Inter & Co(INTR) - 2023 Q2 - Earnings Call Transcript

Financial Performance - The company achieved gross revenue of BRL 1.9 billion and net revenue of BRL 1.2 billion, marking a 33% increase year-over-year and a 12% acceleration in net revenues quarter-over-quarter [1][10] - The net interest margin (NIM) reached 8.1%, an increase of 70 basis points from the previous quarter, while the interest-earning portfolio saw an increase of 80 basis points [4][10] - The efficiency ratio improved to 53%, reflecting disciplined cost control and operational excellence [10][44] Business Lines Performance - The loan portfolio grew by 5%, with FGTS loans increasing by 26% and home equity loans by nearly 10% quarter-over-quarter [16] - The company reported a 46% increase in active clients in the insurance segment and a 66% year-over-year growth in investment clients, reaching 3.6 million [24] - The transactional platform added 1 million new active clients, with a total of 28 million clients, and the activation rate surpassed 52% [12][21] Market Data - Deposits grew by 29% year-over-year, reaching BRL 33.5 billion, with over 13 million clients [20] - The total payment volume (TPV) for debit and credit cards, as well as PIX, reached BRL 197 billion, indicating strong market presence [22] - The net take rate in e-commerce reached 9%, the highest level ever for the company [23] Company Strategy and Industry Competition - The launch of the loyalty program "Inter Loop" is seen as a significant step in enhancing client engagement and cross-selling opportunities [14][25] - The company aims to replicate its Brazilian offerings in the U.S. market with minimal investments, having already deployed five of seven business verticals [28] - The focus remains on high-return products and maintaining a competitive edge through technology and customer engagement [10][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's growth trajectory, emphasizing the importance of innovation and operational efficiency [33][37] - The company is positioned to benefit from potential interest rate reductions, which could further enhance NIM [81] - There is a strong belief in the sustainability of recent profitability improvements and the potential for continued growth in active clients [41][46] Other Important Information - The company recorded a CET1 ratio of 22.8%, indicating strong capital adequacy compared to peers [36] - The cost to serve decreased by 20% year-over-year, enhancing the company's competitive advantage [35] Q&A Session Summary Question: What drove the increase in payroll? - The increase was attributed to a mix of factors, including repricing and a higher mix of FGTS loans [42][54] Question: When can improvements in NPLs and cost of risk be expected? - Management expressed optimism about asset quality improvements, particularly in non-card segments, with a stable cost of risk around 1% [58] Question: How is the company positioned for a potential easing cycle in interest rates? - The company is liability sensitive and expects to benefit from a reduction in Selic rates, which should positively impact NIM [81] Question: What are the dynamics behind personnel expenses despite a reduction in headcount? - Personnel expenses increased due to long-term incentive provisions and compensation adjustments, despite a reduction in headcount [62] Question: How sustainable is the reduction in customer acquisition costs (CAC)? - The company believes that improvements in platform offerings and a slowdown in competition will sustain the lower CAC [66]