Nu Holdings Ltd. NYSE:NU, the financial technology company known as Nubank, has agreed to acquire Banco Porto Real de Investimentos SA, a Brazilian financial institution with a banking license, as it moves to meet a recent regulatory requirement in its home market. The new rules require companies using the word bank in their brands to hold a banking license, making the purchase an important compliance step for Nubank in Brazil. The transaction remains subject to approval from Brazil's central bank.
Banco Porto Real reported 32 million reais, or about $6.3 million, in assets as of March, according to central bank data. Nubank said the license will not increase its capital or liquidity requirements and is not expected to change how the fintech serves its customers. The company already holds Brazilian regulatory qualifications covering payments, credit, financing, investment activities, and securities brokerage, while the scale of its operations has led regulators to treat it similarly to a midsized bank.
The deal could help Nubank strengthen its regulatory position in Brazil as it continues seeking banking approvals in other markets. Earlier this month, the company received authorization to operate as a bank in Mexico, its second-largest market, after gaining preliminary approval in January to conduct certain banking activities in the United States. Founded in 2013, Nubank has grown to more than 115 million customers in Brazil and now ranks among the country's 10 largest financial institutions by total assets, although it remains smaller than Brazilian banking giants Itau Unibanco Holding SA, Banco do Brasil SA, and Banco Bradesco SA.