Star investor Warren Buffett is known for his penchant for bank investments. The stock portfolio of his investment company Berkshire Hathaway includes stocks such as Bank of America, Goldman Sachs, Citigroup and JPMorgan. Now Buffett has added another title to this list.
We’re talking about the Brazilian fintech Nubank, in which Buffett invested $ 500 million through his holding company. Nubank is a pure online bank. One of the special features of Nubank is that it offers a toll-free credit card that is completely controlled via a mobile app. For example, users can use the app to track transactions in real time, block their credit cards, request a limit increase or contact customer support.
Among other things, Nubank made it to the list Disrupter 50 of CNBC made. Fintech is disrupting the inefficient and inaccessible financial ecosystem in Brazil. In a country where just a few years ago only five banks controlled over 80 percent of the country’s assets, the annual credit card interest was up to 300 percent and a third of the population had no bank account at all.
According to Nubank, there are also bank branches in only 60 percent of Brazilian cities. A digital platform like Nubank, on the other hand, could support customers regardless of location. The situation is similar in other Latin American countries. The online bank is already offering its services there in Mexico and, since the end of 2020, also in Colombia. Other countries are to follow. The growth potential is therefore gigantic.
The company admitted to the Wall Street Journal assumes that an IPO is not currently planned, but is likely in the near future.
Berkshire Hathaway
(WKN: A0YJQ2)
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Buffett’s investment in Nubank makes sense. On the one hand, as a diversification of its banking portfolio, which largely consists of traditional finance houses. On the other hand, to participate in one of the most promising fintechs in Latin America. Because Nubank is a true fintech jewel that is still in private hands. Berkshire stock remains a buy.
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