Inter & Co's Q1 2025: Unraveling Contradictions in Loan Growth, NIM, and Regulatory Impact

Loan growth and net interest margin expectations, cost of risk and asset quality assessments, loan growth expectations, credit penetration drivers, and impact of Resolution 4966 on financial performance are the key contradictions discussed in Inter & Co's latest 2025Q1 earnings call.



Strong Financial and Operational Performance:
- Inter & Co reported revenue of R$3.2 billion for Q1 2025, with a year-on-year growth of 38%, and net revenue of R$1.8 billion with a 31% increase.
- The growth was driven by the successful expansion of business verticals and a 57% activation rate of new clients, reaching 57 million active users.

Asset Quality and Risk Management:
- The company's 90-day past-due loans ratio improved by 10 basis points to 2022 levels, and the credit card MPL showed strong performance with a 30 basis point decrease over the last year.
- This improvement is attributed to enhancements in underwriting models and strong performance in collections, leading to a cost of risk of 4.6%, the lowest since 2022.

Margin Expansion and Efficiency:
- Inter & Co achieved a record net income of R$287 million and a 12.9% ROE, excluding minority interest, driven by a 14.8% efficiency ratio.
- Margin expansion was driven by an increase in net interest income and improved revenue per active client (ARPAC), supported by operational leverage and strategic cost control measures.

Product Expansion and Market Penetration:
- The consumer finance 2.0 portfolio, including Pix financing and buy-now-pay-later, grew by more than five times, reaching R$920 million.
- Private payroll loans reached R$200 million in just 10 days of originations, demonstrating strong demand for these new products and expanding Inter's market share.