Research reports- Banks
PicPay: Digital banking turbo-charges growth opportunities
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PicPay, already Brazil’s top digital wallet, is now also second only to Nubank in digital banking, with 64mn users
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Its new banking vertical has anchored strong top line growth: originating US$816mn in new loans (H1 25), generating US$469mn net revenue
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Listed EM digital banking peers’ multiples point to a valuation range of US$2.3-2.9bn for PicPay, but subject to significant uncertainty
Please see the end of this report for Important Information
We write this note following disclosure of Q1 25 results, and the Q2 25 earnings release. PicPay is currently not listed, but we believe management intends to list the company at some point in the medium future. In this note we review strategic positioning and developments, operating trends, on a corporate and comparative basis, and financial multiples of peers and implications for PicPay
PicPay first achieved double-digit profitability in Q2 24, so like-for-like comparisons are limited, explanation(s) on P&L line volatility is not available, and additionally, forward-looking earnings guidance has not been provided. Further, swings in the reported tax rate and lack of clarity on potential over-provisioning may or may not be off-setting uncertainties. Nevertheless, PicPay has successfully implemented its growth strategy driving rapid profitability gains, and this promises to make it a premium opportunity once the IPO is scheduled.
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MCBG 9M 25: Steady growth in income, assets and profitability
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9M 25 operating income rose to MUR31.5bn (+13% yoy), balanced across net interest (+13%) and non-interest income (+14%)
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MCBG trades at a premium to regional peers (7.6x P/E) reflecting its domestic leadership, strong risk management and profit focus
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Key risks: collapse of interest spreads, volatile trading income, concentration in corporate lending
Please see the end of this report for Important Information
MCBG reported solid 9M 25 performance, with operating income rising 13% yoy to MUR31.5bn and net profit up 16% yoy to MUR14.4bn. Despite a 21% rise in staff costs, the cost/ income ratio improved to 35.7%. Asset quality continued to strengthen, with the NPLs ratio down to 3.1% and provisions coverage rising to 80%. Return on equity was a healthy 17.4%, backed by stable margins and strong liquidity (59.6% loan/deposit ratio).
MCBG trades at a premium valuation to regional peers, at 7.6x P/E. We think this is justified given Mauritius’ favourable macro environment, the bank’s leading domestic franchise, and its strong over-the-cycle risk management track record. Key risks include a collapse of interest spreads, volatility in non-recurring income, and a concentration in corporate lending.