Comprehensive Analysis of Nu Holdings (Nubank) for Long-Term Investors

Company Overview and Expansion Plans

Nu Holdings Ltd. (NYSE: NU) is the holding company of Nubank, one of the world’s largest digital banking platforms. Founded in 2013 in Brazil, Nubank has rapidly grown its customer base by offering no-fee, mobile-centric financial services. As of Q2 2025, the company serves approximately 123 million customers across Brazil, Mexico, and Colombia . In Brazil alone, Nubank has over 107 million customers (about 60% of the country’s adult population), making it the third-largest financial institution in Brazil by customer count . Nubank’s core products include credit cards, digital bank accounts, personal and SME loans, investments, insurance, and more – all delivered through a low-cost, app-based platform.

Expansion Plans: Nubank’s growth strategy has been aggressive in expanding both geographically and through new products:

• Latin America Focus: Nubank initially expanded from Brazil into Mexico and Colombia, achieving 12 million customers in Mexico (≈13% of Mexico’s adult population) and 3.4 million in Colombia (≈10% of Colombia’s adult population) by Q2 2025 . This underscores its success in replicating the model beyond Brazil. Notably, Nubank’s Mexican subsidiary received authorization in April 2025 to become a fully licensed bank (awaiting final approval), which will enable it to offer a broader range of services in Mexico .
• Serving the Underserved: Nubank’s expansion emphasizes financial inclusion. For example, in Mexico, 78% of Nubank’s customers live outside large urban centers – often in regions with little traditional banking presence . By reaching these underserved populations with purely digital services, Nubank is driving financial inclusion where brick-and-mortar banks historically had limited reach. Similar patterns are seen in Brazil and Colombia, where many Nubank users are first-time entrants into the formal financial system.
• Product Portfolio Expansion: Nubank began with a simple credit card and digital account but has continually added new products. By 2025, it offers personal loans, business accounts for SMEs, investments (including an in-app brokerage/investment platform), crypto trading, insurance, and even non-banking perks (e.g. partnerships like an Uber membership for Nubank customers) . This multi-product approach increases customer engagement – for instance, over 60% of customers use both saving and credit products . Nubank’s strategy is to become a one-stop financial platform, which deepens customer relationships and loyalty over the long term.
• Global Ambitions: While Latin America remains the focus, Nubank has signaled interest in selective expansion beyond the region. In September 2025, the company applied for a U.S. national bank charter with the OCC . This move is a preparatory step to potentially offer services in the U.S. and serve existing Nubank customers who live or travel there. Management noted that while current priority is growing in Brazil, Mexico, and Colombia, securing a U.S. banking license lays the groundwork for future global expansion . With a U.S. charter, Nubank envisions eventually offering deposit accounts, credit cards, loans, and digital asset custody in the U.S., leveraging its tech-driven, customer-centric model . Additionally, there have been reports (unconfirmed by the company) that Nubank is considering expanding into Argentina via acquiring an established local neobank. For example, in August 2025 news surfaced that Nubank may pursue a billion-dollar acquisition of Argentina’s Brubank, which has ~4 million customers, to jump-start its entry into that market . Such an acquisition (if it happens) would accelerate Nubank’s regional footprint beyond its current three-country presence.

Long-Term Vision: Nubank’s mission is to “fight complexity” in banking and empower people through simpler, low-cost financial services. The company’s long-term vision is to evolve from a regional Latin American fintech into a global digital banking platform . The groundwork for this is visible in Nubank’s technology — a single, scalable cloud-based platform that can be adapted to new markets. In fact, Nubank prides itself on a low operating cost per customer (about $0.80 per active customer per month ) thanks to automation and digital-only service. This efficiency is a critical advantage for scaling globally and underpins their expansion plans. Overall, for a long-term investor, Nubank offers a compelling growth story: a rapidly scaling fintech with a proven model in large emerging markets, now eyeing new frontiers (like the U.S. and possibly other countries) as it aims to become a global financial powerhouse.

Financial Performance and Long-Term Outlook

Nubank’s financial performance has been impressive, with high growth translating into improving profitability – a rarity among fintech startups, many of which struggle to break even. According to the latest results (Q2 2025):

• Robust Growth: Nubank’s revenues reached $3.7 billion in Q2 2025, up 40% year-over-year (FX-neutral) . This reflects an ~85% annualized revenue growth rate since 2021 , highlighting the company’s ability to rapidly scale its top line. Revenue growth is fueled by the expanding customer base and higher customer activity (monthly active customers are ~83% of total users ). Importantly, Monthly Average Revenue per Active Customer (ARPAC) hit $12.2, growing 18% YoY FX-neutral – indicating that as customers stick with Nubank longer and adopt more products, their value to the company increases.
• Profitability and Efficiency: Nubank has achieved consistent profitability while still in high-growth mode. Net income was $637 million in Q2 2025, up 42% YoY (FX-neutral) . For the first half of 2025, net income rose 38% YoY . The bank’s return on equity (ROE) reached 28% in Q2 2025 , which exceeds the ROE of traditional peers in Brazil. This high ROE indicates Nubank is generating earnings very efficiently relative to its equity base – a positive sign for long-term investors. Nubank’s cost-to-income ratio is relatively low thanks to its tech platform; as noted, serving a customer costs only ~$0.80 per month , far below what brick-and-mortar banks incur. Net interest margin (NIM) was 17.7%, with risk-adjusted NIM (after loan loss provisions) at 9.2% , indicating healthy lending profitability even after accounting for credit risk. The bank’s asset quality is stable: early delinquency (15-90 day NPL ratio) improved to 4.4%, and 90+ day NPLs were 6.6%, following seasonal patterns . These levels are manageable given Nubank’s predominantly unsecured lending; the company appears to be balancing growth with prudent risk management.
• Scale and Market Position: Nubank’s deposit base reached $36.6 billion (+41% YoY FXN), providing a low-cost funding source for lending . Loan portfolios (credit cards, personal loans) grew ~40% YoY to $27.3 billion . In Brazil, Nubank now holds a substantial share of retail deposits and credit cards – it is the #3 institution by customers and is increasingly the primary bank for 60% of its Brazilian users . This scale in a relatively short time suggests a strong competitive moat in digital banking. Long-term, management sees “substantial opportunities for expansion” in existing markets – e.g., in Brazil many customers still only use Nubank for a subset of their financial needs, providing room to grow share-of-wallet.

Looking ahead with a long-term investment horizon, there are several considerations:

• Growth Trajectory: Nubank is expected to continue double-digit growth for the foreseeable future, albeit likely moderating as the absolute base gets larger. The company still adds millions of customers each quarter (4.1 million net new in Q2’25) . There remains ample room to grow in Mexico and Colombia (where market penetration is in the teens of the adult population) and to expand product offerings in Brazil. Furthermore, potential entry into new markets (e.g. Argentina, U.S.) provides optionality on future growth. This ongoing growth should drive capital appreciation for investors if Nubank can execute well, as revenue and earnings scale up over the long term.
• Profit Reinvestment vs Dividends: Nubank does not currently pay dividends. The company has retained earnings to fuel expansion and bolster its capital base. Given its high growth phase and opportunities to reinvest profits into new markets and products, Nubank is likely to prioritize growth over near-term dividend payouts. This is common for fintech growth companies. By contrast, mature banks often distribute a significant portion of earnings as dividends – but Nubank’s strategy is to compound its growth. For a long-term investor, this means the return will mainly come from capital appreciation (rising stock price as earnings grow), rather than dividend income, at least in the next few years. Over a longer horizon (say 5-10 years), if Nubank’s growth stabilizes and it generates surplus capital, it could initiate dividends, but there is no indication of a dividend policy yet. Investors seeking current income should note Nubank’s dividend yield is effectively 0% at present, whereas traditional banks like Itaú Unibanco offer dividend yields around 6–7% . Nubank’s value proposition is thus oriented to growth investors.
• Long-Term Margins and Risks: Nubank has shown it can scale efficiently (improving margins even as it grows). Its annualized ROE of ~28% is very robust, suggesting it can eventually generate substantial excess capital. Key to long-term success will be maintaining asset quality and competitive advantage. As interest rates and economic cycles fluctuate, Nubank’s mainly unsecured loan portfolio will be tested; encouragingly, it has navigated a high Brazilian interest rate environment with strong results so far. Another factor is competition – incumbents are investing heavily in digital offerings, and other fintechs are emerging. Nubank’s high customer satisfaction and first-mover brand (especially among younger customers) give it a moat, but it will need to continually innovate to stay ahead. Overall, however, the long-term outlook for Nubank is positive: it is profitable, scaling, and still expanding into new opportunities. The company’s CEO David Vélez summed it up by saying Nubank is “building the foundation for the long-term” – proving it can scale with discipline and still generate strong earnings . For investors, if Nubank continues on this trajectory, the long-term capital appreciation potential is significant, albeit with the caveat that the stock’s valuation already prices in high growth (as discussed below).

Peer Comparison: Nubank vs. Traditional and Fintech Peers (Local & International)

To gauge Nubank’s value and prospects, it’s useful to compare it with both traditional banks and fintech peers, in Brazil and globally. Below we examine how Nubank stacks up in terms of scale, growth, and valuation metrics against key peers:

• Brazilian Traditional Banks: Nubank’s rise is often contrasted with incumbent Brazilian banks like Itaú Unibanco, Banco Bradesco, Banco do Brasil, and Santander Brasil. These are large, decades-old institutions with extensive branch networks. For instance, Itaú (Brazil’s largest private bank) serves ~98 million customers (as of end 2024) and historically dominated the market . However, Nubank has now surpassed Itaú in total customers (123M vs ~98M) , showcasing a shift in market dynamics. In terms of market value, Nubank’s market capitalization is around $70+ billion (at a stock price of ~$14-15) , comparable to Itaú’s market cap (≈$71 billion) . This is remarkable since Itaú has far larger assets and earnings – but it reflects higher growth expectations for Nubank. Valuation: Traditional banks trade at much lower multiples. Itaú’s stock has a P/E around 9–10 (trailing basis) and P/BV around ~2x, whereas Nubank trades at about 30+ times earnings and a substantially higher P/B (due to its smaller equity base and high ROE). In effect, investors are valuing Nubank more like a high-growth tech company than a bank. Dividends: Incumbent banks also pay substantial dividends – Itaú’s dividend yield is roughly 6–7% in recent years , and peers like Banco do Brasil and Santander Brasil yield ~6–8%. Nubank’s lack of dividend (0% yield) stands out here. Growth: Conversely, growth rates favor Nubank – Itaú’s annual revenue or loan growth is typically in single digits, whereas Nubank is growing revenue ~40% YoY and customer count ~17% YoY . Traditional banks are profitable but growth-constrained, and they face higher cost structures. For example, Itaú is embarking on a major digital overhaul to cut costs and reach more low-income clients via digital channels , essentially reacting to Nubank’s challenge. Nubank’s cost-to-serve advantage (no branches, tech automation) allows it to serve many new customers (including low-balance accounts) profitably, something incumbents struggled with. Bottom line: Traditional local banks offer stability and income (dividends) but at low growth and low valuation multiples. Nubank offers high growth and tech-driven efficiency, but at a premium valuation. It has in fact dethroned some incumbents in market cap, reflecting investor belief that Nubank’s model can capture a big share of the future banking profit pool in Brazil.
• Brazilian Fintech and Neobank Peers: Nubank is not the only fintech in Brazil, though it’s by far the largest. Inter & Co (NASDAQ: INTR) is another Brazilian digital bank that went public (via Nasdaq) – it has about 36–40 million customers (roughly one-third of Nubank’s base) and focuses on a “super-app” offering banking, investments, shopping, etc. Inter & Co is profitable and growing, but at a smaller scale; its market cap is around $3.9 billion, an order of magnitude lower than Nubank . Inter’s valuation multiples are also rich but lower than NU – a P/E ~20 (TTM) and forward P/E ~11 . Another peer is StoneCo (NASDAQ: STNE), originally a merchant payments processor in Brazil that has added banking services for small businesses. StoneCo’s market cap is only ~$4–5 billion . Its earnings have been volatile (it had losses in some recent quarters), so P/E is not meaningful on a trailing basis, but on a forward basis StoneCo trades around ~11x forward earnings . PagSeguro (NASDAQ: PAGS), a fintech offering payments and digital banking (PagBank) to consumers and merchants in Brazil, is valued around $2.5–3 billion and trades at a P/E of ~6–7 (trailing) – indicating the market has low growth expectations for it (PagSeguro’s growth has slowed recently). These local fintech stocks have generally underperformed in the past couple of years, due to issues like credit losses (StoneCo had setbacks with its credit portfolio) and intense competition. Nubank, by contrast, has outperformed with superior growth and execution, which helps explain why Nubank’s valuation (P/E ~30) is higher than Inter’s (~20) or Stone/PagSeguro (single-digits P/E) . Investors are effectively assigning a premium for Nubank’s market leadership and profitability. It’s also worth noting that Nubank’s scale (over 120M customers) dwarfs these peers – giving it network effects and cost advantages (for example, Nubank’s economies of scale help keep its unit costs very low). In summary, among Brazilian fintechs, Nubank is the clear leader in size and profitability, and the market values it accordingly.
• International Traditional Banks: Comparing Nubank to large global banks provides context on valuation and strategy. Big U.S. banks like JPMorgan Chase, Bank of America, or European banks (HSBC, etc.) typically trade around 8–12x earnings and 1–1.5x book value, reflecting their mature, low-growth profiles. They often pay steady dividends (3–5% yields). For instance, JPMorgan (the largest US bank) trades near 10x forward earnings and ~3% yield. Nubank’s P/E ~30 is significantly higher than such traditional banks, underscoring that Nubank is viewed more as a growth tech company than a mature bank. It is also much smaller in absolute size – JPMorgan’s market cap and balance sheet are an order of magnitude larger. From a business model perspective, Nubank’s entirely digital operation is a disruptor model not directly comparable to the diversified operations of a global bank. That said, it’s notable that Nubank’s ~28% ROE is higher than many global banks’ ROE (JPM is ~15% ROE, for example). If Nubank can sustain high ROEs, it could justify higher valuations over time. Internationally, some emerging-market banks with high growth (e.g., in Asia) also trade at premiums, but Nubank’s valuation is on the higher end even among growth banks.
• International Fintech/Neobank Peers: On a global stage, Nubank is often cited alongside other digital-only banks and fintechs. Many well-known neobanks globally are still private (e.g. Revolut, N26, Chime) or part of larger companies. However, a few comparisons: SoFi Technologies (NASDAQ: SOFI) is a U.S.-based fintech that, like Nubank, obtained a bank charter (in the U.S.) and offers a suite of digital financial products (loans, accounts, investments). SoFi has about ~6 million customers and a market cap around $7–8 billion – much smaller scale than Nubank. SoFi is growing revenue quickly (30-40% YoY) but just reached EBITDA profitability and still posts small net losses, so its forward P/E is high (not meaningful trailing). Nubank is far larger and already solidly profitable, so in many ways Nubank is ahead of most U.S. neobanks. PayPal (NASDAQ: PYPL), while not a bank, is a global fintech leader in payments with some overlap in digital wallets and credit. PayPal’s market cap ($60B as of late 2025) is in a similar ballpark to Nubank’s, but PayPal’s growth has slowed to single digits and it trades around ~12-15x earnings – a much lower multiple than NU. This again highlights that Nubank’s growth prospects are considered much stronger. We could also mention MercadoLibre (NASDAQ: MELI) – Latin America’s e-commerce and fintech giant. MercadoLibre’s Mercado Pago fintech arm competes in digital payments and lending. MercadoLibre is valued around $70–80B (recently) and trades ~80-100x earnings due to high growth in e-commerce and fintech combined. Nubank’s scale of customers (123M) even exceeds MercadoLibre’s active user count, though MELI’s revenue is higher due to e-commerce. The key takeaway: Nubank is one of the most valuable fintechs in the world, and among digital-focused banks it’s arguably the leader in scale. Its valuation multiples (P/E ~30, Price/Book ~5-8 estimated) reflect those growth expectations. Peers like SoFi or Inter that are smaller or less profitable trade at lower multiples, while more established fintechs with slower growth (PayPal) also trade lower. Nubank’s premium valuation will require it to continue delivering high growth and expanding successfully into new markets to be justified over the long run.

Competitive Dynamics: In Brazil, Nubank faces a two-front competition: the big banks (which it is chipping away at, especially among younger and low-income segments) and other fintechs/startups. The incumbents still have advantages in corporate banking, wealth management, and an older customer base, but they are losing ground in retail banking to Nubank’s simpler value proposition. Many incumbents (Itaú, Bradesco) have launched copycat digital brands or revamped apps, but none have matched Nubank’s viral customer acquisition. Meanwhile, fintech competition is present (as discussed with Inter, Stone, etc.), but Nubank’s headstart and massive scale create a network effect (more merchants accept Nubank’s card, more third-party integrations, brand recognition as “the bank of the people,” etc.). Nubank also consistently ranks highly in customer satisfaction and brand surveys (it was ranked #1 in Kantar BrandZ’s global banking brands, and noted as one of the fastest-growing companies globally by Fortune ). These soft factors bolster its competitive moat.

Valuation Summary: From an investor’s perspective, Nubank’s stock isn’t “cheap” by traditional metrics. It commands a premium much like a top-tier growth stock. For example, at ~$15/share, NU was around 31x earnings (vs ~9x for Itaú , ~7x for PagSeguro ). Its price-to-sales and price-to-book ratios are also significantly higher than bank averages. This means the market is pricing in strong growth for years to come. The upside for long-term investors comes if Nubank continues to expand earnings at a high rate (e.g., 30%+ annually) – in such a case, today’s high multiples could “grow into” more moderate ones, and the stock could appreciate in tandem with earnings growth. However, investors should be aware of valuation risk: any slowdown in growth or stumble in execution could lead to volatility, given the rich pricing. In August 2025, positive analyst sentiment and expansion news helped NU stock rise near its 52-week high . Clearly, the market is keenly watching indicators like customer growth, new market launches (e.g. a potential Argentina entry), and the trajectory of profits. In comparison to peers: Nubank is valued higher than nearly all local peers on a multiple basis, and roughly in line with its large-cap fintech global peers in absolute market cap. This underlines that Nubank is viewed as a category leader.

In summary, Nubank offers a unique mix: the user scale of a large bank, growth of a fintech, profitability already achieved, and a high valuation reflecting optimistic forecasts. Peers highlight the trade-offs: traditional banks offer stability and cash returns but little growth, fintech peers offer growth but many are still proving their business models. Nubank appears to have struck a balance by mastering digital banking profitability. Long-term investors must decide if Nubank’s growth runway and execution justify its premium valuation relative to those peers.

Investing in Nubank: U.S. Stock (NU) vs. Brazilian BDR (ROXO34)

International investors interested in Nu Holdings have two main avenues to invest: buying the U.S.-listed stock (NYSE: NU) or purchasing its Brazilian Depositary Receipt (BDR) on B3 (ticker ROXO34). Each route has different practical and tax considerations, especially for foreign investors. Below is an analysis of both:

1. U.S.-Listed Stock (NU on NYSE): Nu Holdings’ primary listing is on the New York Stock Exchange, under the ticker NU. Buying this common stock is straightforward for investors with access to U.S. markets (e.g. via an American or international brokerage account). Key points:

• Liquidity and Volume: The NYSE listing is highly liquid. Nubank’s stock trades tens of millions of shares per day , ensuring tight bid-ask spreads. The vast majority of Nu’s share float trades on NYSE, which means international price discovery happens there. The Brazilian BDR represents a very small portion (<0.5%) of total shares . So, large investors will favor the U.S. market for entering/exiting positions without moving the price.
• Regulation and Reporting: NU is registered with the SEC and adheres to U.S. reporting standards (IFRS accounting with reconciliations). Investor communications, earnings releases, etc., are all in English and readily available. As a shareholder of the NYSE-listed stock, you have direct ownership of Nu Holdings Class A ordinary shares. This typically includes voting rights (Nu’s Class A shares carry 1 vote each, though the founders’ Class B shares carry 20 votes each, giving them control). BDR holders often do not directly vote or have to route votes via the depositary, whereas owning the NYSE stock gives more direct shareholder rights.
• Currency: Buying NU means transacting in U.S. dollars. Non-U.S. investors will have USD exposure – e.g., a European investor would need to convert EUR to USD to buy, thus taking on USD/EUR exchange risk on their investment. Conversely, if one’s base currency is USD (or one expects the USD to strengthen), this may not be an issue. The stock’s performance for a foreign investor will depend purely on Nubank’s business and USD stock price (your returns could be influenced by USD exchange rate if converting back to your local currency later).
• Accessibility: For U.S. investors or those with international brokerages, NU is easily accessible. Many foreign investors already have accounts that can trade U.S. equities, given the U.S. market’s global reach.

2. Brazilian BDR (ROXO34 on B3): Nubank also trades on the Brazilian stock exchange (B3) via a Brazilian Depositary Receipt (BDR), ticker ROXO34. A BDR is essentially a certificate that represents shares of a foreign company, allowing local investors to gain exposure without transacting in the foreign market. Nubank’s BDR was launched at the time of its IPO (late 2021) as a way to include Brazilian retail investors (notably through a program called “NuSócios” where many Nubank customers got a free BDR share). Initially it was a Level III (sponsored) BDR, but in 2023 Nubank restructured it to a Level I unsponsored BDR for cost efficiency . Now Bradesco (a Brazilian bank) acts as the depositary institution for ROXO34 . Features of investing via the BDR:

• Local Trading in BRL: The BDR trades on the B3 exchange in São Paulo, and transactions are in Brazilian Reais (BRL). This is convenient for Brazilian investors who have funds in BRL and a local brokerage – they can buy/sell Nubank BDR like any domestic stock, without the need to send money abroad. One advantage is that by using BDRs, investors avoid the IOF tax on remittances (Brazil imposes a financial operations tax of 0.38% on money wired abroad for investments) . Since buying the BDR doesn’t require converting BRL to USD externally, there’s no IOF on a foreign remittance . For a Brazilian investor, that saves some cost and hassle versus opening an international account and funding it with USD.
• Conversion and Ratio: Nubank’s unsponsored BDR represents a fraction of a U.S. share. During the 2023 BDR restructuring, investors had the option to convert BDRs to NYSE shares at a ratio of 6 BDRs = 1 Class A share . After restructuring, the new ROXO34 BDR trades roughly at a price ~1/6 of NU’s USD price (adjusted for BRL/USD). (For example, if NU is $15, 1/6 of that is $2.50, and converting to BRL at say 5:1 would be ~R$12.5 – indeed ROXO34 has traded in the ~R$13 range in late 2025 .) This ratio is transparent and maintained by the depositary. Large investors can arbitrage any major deviations by converting BDRs to stock or vice versa (though for small investors this isn’t typically done). The BDR’s price in BRL will naturally reflect Nubank’s USD stock performance and the USD/BRL exchange rate movements. So a Brazilian holding ROXO34 has the Nubank business exposure plus implicit currency exposure to the dollar (if the USD strengthens against BRL, the BDR in BRL becomes more valuable even if the USD stock is flat, and vice versa).
• Liquidity and Volume: The BDR is less liquid than the NYSE stock. Volume in ROXO34 is much lower because, as noted, under 0.5% of shares are on the B3 . That said, Nubank’s popularity in Brazil means ROXO34 still sees active trading by retail investors and has decent daily volume, but one should expect wider spreads than in New York. For a small investor, this may not be a big issue, but large trades might be harder to execute on B3 without moving the price. Over time, if more Brazilians invest via BDR, liquidity could improve – Nubank’s IR noted “rising local market interest” in the BDR .
• Convenience for Locals: For Brazilian residents, buying the BDR through a local broker is often simpler than dealing with a foreign brokerage. Reporting and taxes (discussed below) might also be simpler in some respects when sticking to local instruments. Additionally, corporate actions (stock splits, etc.) are handled by the depositary, which simplifies things for the BDR holder.
• Costs: The depositary (Bradesco) may charge fees for certain events (e.g., conversion fees, or a small annual custody fee embedded). Typically these are minimal per share, but one notable cost is on dividends: if Nubank were to pay dividends, the depositary bank will take a cut (usually around 3-5% of the dividend as a servicing fee) . This is standard for BDRs/ADRs – it compensates the depositary for handling currency exchange and distribution of the dividend to BDR holders. So a BDR investor might receive slightly less net dividend than an investor holding the stock directly. (However, since Nubank doesn’t pay dividends yet, this is a potential consideration for the future.)

3. Tax Implications for International Investors: The tax treatment varies depending on whether you hold NU or the BDR, and also your residency. Below we consider primarily the case of a Brazilian investor (since the question mentions BDR) and a U.S./other foreign investor.

• Brazilian Investor – BDR vs US Stock: For a Brazilian resident, investing via BDR is generally taxed similarly to local stocks, whereas investing directly in U.S. shares has different rules:
  • Capital Gains: Brazil currently exempts capital gains tax on sales of local stocks/BDRs up to R$20,000 (or R$35,000) in a month (the rule has been R$20k, and R$35k for foreign assets’ currency gain – there have been some updates). However, this exemption does NOT apply to gains on BDRs – gains from BDR trades are taxable regardless of amount . Brazilian tax on stock gains is 15% on net profits (for trades outside day-trade; day trades 20%) . So, if a Brazilian buys ROXO34 and later sells at a profit, they owe 15% capital gains tax on the profit. By contrast, if the same person buys NU on NYSE via a foreign broker, that’s considered a disposition of foreign assets. Until recently, any gain on foreign stock was taxable with no exemption; however, a tax rule allows that sales of foreign assets up to R$35,000/month can be exempt from capital gains tax on the currency fluctuation portion . (This can be complex: essentially, Brazil lets individuals exclude the FX gain for small sales abroad, encouraging foreign investment diversification.) The Exame article cited suggests direct US investment can be more tax-efficient in certain scenarios due to this exemption . In short: on large trades, both direct and BDR gains would be taxed 15%; on small trades, BDR has no exemption whereas direct might have partial exemption. Brazilian investors should consult tax advisors, but generally capital gains tax is similar (15%) either way if you exceed the small investor threshold, with a slight edge to direct investment for those who utilize the monthly exemption.
  • Dividends: In Brazil, dividends from Brazilian companies are currently tax-free to individuals (under current law). But Nubank is not a Brazilian company – it’s Cayman-incorporated and the dividends would come from a foreign source (the U.S.). If a Brazilian holds the BDR and Nubank pays a dividend, two things happen: First, the U.S. will withhold 30% of the dividend at source (the U.S. tax on dividends to non-U.S. persons is 30%, since Brazil has no tax treaty to reduce it) . The remaining 70% is converted to BRL and passed to BDR holders, minus the depositary’s fee (3-5%) . Then, Brazilian tax law treats that dividend as foreign income to the individual, which means it is subject to Brazilian income tax (progressive rates up to 27.5%) . There is likely some credit for the U.S. withholding in practice (to avoid double taxation, one can often credit foreign tax paid, but Brazil has no treaty so it’s a unilateral credit scenario). In any event, dividend taxation for a Brazilian investor in Nubank is not as favorable as dividends from a domestic stock. If the Brazilian instead holds the U.S. stock directly, the situation is similar: 30% U.S. withholding, and then you declare the net dividend in Brazil as foreign income. So either way, dividends from Nubank (when they occur) will be taxable foreign income. The BDR route saves the trouble of dealing with cross-border payments (the broker and depositary handle it), but you still end up with only ~70% of the declared dividend in your pocket before Brazilian taxes. For now, since Nubank has no dividends, this is a theoretical issue – but important for long-term investors expecting eventual dividends.
  • IOF and Other Costs: As mentioned, using BDRs avoids the IOF 0.38% tax on sending money abroad . If a Brazilian instead wires money to a U.S. brokerage to buy NU, they’ll pay that small IOF fee on the conversion. Also, foreign assets above certain amounts require the investor to file a Brazilian Capitals Abroad declaration (if over $1 million) and include them in annual tax reporting. BDRs, being local, are reported like domestic assets, which is a bit simpler. These are logistical considerations that might make BDRs more convenient for some Brazilian investors not wanting to manage an overseas account.
• U.S. Investor or Other Foreign Investor: If you are a U.S. resident, you would obviously just buy NU on the NYSE. You’d pay U.S. tax on any dividends (as ordinary or qualified dividends as applicable) and capital gains tax on profits as per normal rules. The BDR route is not relevant for a U.S. investor (B3 is not easily accessible and offers no benefit). If you are an investor from another country (Europe, Asia, etc.), generally NU on NYSE is the most accessible. Many international brokers allow U.S. stock trading, whereas accessing B3 might require specialized brokers. Additionally, as a non-U.S. foreign investor in NU, you’d face the standard 30% U.S. withholding on dividends (or a reduced rate if your country has a tax treaty with the U.S.), and you’d pay capital gains tax per your own country’s rules (the U.S. does not tax capital gains of non-resident aliens). If such an investor instead somehow bought the BDR, they could face Brazilian withholding on capital gains (Brazil sometimes charges 15% capital gains tax for non-resident investors, unless using certain exemption structures). In short, for non-Brazilian international investors, the U.S. stock is usually the cleanest option tax-wise (only worry about U.S. dividend withholding and local country taxes). The BDR is primarily designed for Brazilian residents, and its tax advantages/disadvantages are mostly in the Brazilian context.

Summary of Investing Routes: For a foreign investor evaluating Nubank, the NYSE-listed stock (NU) is typically preferable due to superior liquidity, direct ownership, and global ease of access. BDRs (ROXO34) serve the purpose of enabling Brazilian investors to participate in Nubank using their local market. They come with quirks: currency conversion impacts, lower liquidity, and Brazilian tax treatment of a foreign asset. Brazilian long-term investors will weigh the slight tax differences: BDRs mean paying 15% on any gains (with no small-sale exemption) and potential custodian fees on dividends, but avoid the upfront IOF cost and complexity of a foreign account . Direct U.S. investment could offer an exemption on small sales and slightly more control (and possibly marginally higher net dividend if one can reclaim foreign tax credits). In either case, international investors should consult their tax advisors given the complexity of cross-border taxation.

From a long-term perspective, the choice of BDR vs U.S. stock likely won’t significantly impact the investment’s outcome if one is aware of the costs. What matters more is Nubank’s business performance. Many Brazilian investors initially got Nubank BDRs through the NuSócios program, reflecting the company’s ethos of inclusion. As Nubank grows, it’s conceivable the BDR will remain a popular instrument for locals, while global investors will mainly trade the NYSE stock. Both reflect the same underlying asset. The key is to ensure you buy through the venue that offers you the best combination of accessibility, cost, and tax efficiency for your situation.

Conclusion

Nu Holdings (Nubank) presents a compelling long-term investment case as a leading fintech disruptor in emerging markets, with a track record of hyper-growth paired with actual profitability – a combination that sets it apart. The company’s expansion plans (both deepening in Latin America and cautiously moving into markets like the U.S.) signal confidence in the scalability of its model. For investors with a long-term horizon, Nubank offers the prospect of continued capital appreciation driven by its growing earnings base and market expansion. While the stock does not currently provide dividend income (and likely won’t in the near future), its fundamentals – high customer growth, improving monetization (ARPAC), strong ROE, and low operating costs – suggest that value is being created and reinvested for future gains.

However, investors should also keep in mind the valuation and risks. Nubank’s premium valuation means that its stock price could be sensitive to any hiccups in growth or credit quality. The competitive landscape (from both incumbents and upstart fintechs) will require Nubank to continuously innovate and execute well to maintain its edge. Macroeconomic factors, such as interest rate changes or regulatory shifts in its markets, could impact profitability (for instance, lower interest rates might compress NIM, while higher credit losses could occur in an economic downturn). So far, Nubank has navigated these factors adeptly, even thriving in a high-rate environment with net interest income at record highs .

In comparing Nubank to peers, it’s clear that Nubank is redefining the banking landscape – it has reached a scale comparable to top banks, but with a fintech DNA that yields a different growth and profitability profile. Traditional bank investors might be wary of the lack of dividends and high multiples, whereas growth-oriented investors see Nubank as a long-term compounder tapping into huge markets (Brazil alone being one of the largest banking markets, plus international expansion).

For foreign investors considering an investment, the decision of how to invest (NYSE vs BDR) should be guided by practical considerations like market access and tax. U.S. and other international investors will find the U.S. listing to be the most straightforward. Brazilian investors have the BDR option, which provides local convenience at the cost of certain tax and fee trade-offs. Either way, doing due diligence on the tax implications is important – e.g., understanding that U.S. withholding on any future dividends will be 30% for non-U.S. persons , and that Brazilian holders of BDRs face a 15% capital gains tax on profits and small custodian fees on dividends .

In conclusion, Nu Holdings Ltd. (Nubank) can be seen as a transformative growth story in the financial sector. Its focus on long-term value (over short-term distributions) aligns with investors seeking growth and capital appreciation. The company’s latest results and initiatives (record revenues and earnings , new market applications, product launches) reinforce a narrative of ongoing momentum. A long-term investor in Nubank should be prepared to ride through volatility, but can reasonably expect that if Nubank continues to execute on its vision – bringing more people into modern finance across Latin America and beyond – the company’s value and stock price could correspondingly rise. As always, balancing this optimism is the need to monitor performance and valuation. But with strong fundamentals and expansion on the horizon, Nubank stands out as a leading player in the global fintech revolution, offering a mix of growth potential and (eventually) the promise of sustained profitability that could underpin both capital gains and, in the longer run, potential dividend income as the business matures.

Sources:

• Nubank Q2 2025 Earnings Release (Customer growth, financial highlights, international expansion data)
• Nubank Investor Relations News (U.S. bank charter application and global expansion vision)
• Nasdaq/Motley Fool – Analyst Optimism & Expansion News (Market cap, P/E, Brubank acquisition rumor, analyst views)
• Yahoo Finance/Market Data (Peer valuations: Itaú, PagSeguro, Inter & Co.)
• B3 / Exame Articles on BDR vs Foreign Investment (Tax treatment, IOF, and fees differences for BDRs vs U.S. stocks)
• B3 “Mitos e Verdades” on BDR (Dividend withholding tax and custodian fee on BDR dividends)
• Wisesheets Data (Itaú Unibanco dividend yield ~7% TTM)

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