Nubank Profit Misses Estimates on Higher Credit Provisions

Nubank reported quarterly profit that came in below analysts’ estimates as the company increased provisions for credit losses amid expansion of its lending business. The digital bank said it had to set aside more money due to growth in its credit portfolio.

This increase in provisions contributed directly to the lower-than-expected profit figure. Nubank has expanded its customer numbers and product offerings in recent years.

Growth in the credit portfolio required higher reserves to cover potential defaults. The company reported the development in its earnings release on Thursday. Analysts had projected higher profit than the amount ultimately announced. The gap between the reported figure and consensus estimates stemmed primarily from the elevated provisions.

The bank continues to focus on expanding its lending activities while managing credit risk. No further details on the exact profit amount or percentage miss were disclosed in the initial report.