Nubank’s first profit, crypto regulation advances and what matters in the market

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Nubank in the blue in a year for the 1st time

Nubank recorded its first annual profit in history in 2021, according to the company’s balance sheet released this Tuesday (22).

Fintech’s adjusted net income was US$ 6.6 million (R$ 33.4 million) last year, reversing the loss of US$ 26.8 million (R$ 135.6 million) in 2020.

In numbers: in the fourth quarter, adjusted net income was US$ 3.2 million (R$ 16.2 million), compared to US$ 15.8 million (R$ 80 million) in the same period of the previous year.

Nubank had 5.8 million new customers in the quarter, reaching a record level of 53.9 million customers, a growth of 61.9% compared to December 2020. Of the total, 52.4 million are in Brazil, 1.4 million in Mexico and 114 thousand in Colombia.

what explains: it may seem strange for Nubank, which at the time of its IPO (initial offering of shares) had become the most valuable bank in Latin America –today it is behind Itaú– to have its first profit only now.

The company, like other techs, has an investment-based strategy to attract customers, with the expectation that they will generate revenue for it in the future. Tesla, for example, only made its first annual profit in 2020.

Up and down: after the IPO on the New York Stock Exchange, when fintech shares were priced in $9the shares even plunged in January to the level of $6.

• The company was affected by greater risk aversion to technology securities in the face of expectations of rising interest rates in the US.
• Since then, stocks have rallied and hit more than $11 last week, close to their December peak.
• On Tuesday, they closed down 10% at $8.80. After the release of the balance sheet, however, the shares rose 9% in post-trade trading.

Cryptocurrency regulation advances

The CAE (Commission on Economic Affairs) of the Senate approved this Tuesday a proposal that regulates financial operations with cryptocurrencies in Brazil.

The text, which goes straight to the Chamber of Deputies if there is no recourse for a vote in plenary, also includes fraud with these digital currencies within the scope of the penal code.

Understand: under the proposal, the Central Bank will be responsible for granting authorization to companies that provide virtual asset services (such as brokers, for example) in the country.

Despite being called a “regulatory framework for cryptocurrencies”, the text still provides for an act by the Executive Branch to establish some of the main guidelines.

Combating fraud: the proposal aims to typify crimes linked to these digital assets, with financial pyramid crimes being the most common.

• For this, it amends the Brazilian penal code to include the crime of fraud with cryptocurrencies, which will have a prison sentence of four to eight years in prison.
• It also establishes that virtual asset operators will also be included in the legislation on crimes against the financial system.

It’s not like that.. Despite bringing more security to investors, the project will hardly achieve the objective of preventing people from continuing to operate in brokerages outside the country or using the system for money laundering crimes, according to experts consulted by the sheet.

Offensive: a sheet has already shown how the BC has rushed the regulation of financial transactions with cryptocurrencies in Brazil to contain the explosion of scams and fraud.

Is different: These projects regulate transactions involving cryptos, but do not prevent their trading and other crypto-related activities, as China did in 2021 and also proposed by the Russian central bank last month.

Websites down affect Americanas deliveries

This Tuesday, Americanas completed the third day without online sales on the group’s websites (which also includes Submarino and Shoptime).

The instability prompted criticism from customers, who complained on social media of not being able to keep up with the delivery of their products or even pick them up in physical stores – which continue to operate.

Understand: the sites were taken off the air by the company after an “improper access” – a term that can characterize a hacker attack, but Americanas does not confirm it.

• The lack of clarity in communication is part of the problem of companies’ unpreparedness to deal with cybersecurity, analyzes Raphael Hernandes.
• The loss is significant, as about two-thirds of the company’s sales are made online. The estimate is that the company is losing from R$ 110 million to R$ 145 million per day. After falling 6% on Monday, the company’s shares fell more 5.40% this tuesday.

It’s not just Americanas: Recent cases of attacks suffered by Brazilian and foreign companies show that this episode is not an isolated one.

• The risk is clear in the global survey by the consultancy Accenture, which points out that more than half of companies (55%) do not effectively combat cyberattacks.
• The survey of companies with annual sales of US$ 1 billion (R$ 5.06 billion) or more also shows that each company recorded 270 cyber attacks in 2021, an increase of 31% compared to 2020. Of this total, 29 (11%) were successful.

Eletrobras privatization advances another step

Eletrobras shareholders approved this Tuesday, at a meeting, the issuance of new shares in the company, an important step towards enabling the privatization of the state-owned company.

Understand: the Union’s share in the company, today 70%will be diluted to 45% after the issuance of new shares. The proposal had the support of private shareholders, but was the target of protests from unions linked to Eletrobras employees, who tried to suspend the meeting and failed.

• From the proceeds from the sales of the shares, the company will pay the government BRL 32 billion renewal of the hydroelectric power plants it operates. Another R$ 25.3 billion must be paid for the change in contracts that had already been renewed.
• At the meeting, the government also approved the transfers of the company in Itaipu and Eletronuclear, operator of the Angra dos Reis nuclear plants, to the new state-owned company called ENBPar.

Next steps: in addition to a new meeting to approve the 2021 accounts, the Eletrobras privatization process will need to go through the TCU (Union Court of Auditors) once again.

• The court of accounts must analyze the minimum share price, calculated by consultants hired by BNDES, and which will be kept confidential. The estimate is that the trial will take 30 to 45 days.
• This is the most sensitive part from now on, as a request for a view from one of the ministers could delay the operation from May to August, the date closer to the elections.
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• The first trial at the TCU, last week, has already left the market apprehensive because of the dissenting vote of one of the ministers, which could disrupt privatization plans. The other ministers ended up rejecting the proposal.