Inter & Company Incorporation Class A ((INTR)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Inter & Company Incorporation Class A’s recent earnings call painted a picture of strong growth and innovation, coupled with a cautious optimism for the future. The company reported significant increases in client base and revenue, alongside the successful launch of new products. However, challenges such as cost of risk, efficiency ratio improvements, and macroeconomic conditions were acknowledged. Despite these hurdles, the overall sentiment remained positive due to strategic initiatives and product performance.
Client Base Growth
Inter & Company reached a milestone of 40 million clients, consistently adding between 1 million to 1.1 million active clients each quarter. This growth underscores the strong brand engagement and the attractiveness of the platform, indicating a robust expansion in their customer base.
New Product Launches
The company introduced innovative features like ‘My Credit’ and ‘My Piggy Bank By Savings Goals’. These new offerings have been well-received, with over 425,000 clients using the savings feature within a month, creating more than 529,000 savings goals. This demonstrates the company’s commitment to enhancing client engagement and satisfaction.
Record Revenue Growth
Inter & Company reported impressive financial results, achieving BRL 3.6 billion in total gross revenues and BRL 2.0 billion in net revenue. This represents a year-over-year growth of 48% and 35% respectively, showcasing the company’s strong financial performance.
NIM Expansion
The company’s Net Interest Margin (NIM) has consistently shown growth, reaching new record levels. This reflects their effective asset-liability management strategy, contributing to their overall financial health.
Global Account Performance
Global account clients grew by 34% year-over-year, reaching 4.4 million. The company also saw a record performance in deposits, which increased by 90% year-over-year, highlighting the success of their global operations.
Credit Portfolio Performance
Inter’s total credit portfolio grew by 8% quarter-on-quarter, driven by significant growth in the private payroll loan portfolio, which reached BRL 728 million. This indicates strong demand and potential for future growth in this segment.
Cost of Risk
The cost of risk increased to 5.0%, with expectations to remain within the range of 5% to 5.25%. This reflects the company’s growth in higher-risk segments, which they are managing carefully.
Efficiency Ratio Challenges
While the efficiency ratio has shown only modest improvement, the company is focusing on reducing variable costs in vendor contracts to achieve better operational leverage. This is a critical area for future improvement.
Macroeconomic Concerns
The company acknowledged the challenging macroeconomic environment, particularly the high Selic rates, which could impact future growth and profitability. This remains a key area of concern for the company’s strategic planning.
Forward-Looking Guidance
Inter & Company provided robust forward-looking guidance, highlighting their strategic progress and market growth. They achieved a significant milestone of 40 million clients and reported a Net Promoter Score of 85, indicating strong customer satisfaction. The company also noted an 8% quarter-on-quarter growth in their total loan portfolio, with credit penetration among active clients reaching 33.8%. Their private payroll loan portfolio demonstrated significant growth potential, reaching BRL 728 million. Improvements in efficiency ratio and return on equity were also highlighted, alongside the successful introduction of new features driving client engagement.
In summary, Inter & Company Incorporation Class A’s earnings call reflected a cautiously optimistic outlook, with strong growth in client base and revenue, alongside innovative product launches. While challenges such as cost of risk and macroeconomic conditions were noted, the company’s strategic initiatives and product performance provide a positive outlook for future growth.