
6% |
|
113,595 |
|
1,022,749 |
|
1,136,344 |
|
5% |
Bank certificate of deposit (CDB) |
|
243,081 |
|
28,591 |
|
271,672 |
|
1% |
|
213,707 |
|
34,379 |
|
248,086 |
|
1% |
Instruments eligible as capital |
|
- |
|
3,990 |
|
3,990 |
|
0% |
|
- |
|
3,988 |
|
3,988 |
|
0% |
Total |
|
20,662,713 |
|
1,510,559 |
|
22,173,272 |
|
100% |
|
21,227,397 |
|
1,215,464 |
|
22,442,861 |
|
100% |
(i) Considering the earliest date in which
the client can withdraw the deposit, although it is not expected that all deposits will be withdrawn at the same time.
Maturities of financial
liabilities
The tables below summarize the Group’s
financial liabilities and their contractual maturities:
|
|
03/31/2024 |
|
|
Carrying amount |
|
Total (iii) |
|
Up to 1 month |
|
1 to 3 months |
|
3-12 months |
|
Over 12 months |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments |
|
27,488 |
|
27,490 |
|
145 |
|
5,628 |
|
21,717 |
|
- |
Instruments eligible as capital |
|
3,990 |
|
4,142 |
|
|
|
4,142 |
|
- |
|
- |
Repurchase agreements |
|
628,947 |
|
629,200 |
|
629,200 |
|
- |
|
- |
|
- |
Deposits in electronic money (i) |
|
3,488,952 |
|
3,506,557 |
|
3,506,557 |
|
- |
|
- |
|
- |
Bank receipt of deposits (RDB) (ii) |
|
20,494,261 |
|
20,553,444 |
|
19,411,872 |
|
217,675 |
|
728,419 |
|
195,478 |
Bank certificate of deposit (CDB) |
|
271,672 |
|
292,297 |
|
17,750 |
|
8,626 |
|
232,593 |
|
33,328 |
Payables to credit card network |
|
9,516,090 |
|
9,516,090 |
|
5,313,168 |
|
2,218,126 |
|
1,984,238 |
|
558 |
Borrowings and financing |
|
1,403,349 |
|
1,445,292 |
|
262 |
|
500 |
|
130 |
|
1,444,400 |
Total Financial Liabilities |
|
35,834,749 |
|
35,974,512 |
|
28,878,954 |
|
2,454,697 |
|
2,967,097 |
|
1,673,764 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
(i) In accordance with regulatory requirements
and in guarantee of these deposits, the Group holds the total amount of US$122,624 in eligible securities composed of Brazilian government
bonds as described in note 12b, under a dedicated account within the Central Bank of Brazil as of March 31, 2024 (US$23,050 as of December
31, 2023).
(ii) Considering the earliest date in which
the client can withdraw the deposit, although it is not expected that all deposits will be withdrawn at the same time.
(iii) The total was projected considering
the exchange rate of Brazilian Reais, Mexican and Colombian Pesos to US$ as of March 31, 2024.
The unused limit of credit cards is the pre-approved
limit that has not yet been used by the client and represents the current maximum potential credit exposure. Therefore, it does not represent
the real need for liquidity arising from commitments. When customers begin utilizing their unused limits, the duration of the credit card
receivables are expected to be shorter than the duration of the payables to network.
Maturities of financial
assets
The table below summarize the Group’s
financial assets contractual undiscounted cash flows and their contractual maturities:
|
|
03/31/2024 |
|
|
Carrying amount |
|
Total |
|
Up to 1 month |
|
1 to 3 months |
|
3-12 months |
|
Over 12 months |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
Credit card receivables (i) |
|
12,796,677 |
|
13,751,534 |
|
6,340,524 |
|
4,342,729 |
|
2,920,222 |
|
148,059 |
Securities |
|
9,496,150 |
|
9,653,237 |
|
298,050 |
|
80,560 |
|
2,033,195 |
|
7,241,432 |
Compulsory and other deposits at central banks |
|
7,005,946 |
|
7,005,946 |
|
7,005,946 |
|
- |
|
- |
|
- |
Cash and cash equivalents |
|
6,033,658 |
|
6,033,658 |
|
6,033,658 |
|
- |
|
- |
|
- |
Loans to customers (i) |
|
3,863,812 |
|
5,144,397 |
|
964,978 |
|
1,434,387 |
|
2,170,974 |
|
574,058 |
Other receivables |
|
1,405,969 |
|
1,437,699 |
|
505,008 |
|
580,325 |
|
352,366 |
|
- |
Other assets |
|
567,552 |
|
567,674 |
|
567,674 |
|
- |
|
- |
|
- |
Total Financial Assets |
|
41,169,764 |
|
43,594,146 |
|
21,715,837 |
|
6,438,002 |
|
7,476,756 |
|
7,963,549 |
(i) Credit card receivables and loans
to customers do not include overdue values that are still being considered in the book value
Market risk and interest rate risk in
the banking book (IRRBB)
The table below presents
the Value at Risk (VaR) calculated using a confidence level of 99% and a holding period of 10 days. The calculation is performed using
a filtered historical simulation approach, based on a 5-year historical window. For Brazil, the VaR is calculated only for the Trading
Book, in line with the portfolio management strategy.
VaR |
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
|
Nu Brazil (i) |
|
423 |
|
249 |
Nu Holdings (ii) |
|
14,908 |
|
14,419 |
Nu México |
|
183 |
|
323 |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
(i) Includes Nu
Prudential Conglomerate in Brazil.
(ii) Considers
only financial assets held directly by Nu Holdings as other subsidiaries do not have significant market risk exposures.
The following analysis
presents the Group's sensitivity of the mark to market fair value to an increase of 1 basis point (“bp”) (DV01) in the Brazilian
risk-free curve, Brazilian IPCA coupon curve, US risk-free curve and Mexican risk-free curve, assuming a parallel shift and a constant
financial position:
DV01 |
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
|
Brazilian risk-free curve (i) |
|
(244) |
|
(158) |
Brazilian IPCA coupon |
|
(5) |
|
(5) |
US risk-free curve |
|
(149) |
|
(136) |
Mexican risk-free curve |
|
2 |
|
2 |
Colombia risk-free curve |
|
(18) |
|
- |
(i) Includes Nu
Prudential Conglomerate in Brazil.
The interest rate
risk in Brazilian subsidiaries other than those mentioned above is not significant as of March 31, 2024 and December 31, 2023. To maintain
DV01 sensitivities within defined limits, interest rate futures, traded in B3, and swaps derivatives are used to hedge interest rate risk.
Foreign exchange (FX)
risk
The financial information
may exhibit volatility due to the Group’s operations in foreign currencies, such as the Brazilian Real and the Mexican and Colombian
Pesos. At the Nu Holdings level, there is no net investment hedge for investments in other countries.
As of March 31,
2024 and December 31, 2023, none of the entities of the Group had significant financial instruments in a currency other than their respective
functional currencies.
The functional currency
of the entities in Brazil is the Brazilian Real. Certain costs in US Dollars and Euros, or intercompany loans in US Dollars, are hedged
with futures contracts, traded on the B3 exchange, based on projections of these costs, or when there are new exposures. Hedge transactions
are adjusted when internal cost projections change and when the FX derivatives expire. As a result, the unaudited interim condensed consolidated
financial statements have no significant exposures to exchange rates after the hedge transactions take effect.
32. CAPITAL MANAGEMENT
The purpose of capital management is to maintain
the capital adequacy for Nu's operation through control and monitoring of the capital position, to evaluate the capital necessity according
to the risk taken and strategic aim of the organization, and to establish a capital planning process following future requirements of
regulatory capital, based on the Group's growth projections, risk exposure, market movements, and other relevant information. Also, the
capital management structure is responsible for identifying sources of capital, writing and submitting the capital plan and the capital
contingency plan for approval by the Executive Directors.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
In July 2023, a new regulatory framework
from the Central Bank of Brazil was implemented determining the classification of conglomerates containing at least one payment servicer
institution. This new framework replaced the previous capital requirements for the financial conglomerate led by Nu Financeira. The amounts
for March 31, 2024 reflecting Prudential Conglomerate requirements, are presented below.
Regulatory Capital Composition
a) Nu Prudential Conglomerate
in Brazil
Brazil's Central bank defines a prudential
conglomerate as a group of companies in which one regulated entity controls other regulated companies or investment funds. The conglomerate
is classified as Type 3 when the regulated company that leads the conglomerate is a Payment Institution, which is the case of Nu Pagamentos.
The regulatory capital of the prudential
conglomerate, defined by Brazil's Central Bank, consists of three key components:
| ● | Common Equity Tier 1 (CET1) Capital: Consisting of paid-in capital, reserves, and retained earnings, after
accounting for deductions and prudential adjustments. |
| ● | Additional Tier 1 (AT1) Capital: This includes debt instruments that have no specific maturity and can
absorb losses, meeting the eligibility criteria set out by the Central Bank. The sum of CET1 and AT1 forms the overall Tier 1 Capital. |
| ● | Tier II Capital: This involves subordinated debt instruments with set maturity dates that meet eligibility
requirements. |
Type 3 institutions are required to implement
capital rules as a prudential conglomerate. This implementation includes a phase-in rule for minimum capital requirements and prudential
adjustments up to December 2024. Transitional rules are currently in effect and are outlined in the table below. The figures for 2025
represent the final implementation requirements.
|
|
|
|
Full year |
Transitional Rule |
|
|
|
2024 |
|
2025 |
|
|
|
|
|
|
|
Prudential Adjustments |
|
|
|
60.0% |
|
100.0% |
Tier 1 Capital |
|
|
|
1.25% |
|
2.5% |
Minimum Requirement |
|
|
|
5.75% |
|
7.0% |
Conservation Capital Buffer (CCB) |
|
|
|
7.25% |
|
8.5% |
Total Requirement |
|
|
|
8.75% |
|
10.50% |
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
The following table presents the calculated
capital ratios for the CET1, Tier 1, and the Capital Adequacy Ratio (CAR) and also outlines their minimum requirements for the prudential
conglomerate under Brazil's current regulations:
Prudential conglomerate |
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
|
Regulatory Capital |
|
2,785,766 |
|
2,629,271 |
Tier I |
|
2,551,735 |
|
2,396,007 |
Common equity capital |
|
2,363,593 |
|
2,197,185 |
Additional |
|
188,142 |
|
198,822 |
Tier II |
|
234,031 |
|
233,263 |
|
|
|
|
|
Risk weighted assets (RWA) |
|
20,064,307 |
|
19,261,517 |
Credit risk (RWA CPAD) |
|
14,250,282 |
|
13,774,206 |
Market risk (RWA MPAD) |
|
76,798 |
|
145,124 |
Operational risk (RWA OPAD) |
|
4,483,875 |
|
4,036,285 |
Payment services risk (RWA SP) |
|
1,253,352 |
|
1,305,902 |
|
|
|
|
|
Minimum capital required |
|
1,755,627 |
|
1,300,152 |
|
|
|
|
|
Excess margin |
|
1,030,139 |
|
1,329,119 |
CET1 ratio |
|
11.8% |
|
11.4% |
Tier 1 ratio |
|
12.7% |
|
12.4% |
CAR |
|
13.9% |
|
13.7% |
b) Nu Mexico Financiera
Nu Mexico Financiera’s capital management
aims to determine the capital necessary to support its growth and to permanently maintain its Regulatory Capital in accordance with the
requirements defined by the CNBV (National Banking and Securities Commission).
As of March 31, 2024, its regulatory capital
was equivalent to US$ 451,909 (US$ 395,714 as of December 31, 2023), resulting in a Capital ratio of 24.1% (28.1% as of December 31, 2023),
with 10.5% being the minimum required for Category 4 Sociedades Financieras Populares ("SOFIPO").
c) Nu Colombia
Nu Colombia
Financiamiento was granted a license to operate as a financial institution in Colombia by the Financial Superintendency (SFC) in January
2024. As of March 31, 2024, its regulatory capital was equivalent to US$ 7,019, resulting in a Capital ratio of 243.7%, with 10.5% being
the minimum required.
33. SEGMENT INFORMATION
In reviewing the operational performance
of the Group and allocating resources, the Chief Operating Decision Maker of the Group (“CODM”), who is the Group’s
Chief Executive Officer (“CEO”), reviews the consolidated statement of profit or loss and comprehensive income.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
The CODM considers the whole Group as a single
operating and reportable segment, monitoring operations, making decisions on fund allocation, and evaluating performance. The CODM reviews
relevant financial data on a combined basis for all subsidiaries.
The Group’s income, results, and assets
for this one reportable segment can be determined by reference to the consolidated statement of profit or loss and other comprehensive
income as well as the consolidated statements of financial position.
a) Information about
products and services
The information about products and services
is disclosed in note 6.
b) Information about
geographical area
The table below shows the revenue and non-current
assets per geographical area:
|
|
Revenue (a) |
|
Non-current assets (b) |
|
|
Three-month period ended |
|
|
|
|
|
|
03/31/2024 |
|
03/31/2023 |
|
03/31/2024 |
|
12/31/2023 |
|
|
|
|
|
|
|
|
|
Brazil |
|
2,074,415 |
|
1,090,559 |
|
661,401 |
|
656,291 |
Mexico |
|
99,351 |
|
80,512 |
|
50,285 |
|
47,893 |
Colombia |
|
25,215 |
|
13,183 |
|
16,202 |
|
14,796 |
Cayman Islands |
|
- |
|
- |
|
5,420 |
|
38,004 |
Germany |
|
- |
|
- |
|
71 |
|
72 |
United States |
|
22 |
|
569 |
|
37,074 |
|
6,116 |
Uruguay |
|
- |
|
- |
|
- |
|
- |
Total |
|
2,199,003 |
|
1,184,823 |
|
770,453 |
|
763,172 |
(a) Includes interest income (credit card,
lending and other receivables), interchange fees, recharge fees, rewards revenue, late fees and other fees and commission income.
(b) Non-current assets are right-of-use assets,
property, plant and equipment, intangible assets, and goodwill.
The Group had no single customer that represented
10% or more of the Group's revenues in the three-month period ended March 31, 2024 and in the year ended December 31, 2023.
34. OTHER TRANSACTIONS
a) Accounting for crypto-assets
- Staff Accounting Bulletin No. 121 ("SAB 121")
In
March 2022, the Securities and Exchange Commission ("SEC") released Staff Accounting Bulletin ("SAB") 121, which addresses
the rights and obligations of the parties to a crypto asset safeguarding arrangement. SAB 121 explains that an issuer that has obligations
to safeguard digital assets held for their platform users should recognize those digital assets as an asset and a liability to return
to the customers, both of which are measured at fair value.
In
June 2022, the Group launched a platform, through its subsidiary Nu Crypto Ltda. ("Nu Crypto"), which allows clients to trade
crypto assets, in partnership with specialized brokers. The custody activity is performed by the brokers, which hold the cryptographic
key information, and the Company's contractual arrangements state that its customers retain legal ownership of the crypto; have the right
to sell or transfer the crypto assets; and also benefit from the rewards and bear
the risks associated with the ownership, including as a result of any crypto price fluctuations. The Group maintains an internal recordkeeping
of the crypto assets held for the customers.
| Nu Holdings Ltd. Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2024 |
| |
The
following table summarizes the balances relating to crypto assets held for customers, including Nucoin. For the purpose of these unaudited
interim condensed consolidated financial statements the asset and liability have not been recognized.
|
|
03/31/2024 |
|
12/31/2023 |
Fair value of the crypto assets held for customers |
|
264,283 |
|
153,254 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Nu Holdings Ltd. |
|
|
|
By: |
/s/ Jorg
Friedemann |
|
|
Jorg
Friedemann Investor
Relations Officer |
Date: May
13, 2024
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