Nubank lifts 2026 efficiency outlook

Brazilian digital lender Nubank, through its parent Nu Holdings, improved its full-year 2026 efficiency ratio outlook, now expecting the metric to land between 19% and 19.5%, compared with a previous expectation of around 20%. The efficiency ratio, which tracks how much a bank must spend to generate revenue, was 19.3% in the third quarter, down from 19.5% in the second quarter and 20.3% a year earlier. Management indicated that this upgraded guidance reflects performance so far in 2026 and an expected sequential increase in the fourth quarter that still keeps the ratio within the new range.

Nu Holdings reaffirmed its commitment that factors affecting the efficiency ratio will remain within an impact of up to 100 basis points in each of 2026 and 2027. The company’s updated outlook signals confidence that recent cost trends and revenue dynamics can be sustained through the end of the year.

Chief Financial Officer Rob Livingston highlighted that a slowdown in hiring has been a key driver of the improved efficiency outlook. He said the pace of hiring was slightly slower than expected as the company is seeing significant benefits from artificial intelligence in boosting capacity and productivity, which has allowed Nubank to reduce the need for additional staff. Lower personnel costs, along with some expenses shifting into the fourth quarter, supported the third-quarter efficiency ratio.

Livingston also noted that a back-to-office policy announced last year is rolling out more slowly than originally planned, as Nubank opens new offices in several cities. This gradual implementation, combined with stronger-than-expected revenue, has further improved the bank’s efficiency prospects for 2026.

For the July to September quarter, Nubank reported net income of about $1.09 billion, an increase of 31% from a year earlier on a currency-neutral basis and in line with analysts’ estimates. Revenue came in roughly in line with market expectations at about $6.26 billion, representing 37% year-on-year growth. The results matched the Visible Alpha consensus and underscored robust top-line expansion alongside improving cost efficiency.

Nu Holdings now serves over 140 million clients and began expanding beyond Latin America in September, adding to its growth profile. The combination of strong revenue growth, disciplined cost management and operational efficiencies from AI has supported both profitability and the improved efficiency outlook.

Nubank’s 90-day delinquency ratio rose to 7.3% from 6.7%. The CFO attributed this increase mainly to seasonal factors and an earlier rise in risk between late last year and early this year. He stated that there is no evidence of a broad-based exogenous worsening in the loan portfolio.

Management characterized the higher delinquency ratio as the result of management decisions and timing that had been anticipated. While asset quality indicators have softened, the company maintains that these developments remain within expected parameters and have been incorporated into its risk and efficiency planning for 2026.