Brazil's Big Banks Retreat From Risky Lending as Nubank Delinquencies Climb
NU sits 37% above its 52-week low of $11.2.
Summary
Brazil's largest lenders are pulling back from unsecured consumer credit, targeting higher-income borrowers and secured products as household debt strains grow. Nubank, whose portfolio is concentrated in credit cards and unsecured lending, reported its 90+ day delinquency rate rose to 6.9% in Q2 from 6.5% in the prior quarter and year-ago period. This follows Nubank's Q2 earnings beat yesterday, but the rising delinquency trend and industry-wide caution signal a tougher credit cycle ahead. The pullback by incumbents could reduce competitive pressure on Nubank, but also reflects deteriorating credit quality in its core segment.
At the time of this announcement, NU was trading at $15.35 on NYSE in the Finance sector, with a market capitalization of approximately $74.1B. The 52-week trading range was $11.20 to $18.98. This news item was assessed with negative market sentiment and an importance score of 7 out of 10. Source: Reuters.