Nubank improves 2026 efficiency ratio outlook as AI leads hiring slowdown

SAO PAULO, Nov 12 : Brazilian digital lender Nubank posted third-quarter profit in line with analysts' estimates on Thursday, while improving its efficiency ratio projections for the year partly due to an artificial intelligence-led slowdown in hiring.

Nubank parent Nu Holdings, which has over 140 million clients and in September began expanding beyond Latin America, now expects its full-year efficiency ratio, which measures how much a bank has to spend to generate revenue, to land between 19 per cent and 19.5 per cent, below a previous expectation of around 20 per cent.

"The biggest thing is that our pace of hiring was a little bit slower than we expected," Chief Financial Officer Rob Livingston told Reuters. "We are seeing significant benefits from AI helping us with our capacity and productivity, and so we slowed down our hiring." 

Livingston said Nubank's return-to-office policy, announced last year, was also rolling out more slowly than initially planned as the company is opening new offices in several cities, while stronger-than-expected revenue also boosted efficiency prospects.

PROFIT MATCHES ESTIMATES, SHARES UP

Nubank reported $1.09 billion in net income for the July-September quarter, up 31 per cent from a year earlier on a currency-neutral basis and matching the Visible Alpha consensus.

Revenue also came in roughly in line with market expectations at $6.26 billion, a 37 per cent boost. 

Shares of the company were up around 4 per cent in extended trading following the results, after rising 2 per cent during the earnings conference call. 

Nubank's credit portfolio grew by 33 per cent, while the 90-day delinquency ratio rose to 7.3 per cent from 6.7 per cent, a climb Livingston  attributed mostly to seasonal effects and an increase in risk between late last year and early this year.

"We're not seeing any evidence of broad-based exogenous worsening in our portfolio," he said. "The increase is entirely due to management decisions and timing that we were anticipating," he noted.

HIGH BAR ON ACQUISITIONS

Nubank Chief Executive David Velez said in a call with analysts that the bank will look at potential mergers or acquisitions as it expands globally, but that it has a "strong preference" for organic growth.

"The bar would have to be extremely high for us to do a full M&A," Velez said.

The remarks came after media reports in September that Nubank was in talks to buy British digital bank Monzo in a £10 billion ($13.23 billion) deal, which sent Nubank shares lower at the time as investors pointed to the transaction's execution risk.

Nubank said a few days later that it was not pursuing such a transaction.