Brazilian digital bank Inter & Co posted record profit and revenue figures in the second quarter, beating analyst estimates while total clients approached 28 million. Shares rallied.
(Bloomberg) — Brazilian digital bank Inter & Co posted record profit and revenue figures in the second quarter, beating analyst estimates while total clients approached 28 million. Shares rallied.
Revenue grew 33% year-on-year to 1.9 billion reais ($386.7 million) while net income was 64 million reais. Analysts surveyed by Bloomberg had expected 1.1 billion reais in sales and 32.2 million reais in profit. Total clients grew by 1.5 million in the quarter to nearly 27.8 million while raising the percentage of “active users” that are using more services on the “super app” to 52.2% of the total.
“It was a record quarter for all of our key metrics and one that paves the way for those to come,” CEO Joao Vitor Menin said in an interview. “We managed to grow and innovate at the same time.”
Inter, which has a five-year plan to double its client base and expand its credit portfolio four-fold, will look to keep growing organically without acquisitions or the need to raise more capital in the market, Menin said. Its technology team, which is about 33% of the 3,400 employees, continues to grow the banking and services platform with new features like a loyalties program and the ability to use the application globally.
Inter shares gained as much as 10% in New York after the release and are trading at the highest since September, according to data compiled by Bloomberg.
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Non-performing loans over 90 days rose to 4.9% in the quarter, though Menin said it was likely a peak and that metrics will begin to improve in the second half. The default rate on loans between 15 to 90 days declined in the quarter to 4.4%. Overall, the loan portfolio grew 5.4% from the previous quarter to 26.5 billion reais.
After jacking the key interest rate up to 13.75% and leaving it unchanged for a year, the Brazilian central bank cut by 50 basis points earlier this month, ushering the way for further easing going forward and taking some pressure off of consumers and lenders.
Expenses declined for the second consecutive quarter to 575 million reais, in part due to a decrease in headcount to 3,400 in June from 3,800 at the end of March.
(Adds shares in fifth paragraph.)
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