Fast growth, credit risk still calls the tune
- Inter has reached 44 million total clients, giving it a large base to cross-sell loans and services.
- The bull case is operating leverage: Q1 efficiency fell to a record 43.8% and ROE reached 15.5%.
- Growth is being led by private payroll and FGTS loans, with FGTS loans up 58% sequentially in Q1.
- The bear case is credit quality: NPLs rose from 4.7% to 5.1%, and cost of risk is expected near 6.0% in 2026.
- The new US branch license could lower global costs, but the US and Latin America plan still needs proof.
A better bank, if credit behaves
Inter is trying to turn a huge Brazil app user base into a more profitable bank. The good sign is operating leverage. That means revenue is growing faster than costs. In Q1, the efficiency ratio fell to a record 43.8%, and ROE rose to 15.5%.
The growth story is now centered on loans that can earn strong returns. Private payroll loans scaled to BRL 2.5 billion, and FGTS loans grew 58% sequentially in Q1. Inter is also reshaping its credit card book, moving more clients into interest-earning products, now 25% of the book. That can lift net interest margin, which is the spread between what the bank earns on loans and pays for funding.
The bear case is clear. Brazil rates remain high, and borrowers are under pressure. NPLs, meaning loans more than 90 days late, rose from 4.7% to 5.1% in Q1. Management now expects cost of risk, the cost of bad loans, closer to 6.0% in 2026.
The key question is whether the credit trouble stays in older 2021 credit card cohorts, as management says, or spreads into newer lending. If the old card book runs off and newer loans season well, earnings can keep compounding. If private payroll and consumer finance age poorly, the growth case weakens fast.
A super app that sells more per client
Inter makes money by offering banking, credit, investments, insurance, shopping, loyalty, foreign exchange, and merchant services in one app. The basic idea is simple: get clients in with a low-cost digital account, then sell more products over time.
Credit is the main profit lever. Inter funds itself with deposits and other funding, then lends through products like credit cards, FGTS loans, home equity, PIX financing, Buy Now Pay Later, and private payroll. The model works best when Inter can lend to existing clients it already understands.
Fees also matter. Inter earns service and commission revenue from cards, investments, insurance brokerage, Inter Shop, and acquiring through Interpack, formerly Granito. Interpack gives the company more reach into small and midsize businesses and lets Inter offer payment processing and working capital.
Global is the newer option. After the US branch license, Inter can move away from paying bank as a service partners for key US products. That should lower costs and let the company use US deposits more directly to fund US credit. The open question is whether Inter can build scale outside Brazil without taking on new credit or compliance risk.
Where the app earns
Banking and cards
Checking accounts, debit, credit cards, deposits, and payments keep clients active. The card book is being reshaped toward more interest-earning balances.
FGTS and private payroll loans
These are the current loan growth engines. FGTS loans grew 58% sequentially in Q1, and private payroll reached BRL 2.5 billion.
Home equity and secured credit
Home equity gives Inter a more secured lending base. Management has highlighted meaningful market share in home equity, but credit classification remains a watch item.
Investments
Inter offers brokerage, custody, securities distribution, and fund services. This brings fee income and helps clients keep more of their financial life inside the app.
Insurance brokerage
Inter sells partner insurance products and earns commissions. The line is smaller than banking, but it adds cross-sell income with limited balance sheet use.
Inter Shop and loyalty
Inter Shop earns commissions from purchases through the app. Loop loyalty and the Forum community are meant to raise engagement and make the app stickier.
Global accounts and US products
Inter offers USD accounts, USD credit cards, US mortgages, and is expanding to Argentinian clients through Bind. The US branch license could improve unit economics.
Seven AI platform
Seven is a new multi-agent AI tool inside the app. It may reduce service costs and improve client journeys, but the earnings impact is still unproven.
Mostly banking revenue
The mix uses Inter's 2025 Form 20-F revenue by reportable segment for the year ended December 31, 2025. The four reportable segments shown equal 98.0% of consolidated revenue before Others and eliminations, so the page uses the reported segment shares and notes the small caveat.
What could break the story
Old card losses last longer
High impact · Medium oddsManagement says the main driver of the recent NPL increase is the 2021 credit card cohorts. That is better than seeing fresh loans weaken, but it still costs money today. If those cohorts do not run off cleanly, earnings may stay under pressure.
New loan cohorts season badly
High impact · Medium oddsPrivate payroll and consumer finance are growing quickly. Fast loan growth can look great early because losses often show up later. If these loans move into Stage 3, the accounting bucket for impaired loans, Inter may need higher provisions.
High Brazil rates squeeze demand
Medium impact · High oddsInter is exposed to the Selic and CDI rate cycle in Brazil. High rates can raise funding costs, reduce credit demand, and make defaults worse. That slows the path from client growth to profit growth.
US expansion disappoints
Medium impact · Medium oddsThe US branch license should lower partner costs and let Inter fund credit more directly. But new markets bring compliance, credit, and execution risk. If global products do not scale, the license may help costs but not change the growth path much.
Controls or reporting issues return
Medium impact · Low oddsInter remediated its previously disclosed material weakness in internal control over financial reporting as of December 31, 2025. That removes one overhang. A repeat issue would hurt trust, especially for a bank growing fast.
In one breath
What does Inter & Co do?
Inter runs a digital financial app, mainly in Brazil. It offers bank accounts, cards, loans, investments, insurance, shopping, merchant acquiring, and global USD products.
Why are investors watching Inter's credit quality?
Inter is growing loans fast, and bad loans are rising. NPLs moved from 4.7% to 5.1% in Q1, while management expects cost of risk near 6.0% in 2026.
What is the bull case for INTR stock?
The bull case is that Inter keeps adding clients while costs grow more slowly than revenue. If private payroll, FGTS loans, and card reshaping keep improving returns, ROE can rise further.
What does the US branch license change?
It lets Inter rely less on bank as a service partners in the US. That can lower operating and funding costs, and may let Inter offer more direct banking and credit products outside Brazil.