A banner for Nubank, the Brazilian FinTech startup, hangs on the facade at the New York Stock Exchange (NYSE) in New York, U.S., December 9, 2021. REUTERS/Brendan McDermid

By Andre Romani

SAO PAULO (Reuters) -Nu Holdings, the listed entity which runs Brazilian digital lender Nubank, posted on Thursday an increase in its third-quarter net income driven by its Brazilian and Mexican businesses, beating analysts' projections.

The company reported a $783 million net income for the July-September period, up 39% year-on-year on a currency-neutral basis and above the $757 million expected by analysts in an LSEG poll.

Shares of Nu Holdings rose about 3% in post-market trading right after the results.

Chief Financial Officer Guilherme Lago told Reuters the profit increase was mainly supported by the continuous scale gain in Nubank's main market Brazil, while the company grew its credit portfolio in Mexico and cut what it pays for deposits in the country.

"The combination of these two things, the operating leverage in Brazil, and the asset liability management in Mexico, led to a large boost to Nubank's consolidated results," Lago said.

The firm's annualized return on equity (ROE), a gauge of profitability, stood at a record 31%, up from 30% in the same quarter last year.

Nubank revenues rose 39% to $4.2 billion, above market estimates of $3.8 billion, with net interest income rising 32% year-over-year. On the other hand, the closely watched net interest margin contracted about one percentage point to 17.3%.

Jefferies' analysts said Nubank posted a solid beat with no red flags in credit quality and with "management reiterating that delinquencies remain in line with expectations."

The 15-to-90-day delinquency rate in Brazil came in at 4.2%, a 0.2 percentage point fall both yearly and quarterly.

The over-90-day delinquency rate in the country stood at 6.8%, a decline from the 7.2% a year earlier but up from the 6.6% in the second quarter, a result the CFO attributed to seasonal effects.

Nubank reached 127 million clients across its operations in Brazil, Mexico and Colombia and in September announced plans to enter the United States. It posted a credit portfolio of $30.4 billion, up 42% year-on-year.

(Reporting by Andre Romani; additional reporting by Aishwarya Venugopal; Editing by Gabriel Araujo and Lincoln Feast.)