Inter & Co, Inc. Q2 FY2024 earnings call

• Strategy: Focus on growth and profitability through execution, innovation, and hyper personalization. - Client Growth: Consistent increase in active clients and business accounts, with business accounts growing 21% YOY. - Product Performance: Strong TPV growth, credit lines expansion, e-commerce GMV rise, loyalty program success, insurance sales surge, investment growth, and global expansion. - Team and Leadership: Welcome new Brazil CEO and other management hires, launch of social platform to enhance client engagement.

Clients: Welcomed 1 million new active clients, total clients reached 33 million with a sixth consecutive quarter of increasing activation at 55.3%. 2 million business accounts are growing at 21% year-over-year with 80% activation. TPV: Total TPV increased 47% year-over-year to BRL 290 billion, with PIX transactions over BRL 266 billion and credit cards volumes surpassing debit. Credit Lines: PIX financing and other unsecured lines saw nearly 90% growth, reaching BRL 330 million in portfolio. E-commerce: GMV increased by more than 50% to surpass BRL 1.1 billion in the quarter. Loyalty: 8 million clients, with engaged clients spending 2.7x more and RPAC 1.7x higher. Insurance: Sales exceeded 1 million for the first time, active clients up 39% to 2.6 million, with launch of FGTS loan insurance. Investment: Active clients up ~60% to 5.7 million, AUC surpassed BRL 100 billion. Global: Assets under custody and deposits in US dollars reached $516 million, a 133% year-over-year growth, with 3.3 million clients from Brazil.

• Continued focus on growth and profitability. - Expectation of NIM improvement with ongoing digital initiatives and product launches. - Anticipation of further growth in unsecured lines and product mix optimization.

• Market and economic uncertainties. - Intense competition in the banking sector. - Impact of regulatory changes. - Potential volatility in interest rates affecting NIM and profitability.

Q: Regarding NIM adjusted by risk, how to think about future improvement?

A: Cost of risk expected to stay in 5.0% to 5.5% range, NIM before cost of risk has upsides with portfolio mix and liquidity dynamics.

Q: Follow-up on PIX financing and buy now pay later growth?

A: Aiming for BRL 1 billion in unsecured lines, focusing on revenue formation and risk/reward improvement.

Q: Balancing growth investments and profitability?

A: Focus on innovation with low CapEx/OpEx, leveraging operational leverage to balance growth and profitability.

Q: Margins on implied rates for personal loans and credit cards?

A: Personal loans rates improving slowly, PIX financing and buy now pay later as new drivers with average interest rates of 6% per month.

Q: Service revenue growth and loan book credit card anticipation?

A: Service revenue organic growth driven by Inter Shop and insurance, loan book credit card anticipation due to deposit inflow and temporary yield.

Q: Ambition for SMEs and BNPL GMV?

A: SMEs have growth opportunity with cross-selling and product bundles, BNPL product seeing growth in GMV with good risk/reward.

Q: Cost of funding and marketing expenses?

A: Cost of funding influenced by deposit mix, marketing expenses for brand building with upsell/cross-sell as performance metrics, insurance growth driven by small ticket FGTS policies.