And we also estimate that we will continue to acquire market share in the coming quarters. There is one additional caveat that I would make in the credit card numbers, Jorge, which is an accounting, change that we have made in the way that we account for the credit card receivables. Starting in the third quarter of 2023, the credit card receivables are accounted in our balance sheet as the present value of the future flows just like the credit card payables. And that has cost us about a $150 million to $200 million in the credit card book. But all-in-all, I think an FX neutral growth Anywhere between 7% to 9% for credit card, robust market share gain, and we becoming the second credit card issue in the country.
Jorge Kuri: I wanted to ask a follow-up also on credit, if I may. The follow-up is on payroll loans. Is there any metric that you can share on the payroll products during the third quarter, what cross-selling you’ve been able to do with your clients, what market share of origination you’ve achieved? Any metric would be very helpful us to, gauge your initial success of that product?
Guilherme Lago: Let me start with some comments and Jag who’s here with us can certainly share more about the reception of the customer base. So, we’ve launched as a recap the CRP consignado product back in April 2023. We’ve launched FGTS in August 2023, and we launched INSS in October 2023. So the INSS, which is the largest payroll loan business, is not yet represented in our September 2023 books. And we have only now launched portability. So we are in the very early days of the consignado journey or the payroll long journey in Brazil. But we couldn’t be more excited. Not only because of the customer reception to which Jag will allude to, but also given the sheer size of the opportunity that we have ahead of us. So the payroll loans is the largest asset class within consumer finance in Brazil.
It accounts for about R$650 billion of credit book. And it also accounts for about one-third of the profit pool of retail industry in Brazil. Our customers, if we stop growing today, our customers account for approximately 40% of the total payroll on books in Brazil. So just fishing insider of a fishbowl, we have a tremendous room of growth. In the third quarter of 2023, posting or payroll loans accounted for about R$300 million out of our R$9 billion origination. So super incipient to move the needle in 2023, but we are very excited with its ability to move the needle for us in 2024 and 2025.
Jagpreet Duggal: Jorge, this is Jag. Thank you for the question. Let me just compliments a few of the points that Lago made. As he said, we couldn’t be more encouraged by the initial reception of these payroll lending products as we put them out in the market over the last several months. If you look at the Net Promoter Score for secured lending products, they’re at 78 versus a category average of 44. So well above the average. As Lago mentioned, Nubank’s customers account for 40% of the balances in the market. And in our originations in these in these very early stages of the product getting launched was less than 4%. So we expect a lot of growth in secured, being driven by secured lending as we head into 2024. The design of the product has been engineered work backwards from the customer needs.
We’ve built the product to be direct-to-consumer with a much simpler UX than is typical 100% digital flow that allows us to offer disbursement of the loan much quicker than what is typical in the market. And we’re also able to offer the product at a very low price, typical versus what is typical in the market. Our average right now is about 1.39% versus a market average of about 1.8%. This is also a category where we found customers are very responsive to competitive price and the price analysis has been very, very high. So we see a lot of potential here. Great early start, but a lot of room to go, as we head into 2024.
Jorg Friedemann: And our second question comes from the line of Tito Labarta at Goldman Sachs.
Tito Labarta: I guess the first question, in terms of the provisioning levels, it seems as he said, the percentage of loans actually came done for the first in some time, actually, as far as back as I can see. So, some good asset quality trends early NPLs, looked a little bit better, 90 days, which are lagging, so going up a little bit. But just some thoughts, I mean, you mentioned as you grow, NPLs can go up. But in terms of where we are in the credit cycle, are you feeling more comfortable there to continue to accelerate growth? And how do we think about that cost of risk? Does this mean it’s peaked and maybe that that could be a tailwind going forward? And how much of it was kind of impacted by sort of the FX impact on loan growth, I don’t know if that had any impact at all. Thank you.
Youssef Lahrech: Hi, Tito. This is Youssef. Thanks for the question. So let me address your question with a couple of points. First off, as you know, we don’t provide guidance on NPLs or otherwise nor do we try to time the cycle. Our philosophy is credit is to originate and manage credit with strong resilient returns through the cycle. And I think our track record over the last 10 years is a good testament to that. But with that being said, I would point out that what you see in our asset quality and delinquency metrics for both credit cards and unsecured lending is the net result of two offsetting forces. The first thing is you got older cohorts that we’ve originated in the past that that are maturing and as they mature, they exhibit lower levels of delinquency.
The second effect is new cohorts and growth brings, higher levels as they are in the early part of their life cycle. And as Lago and I mentioned in the earlier part of the call, if anything, we see more opportunities to grow our credit portfolio in part through expansions, which will likely increase NPLs going forward. That’s very intentional and we’re very comfortable, growing and accelerating that growth because we see those opportunities to expand. They will come with higher levels of returns and higher resilience that will more than offset those higher delinquency rates. So at the end of the day, our objective is not to minimize NPLs, it’s maximize NPV to originate, you know, resilient high return business. So it’s, our posture is entirely consistent with that objective and we feel very comfortable growing going forward.
Tito Labarta: And then following up, I guess, a little bit more kind of on the growth outlook that you see. Maybe just on Mexico, if you can give any color, just looking at the regulated data, it looks like the loan portfolio is still not growing, but nice growth in deposits, clients you mentioned picked up as well. I think, Lago, you were in the press recently saying that that we shouldn’t expect Mexico to maybe profitable next but any color you can gave on the growth outlook for Mexico both on deposits and loans, into next year.
