United States Securities and Exchange Commission Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of October 2023 Commission File Number 132-02847 INTER & Co, INC. (Exact name of registrant as specified in its charter) N/A (Translation of Registrant’s executive offices) Av Barbacena, 1.219, 22nd Floor Belo Horizonte, Brazil, ZIP Code 30 190-131 Telephone: +55 (31) 2138-7978 (Address of principal executive office) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F ☒ Form 40-F ☐ Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): Yes ☐ No ☒ Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): Yes ☐ No ☒
3Q23 Earnings Release November 6th, 2023
João Vitor Menin Inter&Co CEO CEO Letter | “Another record-breaking quarter” 1 3Q23 Highlights I’m excited to announce another record-breaking quarter. At our Investor Day this past January, we shared our north star of reaching 60 million clients, with 30% ROE, and 30% Efficiency Ratio by 2027, which we called the “60-30-30”. I’m glad to say that we are ahead of schedule in meeting these goals, and well on the path to sustained profitability. During Q3, our diversified business generated a record R$104 million in Net Income, the fourth consecutive quarter of bottom-line growth. We maintained strong momentum in attracting clients, with one million new active clients, increasing our Activation Rate to 52.7%, and bringing our monthly ARPAC to a record R$48. Our accelerated Loan Growth of 29% in an annual comparison is multiple times higher than the industry average, and our Cost of Funding, which is close to 60% of CDI, is among the lowest in the industry. We have reduced our Cost of Risk by 30 bps this quarter by enhancing underwriting practices and collection processes. To understand how we got here, it’s important to remember where we came from: we were the first bank to offer a digital account in Brazil. Since then, our relentless focus on innovating and delivering exceptional value to our clients has led to our remarkable growth and transformation into a financial Super App. Quarter after quarter, our results are showing that we have created a virtuous cycle: the more value we offer to clients, the more they reward us with business across our diversified platform. As our profitability grows, we are empowered to innovate more, and the cycle starts anew. This value creation cycle would not be possible without our employees, the human capital that fuels our creativity, and regulators, who have encouraged innovation to make banking and commerce more efficient and reliable, benefiting individuals, businesses, and the broader economy. We have strong conviction in our strategy and focus on innovation as a driver of sustained growth, profitability, and long-term value for our shareholders – and all our stakeholders. 52.7% +49bps QoQ Activation Rate R$2.1bn +39% YoY Total Gross Revenue R$48 +3% QoQ Gross ARPAC 52.4% +96bps QoQ improvement Efficiency Ratio R$145mm Vs. -70mm 3Q22 EBT Record Since 4Q21 Record Ever Record Ever Record Ever Record Ever 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives
Note: All definitions are in the Glossary section of this Earnings Release. Note 1: “Profit / (loss) before income tax” in the Income Statements of the IFRS Financial Statements. Note 2: “Profit / (loss)” in the Income Statements of the IFRS Financial Statements. Note 3: “Equity” in the Balance Sheet of the IFRS Financial Statements. Highlights of the Quarter 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives 2 3Q23 2Q23 3Q22 ∆QoQ ∆YoY Unit Economics Total Clients mm 29.4 27.8 22.8 5.8% 29.0% Active Clients mm 15.5 14.5 11.6 6.7% 32.8% Gross ARPAC R$ 47.7 46.1 45.9 3.4% 3.9% CTS R$ 12.7 12.5 15.8 1.0% -20.0% CAC R$ 25.9 27.1 28.3 -4.4% -8.5% Income Statement Gross Revenue R$ mm 2,143 1,939 1,540 10.6% 39.2% Net Revenue R$ mm 1,265 1,150 850 10.0% 48.8% Pre Tax Net Income1 R$ mm 145 80 (70) N/M N/M Net Income2 R$ mm 104 64 (30) 62.3% N/M Balance Sheet & Capital Gross Loan Portfolio R$ bn 28.4 26.5 22.0 7.2% 28.8% Funding R$ bn 39.6 35.7 30.7 11.0% 28.9% Shareholders' Equity3 R$ bn 7.4 7.3 7.1 0.7% 3.2% Tier I Ratio % 23.7% 22.8% 29.8% 0.9 p.p. -6.1 p.p. Volume KPIs Cards + PIX TPV R$ bn 219 197 155 11.4% 41.2% GMV Inter Shop R$ mm 869 756 939 15.0% -7.4% AuC R$ bn 83 77 62 7.9% 32.9% Asset Quality NPL > 90 days % 4.7% 4.7% 3.8% 0.0 p.p. 0.9 p.p. NPL 15-90 days % 4.2% 4.2% 4.3% 0.0 p.p. -0.1 p.p. Coverage Ratio % 132% 130% 141% 1.7 p.p. -9.3 p.p. Performance KPIs NIM 1.0 % 7.8% 8.1% 6.4% -0.3 p.p. 1.4 p.p. NIM 2.0 - IEP Only % 9.2% 9.5% 7.4% -0.3 p.p. 1.7 p.p. All-in Cost of Funding % of CDI 61.7% 58.6% 59.0% 3.1 p.p. 2.7 p.p. Fee Income Ratio % 35% 30% 35% 5.1 p.p. 0.7 p.p. Efficiency Ratio % 52% 53% 75% -1.0 p.p. -22.6 p.p. ROE % 5.7% 3.6% -1.7% 2.1 p.p. 7.3 p.p. Variation %
3M A N A G E R I A L R E P O R T | 1 Q 2 3 Strategic Update 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives Operational Leverage Asset Quality Loan Growth Clients and Engagement Unit Economics Bottom Line • Record low Efficiency Ratio of 52.4% • Nearly 100bps improvement, led by administrative expenses • Stronger performance in renegotiations and collection processes • Decrease in cost of risk coupled with expansion in coverage ratio • Continued focus on growing high ROE portfolios • Acceleration in credit cards, leading to 13% Q/Q growth • Increased activation rate by 49bps • Another quarter of + 1 million new active clients • Record high gross ARPAC of R$ 48 • Solid gross margin per active client, reaching 40% annual growth • Record pretax & post income of R$145 and R$104 million, respectively • Growth in organic capital, leading to a CET1 increase to 23.7% A powerful combination of growth and profitability sustained by innovation • Self-reinforcing virtuous cycle • Generating value to all our stakeholders
0 1 2 3 4 5 6 7 8 9 10 1 3 5 7 9 11 13 15 17 19 21 23 Th ou sa nd s M A N A G E R I A L R E P O R T | 3 Q 2 3 Card + PIX TPV per Active Client in R$, monthly Quarters of Relationship 3Q23 1Q21 Primary Bank Relationship % of Active Clients 4 Clients Growth & Engagement Total Clients In Million CAC In R$ 55% 50% 45% 49% 44% 27% 32% 45% 50% 55% 51% 56% 73% 68% 29.0 32.1 28.3 30.4 29.8 27.1 25.9 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 Marketing Costs Operational Costs Unit Economics 3Q23 1Q21 51.8% 51.7% 51.2% 51.0% 51.5% 52.2% 52.7% 9.6 10.7 11.6 12.6 13.5 14.5 15.5 18.6 20.7 22.8 24.7 26.3 27.8 29.4 - 5 .0 1 0. 1 5.0 2 0. 2 5.0 3 0. 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 Active Clients +2.2 mm 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives ~64% Primary Banking Relationship Months of Relationship 35% 45% 55% 65% 75% 85% 1 3 5 7 9 11 13 15 17 19 21 23 25 27 +1.1 mm +0.9 mm +0.9 mm +1.0 mm +1.0 mm +1.0 mm +2.0 mm +1.9 mm +1.6 mm +1.5 mm +1.6 mmFor the third consecutive quarter, we attracted 1.0 million active clients while improving our activation rate, which now stands at 52.7%, a 49 bps increase QoQ. The key to this performance are the continuous enhancements to our onboarding processes, as we prioritize delivering a seamless and frictionless experience, from the initial login to the first deposit, transaction, or purchase. Moreover, we implemented various retention initiatives that led to an increase in user engagement, including maximizing the number of transaction during the first 60 days as clients. Throughout the year, our acquisition strategy has been focused on increasing the number of clients who actively engage in our Super App. By leveraging new channel mix modeling and implementing enriched data to enhance our targeting capabilities, we have successfully attracted a greater number of qualified users with improved efficiency. As a result, we have once again achieved a significant reduction in our Client Acquisition Cost (CAC), which now stands at R$ 25.9. This represents a quarterly reduction of 4.4%.
5 ARPAC 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives M A N A G E R I A L R E P O R T | 3 Q 2 3 0 10 20 30 40 50 60 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 0 15 30 45 60 75 90 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Net ARPAC By Cohort In R$, monthly Gross ARPAC By Cohort In R$, monthly Quarters of RelationshipQuarters of Relationship R$31 Avg. Net ARPAC R$58 Mature Net ARPAC 3Q23 1Q18 R$48 Avg. Gross ARPAC R$90 Mature Gross ARPAC 3Q23 1Q18 ARPAC and CTS Evolution In R$, Monthly Note: All definitions are in the Glossary section of this Earnings Release. 12 11 17 12 16 17 13 13 15 17 18 16 15 23 22 28 32 30 30 32 34 35 32 32 37 44 46 47 46 47 46 46 48 28 28 31 34 34 32 29 31 29 30 31 16 17 14 21 18 16 16 17 14 13 13 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 Cost-to-serve Gross Margin per Active Client (Net of Interest Expenses) Gross Margin per Active Client (Gross of Interest Expenses) Net ARPAC Gross ARPAC As a result of this strategy, our gross monthly ARPAC reached R$48, an all-time record, which combined with our declining cost-to-serve, allowed us to improve our gross margin per active client for the fourth consecutive quarter, reaching R$ 35, 40% higher than in 3Q22. The introduction of new products, such as Global Account, BNPL and PIX Credit, combined with stronger penetration of our legacy products, provides us ample room to further increase the monetization of our clients. Additionally, our credit offering increasingly focuses on high ROE products, including FGTS and Home Equity Loans, further enhancing the sequential increase in our ARPAC by cohorts.
Credit Portfolio Gross Loan Portfolio In R$ Billion + 29% YoY Real Estate Personal SMBs Agribusiness Credit Card Total FGTS Anticip. of CC Receiv. Total Excl. Ant. of CC Receiv. Years Quarters 6 Home Equity Loan Portfolio 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives M A N A G E R I A L R E P O R T | 3 Q 2 3 28% 26% 21% 19% 20% 20% 20% 19%24% 14% 8% 6% 7% 7% 7% 7% 21% 19% 20% 20% 22% 20% 20% 18% 3% 1% 4% 5% 6% 10% 18% 17% 14% 14% 12% 12% 12% 2% 4% 3% 3% 3% 3% 3% 16% 22% 27% 28% 29% 29% 29% 30% 17.2 22.7 21.0 23.8 25.1 27.0 2% 8% 5% 5% 5% 5% 4.8 8.8 17.5 24.5 22.0 25.1 26.5 28.4 0 .0 5 .0 10 .0 15 .0 2 0. 0 2 5. 0 3 0. 0 2019 2020 2021 2022 3Q22 1Q23 2Q23 3Q23 R$ Million Our gross loan portfolio increased 29% YoY, multiple times higher than the market’s rate, reaching R$ 28.4 billion in 3Q23. Notably this quarter we re-accelerated growth in our credit card portfolio by reallocating credit limits from higher-risk to lower-risk individuals and improving loan originations. These actions led to an increase in both the size and the quality of our portfolio, driving client engagement in a core strategic product. 3Q23 2Q23 3Q22 ∆QoQ ∆YoY Gross Loan Portfolio Real Estate 7,528 7,020 5,930 7.2% 26.9% Home Equity 2,031 1,841 1,506 10.3% 34.9% Mortgage 5,497 5,179 4,425 6.1% 24.2% Personal 6,663 6,500 5,057 2.5% 31.7% FGTS 1,631 1,330 434 22.6% N/M Personal excluding FGTS 5,032 5,170 4,623 -2.7% 8.8% SMBs 3,439 3,215 2,979 6.9% 15.4% Credit Cards 8,650 7,681 6,412 12.6% 34.9% Agribusiness 764 724 627 5.5% 21.8% Total 27,044 25,141 21,005 7.6% 28.7% Anticip. Of C.C. Receivables 1,337 1,333 1,030 0.3% 29.8% Total inc. Anticip. Of C.C. Rec. 28,381 26,474 22,035 7.2% 28.8% Variation %
Loan Growth 3Q23 Gross Loan Portfolio Growth and Balance In % QoQ and in R$ Billion 7 Loan Portfolio 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives M A N A G E R I A L R E P O R T | 3 Q 2 3 Note 1: Home Equity includes both business and individuals’ portfolio. Real Estate PersonalCredit Card SMBs Total Loan Portfolio Growth 8.0% R$ 3.4 Bn R$ 5.0 Bn R$ 8.7 Bn FGTS Home Equity1 R$ 1.6 Bn 22.6% 10.3% 6.1% -3% 6.9% R$ 2.0 Bn R$ 5.5 Bn Q oQ G ro w th 12.6% Portfolio Size // We remain focused on growing the more profitable credit products. Two of the fastest- growing portfolios were again FGTS and home equity, which now represent 13% of our loan portfolio. Additionally, as our new collection strategies and credit limit allocation evolves, we were able to reaccelerate credit card portfolio while maintaining resilient asset quality metrics.
8 Note: All definitions are in the Glossary section of this Earnings Release. Note 1: Credit cards are not included since it is a revolving and transactional product. Note 2: Home Equity includes both business and individuals’ portfolio. Note 3: All-in loan rate excluding real estate removes real estate loan revenue and portfolio. Note 4: Including hedge accounting results from each loan portfolio, as of note 27 of IFRS Financial Statements in line “Future and Swaps”. The reconciliation is available on 3Q23 Historical Series. Underwriting1 In R$ Billion Real Estate Personal SMBs Agribusiness Total FGTS Anticip. of CC Receiv. Credit Underwriting Real Estate4 Personal + FGTS4 SMBs All-in Loan Rate Annualized Interest Rates3 In % Home Equity2 10%; 0.6 11%; 0.5 8%; 0.4 8%; 0.5 7%; 0.5 7%; 0.5 7%; 0.5 9%; 0.6 3%, 0.1 3%, 0.1 4%, 0.2 2%, 0.1 3%, 0.2 3%, 0.2 4%, 0.3 4%, 0.3 23%; 1.3 12%, 0.5 13%, 0.6 9%, 0.6 7%, 0.5 6%, 0.4 5%, 0.4 5%, 0.31%, 0.1 3%, 0.1 4%, 0.2 4%, 0.3 6%, 0.4 5%, 0.3 6%, 0.4 51% 2.9 61% 2.7 62% 2.9 47% 3.0 53% 3.8 45% 3.0 40% 2.8 36% 2.5 7%, 0.4 3%, 0.1 6%, 0.3 6%, 0.4 5%, 0.4 2%, 0.1 1%, 0.1 5%, 0.4 5.4 4.1 4.6 4.9 5.6 4.6 4.3 4.5 7%, 0.4 9%, 0.4 3%, 0.2 24%; 1.6 23% 1.6 32% 2.1 38% 2.6 34% 2.4 5.8 4.5 4.7 6.5 7.2 6.8 6.9 6.9 4Q 21 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 12.3% 12.5%12.2% 16.9% 12.5% 16.8% 14.5% 20.6% 25.1%59.3% 72.4% 0 .0 % 10 .0 % 2 0. 0% 3 0. 0% 4 0. 0% 5 0. 0% 6 0. 0% 7 0. 0% 8 0. 0% 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives M A N A G E R I A L R E P O R T | 3 Q 2 3 +6% YoY All-in Loan Rate Excl. Real Estate3 Credit Card exc. Non int. CC Receivables The combination of the shift in underwriting mix, along with the comprehensive repricing efforts, has led to a sequential increase in the implied rates of our loans. In this particular quarter, real estate loans were negatively impacted by exceptionally lower inflation. We expect to reverse to normal levels from 4Q23 onwards.
1.0% 1.1% 1.3% 1.5% 1.5% 1.6% 1.6% 1.0% 1.1% 1.3% 1.5% 1.5% 1.6% 1.6% 0 .0 % 0 .5 % 1. 0% 1. 5% 2 .0 % 2 .5 % 3 .0 % 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 NPL Formation Stage 3 Formation 9 NPLs NPL 15 to 90 days1 In % NPL > 90 days1 In % Note 1: Considering Gross Loan Portfolio, which includes anticipation of C.C. receivables. Note 2: NPL formation is calculated considering: (overdue balance higher than 90 days in the current quarter – overdue balance higher than 90 days in the previous quarter + write-off change in the current quarter) ÷ Credit Portfolio Balance in the previous quarter. Stage 3 Formation = ( Δ Stage 3 Balance + Write-Offs of the period ) ÷ Total Credit Balance of previous period. From 1Q23 onwards IFRS and BACEN GAAP write-off methodology converged. Note 3: Cohorts defined as the first date when the client has his limit available. NPL per cohort = NPL > 90 days balance of the cohort divided by total credit card portfolio of the same cohort. NPL and Stage 3 Formation2 In % Credit Cards NPL 90 days per cohort3 In % Asset Quality 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives 4.5% 4.5% 4.3% 4.1% 4.3% 4.2% 4.2% 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 3.4% 3.8% 3.8% 4.1% 4.4% 4.7% 4.7% 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 M A N A G E R I A L R E P O R T | 3 Q 2 3 Months of Relationship 3 4 5 6 7 8 9 10 11 12 2Q23 4Q21 The ongoing efforts to enhance our credit underwriting and collection processes have enabled us to increase the quality of our data-driven models. As result, we see a positive trend in the asset quality metrics, indicating that the risk profile of the portfolio has improved as result of our strategy. In line with the previous quarter, we observed a positive dynamic in delinquency of credit card clients, as the newer cohorts have shown significantly better performance compared to older ones. We attribute this improvement to our originations approach that prioritizes clients with better credit profile and thoroughly reevaluates limits granted in prior periods. Through this model, we are able to improve the portfolio mix without changing our risk appetite, as reflected by the acceleration in our credit card portfolio growth.
10 Note: All definitions are in the Glossary section of this Earnings Release. Note 1: Considering Gross Loan Portfolio, which includes anticipation of C.C. receivables. 1Q22: managerial number, excluding non-recurrent provision. Coverage Ratio In % 4.8% 5.1% 5.0% 4.5% 5.6% 6.2% 5.9% 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 126% 129% 141% 132% 131% 130% 132% 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 Cost of Risk & Coverage Ratio Cost of Risk1 In % 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives M A N A G E R I A L R E P O R T | 3 Q 2 3 The increasing quality of our risk management, underwriting and collection processes can also be seen in the performance of our cost of risk metric, which improved 30 bps this quarter. This trend gave us confidence to re-accelerate the underwriting of credit cards, which plays a key role in the value proposition of our Super App offering. Our coverage ratio shows the resilience and strength, especially given the substantial collateralization, of our credit portfolio. This quarter it increased 200bps, reaching 132%, in line with the historical average.
All-in Cost of Funding In %, Annualized 11 Deposits Avg. CDI of Quarter All-in Cost of Funding All-in Cost of Funding % of CDI 7.6% 10.3% 12.4% 13.5% 13.7% 13.7% 13.7% 13.3% 4.6% 5.6% 7.1% 7.9% 7.5% 8.1% 8.0% 8.2% 60.0% 54.9% 57.3% 59.0% 54.8% 59.7% 58.6% 61.7% 4Q 21 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 Funding 1 Note 1: Includes Conta com Pontos correspondent balance and demand deposits. Note 2: Excluding Conta com Pontos balance. Note 3: Includes saving deposits, creditors by resources to release and liabilities with financial institutions (securities sold under agreements to repurchase, interbank deposits and borrowing and onlending). 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives 30%, 2.1 47% 6.7 43% 9.9 36% 11.6 34% 10.4 33% 11.0 33% 11.7 31% 12.332%, 2.3 33%; 4.8 30% 6.9 32% 10.5 31% 9.6 35% 11.7 36% 13.0 38% 15.1 25%; 1.7 12%; 1.7 16%; 3.6 19% 6.2 23% 6.9 20% 6.6 20% 7.0 19% 7.5 13%; 0.9 8%; 1.1 11%; 2.6 13%; 4.2 12%; 3.8 13%; 4.2 11%; 3.9 12%, 4.7 7.0 14.3 23.0 32.5 30.7 33.5 35.7 39.6 20 19 20 20 20 21 20 22 3Q22 1Q23 2Q23 3Q23 Transactional accounts Time deposi ts Securities issued Other 3 Funding In R$ Billion M A N A G E R I A L R E P O R T | 3 Q 2 3 2 See more about the Funding methodology in our 3Q23 Historical Series Spreadsheet + 29% YoY The strength of our funding franchise continues to be on of our key competitive advantages. This quarter alone, we added nearly R$ 4 billion of new funding, an 11% quarterly growth and 29% on an annual basis. This quarter was the first one with “Conta com Pontos” operating during the entire period. Currently, the program balance stand at nearly 80% of total transactional accounts in the 3Q23. Our all-in cost of funding stood at 61.7% of CDI in the quarter, continuing to be an industry- leading indicator among Brazilian banks and fintechs.
12 Net Interest Margin See more about the NIM methodology in our 3Q23 Historical Series Spreadsheet Impacted by IPCA Total Revenue Impacted by IPCA 6.9% 7.0% 6.4% 7.2% 7.4% 8.1% 7.8% 0 .0 % 1. 0% 2 .0 % 3 .0 % 4 .0 % 5 .0 % 6 .0 % 7 .0 % 8 .0 % 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 8.0% 8.1% 7.4% 8.4% 8.7% 9.5% 9.2% 0 .0 % 2 .0 % 4 .0 % 6 .0 % 8 .0 % 10 .0 % 12 .0 % 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 Financial Performance 70% 65% 74% 75% 65% 64% 65% 67% 69% 70% 65%30% 35% 26% 25% 35% 36% 35% 33% 31% 30% 35% 417 467 607 731 834 877 850 1,002 1,024 1,150 1,265 544 636 837 1,100 1,281 1,461 1,540 1,704 1,800 1,939 2,143 0 5 0 10 0 0 15 0 0 2 0 0 1Q21 2Q21 3Q21 4Q 21 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 Net Interest Income Net Fee Revenue Total Net Rev enue Total Gross Revenue 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives M A N A G E R I A L R E P O R T | 3 Q 2 3 NIM 2.0 – IEP Only In % Revenue In R$ Million Impacted by IPCA Impacted by IPCA NIM 1.0 - IEP + Non-int. CC Receivables In % Our NIMs achieved the second highest quarterly level ever. On a QoQ basis, it had a slight decrease driven by specific impacts, such as the lower inflation in the period, primarily affecting real estate loan revenue, and higher volume of renegotiations in our credit card product, which in turn also contributed to lower the Cost of Risk. Gross revenues had another record quarter, surpassing R$ 2.1 billion. As we continue to attract new clients, actively reprice our portfolio, build new cross-selling opportunities and leverage our capital structure, we expect this positive trend to continue in the coming quarters.
13 Fee Revenue Fee Income & Fee Income Ratio In R$ Million & In % of Total Net Revenues 290 316 295 327 313 348 447 34.8% 36.0% 34.7% 32.6% 30.5% 30.3% 35.3% - 30 % - 20 % - 10 % 0 % 10 % 2 0% 3 0% 4 0% 0 10 0 2 0 3 0 4 0 5 0 6 0 7 0 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 Net fee income Fee Income Ratio 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives M A N A G E R I A L R E P O R T | 3 Q 2 3 R$ Million +100 mm A detailed description of the Financial Statements notes of Fees is shown below. Our fees had an excellent quarter, growing 28% and delivering another record. The higher growth was a result of the strong performance of interchange and commission revenue lines, mainly due to TPV and insurance expansion, reflecting in a 5 p.p. fee income ratio increase in one single quarter. 3Q23 2Q23 3Q22 ∆QoQ ∆YoY Net result from services and commissions Interchange 214 186 161 15.5% 32.8% Interchange from debit and credit cards Comission 143 117 123 22.5% 16.4% Inter Shop, Seguros, Invest and Global Commissions Banking 24 22 17 9.8% 42.7% Business Account fees and Credit underwriting fees Management (Inter DTVM & Asset) 21 13 6 56.9% 258.1% Inter Invest management and admininstration fees Other 21 21 4 N/M 495.1% Banking related commission fees Securities placement 0 5 17 -93.5% -98.0% DCM operation fees Total revenues from services and commissions 423 363 327 16.5% 29.4% Cashback expense (48) (58) (76) -16.6% -36.7% Cashback expense from all products Inter Rewards (27) (7) 0 N/M N/M Inter Loop expenses excluding cost of funding Other expenses (32) (32) (33) 1.7% -3.4% Withdrawls, Real Estate commissioning and others Total 316 267 217 18.3% 45.4% Other revenues Performance 49 28 31 74.3% 58.1% MasterCard, Liberty and B3 deals performance fees Capital gains (losses) 25 6 3 N/M N/M Payments for overdelivered performance Foreign exchange 27 26 31 1.8% -14.4% Exchange revenues, including USEND Other 31 21 13 47.2% 134.4% Other revenues Total 131 81 78 61.9% 69.2% Net Fee Income 447 348 295 28.4% 51.7% Variation % Description
Other3 14 Expenses Data Processing5 Advertising & marketing Personnel4 M&A2 Expenses Excl. M&A & SBC D&A Share-based comp.2 Expenses Breakdown1 In R$ Million Note 1: IFRS Financial Statements lines: “Personnel expenses”, “Depreciation and Amortization”, “Administrative Expenses”. Note 2: Share-based and M&A Expenses are included in Personnel Expenses in the Income Statement. Note 3: Others = third party services; rent, condominium fee and property maintenance; provisions for contingencies and Financial System services. Note 4: Personnel Expenses excluding Share-based and M&A Expenses. Salaries and benefits (including Board). Note 5: Data processing and information technology. 190 159 169 190 178 209 200 190 45 43 32 23 40 20 21 22 19 36 36 36 56 38 41 41 146 141 149 160 189 156 170 191 202 175 148 166 171 157 127 151 602 555 533 576 634 579 559 59412 8 43 6 10 81 4 12 8 8 10 6 11 603 558 557 592 685 596 575 614 - 50 5 0 15 0 2 50 3 50 4 50 5 50 6 50 7 50 4Q 21 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives M A N A G E R I A L R E P O R T | 3 Q 2 3 R$ Million Total Expenses 3Q23 2Q23 3Q22 ∆QoQ ∆YoY Expenses Data processing and information technology 190 200 190 -5% 0% Personnel expenses 191 170 160 12% 19% Others 138 119 137 16% 1% Financial System services 13 8 29 58% -56% Depreciation and amortization 41 41 36 -1% 14% Advertising and marketing 22 21 23 4% -6% Expenses Excl.M&A & SBC 594 559 576 6.4% 3.3% Share based compensation 11 6 8 91% 40% M&A expenses 8 10 8 -19% 29% Total Expenses 614 575 592 6.8% 3.8% Advertisement and public relations expenses Stock options and share compensation Variation % Description Reimbursement, communication and portability Salaries and benefits (including Board) Data centers, systems maintenance, communicantion Deferred M&A compensation related to USEND Wire transfers and overdraft Since 1Q23, we have been implementing a series of cost control initiatives that are yielding strong results. Efforts such as headcount reduction, renegotiation of contracts with suppliers and marketing optimization were set in place with squads dedicated to each of the main expense items. As our profitability increased, our personnel expense line reflected an increase in compensation associated with accrued bonuses and profit share agreements.
15Note: All definitions are in the Glossary section of this Earnings Release. Note 1: Including interns. Efficiency Ratio In % Efficiency Cost-to-Serve In R$, monthly Active Clients per Employee1 In Thousand Our efficiency ratio also achieved a record level of 52%, decreasing 1 p.p. on a quarterly basis. 21.2 17.5 15.7 15.8 17.1 13.8 12.5 12.7 0. 0 5. 0 10. 0 15. 0 20 .0 25. 0 4Q 21 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 2.3 2.5 2.6 2.9 3.1 3.5 4.2 4.7 0. 0 0. 5 1.0 1.5 2. 0 2. 5 3. 0 3. 5 4. 0 4. 5 5. 0 4Q 21 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 88.3% 71.9% 68.3% 75.0% 73.4% 62.4% 53.4% 52.4% 21.5% 18.7% 21.2% 22.3% 25.7% 18.0% 17.3% 18.0% 66.8% 53.2% 47.1% 52.7% 47.7% 44.3% 36.1% 34.4% 10 % 2 0% 3 0% 4 0% 5 0% 6 0% 7 0% 8 0% 9 0% 4Q 21 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 Total Personnel Eff. Ratio Administrative Eff. Ratio -20% YoY 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives M A N A G E R I A L R E P O R T | 3 Q 2 3 R$ Million +0.5 Boosting operational leverage continues to be one of our main objectives. We delivered 100 bps of operational leverage improvement, driven by effectively managing our administrative expenses, which increased by 5%, while our net revenues grew at twice that rate. 3Q23 2Q23 3Q22 ∆QoQ ∆YoY Total net revenues 1,265 1,150 850 10.0% 48.8% Net interest income 819 802 556 2.1% 47.3% Net result from services and commissions 316 267 217 18.3% 45.4% Other revenues 131 81 78 61.9% 69.2% Tax expenses (94) (72) (62) 29.8% 52.9% Total expenses (614) (575) (592) 6.8% 3.8% Personal expenses (211) (186) (176) 13.1% 19.5% Depreciation and amortization (41) (41) (36) -1.3% 14.0% Administrative expenses (363) (348) (380) 4.3% -4.5% Efficiency Ratio 52% 53% 75% -1 p.p. -23 p.p. Personnel Efficiency Ratio 18% 17% 22% 1 p.p. -4 p.p. Administrative Efficiency Ratio 34% 36% 48% -2 p.p. -14 p.p. Variation %
16 Earning Before Tax & Net Income1 In R$ Million | Inter&Co Net Income (56) (29) 16 (30) 29 24 64 104 23 -110 -60 -10 40 90 140 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives Note 1: Adjusted Net Income for the third quarter of 2022 is presented for illustrative purposes only and does not reflect our actual results. Adjusted Net Income for the third quarter of 2022 has been adjusted as if the deflation in the third quarter of 2022 had actually been the average inflation projected for each quarter of 2023 in the Brazilian Central Bank Focus Report. M A N A G E R I A L R E P O R T | 3 Q 2 3 1 -111 -100 12 -70 -20 6 80 145 -2.6% -1.4% 0.8% -1.7% 1.6% 1.4% 3.6% 5.7% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% -150 -100 -50 0 50 100 150 200 EBT Net Income ROE We are proud to report another quarter of Net Income and EBT records, reaching R$ 104 and R$ 145 million, respectively. We believe that we have entered a virtuous cycle that is self-reinforcing as we further advance in our strategy, positioning us ahead of schedule in our 60/30/30 goals announced in our 2023 Investor Day.
17 RWA & Tier-I Ratio In R$ Million & In % Capital Ratio Tier-I Ratio In % 32.9% 29.8% 24.1% 23.0% 22.8% 23.7% 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 Capital Consumption 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives M A N A G E R I A L R E P O R T | 3 Q 2 3 +0.9 p.p. Source: 3Q23 Banco Inter Bacen GAAP Financial Statements.. One of our key competitive advantages continues to be our strong capital base. Our regulatory capital is fully comprised of high-quality Tier I, with no hybrid instruments. To maintain this advantage over time, we established a framework of ROE-driven policies based on return on allocated capital. This quarter, the combination of our expanding profitability, together with changes in BACEN capital rules, led to an increase in our CET1 to 23.7%. 3Q23 2Q23 3Q22 ∆QoQ ∆YoY Reference Equity - Tier I (RE) 5,964 5,960 7,162 0.1% -16.7% Risk-Weighted Asset (RWA) 25,122 26,111 24,039 -3.8% 4.5% Capital Requirement 4,648 4,831 4,447 -3.8% 4.5% Margin on Capital Requirements 9,290 9,178 11,800 1.2% -21.3% Tier-I Ratio (RE/RWA) 23.7% 22.8% 29.8% 1 p.p. -6 p.p. Variation %
18 Banking & Spending +23% +30% +43% +41% % YoY +17% +8% +12% +12% +11% % QoQ +4% BANKING & SPENDING SHOP INVEST INSURANCE GLOBALCREDIT R$870mm R$344mmR$83bn 1.8mm+R$28bn +219bn Note 1: Height of PIX volume was reduced to fit on page. 62% 62% 61% 58% 55% 54% 54% 55% 54% 53% 51%38% 38% 39% 42% 45% 46% 46% 45% 46% 47% 49% 8 9 12 14 14 16 17 19 18 20 21 37 58 80 94 97 118 138 158 163 177 198 44 67 92 109 111 134 155 178 181 197 219 0 10 20 30 40 50 60 1Q21 2Q21 3Q21 4Q 21 1Q22 2Q22 3Q22 4Q 22 1Q23 2Q23 3Q23 Debit Credit PI X Our ecosystem 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives LOYALTY 4mm M A N A G E R I A L R E P O R T | 3 Q 2 3 Cards + PIX TPV Gross loan portfolio GMV 8.7% Net Take-Rate AuC Strong AuC growth Consortium High margin business Global Clients Brazilian diaspora as main focus Clients Attractive new revenue stream Cards + PIX TPV1 In R$ Billion Through a simple and seamlessly integrated digital experience, our clients have access to a complete solution to manage their entire needs with a suite of commercial and financial products within a single Super App, which includes: In the 3Q23, more than R$ 219 billion were transacted in our platform through PIX, debit and credit cards. In this quarter we saw a strong acceleration of TPV, specially in credit cards, reaching 30% growth in the annual comparison. Our PIX market share remains strong at 8%. The card TPV mix between credit and debit had has been improving since 4Q22, resulting in a larger interchange revenue.
3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives Inter Seguros Active Contracts & Net Revenue In Million & R$ Million Inter Global AuC & Deposits in US Dollars In USD Millions Inter Shop Active Clients & Net Take-Rate In Million & In % Inter Invest Active Clients & AuC In Million & In R$ Billion 5.1% 8.7% 2.2 2.9 3Q22 3Q23 Inter Shop Acti ve Clients 31.2 46.9 1.1 1.6 -0.5 0.0 0.5 1.0 1.5 0. 0 10. 0 20 .0 30 .0 40 .0 50 .0 60 .0 70 .0 80 .0 90 .0 3Q22 3Q23 Inter Seguros Active Contracs 62.3 82.9 2.4 4.2 -3. 00 -2. 00 -1.0 0 0. 00 1.0 0 2. 00 3. 00 4. 00 5. 00 30 .0 0 40 .0 0 50 .0 0 60 .0 0 70 .0 0 80 .0 0 90 .0 0 100 .0 0 110. 00 120 .0 0 130 .0 0 3Q22 3Q23 Inter I nvest Active Clients 56 272 3Q22 3Q23 Loyalty M A N A G E R I A L R E P O R T | 3 Q 2 3 19 Inter Seguros had another record-breaking quarter, generating nearly R$ 47 million in net revenue. An important highlight for this quarter is our consortium product, which increased 113% YoY, reaching R$ 334 million portfolio. We also increased the number of active clients by 40% when comparing to last year. Our global vertical had another quarter of strong success, growing 3.7 times the client base when compared to last year, achieving nearly 2.0 million clients. The strong adoption of these products is the result of the continuous UX improvement, which starts by focusing on Brazilians who travel and invest in the US. On Inter Shop, we reached 2.9 million clients transacting in the 3Q. We also reaccelerated GMV after two quarters, reaching a 15% QoQ growth. We continue to foster end-to-end transactions, which allows us to improve our pricing power, and as result we delivered another quarter with strong net take rate, reaching 8.7%, 3.6 p.p. YoY improvement. With a simpler and accessible product offering, we increased our client base to 4.2 million in 3Q23, while our AuC reached R$ 83 billion. Third-party fixed income distribution continues to be an important growth driver, reaching more than R$ 8.2 billion, representing a 11% QoQ increase. We are continuously focused on scaling up our 7th vertical, which achieved nearly 4.0 million active clients in this quarter. Inter Loop clients also demonstrated better profiles, being more engaged and spending on average 1.6 times more than other clients.
20 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives M A N A G E R I A L R E P O R T | 3 Q 2 3 Climate Change Financial Education Vida Sustentável Corporate Governance ESG Initiatives For the fourth consecutive year, we have received the gold seal from the GHG Protocol for our greenhouse gas (GHG) emissions reporting. This demonstrates our effort, commitment, and transparency as a company that cares about climate change. In the last report, we released scopes 1, 2, and 3, with external verification of all data. In addition to measuring the climate impact of our operations, we continuously work on mitigating and offsetting greenhouse gas emissions. As a result, we have fully offset 100% of the reported emissions in accordance with the GHG Protocol by purchasing carbon credits from Eco Parks, verified by CDM/UNFCC, and by using renewable energy in our headquarters As a result of the efforts of the Inter Financial Education Taskforce, we have launched the “+Valor Social” project. The project aims to promote financial education among socioeconomically vulnerable populations through a course delivered by Inter Volunteers. In order to measure the project's impact and align with Sustainable Development Goal (SDG) 4, Quality Education, the project aims to reach 100,000 people by 2030. In order to further integrate the ESG agenda at a strategic level, we have launched new features in the “Vida Sustentável” section of the Super App. Now, customers have the option to donate their cashback to internationally recognized social institutions such as ChildFund, WWF, and Doctors Without Borders. We have also created a digital education section with free content on privacy and digital security. 20% Compared to 2021, considering the same reported categories We reduced our greenhouse gas emissions by: Our Board of Directors approved the Inter&Co Clawback Policy. According to the policy, in the event of adjustments to the financial statements (accounting restatements), executives who have received incentive compensation based on the adjusted numbers must refund to the company the amounts that exceed those due based on the adequate numbers. This measure reinforces our commitment to transparency in the disclosure of information to our stakeholders and the integrity of our operations.
21 Balance Sheet R$ Million 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives M A N A G E R I A L R E P O R T | 3 Q 2 3 3Q23 3Q22 Variation % 09/30/2023 09/30/2022 ∆YoY Balance Sheet Assets Cash and cash equivalents 4,297 838 413% Amounts due from financial institutions 3,474 3,418 2% Compulsory deposits 2,191 2,686 -18% Securities 14,908 13,373 11% Derivative financial instruments 9 1 1516% Net loans and advances to customers 25,297 19,821 28% Non-current assets held-for-sale 169 166 2% Equity accounted investees 72 77 -6% Property and equipment 174 194 -10% Intangible assets 1,322 1,209 9% Deferred tax assets 1,071 873 23% Other assets 2,094 1,188 76% Total assets 55,079 43,844 26% Liabilities Liabilities with financial institutions 9,418 7,349 28% Liabilities with clients 29,064 21,452 35% Securities issued 7,463 6,917 8% Derivative financial liabilities 21 40 -48% Other liabilities 1,745 945 85% Total Liabilities 47,711 36,704 30% Equity Total shareholder's equity of controlling shareholders 7,260 7,044 3% Non-controlling interest 108 96 12% Total shareholder's equity 7,368 7,140 3% Total liabilities and shareholder's equity 55,079 43,844 26%
22 Income Statement R$ Million M A N A G E R I A L R E P O R T | 3 Q 2 3 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives Variation % 3Q23 3Q22 ∆YoY Income Statement Interest income from loans 1,107 788 40% Interest expenses (770) (580) 33% Income from securities and derivatives 482 347 39% Net interest income 819 556 47% Revenues from services and commissions 348 250 39% Expenses from services and commissions (32) (33) -3% Other revenues 131 78 69% Revenue 1,265 850 49% Impairment losses on financial assets (408) (263) 55% Net result of losses 858 587 46% Administrative expenses (363) (380) -4% Personnel expenses (211) (176) 20% Tax expenses (94) (62) 53% Depreciation and amortization (41) (36) 14% Income from equity interests in affiliates (4) (4) 5% Profit / (loss) before income tax 145 (70) N/M Income tax and social contribution (41) 40 N/M Profit / (loss) 104 (30) N/M
Activation rate: Number of active clients at the end of the quarter Total number of clients at the end of the quarter Active clients: We define an active client as a customer at any given date that was the source of any amount of revenue for us in the preceding three months, or/and a customer that used products in the preceding three months. For Inter insurance, we calculate the number of active clients for our insurance brokerage vertical as the number of beneficiaries of insurance policies effective as of a particular date. For Inter Invest, we calculate the number of active clients as the number of individual accounts that have invested on our platform over the applicable period. Active clients per employee: Number of active clients at the end of the quarter Total number of employees at the end of the quarter, including interns Card+PIX TPV: PIX, debit and credit cards and withdrawal transacted volumes of a given period. PIX is a Central Bank of Brazil solution to bring instant payments among banks and financial institutions in Brazil. Card+PIX TPV per active client: Card+PIX TPV for a given period divided by the number of active clients as of the last day of the period. Client acquisition cost (CAC): The average cost to add a client to the platform, considering operating expenses for opening an account, such as onboarding personnel, embossing and sending cards and digital marketing expenses with a focus on client acquisition, divided by the number of accounts opened in the quarter. Global Services Clients: Includes Brazilian Global Account clients, US clients and international investors. Gross merchandise volume (GMV): Gross merchandise value, or GMV, for a given period as the total value of all sales made or initiated through our Inter Shop & Commerce Plus platform managed by Inter Shop & Commerce Plus. Gross take rate: Inter Shop gross revenue GMV Net take rate: Inter Shop net revenue GMV Primary banking relationship: A client who has 50% or more of their income after tax for that period flowing to their bank account with us during the month. 23 Glossary | Operational definitions M A N A G E R I A L R E P O R T | 3 Q 2 3 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives
Administrative efficiency ratio: Administrative expenses +Depreciation and amortization Net Interest Income+Net result from services and comissions +Other revenue −Tax expense Annualized interest rates: Yearly rate calculated by multiplying the quarterly interest by four, over the average portfolio of the last two quarters. All-in loans rate considers Real Estate, Personal +FGTS, SMBs, Credit Card, excluding non-interest earnings credit card receivables, and Anticipation of Credit Card Receivables. Antecipation of credit card receivables: Disclosed in note 9.a of the Financial Statements, line " "Loans to financial institutions”. ARPAC gross of interest expenses: (Interest income+ (Revenue from services and comissions − Cashback − Inter rewards) + Income from securities and derivarives +Other revenue) ÷ 3 Average of the last 2 quarters Active Clients ARPAC net of interest expenses: (Revenue − Interest expenses) ÷ 3 Average of the last 2 quarters Active Clients ARPAC per quarterly cohort: Total Gross revenue net of interest expenses in a given cohort divided by the average number of active clients in the current and previous periods1. Cohort is defined as the period in which the client started his relationship with Inter. 1 - Average number of active clients in the current and previous periods: For the first period, is used the total number of active clients in the end of the period. Assets under custody (AuC): We calculate assets under custody, or AUC, at a given date as the market value of all retail clients’ assets invested through our investment platform as of that same date. We believe that AUC, as it reflects the total volume of assets invested in our investment platform without accounting for our operational efficiency, provides us useful insight on the appeal of our platform. We use this metric to monitor the size of our investment platform. Card fee revenue: It is part of the “Revenue from services and commission” and “Other revenue” on IFRS Income Statement. Cost of funding: Interest expenses × 4 Average of last 2 quarters Interest bearing liabilities (demand deposits, time deposits, savings deposits, creditors byresources to release, securities issued, securities soldunder agreements to repurchase, interbank deposits and others) 24 Glossary | Financial measures reconciliation M A N A G E R I A L R E P O R T | 3 Q 2 3 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives
Cost of risk: Impairment losses on Qinancial assets × 4 Average of last 2 quarters of Loans and advances to customers Cost of risk excluding anticipation of credit card receivables: Impairment losses on Qinancial assets × 4 Average of last 2 quarters of Loans and advances to customers excluding anticipation of credit card receivables Cost of risk excluding credit card: Impairment losses on Qinancial assets × 4 Average of last 2 quarters of Loans and advances to customers excluding credit card Cost-to-serve (CTS): (Personnel Expense +Administrative Expenses − Total CAC) ÷ 3 Average of the last 2 quarters Active Clients Coverage ratio: Provision for expected credit loss Overdue higher than 90 days Earning portfolio (IEP): Earnings Portfolio includes “Amounts due from financial institutions” + “Loans and advances to customers” + “Securities” + “Derivatives” from the IFRS Balance Sheet Efficiency ratio: Personnel expense +Administrative expenses +Depreciation and amortization Net Interest Income+Net result from services and comissions + Other revenue −Tax expense Fee income ratio: Net result from services and commissions + Other revenue Net Interest Income+Net result from services and comissions + Other revenue −Tax expense Funding: Demand Deposits + Time Deposits + Securities Issued + Savings Deposits + Creditors by Resources to Release + Securities sold under agreements to repurchase + Interbank deposits +Borrowing and onlending 25 Glossary | Financial measures reconciliation M A N A G E R I A L R E P O R T | 3 Q 2 3 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives
Gross loan portfolio: Loans and Advance to Customers + Loans to Qinancial institutions Gross margin per active client gross of interest expenses: ARPAC gross of interest expenses –Cost to Serve Gross margin per active client net of interest expenses: ARPAC net of interest expenses –Cost to Serve Net fee income: Net result from services and commissions + Other revenue Net interest income: Interest Income+ Interest Expenses + Income from securities and derivatives Net revenue: Net interest income + Net result from services and commissions + Other revenue NIM 1.0 – IEP + Non-interest Credit Cards Receivables: Net interest income x 4 Average of 2 Last Quarters Earning Portfolio (Loans to Qinancial institutions + Securities + Derivatives + Net loans and advances to customers NIM 2.0 – IEP Only: Net interest income x 4 Average of 2 Last Quarters Earning Portfolio − Non− interest − Bearing Credit Cards Receivables (Amounts due from Qinancial institutions + Securities + Derivatives + Net loans and advances to customers – Credit card transactor portfolio) NPL 15 to 90 days: Overdue 15 to 90 days Loans and Advance to Costumers + Loans to Qinancial institutions 26 Glossary | Financial measures reconciliation M A N A G E R I A L R E P O R T | 3 Q 2 3 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives
NPL > 90 days: Overdue higher than 90 days Loans and Advance to Costumers + Loans to Qinancial institutions NPL formation: Overdue balance higher than 90 days in the current quarter –Overdue balance higher than 90 days in the previous quarter +Write − off change in the current quarter Total loans and advance to customers in the previous quarter Personal efficiency ratio: Personnel expense Net Interest Income+Net result from services and comissions + Other revenue −Tax expense Return on average equity (ROE): (ProQit / (loss) for the quarter)× 4 Average of last 2 quarters of total shareholder`s equity SG&A: Administrative Expenses + Personnel Expenses + Depreciation and Amortization Stage 3 formation: Stage 3 balance in the current quarter – Stage 3 balance in the previous quarter +Write − off change in the current quarter Total loans and advance to customers in the previous quarter Tier I ratio: Tier I referential equity Risk weighted assets Total gross revenue: Interest income + Revenue from services and commissions − Cashback expenses − Inter rewards + Income from securities and derivatives + Other revenue 27 Glossary | Financial measures reconciliation M A N A G E R I A L R E P O R T | 3 Q 2 3 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives
28 Disclaimer M A N A G E R I A L R E P O R T | 3 Q 2 3 This report may contain forward-looking statements regarding Inter, anticipated synergies, growth plans, projected results and future strategies. While these forward-looking statements reflect our Management’s good faith beliefs, they involve known and unknown risks and uncertainties that could cause the company’s results or accrued results to differ materially from those anticipated and discussed herein. These statements are not guarantees of future performance. These risks and uncertainties include, but are not limited to, our ability to realize the amount of projected synergies and the projected schedule, in addition to economic, competitive, governmental and technological factors affecting Inter, the markets, products and prices and other factors. In addition, this presentation contains managerial numbers that may differ from those presented in our financial statements. The calculation methodology for these managerial numbers is presented in Inter’s quarterly earnings release. Statements contained in this report that are not facts or historical information may be forward-looking statements under the terms of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may, among other things, beliefs related to the creation of value and any other statements regarding Inter. In some cases, terms such as “estimate”, “project”, “predict”, “plan”, “believe”, “can”, “expectation”, “anticipate”, “intend”, “aimed”, “potential”, “may”, “will/shall” and similar terms, or the negative of these expressions, may identify forward looking statements. These forward-looking statements are based on Inter's expectations and beliefs about future events and involve risks and uncertainties that could cause actual results to differ materially from current ones. Any forward-looking statement made by us in this document is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. For additional information that about factors that may lead to results that are different from our estimates, please refer to sections “Cautionary Statement Concerning Forward-Looking Statements” and “Risk Factors” of Inter&Co Annual Report on Form 20-F. The numbers for our key metrics (Unit Economics), which include active users, as average revenue per active client (ARPAC), cost to serve (CTS), are calculated using Inter’s internal data. Although we believe these metrics are based on reasonable estimates, but there are challenges inherent in measuring the use of our business. In addition, we continually seek to improve our estimates, which may change due to improvements or changes in methodology, in processes for calculating these metrics and, from time to time, we may discover inaccuracies and make adjustments to improve accuracy, including adjustments that may result in recalculating our historical metrics. About Non-IFRS Financial Measures To supplement the financial measures presented in this press release and related conference call, presentation, or webcast in accordance with IFRS, Inter&Co also presents non-IFRS measures of financial performance, as highlighted throughout the documents. The non-IFRS Financial Measures include, among others: Adjusted Net Income, Cost to Serve, Cost of Funding, Efficiency Ratio, Underwriting, NPL > 90 days, NPL 15 to 90 days, NPL and Stage 3 Formation, Cost of Risk, Coverage Ratio, Funding, All-in Cost of Funding, Gross Merchandise Volume (GMV), Premiuns, Net Inflows, Global Services Deposits and Investments, Fee Income Ratio, Client Acquisition Cost, Cards+PIX TPV, Gross ARPAC, Net ARPAC, Marginal NIM 1.0, Marginal NIM 2.0, Net Interest Margin IEP + Non-int. CC Receivables (1.0), Net Interest Margin IEP (2.0), Cost-to-Serve. A “non-IFRS financial measure” refers to a numerical measure of Inter&Co’s historical or financial position that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with IFRS in Inter&Co’s financial statements. Inter&Co provides certain non-IFRS measures as additional information relating to its operating results as a complement to results provided in accordance with IFRS. The non-IFRS financial information presented herein should be considered together with, and not as a substitute for or superior to, the financial information presented in accordance with IFRS. There are significant limitations associated with the use of non-IFRS financial measures. Further, these measures may differ from the non-IFRS information, even where similarly titled, used by other companies and therefore should not be used to compare Inter&Co’s performance to that of other companies. 3Q23 Highlights Asset Quality Funding Capabilities Financial Performance Loan Portfolio Strategic Updates Unit Economics Capital Ratio Business Verticals AppendixESG initiatives
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INTER & Co, INC. By: /s/ Santiago Horacio Stel Name: Santiago Horacio Stel Title: Senior Vice President of Finance and Risks Date: November 6, 2023