Nu Holdings (NU) Q2 FY26 earnings call: guidance and Q&A

What was the impact of the Desenrola program on provisions and risk-adjusted NIM, and how sustainable is the current risk-adjusted NIM given the macro outlook for 2027?

Desenrola impacted cost of credit by about 5%, contributing to the risk-adjusted NIM expansion, though seasonality and underlying credit performance were larger factors. Management expects risk-adjusted NIM to remain in the current region for the foreseeable future, viewing it as sustainable. They maintain a conservative underwriting approach, assuming future economic conditions will be worse than the past, and leverage customer primacy for credit advantage.

“And to your question on net interest margin or risk adjusted net interest margin for the foreseeable future, we see it as being in the same region as where we are today. We think that it's sustainable.”

asked by Unknown Analyst · answered by Rob Livingston

How do AI models contribute to the 12.4% risk-adjusted NIM, and what KPIs demonstrate their effectiveness in allowing more risk with lower losses?

AI-generated models are more powerful than traditional ones, tracked by predictability and outcomes. The 12.4% risk-adjusted NIM is a result of intentional risk expansions enabled by stronger models, not necessarily a floor. The increasing loan-to-deposit ratio (LDR) and optimization of the balance sheet also contribute significantly by reallocating deposits to higher-yielding assets.

“The first is that it certainly is the case that our sort of generated models and assisted models are more powerful than traditional logistic regression models that is incontrovertible.”

asked by Jorge Kuri · answered by Rob Livingston

How will David Velez's board position at OpenAI benefit Nubank, and how can he contribute to OpenAI?

David Velez views AI as the most important technological transformation, driving significant changes within Nubank across credit, underwriting, and customer-facing applications. His involvement with OpenAI provides valuable insight into this trend, and he aims to contribute to building a great future for humanity through AI, seeing it as a win-win.

“I think effectively, we discussed very openly that internally and externally that we think artificial intelligence is the most important technology transformation in our history.”

asked by Eduardo Rosman · answered by David Velez-Osomo

What is the technical classification of portfolios under Desenrola (Stage 3), and what is the latest update on private payroll lending, including private payroll?

Desenrola-impacted portfolios are classified as Stage 3, with a small, immaterial impact on expected credit losses. A bit more impact is expected in Q3. For private payroll, Nu is accelerating its efforts, becoming more comfortable with the product setup in Brazil. They aim to be a leading player in 18-24 months, emphasizing that good customers are now seeing the opportunity to refinance, making it a more attractive and strategically beneficial product for diversification and resilience.

“We think we're getting close to a system that makes a lot of sense, and we are accelerating. And ultimately, the lowest cost provider and whoever treats the customer best will win this market.”

asked by Pedro Leduc · answered by David Velez-Osomo

Headcount has been flat after rapid growth; what are the hiring plans, and how is AI impacting workforce productivity?

Headcount is currently flat due to attrition from a return-to-office policy, which has largely been rehired. While the number of employees may not significantly increase or decrease, AI is expected to make the existing 10,400 employees 2-5x more productive over the next few years, enabling a much larger output. Hiring in the U.S. will be targeted for specific talent, primarily in AI, but will not significantly shift the overall distribution.

“So net-net, I don't see us significantly increasing that number. I also don't necessarily see us decreasing the number feels more or less right, but it's certainly 10,400 employees that will be 2, 3, 4, 5x more productive over the next few years as we really integrate more AI with that.”

asked by Unknown Analyst · answered by David Velez-Osomo

Where is the biggest prize in credit card financing optimization, and how does the low loan-to-deposit ratio influence the deposit strategy regarding funding costs versus customer quality?

The goal of optimization is to maximize quality at a lower cost, not just minimize cost. For credit card financing, this means offering personalized rates to optimize the equation of quality and cost for each customer. On deposits, while optimization could lower funding costs, Nu might reinvest those gains into customer quality and competitiveness, especially in early-stage markets like Mexico and Colombia, prioritizing growth and customer experience over short-term net income optimization.

“Specifically on the deposit, we just get to an equation whether we -- it would be our decision to decide if we want to optimize cost. Then we would be able to optimize the funding cost, but we would know specifically what would be what we're giving up in terms of quality and competitiveness in that opportunity.”

asked by Daniel Vaz · answered by David Velez-Osomo

Why did risk-adjusted NIM overperform expectations, and how to reconcile credit card NPL stability by income band with overall NPL deterioration, suggesting unsecured personal loans as the driver?

Risk-adjusted NIM overperformed due to Desenrola's impact (1/3 of benefit) and better-than-expected solid credit performance and increased earning balances (2/3 of benefit). The credit card NPL slide (Page 20) is smoothed and credit-card-only, showing stability. The overall NPL increase is primarily driven by a mix shift in the portfolio, rather than a broad deterioration within unsecured lending, as Nu intentionally lends to different segments.

“One is just really solid credit performance across the board and in some cases, better than expected. And the other is the increase in our balances that we're earning yield in Q2 at the very beginning.”

asked by Mario Pierry · answered by Rob Livingston

How will Nu's credit models hold up in the U.S. given demographic changes, and how much work is needed to rebuild them for the U.S. market?

The nuFormer platform and credit risk expertise will translate quickly, but building data richness and foundational testing for U.S.-specific models will take 12-30 months. The initial U.S. entry will focus on testing and learning to build confidence before expanding, aligning with the commitment to not exceed 100 basis points in efficiency ratio for U.S. entry.

“The way to think about it is that the platform, the new performer platform for credit models and the credit risk expertise that we have in the company will translate very, very quickly across the border, but the actual data richness in building the experience of foundational testing and having the models in place that are specifically tooled for the U.S. market will take somewhere between 12 and 30 months, depending on the degree of maturation of those curves.”

asked by Craig Maurer Murer · answered by Rob Livingston