:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/S4D22IKSZJHU7MU6WUX62RGFSE.png "Nu Holdings Seeks Approval to Operate as a Bank In Mexico.")
Mexico City — Nu México, the local business of Brazil’s Nu Holdings, has began its application before Mexico’s Banking and Securities Commission (CNBV), the country’s financial sector regulator, to obtain a license to operate as a bank in the country.
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The move that will allow it to expand its competition with traditional banks, as well as with other fintechs that have acquired banks to better position their businesses.
The company, which currently operates under the regulatory model of a so-called financial society (Sofipo), seeks to become a multiple banking financial institution to expand the limit of deposits it can receive, payroll portability and investment management.
“The order in which we launch these products will be 100% tied to the feedback we get from our clients, but we see many opportunities,” said Ivan Canales, CEO of Nu Mexico in an interview for Bloomberg Línea’s La Estrategia del Día podcast.
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Nu will now follow the regulatory path to expand its product offering in Mexico.
Other companies in the financial technology industry have positioned their business offerings through the purchase of regulated institutions, and which Nu itself has done so in the past.
Ualá and Credijusto, now Covalto, made acquisitions of banking institutions in Mexico to expand their regulatory capacity and open the door to a wider range of services. Meanwhile, traditional banks such as Banorte, Banregio and Santander Mexico have received regulatory backing for their Bineo, Openbank and Hey digital banking services, respectively.
The decision by Nu Mexico, with 3.6 million customers currently in the country, comes almost a year after the company adopted in December 2022 its role as a Sofipo, following the purchase of Akala, which allowed it to receive deposits and issue debit cards.
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“We want to follow it to see how it evolves in the coming months,” Yuri R Fernandes, Guilherme Grespan and Marlon Medina, analysts at JP Morgan, stated in an October 13 note regarding Nu Mexico’s operation as a Sofipo.
In their report, the analysts noted the importance of the Mexican business for Nu Holdings, as it is the company’s second most important market, as well as an important element in its investment thesis.
Cristina Junqueira, co-founder of Nubank, pointed out in May that there is room for Mexico to become a more important market than Brazil for the bank. At the time, she said the company would work on launching products to gain market share in the country.
Nubank has 85 million clients across Brazil, Mexico and Colombia, of which 80 million are located in Brazil.
-- Jimena Tolama contributed to this report
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