Nu .(NU) - 2024 Q4 - Annual Report

Customer Growth and Market Expansion - Approximately 80-90% of new customers were acquired organically each year since inception, primarily through word-of-mouth referrals [204]. - Nu Mexico doubled its customer base to over 10 million in 2024, with a 14 percentage point increase in brand awareness [226]. - The launch of the savings account in Colombia led to a growth from 1 million to 2 million customers in less than 5 months, making it the 4th largest savings account provider in the country [235]. - Nubank expanded its customer base in Colombia from approximately 800,000 in December 2023 to over 1.2 million in December 2024 [253]. - The number of unique customers with accounts in Brazil reached over 199 million as of December 31, 2024, a 2.9% increase from 194 million in 2023, with 47% having an active account [285]. Financial Performance and Revenue - Nubank's revenue for the year ended December 31, 2024, was US$8,409.9 million in Brazil, compared to US$523.1 million in Mexico and US$111.8 million in Colombia, showing significant growth from the previous year [297]. - Customer deposits in Brazil totaled US$387 billion as of December 31, 2024, reflecting a 12% FX-neutral increase from US$374 billion in 2023 [286]. - The average outstanding loans to customers in Brazil reached US$691 billion, with credit cards accounting for 15% of this total [259]. - Nubank's payroll loans in Brazil reached US$122 billion, making it the second largest loan product in terms of credit portfolio [260]. - Nubank's personal unsecured loans achieved a 24$4.9 trillion in 2024, a 54% FX-neutral increase over 2023, with the company holding close to 20% market share in transfer originations [250]. - Nubank's market share in total card transaction volumes in Brazil reached 15% in 2024 [251]. - In Mexico, Nubank grew its credit card customer base to 5.6 million in 2024, a 70% increase from 2023, with 50% of these customers being first-time credit card users [252]. - Nubank's market share in Mexico surpassed 5% in terms of purchase volume according to Banxico statistics [252]. Marketing and Brand Affinity - The company's blog attracted nearly 47 million unique visitors in 2024, covering over 435,000 keywords related to financial education [205]. - The marketing strategy in Brazil resulted in a 10% increase in brand affinity among mass market customers and a 22% increase in client preference compared to December 2023 [212]. - The Ultraviolet brand targeting high-income customers saw an 11 percentage point increase in brand affinity year-over-year [218]. - The influencer program in Brazil generated 156 million impressions and 1.8 million total engagements in 2024 [224]. Regulatory Environment and Compliance - The regulatory environment in Brazil imposes extensive requirements on payment institutions, financial institutions, and securities brokers, ensuring compliance with risk management and anti-money laundering regulations [310]. - Payment institutions in Brazil must segregate prepaid payment account funds from their own assets, holding them in specified instruments to protect against bankruptcy [316]. - The Central Bank of Brazil oversees the activities of financial institutions and regulates the structure and operation of financial markets [349]. - The Anti-Money Laundering Law plays a significant role in regulating banking and payment activities, imposing penalties for illicit activities [420]. Product Development and Innovation - The company launched more than 17 product features in Mexico, enhancing its portfolio value proposition [232]. - Nubank's active insurance policies exceeded two million by December 2024, achieving an annual growth rate of 60% [294]. - The Brazilian e-commerce market reached a gross merchandise volume of almost US$38 billion in 2024, indicating a robust growth environment for Nubank's marketplace initiatives [295]. Risk Management and Capital Requirements - The prudential conglomerate led by Nu Pagamentos is subject to a minimum regulatory capital requirement of US$1.9 billion (R$11.7 billion) as of December 31, 2024 [386]. - The new prudential framework mandates that financial institutions maintain capital ratios based on Total Capital relative to risk-weighted assets, aligning with Basel III standards [379]. - Minimum paid-in capital requirements for payment institutions range from R$1.0 million to R$3.0 million depending on the type of activity [374]. - The transition period for the new provisioning model for expected credit loss will span from 2025 to 2028, allowing for phased incorporation of regulatory capital impacts [373].