Nubank applies for a banking license in Mexico

Mexico City, October 19, 2023 – Nu Mexico announced today that it has applied for a banking license with the National Banking and Securities Commission (CNBV), the local regulator. This strategic move aims to provide a broader and more robust regulatory figure by which Nu will be able to provide its customers with a wider range of products and benefits, including investments, payroll portability, and higher deposit limits. Nu Mexico continues to innovate, grow, and invest in the country, contributing to the transformation of the financial sector, and increasing financial inclusion.

“At Nubank, we follow the local regulations of each of the countries in which we operate. While we have a global strategy for the company, we are very mindful of fine-tuning it to each markets’ characteristics, regulatory framework, and customer needs. While we are now able to create and launch products at a much faster pace, we also need to ensure the adequate regulatory framework to unlock the next steps of our growth journey in Mexico and we believe the Banking License is the right fit for us and our long-term roadmap. It has been remarkable to see our Mexican customers asking us to bring the Nu experience beyond credit and savings and into new verticals and segments; we focus our strategy to cater to their needs”, explains Cristina Junqueira, Co-founder and Chief Growth Officer of Nubank.

Nubank operates in Brazil through a conglomerate authorized by the Central Bank to operate as a Payment Institution and a Financial Institution. In Colombia, where it currently only offers credit cards, it operates as a Corporation and is currently in process with the Financial Superintendence of Colombia (SFC) to obtain a second license to operate as a Financing Company. This will enable it to launch savings products, among others.

Banking License in Mexico
“We now offer a broader portfolio of products to our customers in México, having launched a savings account, debit card, and personal loans throughout this year. This has allowed us to continue growing and foster a closer relationship with our customers’ financial lives. We’re very excited about all the products we will be launching in the short term, however, our commitment to Mexico is for the long term and customers are asking us for more, from higher deposit limits, to investment products and the possibility of bringing their payroll to Nu. By transforming our current Sofipo license into a Banking License, we will be able to secure an even broader and more robust regulatory figure, which will allow us to continue freeing more Mexicans from the complexity characteristic of legacy financial institutions. We are entering a new era for Nu in Mexico and are optimistic about our long-term plans in the country,” commented Iván Canales, General Manager of Nu México.

This strategic step follows Nu’s affirmed leadership in the region: in addition to being the largest Popular Financial Society (Sofipo) in the market, Nu Mexico is now one of the leading issuers of new credit cards in the country as well. It also follows the successful launch of its savings account and debit card, which gained more than 1 million customers in less than a month after its public launch. The company has submitted the license application and will continue working closely with the regulator throughout the process, which at the moment has no impact for Nu Mexico’s customers in any way.

The banking license marks a crucial milestone in Nu’s roadmap in Mexico, as it will allow the company to better cater to the needs of a broader public, as well as to offer its customers a wider range of products and gradually become their primary financial relationship. In Brazil, where the company has over 80 million customers, it is already the primary banking relationship for almost 60% of those customers. In general terms, the license enables institutions to offer various types of investments, including stocks in the Mexican exchange, payroll portability, high-value car and mortgage loans, products focused on SMEs, and access to a higher level of deposit insurance thanks to the IPAB insurance.

After slightly over four years since its arrival in Mexico and three years of commercial operation in the market, Nu’s financial indicators demonstrate its solidity. To date, Nubank’s total investment in the Mexican market exceeds US$ 1.3 billion. Nu is already one of the largest foreign investors in Mexico, and Nu Mexico is one of the country’s best-capitalized financial institutions, with a Capitalization Level (NICAP) of around 500%, four times the requirement for Sofipos. Under traditional banking regulations, Nu’s current capitalization ratio (ICAP) would reach close to 40%, four times the regulatory requirement (10.5%), and twice the sector’s average (19%).