Nu Holdings: The Next Chapter After Brazilian Dominance
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Romil Patel1.06K FollowersFollow5ShareSavePlay(18min)CommentsSummaryNu Holdings dominates Brazil's underbanked, high-fee banking oligopoly with a differentiated, tech-driven model.NU's model delivers superior economics, including wide unit margins, a best-in-class efficiency ratio, and consistently high ROE driven by low-cost deposits and data-driven underwriting.The core strategic priority is to replicate Brazil’s playbook in Mexico and Colombia, two large underpenetrated markets with similar structural banking gaps.Valuation appears elevated on headline multiples but becomes attractive when adjusting for the long growth runway in Mexico and Colombia, expected ARPAC lift from new product layers, and call option-like opportunities to expand into new markets and customers. Pakin Jarerndee/iStock via Getty Images Overview Nu Holdings (NU) is overlooked by investors because the valuation at a 28 P/E seems really pricey for a bank, and for many Western investors, LatAm is synonymous with deep value investing, not growth, so theyThis article was written byRomil Patel1.06K FollowersFollowI focus on thematic investing, crisis investing, systematic options trading through both premium selling and long-vol positions, and discretionary global macro. I have experience with private M&A along with many years of publicly-traded equities and equity-based derivatives trading experience.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Recommended For You