Nubank, Brazil’s Giant, Hits 1 Million Accounts in Mexico In One Month

MEXICO CITY : One million people in Mexico have opened savings accounts in Brazilian digital bank Nubank one month after the product’s launch, the company said on Wednesday, with deposits amounting to 1 billion pesos ($58 million).

About 90 per cent of the deposits are being kept in Nubank’s so-called “little boxes,” a separate space within the accounts where customers can hold funds and get a 9 per cent annual return, it said in a statement.

The digital bank’s Mexican arm, known as Nu Mexico, last November opened a waiting list for customers to sign up for the savings accounts, its second financial product in the country, and formally launched it in May.

Nubank, owned by Buffett-backed Nu Holdings, said it is now present in nine out of 10 municipalities in Mexico.

Nubank announced a $330 million equity capitalization for Mexico late last year, in a bid to expand its footprint in the Latin American country.

In addition to its new savings accounts, Nubank has issued 3.2 million credit cards in Mexico, a country with more than 126 million people.

Nonetheless, the contribution of its Mexico operations to Nubank’s total results might be limited in the short term, Citi said in an analysis note, citing low penetration in the credit card market.

Credit card transaction volume in the country amounts only to about 20 per cent of Brazil’s volume, according to Citi data.

The Brazilian lender is also expanding its portfolio in Colombia. The bank announced last month it expects to launch digital checking accounts in the South American country by the end of 2023.

($1= 17.40 Mexican pesos)

Source: Reuters