Brazil digital bank Inter&Co beats profit forecasts in fourth quarter (updated)

Inter & Co

07/02/2024 22:07

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       SAO PAULO, Feb 7 (Reuters) - Brazilian digital bank
Inter&Co  INTR.O  reported on Wednesday a better-than-expected
five-fold increase in fourth-quarter net profit as it cut costs
and focused its lending portfolio on more profitable categories.
    The Nasdaq-listed bank, which counts Japanese technology
investor Softbank  9984.T  among its main shareholders, posted a
net profit of 160 million reais ($32.2 million), up from 29
million reais a year earlier. Analysts polled by LSEG expected
fourth-quarter profit from 2023 to land at 139 million reais.
    Chief Financial Officer Santiago Stel told Reuters factors
such as a better efficiency ratio - a measure of the bank's
expenses relative to its revenues - which improved 1 percentage
point from the previous quarter, helped the firm to boost
profits. 
        Inter&Co's return on equity stood at 8.5% in the fourth
quarter, higher than 5.7% in the third quarter and 1.6% in the
fourth quarter of 2022.
    The lender has been focusing on cutting costs and
concentrating its credit portfolio on more profitable
categories, including home equity and payroll loans. 
        The value of its gross loan book rose more than 26%
year-on-year in the quarter to reach 31 billion reais, and its
90-day non-performing loans ratio was down slightly, by 0.1
percentage point, from the previous quarter to settle at 4.6%.
    Inter&Co last year released operational and financial
targets - which the company says is different from guidance -
for 2027 that include doubling its current 30 million costumer
base as well as reaching a 30% return on equity. 
    Sell-side analysts, however, have been cautious on the
firm's ability to achieve these goals.
    Stel described the bank's 2023 performance as "better than
expected," adding that this year started with a "positive
dynamic."
    In January, the lender raised about $140 million with a
share offer, which according to the financial chief was designed
to raise the stock's liquidity, attract more foreign
shareholders and take greater advantage of Inter&Co's status as
a holding company.  
    ($1 = 4.9668 reais)

 (Reporting by Andre Romani; Editing by David Alire Garcia and
Jamie Freed)
 ((Andre.Romani@thomsonreuters.com; 11 991314109;11 56447500;))