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Buffett-backed Nubank's revenue surges on robust customer growth

FILE PHOTO: Nubank, a Brazilian FinTech startup celebrates the company's IPO at the NYSE in New York

(Reuters) - Nu Holdings Ltd posted a near three-fold jump in third-quarter revenue on Monday, as the Warren Buffett-backed digital banking firm saw rapid customer growth in its key domestic Latin American market.

The Brazilian lender has so far weathered a downturn in the sector on the back of robust demand for its credit cards and other core products. It has lately also expanded its footprint in Mexico, its second largest international market.

"Our customer base grew to over 70 million with a record high activity rate of 82%," said founder and Chief Executive David Vélez in a statement.

The upbeat results come at a rocky time for the global banking industry that has been hit by harsh investor sentiment as economists around the world predict a harsh upcoming economic downturn due to geopolitical turmoil and soaring inflation.

Total revenue of the company, popularly known as Nubank, surged 171% to a record $1.3 billion on a FX-neutral basis for the quarter ended Sept 30.

Still, Nubank, which made a blockbuster market debut in New York late last year, has seen its U.S. shares lose over half their value this year, amid the capital markets turmoil and concerns around the stability of new-age financial firms when faced with harsh macroeconomic headwinds.

On a FX-neutral basis, gross profit climbed 90% to a record high of $427 million in the reported quarter. On an adjusted basis, the digital bank posted net income of $63.1 million.

Nubank's customers grew by 5.1 million in the quarter, or 46%, over last year, to 70.4 million in Brazil, Mexico and Colombia.

(Reporting by Manya Saini in Bengaluru and Aluisio Alves in Sao Paulo; Editing by Shailesh Kuber)