Nu Holdings Q1 sees 41% net income rise despite higher delinquency and lower ROE

Nu Holdings reported a 41% year-on-year increase in net income to $871 million in Q1, driven by a 40% growth in its credit portfolio, mainly from credit cards. However, rising non-performing loans and higher provisions caused concern among investors, alongside a decline in return on equity (ROE) to 29% and a sequential drop in net interest margin (NIM). The Mexican operation reached breakeven and is now the third largest by customers, supporting a positive outlook with a potential 26% upside to 17 times earnings. Investors should watch credit quality and profitability metrics closely going forward.