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Nubank Reports 42% Profit Rise; Shares Surge

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Nu Holdings (NU.N), the parent company of Brazilian digital lender Nubank, posted a 42% year-on-year increase in net profit on a foreign exchange-neutral basis, driving its shares up more than 8% in after-hours trading on Thursday.

The company, which serves nearly 123 million clients across Brazil, Colombia, and Mexico, reported $637 million in second-quarter net profit. CFO Guilherme Lago attributed the growth to operational leverage and revenue expansion but noted that the drivers of growth are shifting. “If in the last three to five years a major part of our growth came from adding new customers, in the next three to five years a major part of our revenue growth in Brazil will come from deepening the relationship with these customers,” he said.

Nubank’s annualized return on equity remained at 28%, consistent with the prior year. Analysts from Citi described the quarter as “strong,” highlighting both net profit exceeding expectations and a recovery in net interest margins.

The lender’s total loan book rose 8% from the first quarter to $27.3 billion, with personal loans contributing to growth alongside existing credit card debt. The early default ratio declined to 4.4%, down 0.3 percentage points from the prior quarter, while the over-90-day delinquency ratio edged up to 6.6%, reflecting seasonal trends and short-term delinquencies in Q1.

Lago said the bank plans to continue expanding unsecured lending throughout 2025 and 2026, provided asset quality remains stable. “Until today… everything seems to be super on track,” he added.

Walmart’s Flipkart Secures RBI Approval for Direct Lending in India

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Walmart-owned Flipkart has obtained a non-bank finance company (NBFC) licence from India’s central bank, the Reserve Bank of India (RBI), enabling the e-commerce giant to directly lend to customers and sellers on its platform. This marks the first time RBI has granted such a licence to a major Indian e-commerce player, allowing Flipkart to offer loans without relying on third-party lenders.

The certificate of registration, officially recognizing Flipkart Finance Private Limited as an NBFC, was issued on March 13, 2025. Flipkart applied for the licence in 2022, and the approval, previously unreported, was confirmed by company spokespersons after Reuters reviewed the official documents.

Currently, Flipkart offers personal loans through partnerships with banks and NBFCs like Axis Bank, IDFC Bank, and Credit Saison. With the new licence, it can launch a more profitable direct lending operation on its e-commerce platform and its fintech app, super.money. The company is also considering offering financing options to sellers on its platform.

The start of lending operations depends on internal steps such as appointing key management and finalizing business strategies. A source familiar with the matter expects Flipkart to commence lending “in a few months.”

Flipkart, valued at $37 billion following a $1 billion funding round led by Walmart in 2024, is in the process of shifting its holding company from Singapore to India. Walmart acquired a controlling stake in Flipkart in 2018, which also included ownership of PhonePe, a fintech firm planning its own IPO.

Flipkart’s competitor Amazon recently acquired Indian NBFC Axio, but that deal awaits RBI approval.

Morgan Stanley to Increase Sale of Loans Tied to Musk’s X Amid Strong Demand

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Morgan Stanley, leading a group of banks, is set to increase the sale of loans linked to Elon Musk’s social media platform X, following stronger-than-expected demand from investors, according to Bloomberg News on Tuesday. Initially, the banks had planned to sell around $3 billion in loans, but the revised target now stands at up to $5.5 billion, reflecting investor interest that exceeded expectations.

In November, reports indicated that Musk’s rising political influence and connections to former President Donald Trump played a role in improving prospects for the platform, which helped banks manage the debt sale without incurring heavy losses. Morgan Stanley, along with other financial institutions like Bank of America and Barclays, provided Musk with loans in 2022 to support his $44 billion acquisition of X, formerly known as Twitter.

Typically, banks sell such loans to investors shortly after a deal is finalized, but the process has been more challenging in the case of X. Despite this, the latest demand suggests a more favorable outcome for the banks involved.