Inter & Co(INTR) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported total gross revenues of BRL 15 billion, marking a 45% year-on-year growth, while net revenues grew 31% year-on-year to BRL 8.4 billion [12] - Net interest income increased by 41% year-on-year, driven by strong performance in payroll loans, credit cards, mortgages, and home equity loans [12] - The efficiency ratio improved from 48.4% to 45.5%, representing a nearly 300 basis points improvement within the year [16] Business Line Data and Key Metrics Changes - The loan portfolio grew by 36% year-on-year, with quarterly growth accelerating to 10% or 40% on an annualized basis [8] - Private payroll loans reached a portfolio of nearly BRL 2 billion with around 400,000-500,000 clients, showing strong digital distribution capabilities [5] - Credit card volume grew by 29%, with the reshaping strategy driving monetization and profitability [8] Market Data and Key Metrics Changes - The company was the fastest-growing financial institution in Brazil among those with over 20 million clients, with 7 million new clients welcomed in the year [2][3] - The transaction volume through Pix reached BRL 1.5 trillion for the year, leading to a market share of 8.5% [4] - The average balance per active client reached 2.1 thousand reais, with total funding growing 32% year-on-year [10] Company Strategy and Development Direction - The company aims to replicate Pix's success in other products, with home equity already ahead of Pix in market share [6] - The focus remains on continuous innovation and enhancing the client experience through a seamless integration of its seven verticals [7] - The company is committed to maintaining a balanced ratio of secured and unsecured loans while pursuing growth in its credit portfolio [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that 2026 will be another excellent year for the company, highlighting the strength of its platform and operational strategies [18] - The company anticipates a cost of risk between 5.5% and 6% for 2026, with expectations of asset quality pressure in the industry [49] - Management emphasized the importance of technology and innovation in improving efficiency and operational leverage [68] Other Important Information - The company achieved a net income of BRL 1.3 billion, surpassing a 15% ROE in the last quarter [17] - The cost of funding improved to 65.6% of CDI, showcasing the strength of the company's funding strategy [11] - The company plans to maintain a 20% payout ratio for dividends, balancing growth and capital needs [26] Q&A Session Summary Question: Concerns about efficiency ratio progress - Management acknowledged the slow progress in efficiency but highlighted significant improvements in ROE and client growth, reaffirming commitment to the 60/30/30 plan [20][22] Question: Future dividend payments - Management confirmed a 20% payout ratio for dividends will continue as long as it does not impact growth execution [25][26] Question: Fee income growth expectations - Management noted that fee income growth was impacted by a strong increase in net interest income, leading to a compression in the fee income ratio [30][31] Question: Provisioning and asset quality concerns - Management explained that the asset quality metrics are performing as planned, with specific adjustments made to the mortgage portfolio to align with best practices [45][48] Question: Growth expectations for private payroll loans - Management indicated strong growth in private payroll loans, with expectations for continued growth as the product matures and market share increases [56][57]