Inter & Co(US:INTR)2024-02-08 23:07Financial Data and Key Metrics Changes - The company achieved a record revenue of BRL2.2 billion in Q4 2023, with annual net revenues reaching BRL8.1 billion, reflecting a 31% year-over-year growth in net interest income [51][54] - The return on equity (ROE) reached a record 8.5%, with net income increasing by BRL160 million, translating to an annual total of BRL640 million combined with EBITDA [54] - The efficiency ratio improved to a record low of 51.4%, indicating strong operational leverage [53] Business Line Data and Key Metrics Changes - The credit portfolio grew to BRL31 billion, with a sequential growth of 7% in Q3 and 10% in Q4 2023, indicating strong momentum entering 2024 [18] - The e-commerce vertical surpassed 3 million clients and achieved over 10 million transactions in the quarter, setting a new record [6] - The investments vertical saw a 66% year-over-year client growth, with assets under custody (AuC) reaching BRL92 billion [15] Market Data and Key Metrics Changes - The company reported a 45% growth in total payment volume (TPV) in 2023, surpassing BRL250 billion in Q4 alone [40] - The global vertical achieved over 2 million clients and $360 million in AuC and deposits, marking a 4x growth compared to 2022 [43] - The company maintained an 8% market share in PIX transactions in Brazil, with expectations to increase this share [28] Company Strategy and Development Direction - The company aims to achieve 60 million clients, a 30% efficiency ratio, and a 10% ROE by 2027 as part of its 60-30-30 business plan [9] - The financial Super App continues to evolve, with a focus on innovation and operational efficiency to enhance client engagement and profitability [10][17] - The company is expanding its Buy Now Pay Later (BNPL) partnerships, which are expected to significantly contribute to revenue growth [14][69] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of the business model and the ability to maintain growth and profitability [3][26] - The company anticipates continued improvement in efficiency and revenue generation, driven by innovative product offerings and a strong client base [37][72] - Management highlighted the importance of maintaining a competitive funding mix and defending the deposit base through transactional business growth [98] Other Important Information - The company launched several new products in 2023, including PIX Crédit and Overdraft, enhancing its service offerings [17] - The company reported a significant decrease in the cost of risk, driven by improved underwriting and recovery processes [49] Q&A Session Summary Question: Initial impressions on PIX Finance and its relevance - Management expressed excitement about PIX Finance, noting an 8% market share and excellent user experience, with expectations to outpace market share in the future [28] Question: Insights on delinquent loans and cost of risk - Management confirmed proactive renegotiation of delinquent loans, resulting in a BRL60 million impact on net interest income and cost of risk [31] Question: Future improvements in funding costs and efficiency - Management indicated that while funding costs have improved, further reductions are expected, with efficiency improvements driven by revenue growth outpacing expense growth [32][61] Question: Revenue growth drivers for 2024 - Management highlighted BNPL as a key revenue driver, with expectations of significant growth in loan products and overall revenue [69][70] Question: Contribution of FGTS loans to the portfolio - Management expects FGTS loans to grow from 6% to around 10% of the portfolio by the end of 2024, citing strong demand and operational improvements [104]