Chit Chat Stocks Podcast Summary

Episode: Nu Holdings: The Best Banking Stock Globally?
Guest: Dave Ahern (Investing for Beginners, Value Spotlight)
Hosts: Brett Schaefer, Ryan Henderson
Date: November 7, 2025

Episode Overview

This episode dives into Nu Holdings—commonly known as Nubank—exploring its business model, growth trajectory, competitive strengths, Latin American expansion, management, risks, and valuation. Dave Ahern joins the hosts to provide both nuanced analysis and firsthand insight as a shareholder and fintech/banking specialist.

Nubank: Core Business & Differentiators

Digital-Only Revolution in Brazil ([03:23])

• Nubank's Model: Digital-only bank—no branches, easy-to-use, app-first experience, making banking accessible in remote and underserved areas.
• Customer Base: Over 120 million customers across Brazil, Mexico, and Colombia, with exceptionally high activity rates.
• Legacy Disruption: Nubank leapfrogs traditional banks (Banco de Brazil, Itau) which bolted-on digital as an afterthought.
• Key Quote:

  “Their app is super easy to use, it's super easy to sign up, it's super easy to create an account...in Brazil, a lot of people don't have access to cars...if you want to go to a bank, then sometimes you're looking at 50 to 100 mile travel.”
  —Dave Ahern, [03:49]

Brazil: Market Penetration and Lending Strategy

• Penetration: Nubank counts 60% of Brazil's adult population as customers, with plenty of runway among the unbanked.
• Lending Innovation:
  • Brazil's unique credit culture: Most people get paid monthly and shop/pay bills monthly.
  • Nubank mimics local habits, offering flexible, incremental credit built on cashflow, not just scores.
  • Credit cards and payroll loans are primary products, with expansion into fixed/installment and small business loans.
• Key Quote:

  "They basically look at your cash flow in your checking account, and they give you a credit limit based on your ability to pay that back…as you use the credit card and pay it back, they will gradually raise your credit limit."
  —Dave Ahern, [07:30]

Mexico & Colombia: The Next Frontiers

Mexico—Mirroring Brazil’s Playbook ([11:45])

• Rapid Growth: Jumped from 2.7M to 12M customers in two years—now 13% population reach, and $6.7B in deposits.
• Opportunity: Huge unbanked population, tech adoption (smartphones), inefficient legacy banks.
• Competition: Emergence of digital players like Mercado Pago, but Nubank’s digital advantage persists.
• Key Quote:

  “I wholeheartedly believe they will be able to get there. They're executing the exact same playbook they did in Brazil.”
  —Dave Ahern, [11:45]

Colombia and Beyond

• Smaller but significant market—similar strategy.
• Hosts and guest agree that further Latin American expansion is feasible, possibly including Argentina when macro conditions stabilize ([20:30]).

Expansion into New Markets

Argentina and Latin America-Wide Growth ([19:04], [21:13])

• Argentina is eyed for re-entry post-crisis stabilization.
• Mercado Libre's home base there will pose stiff competition.
• Management is cautious, deliberate, and not inclined to reckless expansion.

Key Quote:

"They're very, they've been...very deliberate about the things they do and they test the waters, see if things do well, and then they just kind of press on..."
—Dave Ahern, [21:13]

Surprising Move: US Banking License

Why Apply in the US? ([22:38])

• Targeting Hispanic/Latino immigrants in the US, not trying to compete directly with giants like Chase or BofA.
• Remittance opportunities: seamless Nubank-to-Nubank money transfers between the US and Latin America.
• Hosts speculate Nubank could be a threat to (or even an acquirer of) US remittance providers like Remitly (24:29).

Expansion Beyond Core Banking

Premium Services: Imitating Amex for Latin Markets ([26:11])

• Ultraviolet/Ultra Violetta premium card: annual fee, luxury perks, airport lounges, better rates.
• Aims to attract higher-income customers, boosting ARPU (average revenue per user), cross-selling investments and insurance.
• Business banking for SMEs: offering payment devices, fast deposits, bundled services—lock-in and retention tools.
• Key Quote:

  “It's almost a combination of American Express and Discover...they're going to convince all these wealthy people to deposit with them, but then they can use that to start these credit loans with the...underbanked population, right?”
  —Brett Schaefer, [28:04]

Management Quality

Founder-Led, Mission-Driven ([32:18])

• CEO/founder David Vélez inspired by personal frustration with local banks—committed to financial inclusion.
• Turned down a $300M board pay package, prioritizing employees/customers over personal compensation.
• Management is transparent, takes responsibility for mistakes, and fosters a strong customer-centric culture (NPS: 84).
• Key Quote:

  "He was offered by the board...a $300 million pay package and he turned it down. He said, I have enough money and let's put that money into the employees and into the bank... Anti-Elon."
  —Dave Ahern, [32:55]

Risks & Concerns

Political, Credit, and Business Model Risks ([39:30])

• Political Instability: Shifting Latin political winds could alter regulatory or economic conditions.
• Credit Risk: Economic volatility can impact delinquencies—key metric: 90-day+ NPL (non-performing loan) ratio (keep under 7.5-8%).
• Profitability Metrics to Watch: Spread between ARPU and cost to serve (currently $12 ARPU vs. ~$0.80 cost).
• Key Quote:

  "The political stability of Latin America is medium at best… Another part is the credit risk… something I watch is the 50 to 90 day NPLs...if the 90-day plus NPL gets above 7.5 to 8%, that's when you need to worry..."
  —Dave Ahern, [39:30], [41:48]

Valuation

Rapid Growth, But Room for More? ([36:56])

• Near all-time highs ($16/share, $77B market cap).
• Guest models 20% earnings/CAGR forward—indicating $20 fair value today (via excess returns approach, not DCF).
• Strong growth could mean double over 3–5 years, still attractive vs. S&P.
• Key Quote:

  "If the company can grow 10–15% earnings over the next five to ten years, we're all going to enjoy very much the result..."
  —Dave Ahern, [37:22]

Notable Memorable Moments & Quotes

• On Brazilian legacy banks:

  "It took her three hours to open a savings account, and she was the only person in the bank. It was ridiculous."
  —Dave Ahern, [15:44]

• On Nubank's customer economics:

  "Their cost to serve is around 80 cents and that's per customer...I would kill for that!"
  —Dave Ahern, [42:44]

• On Nubank’s approach to new products/markets:

  “They’re not just throwing money at things…they test the waters, see if things do well, and then…press on.”
  —Dave Ahern, [21:13]

• On management’s humility and stakeholder focus:

  "They care about taking care of their customers. In this day and age, that's such a rare thing. And especially in the banking industry."
  —Dave Ahern, [35:47]

Additional Topics & Resources

Where to Learn More About Nubank:

• Fetty Sandler (ex-IR for Nubank)
• Brad Freeman (Stock Market Nerd)
• The Wolf of Harcourt (active on Twitter/X)

Upcoming Investing Trends ([45:45])

• Interest in fintech, financials, insurance, and alternative energy infrastructure.
• AI’s role in semiconductors and supporting industry—opportunities beyond Nvidia.
• Utility and infrastructure plays in energy via companies like Brookfield, Amphenol, Eaton, and Berkshire Hathaway Energy.

Closing Thoughts

Nubank has quickly become a fintech leader by building a radically better bank for Latin America’s massive underbanked population. Management remains mission-driven, cautious about expansion, and focused on sustainable, profitable growth. While valuation is heating up, so is Nubank’s long-term share of the region’s financial ecosystem—but investors must remain vigilant about political, credit, and competitive risks in every market they enter.

Full recommendation and disclaimers apply; the views are those of the speakers and not financial advice.