Inter & Co. Inc. Q3 2026 Earnings Results & Report

Inter & Co. Inc. EPS Results

• Actual EPS: $0.18
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A
• EPS Beat Rate: 4 of last 8 quarters

Inter & Co. Inc. Revenue Results

• Actual Revenue: $491.26 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Inter & Co. Inc. (NASDAQ:INTR) is a digital financial services company whose platform is centered on Banco Inter, a Brazilian digital bank. The company offers banking services such as accounts, payments, credit and debit cards, lending, and financial products, including investment and insurance offerings.

Its broader digital platform also includes shopping and lifestyle services, as well as tools for customers making international transactions. Inter serves customers primarily in Brazil and has expanded its offerings to include services for clients in the United States.

The business traces its roots to Banco Intermedium, founded in Brazil in 1994, and later became known as Banco Inter. Inter & Co. is led by Chief Executive Officer João Vitor Menin.

Inter & Co. Inc. Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Inter reported net revenue of BRL 2.7 billion, up 26% year over year, and net income of BRL 425 million, also up 26%. Annualized ROE reached 15.8%, although quarterly earnings growth was more modest amid lower inflation and a larger average equity base.
• Positive Sentiment: The expanded loan portfolio grew 25% year over year to BRL 58.1 billion, led by mortgages and private payroll; about 70% of the book is secured. Management said it expects to sustain 20%–25% loan growth, while remaining cautious on unsecured lending.
• Negative Sentiment: Asset quality showed mixed signals: over-90-day NPLs rose 29 basis points to 5.3%, while early delinquency and NPL formation improved. Cost of risk was 5.9%, and management expects it to remain around 6%; it attributed some pressure to portfolio mix and noted that Desenrola affected reported metrics.
• Positive Sentiment: Client monetization and operating leverage improved: gross ARPAC reached a record BRL 59.7 per month, while cost to serve remained broadly flat at BRL 13.3. The efficiency ratio improved to 41.9%, 3.2 percentage points better year over year.
• Negative Sentiment: Management expects seasonally higher expenses in the fourth quarter as it continues investing in technology, AI, and branding. It anticipates operational leverage gains in 2027 but did not provide earnings guidance.

Presentation

[Rafa Vitória, IR Officer at Inter]

Hi, everyone. I'm Rafa Vitória, IR Officer at Inter, and I would like to welcome you to Inter's third. Available in Portuguese. To access it, press the globe icon on the lower right side of your Zoom screen, then select the Portuguese room. Please be advised that all participants will be in listen-only mode and that the conference is being recorded. You may submit online questions at any time today using the Q&A box on the webcast. A replay will be available at the company's IR website. Here with me today is João Vitor Menin, our CEO, Alexandre Riccio, our COO, Francisco Santos, our CGO, and Santiago Stel, our CFO. João will start sharing the strategic overview. João, please go ahead.

[João Vitor Menin, CEO at Inter]

Thank you very much, Rafa. Good morning, everyone. Thanks for joining us again to discuss our third quarter results. First of all, before we go into any page, I want to leave you with one important message. I have great confidence in the model we have been building at Inter for a while. I call it the BanTech model, and it works. Today, I will share how we built our story and how it gives us the strength to look at the future with excitement. To explain where this confidence comes from, I would like to start at the origin. This is how we introduced Inter to the market back in 2018 when we did our IPO. I still remember presenting this page on the roadshow and how much it meant to all of us.

[João Vitor Menin, CEO at Inter]

At the time, the market saw traditional banks trying to become digital and fintechs trying to become a bank and Inter was in the intersection of it. That intersection was never a compromise. It was our conviction, and it is one of our biggest strengths to date. We were born from banking, but also powered by tech. As a licensed bank, we offer the full set of banking products, such as credit, deposits, payments, investments, and insurance. As a tech company, we have speed. We run asset-light, no branch network, distribution at fintech cost. We call this combination the BanTech model I told you before, and it still holds true today, maybe more than ever. I'm sure you have heard this story before. Why am I bringing it up again today? Because this design is what makes Inter resilient in any environment.

[João Vitor Menin, CEO at Inter]

We're not stuck in one product or in one specific credit cycle. The BanTech model creates something strong, and it is built for any cycle, for any moment. Let me explore it a bit further. First, our balance sheet fortress. 70% of our loan book is secured, and our cost of funding is consistently lower than our peers, digital and traditional banks. That gives us resilience when the environment gets tougher and room to keep growing when it gets better. Second, regulation. The regulator is moving towards the book we have already built, secured credit, such as private payroll, real estate, or invoice discount. We are ahead where the market is heading. Third, the competitive landscape. In a crowded market of banks and fintechs, clients keep choosing Inter. We are very proud that today we have 90% of all the Pix transactions in Brazil.

[João Vitor Menin, CEO at Inter]

Our daily logins just hit a new record this month. We stand out because clients find everything in one place and use it every day. We call this the strong combination of serving clients with convenience, savings, and trust. The fourth reason is technology. AI is already part of how we run Inter, and we are building on top of strong foundations, especially our data vault. Most importantly, we have the DNA to innovate. If you ask me, "How can Inter innovate so much?" I would answer you, "It's all about being bold." We don't adapt the future, we design it, and we have a track record of doing so. The first digital bank in Brazil back in 2015, the first bank to migrate to cloud in 2017, and also the first super app in the Americas in 2020.

[João Vitor Menin, CEO at Inter]

Every time, the same choice, to lead, to disrupt, and every time, we have been building that with the best partners. Today, we are making the same choice with the next technological wave, AI. It is not a plan, it's a red run, and it's a great opportunity for Inter again, and we are already seizing it. Not only we have the better models and more efficiency in our teams, but we are going even further. As I mentioned at our Owners' Day, we have the perfect combination of our data vault, our 3SA approach, and our agentic engine called Seven. The same way we have launched hundreds of versions of our super app, I'm sure we will launch hundreds of versions of Seven ahead. Our ambition is for Seven to become the core of our client experience, and I'm sure that now we're just scratching the surface.

[João Vitor Menin, CEO at Inter]

As we did before on the previous technological waves, again, we are now partnering with the best. We just recently connected with SpaceX AI, and they are now our strategic partner for us in the AI world. But AI does not work alone. It's fed by data, and data comes from the relationship with our clients. That is where the magic begins, and that's why our model shines. The BanTech approach created something bigger, a flywheel of learning effects, now even more empowered by AI. Let me explain how our flywheel works. It starts with the relationship. Customers come to Inter first, and they come most often. The more of their financial life sits with us, the more data we have, and more they trust us. With more data comes intelligence.

[João Vitor Menin, CEO at Inter]

Every decision and its outcome feed our data vault, and AI turns that data into more personalized experience, better credit models, and faster operations. With that intelligence, our capabilities grow. The client is better served, use more products with us, and brings more data to the vault. That is what makes each loop larger, and the flywheel restarts. More relationship, more data, more learning, each time faster and larger. When this flywheel runs, Inter captures continuous growth and sustainable profitability. This is not theory. It's already showing up in our numbers. For instance, this quarter, our ARPAC reached its highest level ever. Santi will walk you through it later today. But the message is quite simple. The more the flywheel turns, the more value each client generates, and the more data flows into our data vault. This is what we call the learning effect.

[João Vitor Menin, CEO at Inter]

But technology alone does not turn the flywheel. People do. To lead Inter into the future, we are evolving our structure into two clear focuses: growth and operational excellence. We are welcoming Francisco Santos as our Chief Growth Officer. He will be focused on growth and monetization. Francisco will use the flywheel I just described to grow not only our client base, but also our monetization, with our data vault and our learning effects supporting that journey. Xande, who you might know already, steps in as our COO, focused on operational excellence and on improving our credit and collection capabilities. He will turn the intelligence of our data vault and the power of AI into even smarter credit decisions and lighter operations. Also, Santi continues as our CFO, focused on profitability and capital allocation, turning growth into returns with discipline. Think about this flywheel.

[João Vitor Menin, CEO at Inter]

Francisco makes every turn bigger, Xande makes every turn run better, and Santi makes sure each turn is profitable. As I said, it's people who turn the flywheel. Together with these leaders, our 4,000 employees do it every day, guided by our strong culture. With the right team and the right culture, I'm sure we will keep building Inter ahead. Now, it's my pleasure to invite Francisco to share a few words with you. He will share his first impressions of Inter. Francisco, welcome, and the floor is yours.

[Francisco Santos, CGO at Inter]

Thank you, João. It's a pleasure to be here. Inter has a remarkable journey, and I've admired what this company has built for a long time. I'm finishing my second week at Inter. It's been great to see how customer choose Inter and actively engage with us. We have a customer base that most companies would love to have, and I see a tremendous potential to deepen relationships and increase monetization. Data, cloud, and AI are not side projects here. They are embedded in how the company operates, allowing us to move faster and continuously learn and improve. Above all, I see the team highly motivated to achieve more and willing to do things differently. So, my initial focus is on those three areas. First, retail banking. We want to enhance primary banking relationships and increase monetization.

[Francisco Santos, CGO at Inter]

That means more customer choosing Inter as their main bank and generating more value for each relationship. Second, SMBs. I see significant opportunity here. Business customer already bring their deposits to Inter. The next step is to deepen those relationships through products, leveraging data and technology capabilities that have worked so well in retail. To help lead this effort, we brought Frederico Alves to Inter. He brings over 20 years of experience in payment and banking, having led products and businesses at Itaú and Fiserv. He's a great addition to the team. Last but not least, looking ahead, I want to bring fresh perspectives and work alongside the team to help shape the next chapter of Inter's growth. I am very grateful for the warm welcome I received, and I am excited to be part of this team.

[Francisco Santos, CGO at Inter]

I'm looking forward to work closely with Xande because growth and operational excellence need to go hand in hand. Thanks, Xande, for receiving me. Thanks, João. Xande, over to you.

[Alexandre Riccio, COO at Inter]

Thank you, Francisco. I'm looking forward to working side by side with you. Hello, everyone. I'm very excited about this new chapter at Inter, and it is an honor to lead operations at such an important moment for the company. As João said, my mandate is to turn the intelligence of our data vault and the power of AI into even smarter credit decisions and lighter operations. In other words, excellence in credit underwriting and AI-powered operations at scale. It rests on three focuses. First, credit. We're taking our next-gen foundation models to full scale, moving to one single model per client, so every decision is smarter and more consistent using the data that our client relationships generates. Second, collections. We want to reach full maturity in collection execution and products, rebuilding our processes with GenAI and automation. Third, operations.

[Alexandre Riccio, COO at Inter]

We're scaling up the transformation of our processes using agentic AI, automating steps, and simplifying the experience for our clients. João showed that AI is already running at Inter. Our job is to take it to the core of our operations. The logic is the same in all three. Use technology to remove what does not add value and give our teams time for what does. That makes us more efficient, and efficiency is what turns operational excellence into financial results, lower cost to serve, better credit decisions, and more profitable growth. As Francisco said, growth and operational excellence have to move together, and you see this in the numbers. With that, I will hand it over to Santi, who will take you through our financial performance of the quarter. Thank you.

[Santiago Stel, CFO at Inter]

Good morning, everyone. A public welcome here to Francisco. Really great to have you in the team. Xande, it is great to have you focused on credit underwriting and operational excellence, as they are key drivers to execute our ambitions. Now, let me walk you through the financial performance of the quarter. Starting on revenue, on a net basis, we reached BRL 2.7 billion, up 26% year-on-year, and up 3% quarter-on-quarter. This is a run rate net revenue of BRL 10.9 billion, or gross of nearly BRL 20 billion, a very substantial figure that shows the materiality of our performance. Net interest income was BRL 2.1 billion, up 30% year-on-year, representing 78% of our revenue. Fee income was BRL 611 million, up 13%, in line with the growth of our active client base.

[Santiago Stel, CFO at Inter]

What matters is that these results show that our flywheel is working very well. Each quarter, we have a larger client base, a fast-growing loan portfolio, and a strong set of products and services to complement our revenue base. Now, let me show you how this looks on a per-client basis. We reached 46.8 million total clients, up 13% year-on-year, with more than 27 million of them being active. On monetization of these clients, we are making great progress quarter after quarter. Our gross ARPAC reached BRL 59.7 per month, up 5% year-on-year, establishing a new record. Net ARPAC after the deduction of interest expense was BRL 35.6, up 7%, also a new record. Growing revenue higher than client growth is a key component of our strategy, especially considering the sizable existing client base we have already established.

[Santiago Stel, CFO at Inter]

On the cost side, our cost to serve was BRL 13.3 per client per month, a flattish figure when you look at the prior quarters. This gap between ARPAC and cost to serve is our margin per active client, which reached BRL 22.3 per month, establishing another quarter of record. Two factors are behind this performance. The first, deeper engagement and higher credit penetration as our flywheel gets faster, bigger, and better, as João mentioned earlier. The second, our newer cohorts are starting stronger. They begin with an ARPAC that is BRL 10 greater than the one of the prior quarters. This is how client growth turns into returns, and it is in the NIM where we can see this. Our NIM 2.0 reached 9.96% this quarter, staying very close to the 10% landmark figure. Let me walk you through two key points that play in this quarter.

[Santiago Stel, CFO at Inter]

The first, we are 70 basis points higher year-on-year, with an average of 15 basis points greater on a quarter-on-quarter basis. This despite the increase in our leverage. So on a same capital structure basis, the NIM improvement is even stronger. Second, as we anticipated in our last earnings call, this quarter was marked by lower inflation, which impacted NII. If we were to normalize for the inflation effect, we also grew 10 to 15 basis points per quarter on average since the fourth quarter of 2025. That reflects the evolution of mix and pricing, with cards reshaping and private payroll being the main drivers.

[Santiago Stel, CFO at Inter]

All of this to say, the roughly 40 basis points of NIM expansion that we expected to have in this calendar year 2026 is very well on track, and we expect to close the year with a NIM at around 10%, as we have been mentioning. On a risk-adjusted basis, we improved 12 basis points year-on-year, despite the evolution of cost of risk. This margin expansion is built upon an ROE-driven credit strategy that we have been executing thoroughly year after year. Our expanded loan portfolio reached BRL 58.1 billion, up 25% year-on-year, and up 5% quarter-on-quarter. Our strategy here is clear, a credit mix that is sustainable for the client across the cycle, making it a real win-win value proposition.

[Santiago Stel, CFO at Inter]

Today, around 70% of the book has some type of guarantee, and this matters especially in this current environment with high household leverage and high interest rates. Our growth is driven by these type of products, with mortgages and private payroll being the main ones. Real estate loans reached BRL 19.9 billion, up 37% year-on-year, and is now the largest portfolio of product in our mix, representing 34% of the total. This is where expertise shows the most, the best experience and the least bureaucracy in the market to get these loans. That means an efficient operation, low delinquency, and a very profitable product. On private payroll, we reached BRL 3.1 billion, 2.5 times greater than what we had a year ago. I will cover private payroll in depth in a following page.

[Santiago Stel, CFO at Inter]

On cards, we grew 18% as we deliberately reshaped the book towards installments with interest income, which is now 37% up. Personal loans are almost flat, with FGTS running off, and our cautious approach on unsecured credit lines such as buy now, pay later, and overdraft. Overall, we are growing well above the credit market in Brazil, which is growing on a high single-digit basis. We are managing credit cycle with discipline. Let me take you through this page with care, starting with NPL and then NPL and stage 3 formations. NPL over 90 days reached 5.3% on the expanded portfolio, up 29 basis points. The increase came mainly from our portfolio mix into products that I will cover on dedicated pages right after this one. The Desenrola also had an effect of 14 basis points in this KPI.

[Santiago Stel, CFO at Inter]

NPL from 90 to 15 days, which measures the short-term delinquency, decreased to 4.2% from 4.5% in the prior quarter, and is an early sign that delinquency is improving. NPL formation, which is on the bottom left of this page, decreased from 1.83% last quarter to 1.74% this one. This improvement came mainly from private payroll, helped by the automatic relinkage and from credit cards. This is consistent with the early delinquency we just saw. Fewer newer loans are entering delinquency. I will detail later this point. On stage 3 formation, on the bottom right of the page, it was 2.10%, up from 2.12% in the prior quarter, and is impacted by the Desenrola program. The program started in May, and it targeted credit card debt and unsecured personal loans.

[Santiago Stel, CFO at Inter]

Since we do not offer unsecured personal loans, for us, it was the credit card, the one that entered in this program. At the end of September, we had renegotiated a little more than BRL 160 million. This added close to 20 basis points of stage 3 formation because it moved contracts that were fully written off into stage 3. Excluding the program, the stage 3 formation would have been flat at 1.9%, both in second and third quarter. Now, on the cost of risk and coverage, all-in cost of risk was 5.9% this quarter, pretty much in line with the prior one and consistent with the 6% figure that we have been signaling as our new steady state. As we said, two internal decisions explain most of the increase versus last year, the growth of private payroll, two, the reshaping of credit cards.

[Santiago Stel, CFO at Inter]

Excluding private payroll, cost of risk was 5.3%. Coverage ratio, on the other hand, increased slightly from 134% to 135%. Our provisions cover the delinquent balance with a comfortable margin. Here, we added a dedicated page for private payroll, so we can deep dive in it. One year ago, our loan portfolio of this product was BRL 1.3 billion, and now it is BRL 3.1 billion. Our active clients went from 282,000 to 759,000 clients. As I mentioned, this has been the product that drove delinquency up, but most of the missed payments happen when an employee changes employer, and we have two levers to solve this. The first, the automatic relinkage. Around 30% of the delinquent balance has already been relinked, so we can follow the client to the new employer and keep collecting. Second, the private payroll insurance with about 40% penetration.

[Santiago Stel, CFO at Inter]

The effect is showing in asset quality. NPL formation in private payroll fell to 3.2% in the quarter from 4.9% in the prior one. Stage 3 formation was 5.8%, up from 4.8%, because our stage transfer policy keeps loans under observation before they move across stages. It does not mean new delinquency, and NPL formation confirms that. On the right-hand side, you can see the J-curve of this product with a break-even on month three and then a positive return profile. Now moving on to funding. Our total funding reached BRL 81 billion, up 19% year-on-year and 5% quarter-on-quarter. It is a high-growth and diversified funding franchise. Demand deposits reached BRL 20.7 billion, up 13% year-on-year. Time deposits reached BRL 37 billion, up 20% year-on-year. Securities issued reached BRL 17.8 billion, up 45%, as we keep diversifying our sources beyond just deposits.

[Santiago Stel, CFO at Inter]

Deposits per active client, a key metric, reached BRL 2.1 billion, a new high, up 3% year-on-year. Our loans-to-deposit ratio is 69%, up from 65% a year ago, which means that we are putting our excess liquidity to work in the credit book. Let me show you how this follows in terms of funding costs. Our cost of funding, as we have mentioned many times, is one of our greatest competitive advantages. This quarter, we reached 70% of CDI. There were two factors playing out. The first one was seasonality. As you can see in the chart, the third quarter goes up because the number of business days, 65% this quarter, is higher than the 61% in the second quarter. Normalized by business days, our cost of funding would have been 68%, in line with the prior quarters.

[Santiago Stel, CFO at Inter]

The second factor is Selic, and therefore the mix of our deposits. With the Selic still high, our deposit mix are trending towards higher-yielding deposits, pushing the funding cost high. That explains most of the difference versus last year. As we have said many times, our cost of funding remains one of our key competitive advantages. We have kept expenses controlled while we keep scaling the business, and this is one of the advantages of the digital banking model that we have built. Total expenses, which little over BRL 1 billion, up 3% quarter-on-quarter. There are a few drivers of this performance. The first, administrative expenses, which grew 2% this quarter, or 17% on a yearly basis, driven by branding and technology costs. Other lines benefited from scale, which balanced the overall evolution.

[Santiago Stel, CFO at Inter]

Second was personnel expenses, which grew 4% in the quarter and only 10% in the year, with average headcount staying roughly flat. Third, depreciation and amortization, which grew 6% in the quarter and 38% in the year because of the amortization of prior investments in technology infrastructure and our super app. Looking ahead, we expect a fourth quarter with seasonally higher expenses, but a 2027 with an important gain in operational leverage as we collect the benefits of our business model. Jumping to operational leverage, our efficiency ratio reached 41.9%, more than 3 percentage points better than a year ago. Since first quarter of 2023, our revenue has grown 2.7 times, while personal administrative expenses grew 1.8 times. This is operational leverage in action. In three and a half years, our efficiency ratio went from 62% to 42%.

[Santiago Stel, CFO at Inter]

The pace over the quarter was smaller, 15 basis points, because revenue growth was more moderated, in part because of the inflation impact that I commented before. The direction is clear, and there is still room to improve as we collect more benefits from the new investments. Jumping into profitability, this page, as we mentioned many times, gets us very proud. We delivered the 14th consecutive quarter of net income growth, 14th consecutive quarter of net income growth, reaching BRL 425 million this quarter, up 26% relative to the BRL 336 million of the third quarter of last year. Annualized ROE reached 15.8%, up 160 basis points relative to a year ago. This quarter was marginally more timid than the prior one because of inflation and also because the average equity, meaning the denominator in the ROE formula, increased due to the positive mark-to-market in securities.

[Santiago Stel, CFO at Inter]

Overall, this page shows a clear trend that makes us very proud, and we expect to continue delivering. When we compare our profitability in the context of the banking industry, we can see that on an ROE and an ROA basis. On the top, on ROE, we are the 12th in the ranking when we look at the first semester of the banking industry. More importantly, on ROA, which adjusts for the capital structure that is very different across banks, we are in the top third of the industry. When we factor the fact that we are growing and investing heavily, being the top third of the industry is something that makes us very proud, considering the size that we have, which is still a lot lower than what we expect as we continue being a disruptor and a fast-growth player in the industry.

[Santiago Stel, CFO at Inter]

Last quarter, we mentioned that we were capital neutral. What we can see in this quarter is an even stronger pattern. Our CT1 ratio reached 12.2% at Banco Inter level, up 70 basis points from the 11.5% that we had in the prior quarter. Banco Inter profits generated 100 basis points of capital, and the growth in credit and operational risk consumed 70 basis points. So the operational result added 30 net basis points of capital, while our loan portfolio grew 5% this quarter. As we can see in the middle chart, we have significant excess capital ready to be deployed in our business. This is a result of our corporate structure that is highly efficient. With that said, I will pass it back to João for his closing remarks. Thank you.

[João Vitor Menin, CEO at Inter]

Thank you, Santi, Francisco, and Xande. Hearing your perspectives on Inter and also the opportunities ahead and how the results were on this quarter makes me even more excited about our future. Now, I would like to go back to what matters most from this quarter. Here are four takeaways that I would like to reinforce. First, credit growth. We grew our expanded credit portfolio 25%, almost 3x the market. That was driven by our strongest products, real estate, private payroll, and cards. That is the BanTech in credit, banking products with the power of technology. Second, asset quality. Our cost of risk is at 5.9%, flat versus the last quarter, even with the market deteriorating further. This is the balance sheet we built for any cycle, with 70% of our book secured. It is not luck, it is design. Third, our NIMs.

[João Vitor Menin, CEO at Inter]

We are around 10%, 70 basis points above a year ago, even with the impact of IPCA. This is our data vault empowered by AI, turning into even smarter pricing and better credit decisions. Last, efficiency. Our efficiency ratio this quarter hit 41.9%, 322 basis points better than last year, with operating leverage in action. So, growth, asset quality, margins, and efficiency, all moving together. This is a flywheel in motion and a model built for any cycle. I am sure that the best for Inter is yet to come. Thank you very much.

[Rafa Vitória, IR Officer at Inter]

Now we open the Q&A session. Our first question is from Fernanda Sayão from JPMorgan. Fernanda, your mic is open. Please go ahead.

[Fernanda Sayão, Analyst at JPMorgan]

Hey, João, Santi, Rafa. Thank you for the opportunity to ask questions. My question is about private payroll. Since the operational improvements went live in September, how are newer cohorts behaving compared to older ones? Also, how is the cost of risk trending at the margin? Just the last one, if you could also comment on the impacts you are seeing from the bundled insurance. Thank you.

[Alexandre Riccio, COO at Inter]

Hi, Fernanda. This is Xande speaking. Thank you for your question. I will take a step back on the private payroll loans, and the first point is about the excitement with the product. We remain excited with the future prospects for the product, the profitability, and see it as strategic for Inter, aligned with our distribution channels. This is a first message. As far as the processes goes, we know and we have been saying in the earnings calls since last year that it would be a journey, and it has been a journey. Maybe a little bit slower than what everybody initially imagined. But in the last quarter, reality is that we did have a material improvement with the automatic relinkage. Having said that, I would say that we have three very important things that happened with the product in this last quarter.

[Alexandre Riccio, COO at Inter]

The first one, again, is relinkage. The relinkage helped us both on NPLs and on cost of risk, roughly 2% improvements on NPLs and 1% improvement in cost of risk. As we move along, we are going to see these improvements mature more. That is our expectation. The second point is insurance. As we mentioned in the last call, we were starting to do the insurances. Now we are at about 40% penetration, and it is also a process that matures as we go, and which links to your question on cohorts. Our expectation is that the newer cohorts are going to start behaving better than the older cohorts, given relinkage and given the fact that we have 40% penetration on insurance. Finally, when we think a third factor that is very important for us is pricing, and the thing about pricing is it leads to the production.

[Alexandre Riccio, COO at Inter]

The volume of underwriting for us is a lot more an output than an input, so we drive it through ROE, we drive it through observing how the behavior of the delinquency is. As we make adjustments in pricing, we see sensitivity in underwriting volume, and we have been laser-focused on guaranteeing that we grow at a steady pace. Thank you, Fernanda.

[Fernanda Sayão, Analyst at JPMorgan]

Thank you.

[Rafa Vitória, IR Officer at Inter]

Our next question is from Tito Labarta. Tito, your mic is open. Please go ahead.

[Tito Labarta, Analyst at Goldman Sachs]

Okay, thanks, Rafa. Good morning, everyone. Thank you for the call and taking my question. My question is on loan growth. Thinking about 2027 and concerns about macro, right? On credit cards, you mentioned you are deliberately slowing down a little bit because of that, although you also mentioned that credit card NPLs are maybe nearing their peak. Now with private payroll, maybe that can help to grow. Just how should we think about loan growth given the challenging macro scenario? Will you focus primarily on the secured lines? Can you grow unsecured if credit card NPLs, as you mentioned, are peaking, or are there more risks there that you will continue to be cautious there? Thank you.

[João Vitor Menin, CEO at Inter]

Tito, João Vitor speaking. Thank you for your question. Before I answer you about how we see the portfolio growing on 2027, it is important just to connect with my speech earlier today on the call. I am super happy that we have been, since 2015 when we launched the first digital bank in Brazil, we have been building our capabilities to face a tougher macro scenario as we are living today. So we have, again, the right funding in place. We have the number of clients, a lot of clients also in place. We have a secured portfolio that we have been building consistently for the past 10 years, and we have a better credit and collection capability ahead. We acknowledge that the macro is not in the best, it is not at the best moment at all.

[João Vitor Menin, CEO at Inter]

But considering that we see an edge from our competitors, we see an edge on the funding, we see that the regulator is moving toward the secured portfolio, and super important, Tito, we still have a modest credit portfolio size in Brazil. Only, let's say, only BRL 60 billion. With that in place, we are comfortable on growing between 20%-25% going forward, which is, I would say, almost 2.5x the market. I think that everyone that follows Inter for a while knows that we have always been cautious and prudent with credit underwriting, mostly on the unsecured. Again, thinking about the opportunities that we still have on cards, private payroll, mortgage, home equity, and SMEs, I do see that 20%-25% range quite feasible and prudent. Last, it is about team.

[João Vitor Menin, CEO at Inter]

I mean, we're doing the best we can to be able to grow consistently without jeopardizing our balance sheet, our economics. As I mentioned, we have now, in my view, a dream team here to help us on that. Francisco just joined us, 100% focused on client growth and client monetization. He might add later about few opportunities that we have. Also, Xande, 100% focused on operational excellence and credit and underwriting capabilities. With all that in place, Tito, despite of the macro, I see a great chance for Inter to differentiate against our competitors. The message is prudent but excited with the pace of growth ahead.

[Tito Labarta, Analyst at Goldman Sachs]

Okay, very helpful, João Vitor. Thank you. Maybe just one follow-up, I guess, by segment, should we expect the secured lending to grow faster? How do you think about unsecured lending in 2027?

[João Vitor Menin, CEO at Inter]

Tito, I mean, we have been answering these questions for many, many quarters already. People thought that we were going to grow super-fast on credit card once we, let's say, crack the code on underwriting and collection. The true story is, we still see a lot of opportunities on the secured portfolio. When going back to the size of our portfolio, our market share at Pix is at 9%, but our market share at private payroll, public payroll, SMEs collateralized by receivables, home equity, mortgage is still small in a sense. So I do see a lot of opportunities for us to keep growing strongly on the secured portfolio. Again, a good opportunity on cards as well, as Xande was mentioning, better collections, better underwriting.

[João Vitor Menin, CEO at Inter]

That said, overall, pretty much this 7%-ish ratio between secured and unsecured should keep this trend, I'd say, ahead for at least the next, I'd say, one or two years. So that's how I foresee the balance between secured and unsecured ahead.

[Tito Labarta, Analyst at Goldman Sachs]

Okay, perfect. Thank you very much, João Vitor.

[Rafa Vitória, IR Officer at Inter]

Our next question is from Thiago Batista. Thiago, please go ahead.

[Thiago Batista, Analyst at UBS]

Hello. Hi, João, Alexandre, Francisco, Santi, Rafa. Hi, everyone. I have a follow-up on Tito's questions about the loan growth next year but focus on the asset quality. Do you believe it is possible to say already that we are achieving a kind of peak in this asset quality cycle, or not yet? My question would be on the capital of Inter. How is the best way to look and to think about Inter's capital position? When I look for the Tier 1 ratio of Inter, and if include the BRL 2.1 billion that we have in the holding company, Tier 1 would be almost 18%. You show in the slide that you are almost in a kind of stabilizing the pace of consumption of the capital.

[Thiago Batista, Analyst at UBS]

But how we can think about capital over time of Inter? Is it possible to see higher payout ratio, buyback, or do not believe that we are already in this point of discuss a kind of higher capital distribution?

[Santiago Stel, CFO at Inter]

Yeah, good morning. I will take that one here. Santiago speaking. On asset quality, we are very proud of what we are showing this quarter. There are many metrics in the presentation that you can see that it is pointing to an improvement, early delinquency, 15 to 90 day, NPL formation. This is the result of a very strong work that we have been doing on several fronts, and maybe on the most two iconic portfolio, which is credit cards and private payroll, which have been driving NIM growth, but we want to, you know, drive risk-adjusted NIM growth sustainable through time. That is the consequence of a very active management on those two specific products, because the remaining products have performed very well and stable through the cycle. So those two have added a substantial level of revenues.

[Santiago Stel, CFO at Inter]

On the cost side, we have been working through the operational side on private payroll, as Xande mentioned, and on the credit side as well, on UX, on collection, and so on. When we see that, we get to a cost of risk that we reported, 5.9%, same number as per quarter, or actually 3 basis points lower. That is consistent with what we have been signaling, which is at around 6% cost of risk. We have Desenrola playing out also. That benefited us in the second and third quarter. But going forward, we think that the cost of risk that we have reported, adjusted by the Desenrola impact, is the one that we expect for the coming quarters to continue, which is around 6%. That is very exciting because it allows us to continue to have this positive trend on our margins.

[Santiago Stel, CFO at Inter]

Now moving to capital, we have been also working very strongly there on ROE density and optimizing our capital. The ROE going up obviously helps. The structure that we have with the holding on the top is very efficient, and through the last two, three years, we have been paying JCP or tax on capital to move the excess capital to the holding where it is more profitable. That makes the math of excess capital a bit more complicated, but we try to make it easy in our disclosure. We have BRL 2.1 billion of excess capital up in the holding. When you translate that to how many percentage points would it mean at the bank if we were to move that capital down, it is around 4 percentage points. Therefore, the total number is around 19.5% of total capital consolidated. What will we do with that excess capital?

[Santiago Stel, CFO at Inter]

Our primary role would be to deploy it in the business. That is the reason why we have it. So, we would like to do it obviously with caution, as João mentioned, and then the shareholders will decide the dividend policy as they see fit. But the primary goal of the excess capital is to be deployed in the business to grow it through time.

[Thiago Batista, Analyst at UBS]

Thanks a lot, Santiago. Very clear.

[Rafa Vitória, IR Officer at Inter]

Our next question is from Pedro Leduc. Pedro, please go ahead.

[Pedro Leduc, Analyst at Itaú]

Hi, everybody. Thanks for the call, question, and congrats on the numbers. A bit more on credit cards, please. For a while, you have been flagging that you have been de-risking, probably since late last year, early this year. We see the portfolio grow of 18%, but the interest-bearing portfolio is still growing much faster, over 30% a year. If you can update us on where you think you are within the credit card de-risking process, how comfortable you are with the mix of this, with an interest bearing still growing a bit faster. Just give us an overview how to think about the product within this journey and in the macro context. Thank you.

[Alexandre Riccio, COO at Inter]

Hi, Leduc. This is Xande speaking. Let us go. There are a few steps here to cover when we look at the credit cards. The first point that we like what we are seeing internally is we have been able to use everything that we have developed in credit to drive the delinquency. This is very important to us. We know that we look at early NPLs and the effects that those have in cost of risk and longer term NPLs. We have been able to drive the portfolio, but reality is that in the short term, we reduced the pace of growth. What we are discussing in our management meetings is when is the time to re-accelerate. For that, obviously, we have to observe macro and see what are the reactions. Typically, the end of the year is not the best time to open credit in credit cards.

[Alexandre Riccio, COO at Inter]

If I was to ask when is time to accelerate, I would look more into the beginning of next year than in the end of this year, in this fourth quarter, given both macro and the cyclical delinquency that we observe every year in this time of the year. Now, I think it's important to highlight also all the focus that we're going to give in credit and collections with the new structure. I'm super excited about the changes that we made. I believe we're going to be able to dedicate more, including my personal effort, in evolving on top of everything that we built in these last three to four years that allowed us to get to this BRL 16 billion-BRL 17 billion credit card portfolio. This is a structural message. That's the first point. A lot of focus.

[Alexandre Riccio, COO at Inter]

Where does it go and when does it go? The long-term view is to have the not long, but the 2027 end of year view is to have the foundation models operational, both for individuals and for business accounts. These foundation models are going to allow us to underwrite better, so sorting better through the client base to approve more credit card limits, again, for individuals and for businesses. These are generic models, so they're going to be able to help us improve on collections, help us improve on propensity models for cross-selling, AMLs. There is a lot to come as we move along. Along with that, we're going to keep focusing on three points, which are controlling, optimizing, and scaling. The controlling part is what I began talking about. Optimizing, something that we're doing.

[Alexandre Riccio, COO at Inter]

The scaling is what we expect to be able to do more next year. I will say that given these model improvements, we should be able to resume growth even in a deteriorated macro, if that happens. We want to be ready to grow regardless of the macro environment. Thanks, Leduc.

[Pedro Leduc, Analyst at Itaú]

Very useful, Xande. Thank you.

[Rafa Vitória, IR Officer at Inter]

Our next question is from Gustavo Schroden. Gustavo, please go ahead.

[Gustavo Schroden, Analyst at Citigroup]

Hi, guys. Good morning, everybody, and thanks for taking my question. I would like to ask your help to understand or to reconcile some things here, because it was indeed a very good quarter, especially when we analyze the fundamentals, right? Loan growth still at 25%, we saw improvement in the efficiency ratio, cost of risk stable at 5.9%, some good trends on asset quality. It was indeed, in my opinion, a good quarter. But when we analyze the numbers, and especially net income and also margin per active customers, it was not fully reflected in these numbers, right? I am saying that net income grew only 1% quarter-on-quarter, which is compared to previous quarters, there was a deceleration in this evolution. Margin per active customers also almost stable quarter-on-quarter. I would like to understand what is your diagnosis regarding the quarter?

[Gustavo Schroden, Analyst at Citigroup]

Because as I said, we saw good fundamentals, good trends, but when we analyze the bottom line and also the margin per active customer, there was some, let's say, stabilization. I wonder if you could help us to reconcile and to understand what we are missing in the quarter, and this disconnection between the fundamentals and the numbers per se. Thank you.

[Santiago Stel, CFO at Inter]

Hi, Gustavo, Santiago here. I will take that one. Thank you for the question. We agree on the fundamentals. I would say there are three things that we are particularly happy with. That we are able to maintain the growth at 25%. The asset quality metrics that I mentioned before, and stabilizing and showing some improvement, particularly on the early or high-frequency ones. And then the evolution of the NIM is another one that I would like to highlight too.

[Santiago Stel, CFO at Inter]

We said this year that we would deliver around 40 basis points of NIM expansion, and we are very close to 10, and we ended the last year at 9.6. So, on a fundamental basis, the machinery is working, we think, in the right direction and in a way that is sustainable through time. In terms of the net income growth, a few observations. First one, inflation did not help this quarter.

[Santiago Stel, CFO at Inter]

It did in the prior one, but it helped a bit less on this one, so that's a factor to be considered. On expenses, we have more to come. We are investing heavily on AI, we're investing on branding. Those things will pay out going forward. On growth, we had clear drivers. In the past, it was private payroll, credit cards, before FGTS, home equity. We are chasing very actively the next phase, which could be an improvement of the current products, but that could be a driver going forward. But when you do put all that together and you see our ROA in the context of the industry, being at the top third of the league, we don't want to settle with that, but we are happy, and we continue to search the growth going forward. This is a continuous game, and as we say, it's not linear.

[Santiago Stel, CFO at Inter]

But in general, we're happy with the quarter, and we see that this stabilization of the net income growth is something that is a subject of the quarter and not of the story.

[Gustavo Schroden, Analyst at Citigroup]

I see. Thank you, Santi. Just so, you think that, excluding these, let's say, items that you mentioned, you think that 2027 would be reasonable to expect earnings growing above 20%? You think this is the plan, that it's something that we can dream? Of course, always equal and assuming these items you mentioned normalizing.

[Santiago Stel, CFO at Inter]

Well, we don't give yearly guidance, as you well know. João gave some indications on the loan growth, which you can interpolate with, 20%-25%. We aim to continue to gain market share, and we aim to continue to have an increasing improvement in operational leverage. So all of those things will play in that evolution of the metrics.

[Gustavo Schroden, Analyst at Citigroup]

All right. Thank you, guys.

[Rafa Vitória, IR Officer at Inter]

Our next question is from Marcelo Mizrahi. Marcelo, please go ahead.

[Marcelo Mizrahi, Analyst at Bradesco BBI]

Hello, everyone. Thank you for the opportunity to do a question here. Regarding the credit card product, we saw some increase on the stage 3, and you guys said that adjusting by the Desenrola issue, the dynamic were pretty stable. Can you explain a little bit more, how do you guys are seeing this last new vintages? It seems that the new vintages are better. Can we think that on the credit card side, we will see some stabilization, even more on the growth? Or you are seeing that those new clients, new vintages are gaining share, and probably there are more room to growth in the next couple of quarters? Thank you.

[Santiago Stel, CFO at Inter]

Marcelo, I will take that one. The new vintages are still relatively small in the overall mix. Yes, they should favor the delinquency metrics in a better way, but they need to gain more materiality, and that will depend on how much they continue growing and how the mix they expand. In staging three, something that I like to mention is we provisioned BRL 1.02 billion, a little over BRL 1 billion, which is 93% of what went into stage 3. That has to do with our policy of having a well-provisioned portfolio. On cards, we did that above 110%. When you look at that relative to the stage 3 of the product itself, and the one that is a bit below is on the personal loans. A consequence is private payroll, which is coming with better performance, and then the Desenrola impact that has on with the FGO guarantee.

[Santiago Stel, CFO at Inter]

Overall, we are quite confident that this factor on the provisioning, which reflected an increase in the coverage ratio, is managing this well. And the operational improvements in private payroll should make that improvement even more prudent going forward. There is a specific page of private payroll that we added this quarter where you can see the NPL formation there, and that performed very well. It is a great leading indicator that I will invite you all to follow. The stage 3 follows that metric with one quarter delay, right? And that is also a consequence of the new vintages coming in with better performance.

[Marcelo Mizrahi, Analyst at Bradesco BBI]

Okay. Can I do another one regarding margins? This year, margins were pretty in line with our forecast in terms of gross margin, I mean, gross NIMs, pretty stable around this 10%. Makes sense, so in my view, it still makes a lot of sense to see an improvement on these margins going forward. That is the base case scenario for you guys, even assuming the reduction of the growth?

[Santiago Stel, CFO at Inter]

Risk-adjusted NIM will be a consequence of the loan mix that we will have going forward. We have grown a lot. Remember when we started 60/30/30, it was at four. Now it is a bit below six, so the expansion of risk-adjusted NIM was very substantial. Going forward, it will depend on the mix. We would like to keep it flat, if not higher going forward. But again, it will depend a lot on the mix as we continue going into next year. If private payroll grows more as a consequence of the improvement that we have had, that could push it up a bit. But we want to see a bit more quarters on how that evolves to give a bit more precise answer.

[Marcelo Mizrahi, Analyst at Bradesco BBI]

Okay, thank you.

[Santiago Stel, CFO at Inter]

Thank you.

[Rafa Vitória, IR Officer at Inter]

Our next question is from Mario Pierry. Mario, please go ahead.

[Mario Pierry, Analyst at Bank of America]

Hey, guys. Good morning. Thanks for taking my question. Most of my questions have been answered, so I would like to focus a little bit, João, on this partnership that you created with SpaceX AI. Exactly what does it mean? Are you trying to improve efficiency, or is it to improve revenue generation, or is it to improve your credit models? And how does it work? Is there some type of revenue-sharing partnership? So, if you can just give us more details on the benefits of this strategic partnership. Thank you.

[João Vitor Menin, CEO at Inter]

Well, Mario, thank you for the question. Maybe I would say it is the best question of the Q&A, to be honest. As you know, I have been very focused on always trying to disrupt ourselves, to think about the next wave of Inter. I like to say that we did a 10x thing for the past 10 years, so from 5,000 clients, 45 million clients, a small company in a few cities in Brazil to 100% of clients in all over Brazil. And that was possible mainly because we were able to tackle all the technology available back then, and we had the right mindset. So, I know that back then, we had a few banks trying to be more efficient on how they were opening branches, how they were trying to optimize the cost with their own data centers, and Inter did something completely different.

[João Vitor Menin, CEO at Inter]

I like to say, Mario, I call this cognitive change. Not to think linearly, but how to disrupt the way you have been doing things. We launched the first digital bank in Brazil. 10 years later, 2026, I really see AI, despite all the buzz and all the excitement, but I really see AI as the next technological wave. I have been working alongside with Guilherme Ximenes, our CTO, to again, to try to disrupt the way Inter are doing our business today. As I told, we have superior position. We are better than the competition, funding, and on a lot of things, the portfolio secure, but that is not enough. When we are trying to figure out how to put AI at the center of it, how I run the business, there are three things that is important.

[João Vitor Menin, CEO at Inter]

We like to say that first people, so how we do this cognitive change around our senior managers, it is what I am working hard on that. The second thing is about the process, how we do Inter more efficient. But the main one, the main important one, it is about the product itself. So how can we have a new type of product, a new type of serving our clients, a new type of relationship.

[João Vitor Menin, CEO at Inter]

This is what I would say that I like to do the most at Inter. So how can we think about the future, bring it faster ahead of the competition? I do see, Mario, that AI is going to play a way more crucial role on how we serve our clients, how we interact with them, always with the three key elements that I told on the call before in place: convenience, savings, and trust.

[João Vitor Menin, CEO at Inter]

In that sense, we decided to team up, which we believe is the best company available today. We did some research, some interactions, a lot of work on our end, and we believe that xAI is the best for us to put Seven, which is our core engine, to seize this opportunity of AI. To put Seven on the core of it. Actually, we just launched a new version of our website. We launched a website called seven.co, which is focused on that AI center, AI-first approach. We do not have the agreement with them. It is not about profit share, so we are just using them as a strategic vendor. Also, we are participating in a client advisory board, Guilherme is there, to get the best technology, to be ahead. I mean, I am super excited.

[João Vitor Menin, CEO at Inter]

The same way cloud computing and the microservice, the App Store, Google Play played this 10x impact at Inter back then, I am kind of convinced and super excited that we have the same opportunity today. I mean, how fast, how impactful it will be to Inter? I do not know. The thing is that I am doing the best I can, and I am putting all my efforts. That is what I, to be honest, I like to do the most, and that is what I believe are my better skills on connecting the technology to how we serve clients in a different way, different from where the market is headed. A long answer, but that is how I see this partnership. That is how I see this technological wave, and I believe that we are going to disrupt ourselves like we disrupted the incumbent banks back then.

[João Vitor Menin, CEO at Inter]

So, I think that we're going to have an amazing journey ahead, and in spite of the macro, in spite of everything, some headwinds, I think that the tailwind there, it's super nice.

[Mario Pierry, Analyst at Bank of America]

João, just to get a little bit more color, then this partnership, is there like a time, a period, and is there like a revenue sharing, or how does it work?

[João Vitor Menin, CEO at Inter]

No, Mario, there is no profit share, as I mentioned. It's just that we elected SpaceX AI as our main partner for developing everything on cloud using Cursor, that is a component now that belongs to the group. How we're going to do the software development life cycle, how we're going to power Seven, which is our core engine thing. As I mentioned, how we put xAI to help on the three Ps, the people, the process, and the product. So that's about having the best, we believe, in the world available to support Inter going forward. So, no partnerships in terms of revenue, but just being able to access first with this client advisory board that I mentioned, and Guilherme is super on top of it, to again, disrupt ourselves, so we avoid that someone else will disrupt Inter as we did 10 years ago.

[João Vitor Menin, CEO at Inter]

That's pretty much the vision behind this partnership with them.

[Mario Pierry, Analyst at Bank of America]

Clear. Are you the only bank in Latin America that has this partnership, or are you aware of this partnership of other banks?

[João Vitor Menin, CEO at Inter]

Yeah, as far as we know, we are the only bank in Latin America on this client advisory board with them. So, super excited with that.

[Mario Pierry, Analyst at Bank of America]

Great. Thank you.

[Rafa Vitória, IR Officer at Inter]

Thanks, João. This concludes our earnings conference call. Thank you all and see you next time.

Participants

Analysts

• Rafa Vitória, IR Officer at Inter
• João Vitor Menin, CEO at Inter
• Francisco Santos, CGO at Inter
• Alexandre Riccio, COO at Inter
• Santiago Stel, CFO at Inter
• Fernanda Sayão, Analyst at JPMorgan
• Tito Labarta, Analyst at Goldman Sachs
• Thiago Batista, Analyst at UBS
• Pedro Leduc, Analyst at Itaú
• Gustavo Schroden, Analyst at Citigroup
• Marcelo Mizrahi, Analyst at Bradesco BBI
• Mario Pierry, Analyst at Bank of America