The bank's new CEO has posted his first market-beating quarterly results, but the firm's exposure to lower-income segments could limit longer-term upside.

The definition of excellence in these Euromoney awards is multifaceted. Sometimes the best bank is the one that has innovated and changed the market, sometimes the momentum in the market deserves recognition and at other times the player that dominates in terms of scale and profitability is the winner. It’s not often all three, but in Brazil, Nubank has revolutionized the retail banking market while enjoying unprecedented growth that has begun to feed – thanks to its highly efficient operating model – into operational leverage that is driving market-leading profitability.

Brazil’s Nubank is the momentum story in global banking. In 2023, the bank added 19 million clients (to a total of 93.9 million), and it now can claim to bank 53% of the adult population of Brazil. It is also now seeing a positive operating leverage effect from the growth in its client base. In the fourth quarter of 2023, it recorded revenue of $2.4 billion (Nubank is listed on the NYSE and all its earnings are reported in dollars), which was up 57% on an annual basis. Net income jumped 489% to $360.9 million, with a return on equity of 23%.

New accounts targeted at low-income customers reflects the reality of intense competition in the sector.

The Brazilian neobank is growing its number of clients faster than perhaps any financial institution on earth. Combine this with static unit costs and the operational leverage potential is big. CFO Guilherme Lago explains how its business model is now focused on the next five to 10 years as open banking generates unprecedented price transparency, customer portability and opportunity.

The leading neobanks in Brazil seem to have hit their stride in terms of profitability just as some of the traditional banks have stumbled. Are these firms the future of Brazilian banking?

The momentum behind the loss-making bank’s IPO had become unstoppable by year-end, even as the range was eventually cut. It now faces intense scrutiny as a public firm.

When David Vélez, co-founder and chief executive of Nubank, Latin America’s best bank, spoke to Euromoney in January 2021 he acknowledged just how powerful an engine the pandemic had been for the growth in digital banking. The Covid-19 lockdown led to such accelerated growth in new customer segments that the bank is seeing numbers that would have taken months or years to achieve in normal times.

Nubank, Latin America’s best digital bank, is still very much in growth mode. Over the past year it has further built out from its credit card origins; current accounts have been added and the bank has acquired online investment platform Easynvest.

Brazil's Nubank is the world’s most valuable fintech in the digital banking space – now worth over $25 billion. In his first interview this year, chief executive and co-founder David Velez explains why he’s in no rush to IPO and why he would rather focus on the huge opportunity left in Brazil and elsewhere in the region.

Brazil’s fintechs and digital challenger banks are making more ground than traditional firms with the central bank’s new payments system.

Brazil’s largest fintech has 5% market share and now poses strategic challenge to market leaders.

Nubank’s acquisition of Easynvest this month is just one example of how the financial market in Brazil is developing at a dizzying speed.

Social distancing and government payments are turbo-charging digital bank’s growth.