By Valentine Hilaire
MEXICO CITY (Reuters) – Brazilian fintech Nubank’s Mexico arm has requested a banking license from local regulators, the unit’s top executive said on Thursday, describing it as a bid to broaden product offering.
A banking license would allow Nubank to offer “diverse kinds of investments,” including shares in Mexico’s main stock index, the company said in a statement to Reuters.
Other opportunities stemming from a banking license include handling direct deposits of salaries for customers and setting higher deposit limits, Nubank Mexico head Ivan Canales said in an interview.
Canales did not provide a timeline for obtaining the license in what is Nubank’s second-biggest market after Brazil.
The company expects to continue expanding its business while seeking the license, Canales noted.
He added that his team is analyzing entering the remittances market, which moved more than $41 billion in the first eight months of this year, although no concrete plans have been announced.
Funding for Nubank’s expansion plans will come from parent company Nu Holdings and deposits made by their customers, said Canales.
The fintech launched savings accounts in May and has since signed up more than 1.3 million people, with deposits exceeding 1.5 billion Mexican pesos ($82.2 million), according to company data from the close of the second quarter.
Asked about the fintech’s management of capital, Canales said Nubank would have a capital ratio of about 40% in Mexico if it was measured against entities with a banking licence, significantly above the minimum 10% required.
The digital bank’s Mexican arm, known as Nu Mexico, is hoping the new license will help it become its customers preferred bank, mirroring Brazil, where nearly 60% of customers use Nubank as their main financial service provider.
($1 = 18.2580 Mexican pesos)
(Reporting by Valentine Hilaire; Editing by David Alire Garcia and Varun H K)
