Nu Holdings Ltd. (NU) Balance Sheet

The balance sheet expanded from $43.3B in 2023Q4 to $77.5B in 2026Q1, a 79% increase, with investment securities growing from $13.0B to $26.7B. This growth appears organic, as cash and bank balances also rose to $19.4B, suggesting strong liquidity. The rapid asset growth, however, may strain capital ratios if not matched by retained earnings, though equity has grown to $12.6B.

While deposit data is not directly provided, the negative operating cash flow of -$1.2B in 2026Q1, despite strong net income, implies that loan origination is exceeding deposit collection. This could indicate a growing reliance on wholesale funding or securities sales to fund asset growth. Investors should monitor deposit franchise quality, as a shift toward costlier funding could pressure NIM.

The provision for credit losses has grown nearly threefold over the period, aligning with the expansion of the loan book. While this is expected in a high-growth phase, the unsecured nature of the portfolio warrants caution. The 90-day NPL ratio is not disclosed, but the rising provisions suggest that credit quality may be deteriorating as the loan book seasons. Investors should monitor charge-off trends and provision coverage.

The equity-to-assets ratio has held steady at 0.15-0.16 over the past ten quarters, suggesting that retained earnings are supporting asset expansion. However, the absence of disclosed CET1 and Tier 1 ratios limits a full assessment of regulatory capital adequacy. The company's high ROE of 30.2% in 2026Q1, as reported, indicates strong internal capital generation, which may provide a buffer for future growth.

The combined cash and securities position of $46.1B represents 59% of total assets, indicating a highly liquid balance sheet. This liquidity may support continued loan growth and provide a buffer against funding shocks. However, the negative operating cash flow in 2026Q1 suggests that loan growth is consuming cash, and the reliance on securities sales to fund operations could be a concern if market conditions deteriorate.

NIM has remained stable around 3.4-3.5% despite fluctuations in NII, suggesting effective balance sheet management. However, the potential Brazilian legislation capping revolving credit card interest rates poses a significant risk to NU's most profitable product. If enacted, this could compress NIM and force a restructuring of the credit card business. Investors should monitor regulatory developments and their potential impact on forward NIM.