Inter & Co. Inc. Q3 Earnings Call Highlights

Key Points

• Inter’s Q3 net income rose 26% to BRL 425 million, its 14th consecutive quarter of profit growth, as revenue increased 26% to BRL 2.7 billion and return on equity reached 15.8%.
• The expanded loan portfolio grew 25% year over year to BRL 58.1 billion, and management expects to sustain 20%–25% loan growth. Delinquency over 90 days edged up to 5.3%, though shorter-term delinquency and NPL formation improved.
• Inter’s active customer revenue and efficiency improved, with monthly revenue per active client reaching a record BRL 35.6 and the efficiency ratio improving to 41.9%. The company also plans to invest in credit, automation, and AI while deploying its excess capital into the business.

Inter & Co. Inc. NASDAQ: INTR reported a 26% increase in third-quarter net income as lending and customer growth lifted revenue, while executives said they expect to keep expanding credit despite a challenging economic environment in Brazil.

Net income reached BRL 425 million, up from BRL 336 million a year earlier, marking the company’s 14th consecutive quarter of profit growth, Chief Financial Officer Santiago Stel said. Net revenue rose 26% year over year to BRL 2.7 billion, while annualized return on equity increased to 15.8% from a year earlier.

Chief Executive Officer João Vitor Menin said Inter’s combination of banking products and technology helps it manage through different credit cycles. About 70% of its loan portfolio has some form of guarantee, he said.

Loan growth and credit quality

Inter’s expanded loan portfolio rose 25% from a year earlier to BRL 58.1 billion and increased 5% from the previous quarter. Real estate loans, the largest component, grew 37% year over year to BRL 19.9 billion. Private payroll loans reached BRL 3.1 billion, about 2.5 times their level a year earlier.

Asked about the outlook for 2027, Menin said Inter was comfortable growing its loan book by 20% to 25% going forward. He cited opportunities in secured lending as well as cards, while emphasizing caution in unsecured underwriting. He said he expected the secured share of the portfolio to remain around its current level for the next one or two years.

Loans more than 90 days past due represented 5.3% of the expanded portfolio, up 29 basis points from the prior quarter. Stel said portfolio mix was the main driver, while the Desenrola debt-renegotiation program contributed 14 basis points to the increase.

Other indicators showed improvement. The 15- to 90-day delinquency measure fell to 4.2% from 4.5%, and nonperforming loan formation declined to 1.74% from 1.83%. All-in cost of risk was 5.9%, roughly in line with the prior quarter. Stel said the company expects cost of risk of around 6% in coming quarters, after adjusting for the impact of Desenrola.

Private payroll lending has contributed to higher delinquency, but Stel said automatic relinkage—which allows Inter to resume collecting when a borrower changes employers—has helped. Around 30% of the delinquent balance had been relinked, while insurance penetration was about 40%. Nonperforming loan formation in the product fell to 3.2% from 4.9% in the prior quarter.

Chief Operating Officer Alexandre Riccio said newer private payroll cohorts are expected to perform better than older ones as relinkage and insurance mature. On credit cards, he said Inter had slowed growth and was considering when to accelerate again, with the beginning of next year more likely than the fourth quarter given economic conditions and seasonal delinquency.

Revenue, customers and expenses

Net interest income rose 30% year over year to BRL 2.1 billion, accounting for 78% of revenue. Fee income increased 13% to BRL 611 million. Inter ended the quarter with 46.8 million total clients, up 13%, including more than 27 million active clients.

Monthly net average revenue per active client, after interest expense, rose 7% to a record BRL 35.6. Monthly cost to serve was BRL 13.3 per client, and margin per active client reached BRL 22.3, Stel said.

The company’s NIM 2.0 was 9.96%, up 70 basis points from a year earlier. Stel said Inter remained on track for roughly 40 basis points of net interest margin expansion in 2026 and expected to end the year at around 10%.

Total expenses were a little over BRL 1 billion, up 3% from the previous quarter. The efficiency ratio improved to 41.9%, more than 3 percentage points better than a year earlier. Stel expects seasonally higher expenses in the fourth quarter but said the company anticipates an important gain in operational leverage in 2027.

In response to an analyst’s question about slower quarterly profit growth, Stel cited a less favorable inflation effect and spending on artificial intelligence and branding. He declined to provide annual earnings guidance.

Capital and technology priorities

Banco Inter’s common equity Tier 1 ratio rose to 12.2% from 11.5% in the prior quarter. Stel said the holding company had BRL 2.1 billion in excess capital and that the primary goal was to deploy that capital in the business, with shareholders determining dividend policy.

Menin also outlined plans to put AI at the center of Inter’s customer experience and operations. He said xAI is a strategic vendor supporting development of Seven, Inter’s AI engine, and that the arrangement does not involve profit sharing. Inter’s chief technology officer, Guilherme Ximenes, participates in a client advisory board, Menin said.

New Chief Growth Officer Francisco Santos said his initial priorities include strengthening primary banking relationships and expanding products for small and midsize businesses. Riccio said his operational focus includes credit underwriting, collections and automation.

About Inter & Co. Inc. (NASDAQ:INTR)

Inter & Co. Inc. 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.

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