Nu Holdings Ltd. (NYSE: NU) enters the new trading week with a freshly announced $1 billion share repurchase program, but the Brazilian digital bank's stock is still reeling from a difficult period. Shares closed at $11.97 on Friday, down 1.24% on the day and off 8.83% for the week, as the market digested a series of corporate developments and sector headwinds.
The buyback, approved by Nu's board on June 4, authorizes the repurchase of up to $1 billion in Class A shares over the next year, through June 3, 2027. The company emphasized that the program does not alter its growth investment plans in Brazil, Mexico, Colombia, or the United States, and that regulatory capital buffers will remain intact. However, the filing notes that the buyback is not mandatory and may be suspended or terminated depending on market conditions or other investment opportunities.
In a separate move, Nu announced a change in its chief financial officer. Rob Livingston, formerly head of finance for Visa North America, will assume the role of CFO on July 13, replacing Guilherme Lago, who will transition to a special adviser position. CEO David Vélez described the management shift as a step toward stability, stating, 'Our priorities are unchanged,' with a focus on growth in core markets, artificial intelligence, and controlled international expansion. Livingston said he aims to 'optimize capital allocation' to support Nu's next growth phase.
The CFO announcement triggered a wave of analyst downgrades. BofA Securities cut its rating on Nu to Underperform from Neutral and slashed its price target to $10 from $16, citing margin pressure and higher loss provisions. Susquehanna also downgraded the stock to Neutral from Positive, lowering its target to $13 from $18. Analyst James Friedman pointed to a 760 basis point drop in Nu's operating margin to 19.2% in the first quarter, attributing the decline to growth in credit cards, unsecured lending, and expansion in Mexico and the U.S.
Nu's first-quarter results provided ammunition for both bulls and bears. The company surpassed 135 million customers and reported quarterly revenue above $5 billion for the first time, with net income reaching $871 million and a return on equity of 29%. However, credit metrics deteriorated: the 15-to-90 day non-performing loan ratio rose to 5.0% from the previous quarter, and credit loss allowances jumped 33% quarter-over-quarter to $1.79 billion. The risk-adjusted net interest margin slipped to 9.5% from 10.5%.
Broad market conditions added to the pressure. Wall Street closed sharply lower on Friday, with the Nasdaq falling 4.18% and the S&P 500 dropping 2.64%, after stronger-than-expected U.S. jobs data fueled expectations that interest rates will remain elevated. In New York, other Brazilian bank ADRs also declined: Itaú Unibanco (ITUB) slipped 1.3% and Banco Bradesco (BBD) dipped 0.9%.
Despite the headwinds, Nu continues to leverage its scale. The company reported over 115 million customers in Brazil, more than 15 million in Mexico, and nearly 5 million in Colombia, with management noting that Mexico has reached break-even. Any U.S. growth will remain measured and focused on capital efficiency, the company said.
Looking ahead, traders will be watching to see if Nu's stock can hold above its 52-week low of $11.20, and whether the buyback program will generate meaningful buying support. The key question remains whether the CFO transition and rising credit costs are routine adjustments or signals of deeper challenges. For now, the market is putting the pressure back on the company to demonstrate that its growth story remains intact.
