Inter & Co’s Earnings Call: Record Growth Amid Challenges

Inter & Company Incorporation Class A ((INTR)) has held its Q3 earnings call. Read on for the main highlights of the call.Meet Your ETF AI Analyst Discover how TipRanks' ETF AI Analyst can help you make smarter investment decisions Explore ETFs TipRanks' users love and see what insights the ETF AI Analyst reveals about the ones you follow. Inter & Company Incorporation Class A’s recent earnings call painted a picture of robust growth and record-setting achievements, tempered by some economic challenges. The company reported significant client growth, increased transaction volumes, and an expanding loan portfolio, although it faces hurdles such as rising costs of risk and a slowdown in fee income growth due to economic pressures like high Selic rates. Record Client Growth Inter achieved a milestone by welcoming 2 million new clients, setting a new record and surpassing the previous high set in 2022. This growth underscores the company’s ability to attract and retain a substantial number of clients, contributing to its expanding market presence. Strong Transaction Volume The company’s active clients transacted over BRL 412 billion on the platform, marking a year-over-year growth of approximately 30%. This impressive increase highlights the platform’s growing popularity and the trust clients place in Inter’s financial services. Credit Card Volume Growth Inter’s credit card volume reached a new record, exceeding BRL 15 billion, which represents a 20% growth year-over-year. This growth indicates a strengthening position in the credit card market and increased consumer spending. Loan Portfolio Expansion The loan book saw a 30% year-on-year growth, driven by private payroll loans and home equity, with the latter experiencing a 33% growth. This expansion reflects Inter’s strategic focus on diversifying and strengthening its loan offerings. Improved Asset Quality The company’s asset quality showed improvement, with the ninety-day past due metric improving by 10 basis points. This indicates effective risk management and a healthier loan portfolio. Low Cost of Funding Inter maintained a low cost of funding at 68.2% of CDI, supported by strong growth in transactional deposits. This low cost base provides a competitive edge in the financial market. Record Net Income and ROE Inter reported a record net income of BRL 336 million and an ROE of 14.2%, showcasing its financial strength and operational efficiency. Increased Cost of Risk The cost of risk rose to 5.35%, primarily due to upfront provisioning for the new private payroll portfolio. This increase reflects the challenges of managing risk in a growing loan portfolio. Fee Income Growth Slowdown The company experienced a slowdown in fee income growth, impacted by one-off events such as the shutdown of a co-owned company and deferred fees. This slowdown poses a challenge to maintaining revenue growth. Economic Headwinds Inter faces economic headwinds, particularly high Selic rates, which impact credit portfolio exposure and growth dynamics. These external factors present challenges to sustaining growth momentum. Forward-Looking Guidance Looking ahead, Inter & Co provided optimistic guidance, supported by strong growth metrics and strategic initiatives. The company aims to sustain its momentum into 2026, focusing on innovation, global expansion, and talent development. With a robust client base and high Net Promoter Score, Inter is well-positioned to enhance client value across its seven verticals. In conclusion, Inter & Company’s earnings call reflects a positive sentiment with record achievements in client growth and financial performance. Despite facing economic challenges, the company remains committed to strategic growth and innovation, positioning itself for continued success in the financial market.