Nu Holdings approved a $1.0 billion share repurchase program covering Class A ordinary shares, the first buyback authorization in the São Paulo-based neobank's public life. The board gave no expiration date. No price ceiling was disclosed. The program sits alongside Nu's existing dividend policy and does not replace it.
Nu closed Wednesday at $14.12 on the NYSE, giving the company a market capitalization near $67 billion. The buyback represents 1.5% of outstanding equity at current prices. Management did not specify whether repurchases will be open-market, accelerated share repurchase, or block trades. The timing follows four consecutive quarters of GAAP profitability and a 68% year-on-year revenue increase in Q4 2024, to $3.3 billion. Nu's return on equity in that quarter reached 29%, higher than most incumbent Brazilian banks. The company serves 109 million customers across Brazil, Mexico, and Colombia as of December 2024.
The authorization matters because Nu is transitioning from a growth story that required permanent equity dilution to a mature allocator of surplus capital. The company raised $2.6 billion in its January 2022 IPO and has issued equity intermittently since to fund customer acquisition and geographic expansion. Buybacks mark the end of that phase. Nu generated $2.1 billion in net income over the trailing twelve months, more than enough to self-fund loan-book growth and still return cash. The company's credit-loss ratio has been falling — 4.9% in Q4, down from 6.1% a year earlier — which reduces the need for precautionary capital. Allocators should note that Sequoia Capital and Tencent remain large holders, each above 5%, and both have sold down in the past year. A buyback at these levels effectively transfers value from those exiting holders to those who stay.
Watch for the 10b5-1 plan filing in the next 30 days, which will show whether repurchases are discretionary or systematic. Nu's next earnings call is scheduled for late April 2025 and will likely include updated guidance on capital allocation mix between dividends, buybacks, and retained earnings. The Brazilian real has strengthened 6% against the dollar since January, which affects the peso-denominated value of any dollar-funded buyback. If Nu accelerates the program in Q2, it would signal confidence that loan-growth rates in Mexico and Colombia can be sustained without additional equity raises. The company has $5.4 billion in cash and marketable securities on its balance sheet, more than five times the buyback authorization.
This is the cleanest signal yet that Nu's board believes the stock is mispriced relative to the earnings power already in place.