Nubank should be profitable in 2025 and 2026 after expansion, says Goldman

With expectations of expansion in other American markets, Nubank has been expanding its operations to win more customers outside Brazil. The expectation is that operations in Mexico will become profitable in early 2025 and those in Colombia in 2026, estimated the bank Goldman Sachs in a report released to customers and the market this Thursday (11.Jul.2024).

However, Brazil will still account for 91% of revenues by 2028, analysts expect.We remain confident that Nubank can replicate some of its successful operations in Brazil.”, they reinforce. Analysts estimate a profitability measured by return on equity (ROE) of 33.1% in 2024, 37.6% in 2025 and 35.8% in 2026.

Operations in Mexico are expected to post a net loss of US$50 million in the second quarter of this year. However, with the acceleration in loan growth, which is expected to rise 52% in 2024, according to the bank’s projections, the trend is to turn a profit soon.

In Colombia, Goldman estimates a quarterly net loss of US$12 million and estimates a profit of US$1 million in 2Q26, also with growth in loans, which are expected to increase by 23% in 2024, 116% in 2025 and 75% in 2026.

“We estimate that the balance of the results will be in Brazil, although we acknowledge that this includes liquidity and equity at the share level that is not allocated to Brazil. However, we believe that this should be a good reflection of the profitability of the business in the long term, as Brazil is expected to remain its largest market for the foreseeable future.”, say analysts Tito Labarta, Tiago Binsfeld, Beatriz Abreu and Lindsey Shema.