Inter & Co(INTR) - 2023 Q4 - Annual Report

Customer Base and Growth - As of December 31, 2023, the total customer base reached 30.4 million, with an activation rate increase of 300 basis points to 54.0% compared to December 31, 2022[6]. - The loan portfolio balance reached R$29.8 billion, reflecting a 31% increase compared to December 31, 2022[7]. - Total funding amounted to R$40.7 billion, representing a 36.5% increase compared to December 31, 2022[8]. - Total assets grew to R$60.4 billion, marking a 30.2% increase compared to December 2022[12]. - Total assets increased to R$60,351,797 in 2023, up from R$46,343,100 in 2022, representing a growth of 30.2%[33]. - The company reported net cash from operating activities of R$7,545,050 in 2023, significantly higher than R$2,103,405 in 2022[39]. Financial Performance - The accumulated profit for the period was R$352.3 million, a significant turnaround from a loss of R$14.1 million in the same period of 2022[9]. - Revenues reached R$7,775.7 million, an increase of R$2,111.0 million compared to the same period in 2022[10]. - Profit for the year reached R$352,260 in 2023, a significant recovery from a loss of R$14,079 in 2022[37]. - Basic earnings per share improved to R$0.75 in 2023, compared to a loss of R$0.03 in 2022[35]. - Other comprehensive income for the year was R$149,813 in 2023, compared to a loss of R$753,017 in 2022, indicating a positive turnaround[37]. - Total revenues for the year ended December 31, 2023, reached $4,752,576, an increase from $3,562,697 in 2022, representing a growth of approximately 33.4%[190]. - Interest income for the year was $4,549,827, significantly higher than $2,802,658 in 2022, representing an increase of approximately 62.2%[190]. Expenses and Liabilities - Administrative and personnel expenses totaled R$1,461.3 million, a decrease of R$33.1 million compared to the same period in 2022[11]. - Total liabilities rose to R$52,755,107 in 2023, compared to R$39,253,996 in 2022, an increase of 34.5%[33]. - The company reported impairment losses on financial assets of $1,541,584 for 2023, compared to $1,083,237 in 2022, indicating an increase in credit risk exposure[190]. - Administrative expenses for the year were $1,461,348, up from $1,494,484 in the previous year, showing a decrease of approximately 2.2%[190]. Shareholder Equity - Shareholder's equity totaled R$7.6 billion, reflecting a 7.2% growth compared to December 31, 2022[13]. - The company maintained a total equity of $7,596,691 as of December 31, 2023, compared to $7,089,104 in 2022, reflecting an increase of about 7.1%[190]. Acquisitions and Corporate Strategy - The company completed the acquisition of Inter&Co Payments, Inc. in January 2022 to enhance its global expansion strategy[45]. - Inter acquired 100% of the share capital of Inter US Finance, LLC and Inter US Management, LLC for a total consideration of R$3,317 thousand, with R$1,990 thousand for Inter US Finance and R$1,327 thousand for Inter US Management[70][72]. - The acquisition allows Inter to expand its operations in Florida, Georgia, and Colorado, enhancing its mortgage origination and distribution capabilities[71]. - The acquisition is expected to provide future economic benefits through synergies and a broader range of financial services for customers[73]. Risk Management and Compliance - The company has implemented significant internal controls related to credit loss measurement, which is a key audit matter due to its complexity and material measurement uncertainties[26]. - Inter & Co's financial statements are prepared in accordance with International Financial Reporting Standards (IFRS), ensuring compliance and transparency[48]. - The company continues to refine its internal risk management processes without any material changes to the nature of credit risk exposures in 2023[198]. Revenue Recognition - The Group recognizes revenue from interchange fees as commission income from card transactions, with the transaction price being a predefined percentage of the total payment[166]. - Management fees from asset management activities are recognized as the service is performed, while performance fees are recognized at the end of each performance period[167]. - Income from bank fees, primarily related to account opening and interbank transfer fees, is recognized when the services are provided[168]. - The Group does not have any single customer accounting for more than 10% of its total net revenue[183].