Inter & Co. Inc.

Good afternoon and thank you for standing by. Welcome to the InternCo's third quarter earnings conference call. Today's speakers are João Vitor Menin, Inter's CEO, Alexandre Retio, Senior Vice President of Retail Banking, and Santiago Stel, Senior Vice President of Finance and Risks. Please be advised that today's conference is being recorded and a replay will be available at the company's IRR website. At this time, all participants are in listen-only mode. After the prepared remarks, there will be a question and answer session. For this session, we ask you to write down your question via the Q&A icon on your screen. Your name will then be announced and you will be able to ask your question live. At that point, a request to activate your microphone will appear on your screen. If you do not want to open your microphone live, please write down no microphone at the end of your question. In this case, our operator will read your question for you. Please note that there is an interpretation button on your screen where you can choose the language you want to hear, English or Portuguese. Throughout this conference call, we will be presenting non-IFRS financial information. These are important financial measures for the company but are not financial measures as defined by IFRS. Reconciliations of the company's non-IFRS financial information to the IFRS financial information are available in Inter's Earnings Release and Earnings Presentation Appendix. Today's discussion might include forward-looking statements which are not guarantees of future performance. Please refer to the forward-looking statements disclosure in the company's earnings release and earnings presentation. Now, I would like to yield the floor to Mr. João Vitor Menin. Sir, the floor is yours.

Thank you, operator. Good afternoon, everyone. I am pleased to announce another record-breaking quarter in our history. We believe that we have successfully entered a virtual cycle that leads us into a sustainable, growing and profitable business model. Once again, we can affirm that our results are no longer a glimpse, as we said a few quarters ago, but a clear testament of our long-term profitability potential. When I reflect on the states in our history, I see three clear phases. The first, which was until 2021, focused on growth, creating the full ecosystem of products and gaining market share while creating deep primary relationships with our customers. The second, which took place during 2022, when we had our platform in place and started to prioritize monetization. building the foundations for a business model that was built to last. Now in the third phase, with the foundations in place, we started 2023 with strong momentum. We continued improving our profitability while re-accelerating our growth profile. As I mentioned before, we have entered a virtual cycle, as we can see on the slide. Driven by our innovative DNA in the center, we built a best-in-class financial super app, delivering the broadest digital offering with a top-notch UX that continuously attracts new clients. As these clients engage more deeply with us, we are generating higher revenues that yields growing profits, making it a sustainable business model. This dynamic then restarts to the beginning by reinforcing our innovative DNA, and the cycle keeps moving on and on. To conclude, I believe that the importance of this quarter goes beyond the amazing numbers we are reporting. It represents something far more relevant. We are in the right direction to meet our five-year North Star, which we named the 6-30-30 plan. The commitment to the 6-30-30 is already generating significant value to all our stakeholders, which we believe is the only way to build a company to last. Let me elaborate a little more on that. First, to our clients by disrupting the industry offering the best value banking services. Second, to our employees with a great place that foster creativity and growth. Third, To regulators, developing technology and bringing efficiency into the financial system. Fourth, to our community with an eco-efficient business model. And last but not least, we're generating value to our shareholders by delivering sustainable long-term profitability. Before passing the word to Shanji and Santi, I will highlight some of our record-breaking numbers of the quarter. We delivered an impressive combination of record figures, which we believe proves we are on the path to sustained profitability. From a financial perspective, our gross revenue had another record quarter, surpassing R$ 2.1 billion. 39% higher than last year. The combination of top line growth and cost control enabled us to achieve another record efficiency ratio of 52.4%. On the bottom line, we had our highest ever profitability level with a pre-tax income of 145 million and post-tax income of 104 million reais. We also achieved a record-breaking RE of 5.7%. When we look at the operational side, we also see a series of milestones. For the third quarter in a row, we attracted 1 million new active clients. We also continued increasing our activation ratio, reaching 52.7%, the highest level since 4Q21. Our monthly R-PAC increased once again, reaching the record level of R$ 48. And finally, we had a great quarter in terms of transacted volumes, expanding our TPV to R$ 219 billion. Now I'll pass it to Sandy. and Santiago, who will deep dive on both fronts.

Thank you. Thank you, João, and good afternoon, everyone. I'll start talking about credit and our funding capabilities. Jumping to page 10, I'll pass through some important highlights regarding credit. This quarter, we were able to accelerate the growth in our loan portfolio, growing by 7% and remaining focused on high ROE products, such as our FGTS loans, which once again grew more than 20%, and home equity, which grew nearly 10% and reached a market share in originations of also 10%. The most interesting factor of this quarter was on credit cards, which reached a growth of 13%. This is the result of continuous improvement in the credit underwriting processes, active portfolio management, the success of Loop, amongst other factors. When we look at pricing on the top part of the page, the all-in yield excluding real estate loans, which is the dotted line, continued its quarter over quarter improvement. Now moving to page 11, we'll talk about improvements in our asset quality metrics. What we see in this slide is the result of our ongoing efforts to enhance our credit underwriting processes and collection strategies, reaching a more precise data-driven model. As a result, we're delivering flattish NPLs, both on a 15 to 90 days and above 90 days basis. When we look at the cohorts of NPLs of credit cards, we continue to see a sequential improvement, forecasting a positive trend for the upcoming quarters. Finally, the NPL and stage three formation also have shown stability. On page 12, we can see a very positive improvement on the cost of risk metric, which decreased by 30 bps. This improvement was driven by our active risk management mentioned in the previous slide. Despite the decrease in cost of risk, our coverage ratio increased 200 bps to 132%. Always worth mentioning that around 70% of our portfolio is collateralized. thus presenting a lower than average risk profile. Overall, these results give us confidence for the quarters to come. On page 13, we can see once again that we have one of the best in class funding franchises in the industry. Our deposit growth accelerated to 11% this quarter, almost twice the growth level of last quarter. In total, we reached a funding base of around 40 billion reais. In page 14, we see that we continue delivering an impressive cost of funding, which is now 61.4% of CDI, including all interest-bearing liabilities. We're confident in the sustainability of this cost of funding profile, for the quarter to come. Our deposit base is diversified in more than 14 million retail customers that trust us with their savings and transactional balances. Our average deposit per client grew by 4% to 2.6 thousand, despite the accelerated growth in our activation rates. Now let's move forward and talk about our transactional platform session. As mentioned in the beginning, we're reporting our third consecutive quarter bringing 1 million new active customers, achieving 15.5 million. Our activation rate showed another quarter of strong progress, increasing by 49 bps. This milestone, combined with the lowest CAC since the third quarter of 2020, is a direct outcome of our commitment to leveraging better client profile targeting, new customer journeys, and communication strategies. We're constantly deepening our understanding and feeding this new knowledge into our algorithms to optimize the new cohorts. In terms of volumes, you can see that our TPV reached an impressive 219 billion reais, mostly driven by credit and PIX. This is the highest credit TPV growth in a quarter since the second quarter of 2022, combined with a more balanced mix between credit and debit transactions. This contributed to a greater interchange revenue growth this quarter. In a cohort basis, as presented in the right chart, we can see that the newer cohorts are starting at higher levels and growing at a faster pace than the older ones. We're proud about this performance, which is a strong evidence of better quality in client ads and activation. Moving forward to our other verticals, we can see the power of our financial super app ecosystem. On e-commerce, we reached 2.9 million clients who conducted over 10 million transactions in the quarter, another record. We also had 870 million reais in GNV, leveraged by our Interday in July 7th. Our net take rate in the quarter was 8.7%. Combining this, we reached the record-breaking gross revenue in this vertical of R$124 million. On insurance, we had a great quarter, reaching more than 322,000 sales and 1.6 million active clients. And finally, on investments, our simpler and accessible product offering resulted in an impressive 74% year-over-year client growth, reaching 4.2 million, along with a strong AUC that increased to 83 billion reais. Talking about our global solutions, we experienced another quarter of strong success. We achieved over 270 million US dollars in deposits and AUC. We continue replicating our Brazilian offering in the US by taking advantage of our scalable technology to create a best-in-class global app. The strong adoption of these products is a result of the continuous UX improvement and our focus on Brazilians who travel, invest, and or are immigrants in the US. The client base grew nearly four times year over year, reaching almost two million. Before passing to Santi, I would like to comment that in the US, we're replicating our number one competitive advantage, that we have in Brazil, which is our unique cost of funding. Now, Santi, please go ahead. Thanks, everyone.