Profits soar for neobank Inter

The first-ever Brazilian company to migrate shares to a U.S. stock exchange, neobank Inter reported a profit of BRL 104 million (USD 21.28 million) in Q3 — the biggest in its history and above analysts’ projections of BRL 90 million. 

A net revenue of BRL 1.3 billion, 30 percent up from a year ago, supported this growth, mainly driven by a 7 percent quarter-on-quarter expansion of Inter’s loan portfolio, to BRL 28.4 billion. Inter did that by repricing its portfolio at higher interest rates and by fine-tuning granting conditions to its existing customer base.

Inter follows a similar growth recipe to other Latin American digital banks, but in a more conservative manner and with a twist. With the fintech it acquired in the U.S. last year — Usend, an international remittance platform — Inter’s target audience stretches to Brazilian travelers, investors, and immigrants living in the U.S.

Surfing the credit card wave more cautiously

Credit cards, the core product of all challenger banks, account for only 30 percent of Inter’s loan book. Inter hit the brakes on its loan origination at the end of 2021, especially in the credit card business, as a precaution against climbing delinquency risks, lifting interest rates, and fees close to the industry average. It subsequently focused...