Business Context and Reporting Period
Company: Inter & Co, Inc. (INTR)
Filing Type: Form 20-F (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Accounting Standards: International Financial Reporting Standards (IFRS)
Reporting Currency: Brazilian Reais (R$)
Inter & Co is a Cayman Islands holding company controlling a diversified financial services group in Brazil, operating as a digital "SuperApp" with seven verticals: Banking & Spending, Credit, Inter Shop, Investments, Insurance Brokerage, Global, and Loyalty. As of December 31, 2025, the company reported over 43 million total clients and approximately 25 million active clients.
Key Financial Metrics
| Metric (R$ millions) | 2025 | 2024 | Variance |
|---|---|---|---|
| Total Revenues | 8,400.9 | 6,400.2 | +31.3% |
| Net Income | 1,397.3 | 972.8 | +43.6% |
| Net Interest Income & Securities Income | 6,273.8 | 4,456.7 | +40.8% |
| Impairment Losses | (2,416.4) | (1,799.5) | +34.3% |
| SG&A Expenses (Non-GAAP) | 3,631.7 | 2,915.6 | +24.6% |
| Efficiency Ratio (Non-GAAP) | 46.4% | 48.6% | -2.2 p.p. |
| Return on Average Equity (ROAE) | 14.4% | 11.7% | +2.7 p.p. |
| Cost of Risk (Non-GAAP) | 4.9% | 4.7% | +0.2 p.p. |
| Net Interest Margin (NIM) (Non-GAAP) | 7.8% | 7.1% | +0.7 p.p. |
| Gross Loan Portfolio (Non-GAAP) | 52,564.8 | 41,182.8 | +27.6% |
| Total Assets | 98,611.5 | 76,429.7 | +29.0% |
| Cash and Cash Equivalents | 3,801.5 | 1,108.4 | +242.9% |
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased 31.3% to R$8.4 billion, driven by a 68.1% surge in interest income (due to portfolio growth and higher rates) and a 37.4% increase in income from securities, derivatives, and foreign exchange.
- Profitability: Net income rose 43.6% to R$1.4 billion. Profit before tax increased 34.7% to R$1.6 billion.
- Expense Management: While administrative expenses rose 24.4% (driven by data processing and marketing), the Efficiency Ratio improved to 46.4% from 48.6%, indicating better cost control relative to revenue.
- Asset Quality: Impairment losses increased 34.3% to R$2.4 billion, reflecting portfolio growth and higher defaults in the credit card and personal loan segments. However, the Cost of Risk remained stable at 4.9%.
- Loan Portfolio: The Gross Loan Portfolio grew 27.6% to R$52.6 billion. Loans and advances to customers increased 35.8%, while loans to financial institutions decreased 22.8%.
- Capital Adequacy: The Capital Adequacy Ratio (Basel Index) decreased slightly to 14.4% from 15.2%, remaining well above the regulatory minimum of 10.5%.
Guidance, Outlook, and Risks
Management Commentary & Outlook: Management highlighted strong organic client acquisition (1.1 million new active clients per quarter in 2025) and a 58% activation rate. The company is focusing on increasing Average Revenue Per Active Client (ARPAC) through cross-selling and premium service tiers. International expansion continues with a newly approved branch in Miami, Florida, and a Cayman Branch offering time deposits. The company plans to discontinue its Sponsored Level II BDR program in favor of an Unsponsored Level I program to reduce regulatory redundancies.
Key Risks & Contingencies:
- Macroeconomic Environment: High interest rates (SELIC at 14.25% in March 2025) and inflation (IPCA at 4.6%) impact funding costs and consumer demand. The company is exposed to mismatches between interest rates and maturities.
- Credit Risk: Expansion into unsecured personal credit and credit cards increases default risk. The company notes that rising interest rates generally increase the risk of client default.
- Regulatory & Tax: Ongoing Brazilian tax reforms (VAT replacement, dividend taxation) and changes in Central Bank regulations (e.g., CMN Resolution 4,966/21) create uncertainty. The company faces potential liabilities from tax proceedings regarding COFINS and IRPJ/CSLL.
- Operational & Cybersecurity: As a digital-first bank, the company faces significant risks from system failures, cyber-attacks, and data breaches. It relies heavily on third-party cloud providers and AI models.
- Legal Proceedings: The company has provisions of R$55.5 million for labor and civil proceedings, including consumer protection claims related to payroll loans and real estate credit.
Investor Verification Checklist
- Non-GAAP Reconciliations: Verify the reconciliation of Non-GAAP measures (Efficiency Ratio, Cost of Risk, NIM) as the company revised methodologies in 2025, making direct year-over-year comparisons complex.
- Credit Quality Trends: Monitor the ratio of Non-Performing Loans (NPL > 90 days) to the Gross Loan Portfolio (4.7% as of Dec 31, 2025) and the coverage ratio (141%) to assess the adequacy of provisions against rising defaults.
- Regulatory Capital: Confirm the impact of new CMN resolutions on the Capital Adequacy Ratio and the sufficiency of the 14.4% ratio against future loan growth.
- Related Party Transactions: Review Note 34 for loans and securities issued to related parties (e.g., MRV Engenharia, Atletico Mineiro), totaling R$831 million in assets and R$366 million in liabilities.
- Dividend Policy: Note that the company declared a cash dividend of US$0.11 per share in February 2026, but future dividends depend on subsidiary profitability and regulatory capital requirements.
- International Expansion Costs: Assess the financial impact and integration risks of the new US branch and the transition of the BDR program.