INTR — Inter & Co, Inc.

Summary of INTR Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Net Income: BRL 336 million, a record for the company.
• Return on Equity (ROE): Increased to 14.2%.
• Loan Portfolio Growth: 30% year-over-year, with a quarterly growth of 9%.
• Active Clients: 41 million, with 2 million new clients added in the quarter, the highest ever.
• Net Revenue: BRL 2.1 billion, up 29% year-over-year.
• Net Interest Margin (NIM): Continued expansion, with risk-adjusted NIM improving by an average of 14 basis points per quarter.
• Cost of Risk: Increased to 5.35%, primarily due to new private payroll loans requiring upfront provisioning.

2. Strategic Updates and Business Highlights

• Client Engagement: Over 20 million daily logins and 850 million transactions processed in September.
• Product Expansion: Continued focus on innovation, with 380 AI initiatives live, and plans for global expansion and new product offerings.
• Credit Card Portfolio: Reshaping strategy led to a 30% growth, with interest-earning portfolios increasing to over 23%.
• Market Position: Inter is the second-largest underwriter in home equity and has significant market shares in payroll loans and FX transactions.

3. Forward Guidance and Outlook

• Growth Expectations: Management is optimistic about maintaining growth in the loan portfolio, particularly in private payroll loans and mortgages.
• Efficiency Improvements: The efficiency ratio improved to 45.2%, with a focus on cost control and operational excellence.
• Long-term ROE Target: While the 30% ROE target by 2027 is uncertain due to macroeconomic conditions, the company remains committed to growth and profitability.

4. Bad News, Challenges, or Points of Concern

• Cost of Risk: The increase in cost of risk is a concern, particularly related to the new private payroll loans. Management expects some stabilization but acknowledges potential NPL increases in the future.
• Macro Environment: The high Selic rate is seen as a headwind, potentially slowing growth in certain segments.
• Fee Income Growth: There was a slowdown in fee income growth, attributed to one-off impacts and a shift towards credit growth, which may affect future revenue diversification.

5. Notable Q&A Insights

• Long-term Guidance: Management acknowledged that achieving the 30% ROE target may be challenging due to the current macroeconomic environment, particularly the Selic rate.
• Cost of Risk: The increase in cost of risk is expected to stabilize, but management is cautious about future NPL levels as the private payroll product matures.
• Competitive Landscape: Despite concerns from incumbents about the economic outlook, Inter remains confident in its growth strategy and competitive positioning, leveraging its digital distribution and strong client base.
• Credit Card Strategy: The company is cautious about aggressively expanding its credit card portfolio, focusing instead on maintaining a balanced approach to risk and growth.

Overall, Inter & Co reported strong financial performance in Q3 2025, with significant growth in client acquisition and loan portfolios, while also navigating challenges related to cost of risk and macroeconomic pressures.