Inter & Co delivers a record-breaking Q1 2025, boosting profit and client growth, but faces hurdles to meet its ambitious 2027 targets.
The company, a leading Brazilian digital bank, shared these results in its quarterly earnings report on May 12, 2025.Despite macroeconomic challenges, Inters performance signals resilience and strategic focus.
Inter & Co, Brazils premier financial super app, serves over 37 million clients with banking, credit, and digital commerce solutions.The bank achieved a net income of R$287 million ($47.8 million), up 56.8% from Q1 2024.
Total gross revenue hit R$3.16 billion ($526.7 million), a 38% year-over-year increase, driven by strong credit and transaction growth.The return on equity (ROE) reached 12.9%, climbing 3.7 points annually, reflecting improved profitability.
However, the efficiency ratio rose to 48.8%, as expenses surged 32.3% to R$831 million ($138.5 million).Inters client base grew 18.8% to 37.7 million, with active clients up 23.9% to 21.6 million, showcasing robust market penetration.
Inters loan portfolio expanded 21.2% to R$37.39 billion ($6.23 billion), fueled by private payroll loans, which hit R$197 million ($32.8 million) shortly after launch.Inter & Cos Q1 2025 Profit Soars, Yet 60-30-30 Goal Looms Large.
(Photo Internet reproduction)The net interest margin improved to 8.8%, supported by optimized credit origination.
Non-performing loans dropped to 4.1%, down 0.7 points, indicating tighter risk management.Inter & Co Eyes 60-30-30 Goal with Digital MomentumThe ambitious 60-30-30 plantargeting 60 million clients, 30% efficiency, and 30% ROE by 2027remains a challenge.
Currently at 37.7 million clients and a 48.8% efficiency ratio, Inter must accelerate cost control and profitability.CEO Joo Vitor Menin emphasized disciplined growth, but rising expenses signal potential risks.
Transaction volume soared 44% to R$364 billion ($60.7 billion), with PIX market share at 8.3%.Assets under custody jumped 50% to R$122 billion ($20.3 billion).
These metrics highlight Inters digital prowess, yet the efficiency gap underscores the need for operational streamlining to rival traditional banks.Inters capital ratio stands at 15.2%, providing a buffer for expansion.
The banks low funding cost, at 60% of Brazils CDI rate, supports competitiveness.
However, Brazils high 12.25% Selic rate and slowing GDP growth could pressure credit demand and asset quality.Analysts view Inters trajectory positively, with a projected R$1.21.5 billion ($200250 million) profit in 2025.
The stock trades at a 15x price-to-earnings ratio, reflecting market confidence.Still, achieving the 30% ROE target requires scaling high-yield products and optimizing capital allocation.
Inter & Cos Q1 2025 results reveal a bank capitalizing on digital innovation and client trust.Yet, the path to 60-30-30 demands rigorous cost discipline and sustained growth.
Investors await Inters next moves in Brazils competitive banking landscape.