Inter & Co, Inc. (INTR) Earnings Call Transcript

Hello, everybody. Rafa Vitoria here, speaking as Inter's IR Officer, and it's my pleasure to greet each of you on this Inter & Co earnings conference call. To begin, a few instructions. <<operator_script>> This call can also be accessed conference is being recorded. A replay is going to be made accessible on the company's IR website; joining me right now are João Vitor Menin, who serves as our Global CEO; Alexandre Riccio, our Brazil CEO; and Santiago Stel, our CFO. To kick things off with the CEO overview, I'd like to bring in Joao. Joao, the floor is yours.

Thanks, Rafa. I appreciate everyone being here today as we go over what we delivered in the second quarter of 2026. Let me begin with a point that carries real significance for Inter. In May, during our Owners Day, we rolled out the Rule of 50 as our long-term strategy, demonstrating that you don't have to choose between expansion and profits — the two can be achieved side by side. And now, merely 1 quarter after that announcement, the Rule of 50 has become a reality. Our total net revenue climbed 32%. ROE came in above 16%. The plan is already being put into action. The Rule of 50 isn't something we pursue in isolation. It sits on top of our 60 to 30 to 30 North Star — the ambition of 60 million clients, a 30% efficiency ratio and 30% ROE. That guiding compass still shapes every decision we make. What this chart shows is the product of many years of disciplined capital allocation, strong growth and steady execution, all backed by a healthy balance sheet; yet outcomes like these are never accidental. Achieving the Rule of 50 is only within reach thanks to our Inter by design approach. It rests on 3 mutually reinforcing pillars: sustainable revenue growth, scalable distribution capabilities and unique cost efficiencies. That compounding effect is exactly what our numbers reveal. We tripled our revenue growth while at the same time doubling our active client base, which means our clients are more engaged; we've accomplished all of this while bettering our efficiency ratio by 32 percentage points and increasing ROE by 18 percentage points too. Growth and profitability advancing together, in the same direction, at the same moment; that's the result Inter by design delivers. And once this flywheel operates at full speed, gaining market share across every product and segment follows naturally. That's what I'd like to show you now. Additional clients generate additional transactions. Additional transactions generate additional data. Superior data fuels superior products and sharper credit decisions. Superior products draw in still more clients, and the cycle continues compounding. That captures what the flywheel concept means at Inter. What makes our flywheel especially potent is how broad our ecosystem is. The more products we provide across more verticals, the more entry points we open up for clients, and the quicker the cycle turns. Whether you consider PIX, credit cards, investments or home equity, our market share figures are rising across the board, outpacing many of the biggest players in Brazil. It isn't just growth. We're expanding in every segment simultaneously, yet with discipline. That's where the strength of our ecosystem lies, and it keeps getting stronger. This flywheel shapes not only how we grow, but where we decide to grow. The opportunity ahead of us is larger than ever, since we are actively deepening and widening our addressable market. Secured lending is our core. That was an intentional decision from the beginning — mortgages, home equity and payroll, for example. Almost 82% of Brazil's secured personal loans remain held by just the top 5 competitors. That leaves a huge, underpenetrated market, and we possess the distribution, product experience, data, and cost structure needed to continue capturing share. However, we aren't halting there. We're expanding into unsecured too, doing so cautiously with discipline, and results are already appearing. For the very first time, we exceeded 2% market share in credit cards TPV in Brazil. This product has never been more profitable for us than it is right now. To sum up, secured loans stay our foundation, delivering strong asset quality with stable returns, resilient across varying credit cycles. Beyond that, unsecured credit like credit card, PIX credit, and buy now pay later are deepening principality and broadening our addressable market even more. We're capturing the opportunity in both, and that's what provides our confidence to maintain growth of 30% or more for many years ahead. And to wrap up now, as shown on Page 9, I want to emphasize 3 key milestones for our company. First, on gaining scale. For the very first time, we hit over BRL 100 billion in total assets. Second, on expanding margins. For the first time, we achieved double-digit NIMs. And third, on creating value. For the first time, we exceeded capital neutrality, which means our business now generates more capital than it uses to grow even at a rapid pace of growth. These aren't merely milestones; they're evidence that the model we've built with discipline, consistency, and ambition is producing real results for our shareholders; now Sandy and Santi will bring this story to life with the full numbers behind it. Sandy will guide you through the business update, while Santi will take you through the financial performance in detail. Sandy, please go ahead.

Thank you, João, and good morning to all of you. Let's move on now to how our operations performed in the second quarter. Our client count hit 45.3 million, and during the past 12 months we brought in 3.7 million additional active clients. Yet the headline here isn't how large our base has become — it's how good that base is. We've taken a deliberate approach to expansion, being pickier and putting clients who engage more quickly first. That translates into a tighter emphasis on ARPAC growth, which builds a base that's both stronger and more profitable. And you can see this strategy reflected straight in our figures. Newer cohorts begin with an initial ARPAC that's roughly BRL 10 above what older cohorts had. Credit penetration plays a major part in driving ARPAC upward. When clients go deeper in their relationship with Inter and take up credit products, the money we make from them rises considerably. Private payroll illustrates this well, and I'll dig into that topic further on. We also observe signs of engagement in how our clients behave generally; this quarter we averaged 22 million daily log-ins, compared with 18 million a year earlier; these clients aren't merely active — they are genuinely engaged and are making Inter their primary relationship; and that engagement flows straight into monetization even as our cost to serve remains flat. ARPAC rises while CPS holds steady. That difference is the source of margin expansion, and the numbers make the case on their own. Margin per active client has just hit an all-time high. This is the financial payoff of all the things I just walked through — better clients, deeper relationships, higher credit penetration — and it builds on itself each quarter; the engagement I mentioned also shows up in transaction volume. On a run rate basis, our cards and PIX TPV came to 1.8 trillion. TPV is climbing faster than our client base, which proves relationships are getting deeper. Actual market share figures illustrate this most clearly. To start, we now account for roughly 9% of all fixed transactions in Brazil, and that figure keeps climbing — it rose 31 basis points over the past twelve months. Next, as João mentioned before, we crossed 2% market share in credit card TPV for the first time ever. Engagement among our newest cohorts is higher than it has ever been. This isn't just a flywheel that works — it's one that's accelerating. At this point I want to dig into 2 of our standout credit offerings: credit cards and private payroll loans. Santi will then cover how the portfolio performed overall, but first I'd like to give you the strategic view on each one. Let's begin with credit cards and how we're reshaping that strategy — the TPV logic is straightforward: steer our portfolio toward balances that earn more interest, greater installment activity, improved monetization, which lifts revenues. The portion of our portfolio earning interest keeps rising and now accounts for 26% of the credit card book. Interest income from this product was up 64% year-over-year. And here's the crucial takeaway: interest income is expanding more quickly than provisions. Sure — having a bigger portfolio that earns interest does mean more provisioning, as you'd expect, and that's fine with us. Even so, the revenue side is growing faster than the cost side, and margins keep widening. We're going to keep being disciplined about this strategy—bringing in suitable balances, with suitable customers, at suitable times. Now, turning to private payroll loans. Our belief in this offering and its fit with our platform remains unchanged. It generates robust revenue expansion. It grows via our in-house digital channels, and both originating and servicing it are done efficiently. That is exactly the kind of offering we want more of. In Q2, we surpassed 600,000 customers who have private payroll loans. Their ARPAC stands at 3.7x our average, making this a true principality and a monetization accelerator. Operational improvements are underway, and we're handling them with discipline; even so, we think the product will keep improving as DataPrev rolls out new features like automatic employee relinkage; we're expanding, and we believe the pace is right, building a proprietary portfolio that will stay healthy and profitable over the long term and will reinforce principality. The next step is already on its way. Insurance launches in August. Our estimate is that insurance adoption can lower provisions and lift fee revenues, a meaningful gain in how the product performs overall. I'll now discuss business accounts, a major opportunity sitting in front of us; we hit 2.9 million business clients, up 24% year-over-year. When it comes to accounts of this kind, our penetration is already at 12%. The ARPAC we get from business clients is 2.8x what an average client brings in. For companies, we've put together a complete product lineup spanning payments, investments, acquiring cards and credit. Right now, testing is underway on the electronic trade invoice — used as collateral, or what's known in Portuguese as producto bancario — which the Central Bank of Brazil is set to launch. Once that goes live, our product suite gets deeper, ARPAC moves higher, and it compounds straight into NII growth. As a business client adopts more products, they shift more of their financial transactions over to Inter. That's the identical flywheel we're already seeing on the retail side, and now it's happening with business accounts too. Now let's turn to fee income, which is one more key part of what we do. Lending is a strong driver behind our performance. What really sets Inter apart, though, is having seven verticals that strengthen one another and, combined, create a fee income base that's both diversified and resilient. Two engines will power growth going forward: on commissions, we're rolling out subscription plans so customers can move up into our One, Prime and Win tiers and access additional perks. Beyond that, we're broadening investment advisory offerings aimed at clients with higher incomes. We've also just rolled out Inter Ads — a new monetization layer for advertising within our app — and there's still a lot of upside ahead. When it comes to credit-related fees, Inter Change is picking up speed as our credit card TPV passes 2% market share for the very first time and continues to grow faster than debit. Inter Pag will return to growth as we bring the company to maturity and put those products to work among our business clients. Meanwhile, private payroll loans along with credit insurance will contribute a substantial additional fee revenue stream to a product that's already profitable on the credit side. These aren't merely plans. They're initiatives that are already underway. Taken together, they're what will restore fee income growth to the rate we're aiming for. Our confidence that fee income will speed up doesn't come only from the initiatives I just walked through. It comes from the distribution strength supporting them. As this slide shows, several products spanning our 7 verticals have already gone past 1 million — the threshold of 1 million active clients. What's even more striking, though, is how fast this is happening. Every new product hits that milestone more quickly than the previous one. The curves keep getting steeper. Adoption keeps accelerating. That's what distribution at scale looks like. When you've got 26 million active clients logging in 22 million times each day, bringing out a new product doesn't mean beginning at 0. What this represents is dropping a fresh offering into one of the financial ecosystems in Brazil that shows the deepest engagement. Adoption by clients is on the way, and they keep doing it at a faster pace each time; such is the compounding force behind our flywheel. That is also why we feel confident the initiatives tied to fee income are going to gain momentum quickly. On that note, I'll hand things over to Santi to walk through the financial performance. Santi, the floor is yours.

Appreciate that, Sandy. Good morning, all. I'll jump right into our financial performance for the quarter. That Rule of 50 we introduced in New York during May is clearly showing up here, since revenue climbed 32% compared to a year ago. Joao gave the framework a fresh update, and what this slide lays out is exactly how it works when put into action. To me, what's even more impressive than the figure itself is the consistency underneath it. Over 8 consecutive quarters, NII has gone up about 40% versus the prior year — 8 quarters running. The result reflects purposeful follow-through, a lineup of offerings that keeps growing, and a net interest margin that continues to stretch wider, with private payroll gaining momentum exactly as Sandy outlined, along with a lending portfolio his group has deliberately been reworking to favor higher-yielding balances. Fee revenue had a strong quarter, growing alongside the customers we serve. And thanks to the efforts Sandy walked us through, we now have a well-defined, deliberate path to accelerate that income stream ahead. The result is a revenue foundation that's diversified, resilient, and built structurally to keep compounding, with strong momentum across every driver. And there's a direct driver behind the steadiness we just saw in NII: NIM. This quarter our NIM reached 10.1% — the highest level we've ever recorded, and the first time we've gone past the double-digit threshold. That's a milestone worth pausing on. Three factors drove the expansion this quarter. The first is structural and ongoing: continued deployment of capital into high ROE products, quarter after quarter. This is the compounding effect of disciplined capital allocation. The second is strategic: our hyper-personalization pricing approach, which we outlined on the Owners Day, is working. When it comes to assets, we adjusted pricing for buy now pay later, PIX Credit, and private payroll. On the liabilities side, we lowered the rates we pay on LCIs. This isn't a single tweak — it's a strategy we're actively running, and it will keep helping our NIM expand down the road. The third item is a benefit tied to our inflation hedge, which, as we noted back in the first quarter of 2026, we anticipated would come through during this quarter. And that's precisely what occurred. The underlying trend backed up that effect; at this point I'd like to step back, since there's something that tends to get missed. Following the 60-30-30 reveal in January 2023, NIM 2.0 has grown by 30%, moving from 7.8% up to 10.1%. During that same stretch, our capital structure shifted considerably, with leverage rising from 6.7x to 9.7x as of today. Once you adjust for this and keep the capital structure fixed across the period, the actual NIM growth comes out nearer to 50%. That figure captures just how deeply our core banking economics have improved. Altogether, what these figures demonstrate is precisely how rigorous capital allocation and steady execution of our banking business, or producto bancario, play out in real life — and the deployment of capital we just walked through is appearing straightaway in the growth of our loans. On an expanded basis, our loan book reached BRL 55.4 billion, marking a 5% rise compared with the previous quarter and a 29% improvement relative to the same period last year. During this quarter, as you'll notice, we introduced a brand-new concept — the expanded loan portfolio — and it now encompasses our private securities book, FIC, debentures and comparable instruments. So why are we incorporating this into our core credit metrics? Because optimizing treasury sits among the ROE drivers we laid out at the Owners Day under the Rule of 50; we ask ourselves whether putting capital to work here is genuinely a franchise accretive business. Our view is that it is. What we have here is client deposits being channeled into market-originated credits, producing robust returns that get reinvested into our operations; growth in this business should be expected to continue. Inside the portfolio, every product line is carrying its own weight. Private payroll continues to take share and is steadily soaking up the natural runoff from the FGTS book. On the credit card side, the reshaping strategy we've been talking about continues to produce strong outcomes — interest income for that product is 64% higher than it was a year ago. Real estate remains a highlight as well. Since the second quarter of last year, mortgages and home equity have grown at an average rate of 40% — this isn't a one-time spike, it's steady compounding growth in one of our largest and best-secured offerings. And one number ties everything together: loan balance per active client, which reached an all-time high. Credit penetration — a core element of how we carry out the Rule of 50 — is not some distant goal. The situation keeps moving forward, and spreading our bets across different offerings is exactly how we achieve fast growth without accumulating exposure — whether that's credit-related or regulatory — since revenue, NIM, and loan growth are all expanding in alignment as intended. The foundation for loan growth, NIM expansion, and steady revenue is a credit strategy, and this slide is where we spell it out. Before we get into the numbers, let me explain how we think strategically about asset quality. Our goal isn't to push NPL down for its own sake; what we're after is the highest risk-adjusted NIM, efficiency, and ultimately returns. That means we intentionally accept more credit risk in certain portfolios, and those very portfolios are becoming a growing contributor to our profitability quarter after quarter. This is a deliberate trade-off, and we're making it with complete conviction. You'll also see this page is busier than normal, since we brought in the expanded loan portfolio concept on the previous page, we use the same lens here, presenting NPL and Stage 3 formation and the fact that both expanded alongside prior methodologies side by side. That way investors can clearly see both views through the transition. Now, inside the portfolio there are 3 distinctive stories. First, take our secured portfolio—private payroll isn't included in that—and it makes up about 50% of the loans we hold. Over there, asset quality is holding steady and doing well, and returns on equity are strong. Because of that, we feel good about continuing to put capital to work and expanding this offering in line with that. Now, turning to credit cards: the NPLs we're seeing there come from a deliberate strategy—we're growing an interest-earning portfolio inside an unsecured category that's still dealing with a difficult macro environment. Even so, the key point is that across this book, revenue is rising far faster than provisions. From our standpoint, that's the metric that matters, and it's moving in the right direction. Given our focused niche strategy and interest rates heading lower, we anticipate NPL performance will get better over the next several quarters. Private payroll is the third piece. That's something I'll get to on the following page. This product, as the NPL bridge indicates, drives the biggest share of NPL movement — accounting for more than half of the annual rise. We won't ignore this figure. We'll tackle it right here. Delinquency has stayed elevated for a longer stretch than we had anticipated, and that's not due to any product weakening, but rather because from an operational standpoint, maturity is requiring more time than we thought. We're on it actively. Our relinkage solution of our own is in progress, the insurance launch happens in August, and additional data privy enhancements are anticipated this month, as Sandy described; yet here's what preserves our confidence.

Even with delinquency where it stands today, return on equity for private payroll loans is still roughly 30%, so the economics look compelling both for our clients and for us, and that aligns nicely with the Inter by design approach. Then, if you consider private payroll alongside credit cards, both of those 2 portfolios have been producing solid returns, with ROE staying robust even before private payrolls reached operational maturity and with NIM expanding quite strongly. That comes from deliberate execution, and our confidence keeps building as the results come through. Let me now move to funding, which is among our biggest competitive advantages. Total funding hit BRL 77.2 billion in the quarter, up 24% versus a year earlier. That expansion shows the trust clients have in us as their main financial platform. What makes up that funding matters just as much; on the transactional side, deposits rose 17% year-on-year, and we brought in almost BRL 1 billion of nearly free funding during the quarter alone. That stems directly from clients picking us for their everyday financial needs; on the higher-yielding side, time deposits increased 27% and securities issued rose 42%, which shows our funding base keeps diversifying while interest rates remain high. We are drawing funding across the entire spectrum and doing so efficiently. Finally, and most significantly, deposits per active client came to BRL 2,000.80, a 6% increase year-on-year. That is where our funding franchise really stands out. Our cost of funding was 66% of CDI in the quarter, among the lowest and steadiest in the sector. I want to stress the word steady. Market rates have shifted considerably over the last few years, yet our cost of funding hardly budged. That happens by design; it stems from how deep our transactional deposit base is. It reflects clients treating us as their primary bank, as Sandy said. And that advantage builds over time. A cheaper, steadier funding cost lets us price loans more aggressively, safeguard our NIM throughout the cycle and produce better risk-adjusted returns than peers. It ranks among the most durable competitive advantages we have created and, frankly, among the toughest to copy; now let me discuss expenses. There are 3 factors at work here. The first is personnel. Headcount remains steady at roughly 4,000 employees, the same figure we had 4 years ago when we announced the 60 to 30 to 30 plan. Costs rose 18%, and the primary driver is profit sharing, which you can view as actually good news; it shows the team is being rewarded for the stronger profitability we are delivering. Second, D&A came in 44% higher year-on-year, reflecting amortization of earlier investments in our Super App. That line will continue rising as we launch new projects. But importantly, the ratio of intangibles to total assets keeps declining. Third, our administrative costs rose only 15%, which is pretty much in step with how our client base and transaction volumes naturally expanded; we're now operating at a much bigger scale, yet our expenses haven't climbed in proportion. That's a digital model performing precisely as intended; and it's what keeps all of this going, with revenue up 32% year-on-year while expenses are up 19%. Those 13 percentage points of difference represent operational leverage dropping straight through to the bottom line. Looking at the client chart index, both from 2023 onward — when the 60 to 30 to 30 plan was launched — the story is unmistakable. Revenue kept compounding, expenses rose in a disciplined way, and the space between those 2 continues to get wider. That's the digital banking model at scale, with no branches, no legacy systems, and no linear cost growth as clients and products are added. Our efficiency ratio came in at 42.1% this quarter, a fresh record low. That mirrors years of steady cost discipline, paired with the scaling dynamics of our model. There's still additional room on efficiency, and we remain committed to delivering returns. Revenue, NIM, loan growth, asset quality, and now operational leverage, all heading the same way. That's the financial picture for Inter this quarter. And everything covered comes together on this page. Net income hit BRL 421 million this quarter, a new record. And ROE, another record, came in at 16.3%. But frankly, the quarterly figure by itself doesn't capture the whole story. Looking at how this chart has moved, we now have 13 consecutive quarters of net income growth. Quarter after quarter, year after year, net income and ROE continue heading the same way, up. That isn't a single-quarter story. It's a compounding track record. ROA also set a record this quarter, now comparable to some of the most established traditional banks in Brazil. Think about it — a platform expanding at 30% plus, producing returns on par with institutions that have existed for decades. Everything we've built, the disciplined capital allocation, the risk management, and the cost control, all shows up here. Growth and profitability advancing together — that's the Rule of 50 in action. And lastly, I want to wrap up with capital. For the first time, our business generates more capital than it uses to fund its own loan growth. From a capital standpoint, Inter is now self-sustained. We grow, and we finance that growth ourselves through rising profitability. On top of that, at the Inter&Co level, we hold EUR 2.3 billion in excess capital — capital ready to be deployed into the bank whenever needed. Once you factor that in, the Basel ratio at the holding level came to 19.3%, a position of genuine strength. With that, I'll hand it to Rafa to open the Q&A. Thank you all.

Now we open the Q&A session. Our first question is from Eduardo Rosman.

Nice work on those results. I want to dig deeper into NIM and asset quality. Santiago, I believe, laid out the 3 key drivers nicely, and my sense is that further gains will show up over the coming couple of quarters. That said, in this particular quarter, NIM came in a touch too strong, correct? So I was hoping to get a sense of how much each of those 3 main drivers contributed during this quarter. I'm trying to figure out whether we ought to expect NIMs to keep rising in Q3, or whether Q3 might see a slight correction before resuming an upward path in later quarters, right? And then on the asset quality side as well, right? Early NPLs, I believe, ticked up once more. My assumption is that this matters more for provisions than the 90-day NPLs do; so what do you anticipate over the coming couple of quarters? I realize you're taking on somewhat more risk, and that's by design; but I'm just trying to get a handle on likely trends for risk-adjusted NIM, and how we should be thinking about it across the next couple of quarters. That's all.

Let's begin with NIM, and let me go back one quarter. What we communicated at that time, when we walked through Q1 results, was that an inflation effect was at play during the first quarter to the tune of roughly BRL 30 million, or lower inflation landing in that period, yet that would carry an impact forward into the second quarter, which is exactly what we now observe at 10.1%. So the earlier NIM came in somewhat below what a normalized level would have dictated, and the present figure carries some of that inside it because of inflation. Let me take you through the details. We hold roughly BRL 11 billion in inflation-linked exposure, and we hedged approximately BRL 6 billion of that amount, leaving us with a net long exposure of about BRL 5 billion, right? Given that, a timing mismatch exists whereby the BRL 30 million of reduced revenues from the previous quarter are landing favorably in the current quarter. Once you account for that, an adjustment of roughly 15 basis points applies to this quarter, downward, and 15 basis points to the prior quarter, upward. That produces a smoother result, one that better mirrors what truly occurred had inflation remained flat over time and had we not hedged — but what I want to emphasize is that, looking at the broader long-term trajectory of our NIM and our risk-adjusted NIM, performance has stayed quite steady and turned fairly predictable even as inflation swung from very low levels to very high levels across the year, and alongside the shifts in CDI; so we are capable of handling that volatility. Our preference would be for the NIM to be more foreseeable and steady, yet we do observe certain dynamics unfolding across the year, especially during this opening half. And when you look at it annually, as we stated during the previous quarter, we anticipate an annual NIM that is 40 basis points higher than the prior year as we move into this one. And we still believe that will hold true given the loan mix we currently have — we're originating at; and then regarding asset quality, we're pretty pleased with how things are performing. It aligns with our expectations. Keep in mind we talked about 3 drivers during the last quarter, 2 of them were internal, the extra growth we're pursuing in private payroll along with the credit card mix reshaping that Sandy discussed, and then the external one, which relates to elevated interest rates and seasonality. So, regarding those 2 that are internal, private payroll, we remain very enthusiastic about it. Sandy can go into greater detail, but as we've said, this is a product that fits perfectly well within the inter design; and credit card has been our standout P&L product internally. We're monetizing it much more, as you witnessed, a 64% rise in interest income over the last 12 months, and that arrives alongside greater delinquency, correct? But we aren't solving for reduced delinquency. As we mentioned, we're solving for greater returns. So how the delinquency curves evolve or take shape going forward will hinge somewhat on the mix. But the guidance we provided previously was cost of risk at approximately 6%; we still believe that's the case. During this quarter, we did somewhat better than that. And the outlook for the remainder of the year stays the same, both on the NIM side, as I noted in the first question, and with asset quality.

Our next question is from Henrique Navarro. Our next question is from Mario Pierry.

Nice work on those results. I'd like to ask something broader regarding how asset quality is trending in Brazil, okay? Your loan book keeps expanding extremely quickly — around 30%. Your cost of risk has gone up, yet you're offsetting that through stronger revenues. Still, the perception out there is that Brazilian households carry a lot of debt, and debt service ratios are quite elevated; we're facing an unpredictable second half of the year because of the elections. On top of that, people think that next year Brazil's fiscal spending will have to come down, since the government has spent so freely this year; so — could you talk about how you view the operating environment in Brazil and what your main worries are regarding asset quality down the road?

Mario, this is Joao Vitor here. I appreciate the question, and I'll handle this one. Well, we took the company public back in 2018. So it's been roughly 8 years that analysts and investors have been tracking Inter; and our approach to credit risk, credit underwriting and so forth has always been extremely cautious. With that said, we've had a quite, let's say, favorable tailwind benefiting Inter, and honestly it comes down to something simple; our loan portfolio is still small while we have a huge number of clients, plus excellent funding costs and a great distribution channel. That said, naturally, as Sandy just said, we'll make adjustments as needed; so in a healthy credit cycle we might grow the unsecured portfolio. In a weak credit cycle we might shrink it. But the opportunity in front of us, the time in front of us is simply enormous. When we look at the page showing that growing opportunity — the BRL 2.7 trillion portfolio, the BRL 1.3 portfolio on the left side and the BRL 2.6 trillion portfolio addressable market on the right side — we possess, as I said, the tools to go after all of these 3 addressable markets; so even with inflation pressure, with elections and everything else, we can still expand at roughly 30%. I'd say perhaps for a few years ahead. We can achieve that by following the right risk reward approach. This matters greatly; taking risks is our business. We must manage it. We must leverage every tool available to us, and we've been doing so prudently. But once more, since we remain a small loan portfolio platform, we can continue growing at that pace going forward without exposing the balance sheet to risk. So that's my overall perspective, from where I sit, on how Inter will do during this present credit cycle in Brazil. And looking at the mid- to long term, we have every tool on the platform to keep building momentum and deliver enough. And once more, the most favorable funding cost, the proper channel for distribution, plus a highly efficient operating model thanks to being digital. Therefore, we observe a truly significant chance for Inter to continue compounding our loan book, in both secured and unsecured portfolios going forward, all right? That represents how we look at the business regarding risk reward and credit cycles.

Alright, very quickly, I'd like to ask one additional question. You all didn't mention anything about the debt renegotiation initiative down in Brazil. So I'm wondering if that had any impact on your asset quality ratios, and whether you're in the process of renegotiating loans.

Mario, BACEN worked out nicely, much better than the first one we saw. What we saw was renegotiations initially totaling BRL 100 million, so a strong volume driven by BACEN, with an overall P&L impact of about BRL 40 million, although we believe half of that we would have — we would have achieved via other channels. That is, via a collection firm, plus via our internal team, which is pretty robust and takes a great many steps to keep delinquency in check. So we can say BACEN accounted for 12 million of EBT impact. On delinquency metrics, NPLs landed at minus 10 bps; cost of risk landed at minus 15 bps, together with an increase of about 15 bps in Stage 3 formation; and what's behind Stage 3 formation? Two things cause it. First: as we renegotiate, we're also renegotiating credits that are past due more than 360 days or that have been written off. As a result we bring them back onto the balance sheet and place them in Stage 3. And sometimes we renegotiate credits that sit, say, between 90 and 360. When we do that, they move into Stage 3 and that share goes up. The good news is Stage 3 is very recoverable because FGO backs it. Deposits per active client reached BRL 2,000.08 thousand, up 6% year-on-year. João will add a few further remarks.

Okay Mario, circling back to that initial question regarding the addressable market and the way Inter will expand more quickly. One key point worth noting, and something that can give you a sense of, you know, the size of this chance. So once more, if you look at Page 8, there we show the BRL 1.3 trillion plus BRL 2.7 trillion, plus BRL 2.6 trillion addressable market. Right now, we're basically only in that middle column, and we're broadening out, like I mentioned during my opening remarks. We're expanding toward the left and toward the right portions of that addressable market. And something else to keep in mind, we have public data from the Central Bank regarding the credit exposure that our clients, they hold within the system. And what's interesting is that clients with a primary relationship with us, PIX and salary and all of that, and we hold under 5% of the credit exposure for those clients. So among our very own clients, the ones already on our platform, already investing alongside us, doing things with us, using what we offer, we can go much deeper. So that's what I — how I attempt to provide some figures and some flavor around this huge opportunity, this massive addressable market and the reality that we remain, from a credit standpoint, a small platform; we're a large platform when it comes to transactions. But from a credit standpoint, we're still a small platform in Brazil. So I view that as very good news for us.