Slide 1: 2Q23 Institutional Presentation
2Q23 Institutional Presentation
Slide 2: Disclaimer
2Q23 Institutional Presentation August 14th, 2023 INSTITUTIONAL PRESENTATION | 2Q23 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 f
Slide 3: Agenda
Agenda 1. Company Overview 2. Competitive Advantages 3. Business Verticals 4. Lending and Financing 5. Financials 6. ESG Updates
Slide 4: Agenda: Company Overview
Agenda 1. Company Overview 2. Competitive Advantages 3. Business Verticals 4. Lending and Financing 5. Financials 6. ESG Updates
Slide 5: Branch-based banks versus 100% digital model
Agenda 1. Company Overview 2. Competitive Advantages 3. Business Verticals 4. Lending and Financing 5. Financials 6. ESG Updates Branch-Based Distribution High Distribution Costs Substantial Carbon Emissions Travel Costs To Costumers Long Waiting Lines Overcharged Customers Bank Statement Emission F
Slide 6: Combining innovative technology with traditional bank strength
INSTITUTIONAL PRESENTATION | 2Q23 Combining innovative technology with traditional bank strength Mission Empower People to ManageTheir Finances & Daily Activities Simple Engaging Innovative 100% Digital Seamlessly Integrated Full Banking Licensed Wide Range of Products Robust Credit Underwriting Str
Slide 7: Our strong product rollout to attract new clients
Our strong product rollout to attract new clients Phase One: Traditional Bank Phase Two: Digital Account Phase Three: Super App Phase Four: US Expansion Corporate Milestones Intermedium was founded Full Banking License Digital Account Rebranding: Banco Inter Migration to AWS SME Payroll Real Estate
Slide 8: Unlocking the potential value from our strong customer foundation
Unlocking the potential value from our strong customer foundation Strong Market Share at the Beginning of the Journey, with Significant Upside as Our Client Base Matures 1 .04 % 1 .06 % 13.1% 1 .04 % 1 .02 % 1 .04 % 1 .04 % 1 .04 % 1 .04 % 1 .04 % 1 .0 % 1 .02 % 1 .02 % 1 .0 % 7.9% 1 .02 % 1 .0 % 1
Slide 9: Significant addressable credit market to explore
Significant addressable credit market to explore Total Loan Portfolio in Brazil In R$ Billion Total Addressable Brazilian Credit Market R$ 5.0 Tn Total Banking Account Penetration in Brazil1 In Million, June/23 Individuals with Bank Account in Brazil R$ 1.0 Tn Overdraft + Others R$ 0.1 Tn R$ 1.9 Tn
Slide 10: Agenda: Competitive Advantages
Agenda 1. Company Overview 2. Competitive Advantages 3. Business Verticals 4. Lending and Financing 5. Financials 6. ESG Updates
Slide 11: Significant competitive advantages
1 2 3 4 5 High growth platform Uniquely high fee income revenue Best-in-class funding base Strongly capitalized balance sheet Underleveraged clients % Company Overview Competitive Advantages Business Verticals Lending and Financing Financials ESG Updates Appendix 11Significant competitive advantages
Slide 12: Significant competitive advantages: high growth and fee income
Significant competitive advantages Company Overview Competitive Advantages Business Verticals Lending and Financing Financials ESG Updates Appendix 12 INSTITUTIONAL PRESENTATION | 2Q23 High growth platform 1 70% 65% 74% 75% 65% 64% 65% 67% 69% 70% 30% 35% 26% 25% 35% 36% 35% 33% 31% 30% 417 467 607
Slide 13: Significant competitive advantages: funding, capital, underleveraged clients
Significant competitive advantages Company Overview Competitive Advantages Business Verticals Lending and Financing Financials ESG Updates Appendix 13 INSTITUTIONAL PRESENTATION | 2Q23 Best-in-class funding base 3 Strongly capitalized balance sheet 4 Underleveraged clients 5 63% ~75% ~85% Inter Medi
Slide 14: Agenda: Business Verticals
Agenda 1. Company Overview 2. Competitive Advantages 3. Business Verticals 4. Lending and Financing 5. Financials 6. ESG Updates
Slide 15: Highly effective strategy with our verticals as the pillars
Highly effective strategy with our verticals as the pillars Company Overview Competitive Advantages Business Verticals Lending and Financing Financials ESG Updates Appendix 15 INSTITUTIONAL PRESENTATION | 2Q23 Integrated business model Build Client Base & Funding Grow Monetization & Activation Expan
Slide 16: Banking & Spending: Building a strong client base
Banking & Spending: Building a strong client base Digital Account Deposits Debit & Credit Cards Pix Wire Transfers Digital Wallets & many more... Note 1: Total Brazilian market total payment volume of cards according to Abecs. The base of our financial ecosystem A full licensed bank Attracting new c
Slide 17: Credit: Robust income stream
Credit: Robust income stream Note 1: Internal Estimates Total FGTS Loans in 2Q23 and 2Q22 based on public government figures. Note 2: Market data from Banco Central do Brasil. Supply chain Credit card receivables Receivables Credit Cards Loans Payroll Loans FGTS Loans Real Estate Home Equity Auto Lo
Slide 18: Inter Shop & Commerce Plus: Engaging clients in the App
Inter Shop & Commerce Plus: Engaging clients in the App Inter Shop Revenue & Take Rate In R$ Million and % 30 44 48 59 54 67 99 113 102 112 95 104 2 5.0 4 5. 0 6 5. 0 8 5. 0 10 5. 0 12 5.0 Shopping (Marketplace) Giftcard Car Tag Travel ShellBox Food & Duo Gourmet Inter Cel & Top Up & many more… To o
Slide 19: Insurance: Exploring one of Latin America's most complete insurance portfolios
Insurance: Exploring one of Latin America’s most complete insurance portfolio Full range of insurance products Company Overview Competitive Advantages Business Verticals Lending and Financing Financials ESG Updates Appendix 19 INSTITUTIONAL PRESENTATION | 2Q23 Pet Life Travel Telemedicine Auto Cards
Slide 20: Investments: Capitalizing on synergistic opportunities
Investments: Capitalizing on synergistic opportunities 2Q23 Highlights: R$ 7.5bn 3rd party fixed income R$ 43mm net revenue AuC and Active Clients In R$ Billion and Million 58.1 54.6 62.3 66.7 68.0 76.8 2.0 2.2 2.4 2.8 3.3 3.6 -1.0 -0. 5 0. 0 0. 5 1.0 1.5 2. 0 2. 5 3. 0 3. 5 4. 0 40.0 50.0 60.0 70.0
Slide 21: Keeping our innovative DNA with a prudent approach in the US
Keeping our innovative DNA with a prudent approach in the US Product Rollout Pipeline Remittances Gift Cards Global Account Lending Product Rollout Pipeline Investments Broker Dealer Single App Credit Card Global Services Clients1 In Thousand AuC & Deposits in US Dollars In USD Million Debit Card As
Slide 22: New rewards program to drive synergies across business verticals
New rewards program to drive synergies across business verticals Introducing our New Rewards Program More Options for Clients Earn points: Credit Card Bills “Conta com Pontos” Missions Acompliments + 3MM Clients in 2 months Burn points: Cashback Extra Cashback in Inter Shop Credit Card Bill Discount
Slide 23: Agenda: Lending and Financing
Agenda 1. Company Overview 2. Competitive Advantages 3. Business Verticals 4. Lending and Financing 5. Financials 6. ESG Updates
Slide 24: ROE-driven loan portfolio growth
ROE-driven loan portfolio growth Gross Loan Portfolio In R$ Billion 4.8 16% 10% 21% 8.8 17.5 2% 17.2 27% 24.5 8% 19.9 2% 19.5 30% 2% 15% 1% 21% 25.1 26.5> 70% collateralized portfolio2 Continuous focus towards repricing 2019 2020 2021 2022 2Q22 1Q23 2Q23
Slide 25: Breakdown of loan portfolio growth
Breakdown of loan portfolio growth 2Q23 Gross Loan Portfolio Growth and Balance In % QoQ and in R$ Billion 26.2% R$ 1.3 Bn • Strong growth in FGTS and Home Equity, higher ROE products 8.8% 6. % % 2.0% 0 0% 2.0% 5.6% R$ 7.7 Bn 5.2% R$ 5.2 Bn 3.4% 2.8% 5.4% 2.8% Total Loan Portfolio Growth 0.0% 0.0% F
Slide 26: Provisioning level maintaining stable coverage ratio
Provisioning level maintaining stable coverage ratio Cost of Risk1 In % Coverage Ratio In % 126% 129% 141% 132% 131% 130% • Stable coverage ratio 4.9% 5.2% 5.2% 4.8% 4.8% 5.1% 5.0% 4.5% 6.5% 6.0% 5.6% 6.2% 2.1% 1.1% 1.9% 1.0% 1.1% 1.1% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 Cost
Slide 27: Strengthening retail deposit franchise with cost-efficient funding at scale
Strengthening retail deposit franchise with cost-efficient funding at scale Funding In R$ Billion % YoY % QoQ 67.2% 64.5% 67.5% 61.9% 61.2% 65.0% 63.3% -7 .0 % 2.1 p.p. -1.7 p.p. 6 .05 % All-In Cost of Funding as % of CDI 29.8 30.8 33.3 5%; 1.6 6 .0 % +45 29% +14% +8% +6% Total Other1 +13.2 million
Slide 28: Agenda: Financials
Agenda 1. Company Overview 2. Competitive Advantages 3. Business Verticals 4. Lending and Financing 5. Financials 6. ESG Updates
Slide 29: What are our drivers for value creation?
What are our drivers for value creation? High Fee Income Increasing NIM Active Client Growth 35. 0% Fee Income Ratio1 % of Total Net Revenue ~20% Bigger than 10 .0 % 9.5 % NIM In % 8.7% 9.5% 15.0 14.0 Active Clients In Million 12.6 13.5 14.5 30 .0 % 25. 0% 20 .0 % 30% Incumbent Banks ~25% ~125% Bigg
Slide 30: Accelerating revenues with balanced mix of NII and fees
Accelerating revenues with balanced mix of NII and fees Revenue In R$ Million 636 544 837 1,100 731 25% 1,540 1,461 1,281 834 877 850 35% 36% 35% 1,800 1,704 1,002 1,024 33% 31% 1,939 1,150 30% % YoY +33% +31% +10% % QoQ +8% +12% +11% • Reacceleration of fee revenue across business lines• Strong NII
Slide 31: Combining fee revenue growth with efficiency initiatives
Combining fee revenue growth with efficiency initiatives to achieve excellence Net Fee Revenue and SG&A Evolution In R$ Millions % YoY % QoQ 42% 41% 52% 57% 50% 48% 685 52% 60% + 9.6 p.p. + 5.0 p.p. Net Fee Revenue ÷ SG&A Peers Net Fee Revenue ÷ SG&A ~35% Median of 391 387 0 0 165 159 603 30% 183 55
Slide 32: Boosting employee productivity to improve efficiency
Boosting employee productivity to improve efficiency Active Clients per Employee1 In Thousand + 0.7 4.2 Cost-to-Serve In R$, monthly Headcount optimization from 4.1k in December to 3.4k in June + 0.2 2.3 + 0.1 2.5 2.6 + 0.3 2.9 + 0.2 + 0.4 3.1 3.5 21.2 17.5 -20% YoY 17.1 15.7 15.8 13.8 12.5 0. 5 4Q2
Slide 33: Strong NIM expansion, reaching highest levels in multiple years
Strong NIM expansion, reaching highest levels in multiple years 1 Conversion to Market 2 Ongoing Repricing 3 Loan Mix Change 4 Evolution into 2H23 10. 0% 9. 0% 8. 0% 7. 0% 6.4% 7.3% 8.1% 8.3% 8.0% 8.1% 7.2% 7.3% 6.9% 7.0% 6.4% 7.4% 7.2% 8.4% 8.7% 7.4% 9.5% 8.1% Conta com Pontos full implementation 6
Slide 34: Meaningful improvements in operational leverage
Meaningful improvements in operational leverage Revenue vs. Expenses In %, index in a 100 basis Efficiency Ratio In % 88% 114 119 117 120 115 163 137 140 117 108 158 127 Net revenue1 Personnel Expenses 64% 72% 49% 68% 43% 75% 73% 48% 42% 62% 40% 53% Total 99 95 96 Personnel + 32% Administrative 100
Slide 35: Sequential expansion of gross profit per client
Sequential expansion of gross profit per client ARPAC and CTS Evolution In R$, Monthly 46 47 46 47 46 46 44 32 32 28 28 37 34 34 32 29 31 29 32 32 16 17 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 Gross Profit per Active Client (Net of Cost of Funding) 1 Gross Profit per Active Client (Gross o
Slide 36: Record profitability since IPO
Record profitability since IPO Earnings Before Tax & Net Income In R$ Million | Inter&Co Δ YoY +7x 80 Δ QoQ +14x EBT Speeding up our path to profitability 12 6 -20 64 +4x +3x Net Income -111 -100 -70 16 29 24 (29) (30) (56) 4Q21 1Q22 2Q22 3Q221 4Q22 1Q23 2Q23 Note 1: Adjusted Net Income for the thir
Slide 37: Agenda: ESG Updates
Agenda 1. Company Overview 2. Competitive Advantages 3. Business Verticals 4. Lending and Financing 5. Financials 6. ESG Updates
Slide 38: Improvements and ESG initiatives
Improvements and ESG initiatives High corporate governance levels Improvements in Eco-Efficiency • Two-layer regulatory governance (SEC and CVM) • Creation of Audit Committee IN STITUTIO N A L P RESEN TA TIO N | 2 Q 2 3 • Inclusion of explicit Inter&Co Tag Along rights Rating Evolution • Sequentiall
Slide 39: Appendix
Appendix
Slide 40: Glossary of operational definitions
Glossary of operational definitions 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
Slide 41: Glossary of financial measures reconciliation
Glossary of financial measures reconciliation Administrative efficiency ratio: Administrative expenses Card fee revenue: It is part of the “Revenue from services and commission” and “Other revenue” on IFRS Income Statement. Net Interest Income + Net result from services and comissions + Other revenu
Slide 42: Glossary of financial measures reconciliation
Glossary of financial measures reconciliation Coverage ratio: Provision for expected credit loss Overdue higher than 90 days Net interest income: Interest Income + Interest Expenses + Income from securities and derivatives Earning portfolio (IEP): Earnings Portfolio includes “Amounts due from financ
Slide 43: Glossary of financial measures reconciliation
Glossary of financial measures reconciliation NPL formation: Overdue balance higher than 90 days in the current quarter – Overdue balance higher than 90 days inthe previous quarter + Write − off change in the current quarter Total loans and advance to customers in the previous quarter Personal effic
Slide 44: inter —
inter —