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Inter defies expectations by over-performing as credit weakens

Proactive risk tightening in 2021 sees surging return on equity as scale brings operational leverage.

Photo: Banco Inter

While Brazil’s large banks are reporting increases in non-performing loans and provisions, one of the country’s digital firms has dismissed the assumption that the neobanks could be more exposed than traditional financial institutions to a deterioration in asset quality.

Banco Inter – which prefers the plain appellation ‘Inter’ as it pushes its 'SuperApp' strategy – says it believes that the worst of the deterioration in its loan performance is already behind it.

If you compare us to Itaú and Bradesco, we are performing better than them
Santiago Stel, Inter

Banks such as Bradesco are warning of spiking NPLs in their retail lending books, but Inter is stressing that its priority is to re-price its loan portfolio to higher rates and reckons that NPLs have peaked.

If you compare us to Itaú and Bradesco, we are performing better than them,” Santiago Stel, chief strategy and investor relations officer at Inter, tells Euromoney. “We only have one line of unsecured credit – credit cards – and we saw signs in the market last year and decreased the acceleration of onboarding in this area – and we gave [stricter] limits to those that we did onboard.