6-K
Inter & Co, Inc. (INTR)
United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2023
Commission File Number 132-02847
INTER & Co, INC. (Exact name of registrant as specified in its charter)
N/A (Translation of Registrant’s executive offices)
Av Barbacena, 1.219, 22nd Floor Belo Horizonte, Brazil, ZIP Code 30 190-131 Telephone: +55 (31) 2138-7978 (Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes ☐ No ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes ☐ No ☒
EXHIBIT INDEX
| Exhibit # | Description of Exhibit |
|---|---|
| 99.1 | Unaudited Condensed consolidated interim financial statements |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| INTER & Co, INC. | ||
|---|---|---|
| By: | /s/ Santiago Horacio Stel | |
| Name: | Santiago Horacio Stel | |
| Title: | Chief Strategy and <br>Investor Relations Officer of Inter&Co |
Date: May 8, 2023
Document
| Unaudited Condensed consolidated interim financial statements<br><br>as of for the three-month period ended<br><br>March 31, 2023 | | --- || Contents | | | | | --- | --- | --- | --- | | Management report | | | 2 | | Report of the independent auditors on the condensed consolidated interim financial statements | | | 4 | | Consolidated balance sheets | | | 6 | | Consolidated statements of income | | | 7 | | Consolidated statements of comprehensive income | | | 8 | | Consolidated statements of cash flows | | | 9 | | Consolidated statements of changes in equity | | | 10 | | Consolidated statements of added value | | | 11 | | Notes to the condensed consolidated interim financial statements | | | 12 | | | Note 1. | Activity and structure of Inter & Co, Inc. and its subsidiaries | 12 | | | Note 2 | Basis for preparation | 13 | | | Note 3 | Changes to significant accounting policies | 13 | | | Note 4 | Significant accounting policies | 14 | | | Note 5 | Operating segments | 18 | | | Note 6 | Financial risk management | 21 | | | Note 7 | Fair values of financial instruments | 27 | | | Note 8 | Cash and cash equivalents | 30 | | | Note 9 | Amounts due from financial institutions | 30 | | | Note 10 | Securities | 30 | | | Note 11 | Derivative financial instruments | 32 | | | Note 12 | Loans and advances to customers | 33 | | | Note 13 | Non-current assets held for sale | 37 | | | Note 14 | Equity accounted investees | 37 | | | Note 15 | Property and equipment | 37 | | | Note 16 | Intangible assets | 39 | | | Note 17 | Other assets | 40 | | | Note 18 | Liabilities with financial institutions | 40 | | | Note 19 | Liabilities with customers | 40 | | | Note 20 | Securities issued | 41 | | | Note 21 | Borrowing and onlending | 41 | | | Note 22 | Tax liabilities | 41 | | | Note 23 | Provisions and contingent liabilities | 41 | | | Note 24 | Other liabilities | 43 | | | Note 25 | Equity | 44 | | | Note 26 | Net interest income | 45 | | | Note 27 | Net result from services and commissions | 46 | | | Note 28 | Other revenues | 46 | | | Note 29 | Impairment losses on financial assets | 46 | | | Note 30 | Personnel expenses | 46 | | | Note 31 | Other administrative expenses | 47 | | | Note 32 | Current and deferred income tax and social contribution | 47 | | | Note 33 | Share-based payment | 49 | | | Note 34 | Transactions with related parties | 51 | | | Note 35 | Subsequent events | 54 | | Unaudited Condensed consolidated interim financial statements<br><br>as of for the three-month period ended<br><br>March 31, 2023 | | --- |
Management report
Inter & Co, Inc.
Inter & Co, Inc (the Company and, together with its consolidated subsidiaries, the Group) is a holding company incorporated in the Cayman Island, with limited liability. On June 23, 2022, the Company started trading its shares on Nasdaq, in New York, under the ticker symbol INTR. Inter & Co's main subsidiary is Banco Inter S.A., which, together with its subsidiaries, comprises a global services platform.
Inter
Inter is a Super App with an extensive portfolio of financial and non-financial products and services that are designed to simplify people’s lives.
Since the digitalization of our business model in 2015, we have managed to diversify our revenues, increasing the relevance of service-related revenue streams. The solutions that comprise the Inter ecosystem are integrated and completely interconnected – all in a single application. We offer several solutions to customers such as: current account, loans and financing, investments, foreign exchange, and insurance, in addition to the ability to buy products from major retail partners through Inter Shop, our digital shopping mall, simply and quickly.
Investments in Affiliates and/or Subsidiaries
On January 14, 2022, Banco Inter S.A. closed the acquisition of 100% of the capital of the subsidiary Inter & Co Payments, Inc, formerly Pronto Money Transfer Inc. (USEND), whose company name changed on July 11, 2022. USEND is a US company with 16 years of experience in foreign exchange and financial services, offering, among other products, a digital Global Account solution to conduct money transfers between countries. We describe the business combination in more detail in Note 4.3.
Operating highlights
Digital account
In the period ended March 31, 2023, we surpassed the mark of 26.3 million customers, which is equivalent to 44,4% growth in the period. Our NPS reached 84 points, reaching the excellence zone, and we recorded over 1 billion logins to our app.
Loan Portfolio
The balance of loan operations reached R$23.8 billion, representing a positive variation of 4.8% compared to December 31, 2022. The real estate secured loan portfolio exceeded R$6.6 billion, a growth of 4.8% when compared to December 31, 2022, when its balance was R$6.3 billion. Meanwhile, the credit card portfolio surpassed the R$7.3 billion mark, recording a growth of 6.4% compared to December 31, 2022, when it totaled R$6.9 billion.
Funding
The total funding, which includes demand deposits, time deposits, savings deposits and securities issued, such as Real Estate Bills and Financial Bills, amounted to R$30.6 billion, representing a 2.7% increase compared to the R$29.8 billion recorded on December 31, 2022.
Economic and financial highlights
Profit (loss) for the period
We recorded an accumulated profit of R$ 24.2 million in the quarter ended on March 31, 2023, compared to a loss of R$ 28.8 million for the smae period in 2022.
Revenues
The revenues reached R$ 2,937.0 million, recording an increase of R$ 1,749,2 million compared to the amount recorded in the same quarter of 2022.
Administrative expenses
Accumulated administrative and personnel expenses incurred in the quarter ended in March 31, 2023 totaled R$ 558.0 million, an increase of R$ 36.1 million in relation to the same period of 2022, a growth explained by the increase in volume of operations, expansion of services and products offered, and the growth of the customer base and number of employees.
| Unaudited Condensed consolidated interim financial statements<br><br>as of for the three-month period ended<br><br>March 31, 2023 |
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Equity highlights
Total assets
Total assets reached R$ 47.7 billion in the quarter ended March 31, 2023, a 2.9% growth compared to December 2022.
Shareholder’s equity
Shareholder’s equity totaled R$ 7.1 billion, showing a growth of 0.7% when compared to December 31, 2022.
Relationship with the independent auditors
In compliance with CVM Instruction nº 162/22, Inter & Co, Inc., informs that no other services besides the auditing services of its Condensed Consolidated Interim Financial have been contracted. The institution also has a policy with requirements for contractual risk analysis which defines that the Board of Directors must evaluate the transparency, objectivity, governance aspects and the compromising of the independence of the contract, thus ensuring conformity between the parties involved. Additionally, it has an Audit Committee which, among its responsibilities and competencies, in addition to providing opinions and recommendations on the audit service provider, also evaluates the effectiveness of the independent and internal audits, including with regard to the verification of compliance with legal provisions and regulations applicable to the Bank, as well as internal policies and codes.
Furthermore, Inter & Co, Inc. confirms that KPMG Auditores Independentes Ltda. Has procedures, policies, and controls in place to ensure its independence, which include an evaluation of the work provided, covering any service other than the independent audit of Inter & Co, Inc.'s financial information. This evaluation is based on the applicable regulations and accepted principles that preserve the auditor's independence. The acceptance and performance of non-audit professional services on the Financial Information by its independent auditors during the quarter ended March 31, 2023, did not affect the independence and objectivity in the conduct of the audit work performed at Inter & Co, Inc.
Acknowledgment
We would like to thank our shareholders, customers and partners for their trust, as well as each of our employees who build our history daily.
Belo Horizonte, May 8, 2023.
The Management
| KPMG Auditores Independentes Ltda.<br><br>Rua Paraíba, 550 - 12º andar - Bairro Funcionários<br><br>30130-141 - Belo Horizonte/MG - Brazil<br><br>Caixa Postal 3310 - CEP 30130-970 - Belo Horizonte/MG - Brazil<br><br>Telephone number +55 (31) 2128-5700<br><br>kpmg.com.br |
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Report on review of
interim financial statements
To the Shareholders, Board of Directors and Management of Inter & Co, Inc.
Cayman Islands
| Introduction |
|---|
We have reviewed the condensed consolidated interim financial information of Inter & Co. Inc. ("Company"), included in the Interim Financial Information Form for the quarter ended March 31, 2023, which comprise the balance sheet as of March 31, 2023, and the statements of profit or loss, comprehensive income (loss), changes in equity and cash flows for the three-month period then ended, including the explanatory notes.
Management is responsible for the preparation and presentation of this condensed consolidated interim financial information in accordance with IAS 34 Interim Financial Reporting, issued by the International Accounting Standards Board – (IASB). Our responsibility is to express a conclusion on this condensed consolidated interim financial information based on our review.
| Scope of review |
|---|
We conducted our review in accordance with Brazilian and international review standards on interim financial information (NBC TR 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of people responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with standards on auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
| Conclusion on the condensed consolidated interim financial information |
|---|
Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial information referred to above is not prepared, in all material respects, in accordance with IAS 34, applicable to the preparation of interim financial information and presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission.
| KPMG Auditores Independentes Ltda., a Brazilian limited liability company and a member firm of KPMG's global organization of independent member firms licensed by KPMG International Limited, a private English company limited by guarantee. | KPMG Auditores Independentes Ltda., a Brazilian limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. |
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4
| Other issues |
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Statement of value added
The interim financial statements referred to above include the consolidated statement of value added for the quarter ended March 31, 2023, prepared under the responsibility of the Bank's management, and presented as supplementary information for the purposes of IAS 34. This statement of financial information has been submitted to review procedures performed together with the review of the interim financial statements to conclude whether it is reconciled to the consolidated interim financial information and accounting records, if applicable, and whether its form and content are in accordance with the criteria set by Technical Pronouncement CPC 09 - Statement of Value Added. Based on our review, nothing has come to our attention that causes us to believe that this consolidated statement of value added has not been prepared, in all material respects, according to the criteria set by this Standard and in a manner consistent with the consolidated interim financial information taken as a whole.
Belo Horizonte, May 8, 2023.
KPMG Auditores Independentes Ltda. CRC SP 014428/O-6 F-MG
Original report Portuguese signed by Jonas Moreira Salles Accountant CRC SP-295315/O-4
| KPMG Auditores Independentes Ltda., a Brazilian limited liability company and a member firm of KPMG's global organization of independent member firms licensed by KPMG International Limited, a private English company limited by guarantee. | KPMG Auditores Independentes Ltda., a Brazilian limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. |
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5
| Consolidated interim balance sheets<br>As of March 31, 2023 and December 31, 2022<br>(Amounts in thousands of Brazilian reais) | | --- || | Note | 03/31/2023 | 12/31/2022 | | --- | --- | --- | --- | | Assets | | | | | Cash and cash equivalents | 8 | 1,791,707 | 1,331,648 | | Amounts due from financial institutions | 9 | 3,770,074 | 4,258,856 | | Compulsory deposits at Central Bank of Brazil | | 2,993,616 | 2,854,778 | | Securities | 10 | 12,535,351 | 12,448,565 | | Derivative financial assets | 11 | 1,122 | — | | Loans and advances to customers, net of provisions for expected loss | 12 | 22,371,167 | 21,379,916 | | Non-current assets held for sale | 13 | 178,413 | 166,943 | | Equity accounted investees | 14 | 70,820 | 72,090 | | Property and equipment | 15 | 180,923 | 188,019 | | Intangible assets | 16 | 1,274,423 | 1,238,629 | | Deferred tax assets | 32 | 1,008,370 | 978,148 | | Other assets | 17 | 1,525,108 | 1,425,508 | | Total assets | | 47,701,094 | 46,343,100 | | Liabilities | | | | | Liabilities with financial and similar institutions | 18 | 8,216,538 | 7,906,897 | | Liabilities with customers | 19 | 24,182,006 | 23,642,804 | | Securities issued | 20 | 6,640,557 | 6,202,165 | | Derivative financial liabilities | 11 | 32,614 | 37,768 | | Borrowing and onlending | 21 | 36,632 | 36,448 | | Tax liabilities | 22 | 154,341 | 166,865 | | Income tax and social contribution | | 93,253 | 114,493 | | Other tax liabilities | | 61,088 | 52,372 | | Provisions | 23 | 63,213 | 57,449 | | Deferred tax liabilities | 32 | 29,638 | 30,073 | | Other liabilities | 24 | 1,205,649 | 1,173,527 | | Total liabilities | | 40,561,188 | 39,253,996 | | Equity | | | | | Share capital | 25a | 13 | 13 | | Reserves | 25b | 7,855,472 | 7,817,670 | | Other comprehensive income | 25c | (808,110) | (825,301) | | Treasury shares | 25h | (16,409) | — | | Equity attributable to owners of the Company | | 7,030,966 | 6,992,382 | | Non-controlling interest | 25f | 108,940 | 96,722 | | Total equity | | 7,139,906 | 7,089,104 | | Total liabilities and equity | | 47,701,094 | 46,343,100 |
The notes are an integral part of these condensed consolidated interim financial statements.
6
| Consolidated interim income statements<br><br>for the quarters ended March 31, 2023 and 2022<br><br>(Amounts in thousands of Brazilian reais) | | --- || | Note | 03/31/2023 | 03/31/2022 | | --- | --- | --- | --- | | Interest income | 26 | 1,012,927 | 521,160 | | Interest expenses | 26 | (672,771) | (336,771) | | Income from securities | 10 | 370,924 | 348,013 | | Net interest income | | 711,080 | 532,402 | | Revenues from services and commissions | | 282,353 | 206,219 | | Expenses from services and commissions | | (35,678) | (28,516) | | Net result from services and commissions | 27 | 246,675 | 177,703 | | Net gains / (losses) from derivatives | | 482 | 11,009 | | Other revenues | 28 | 65,877 | 112,407 | | Net revenues | | 1,024,114 | 833,521 | | Impairment losses on financial assets | 29 | (350,681) | (312,946) | | Personnel expenses | 30 | (172,412) | (145,120) | | Depreciation and amortization | 15 and 16 | (37,577) | (36,478) | | Tax expenses | | (68,871) | (56,693) | | Other administrative expenses | 31 | (385,615) | (376,806) | | Income before taxes and interests in associates | | 8,958 | (94,522) | | | 14 | | | | Income from equity interests in associates | | (3,061) | (5,572) | | Profit / (loss) before income tax | | 5,897 | (100,094) | | | 32 | | | | Current income tax and social contribution | 32 | (28,325) | (33,212) | | Deferred income tax and social contribution | | 46,644 | 104,484 | | Income tax | | 18,319 | 71,272 | | Profit / (loss) for the period | | 24,216 | (28,822) | | Profit (loss) attributable to: | | | | | Owners of the Company | | 11,405 | 3,272 | | Non-controlling interest | | 12,811 | (32,094) | | Earnings (loss) per share (in Brazilian Reais – BRL) | | | | | Basic earnings (loss) per share | 25e | 0.0284 | (0.0112) | | Diluted earnings (loss) per share | 25e | 0.0281 | (0.0112) |
The notes are an integral part of these condensed consolidated interim financial statements.
7
| Consolidated interim statements of comprehensive income<br> for the quarters ended March 31, 2023 and 2022<br>(Amounts in thousands of Brazilian reais) | | --- || | 03/31/2023 | 03/31/2022 | | --- | --- | --- | | Profit (loss) for the quarters | 24,216 | (28,822) | | Other comprehensive income | | | | Fair value of financial assets | 32,221 | (88,570) | | Related tax - financial assets | (14,500) | 39,857 | | Financial assets at fair value through other comprehensive income | 17,721 | (48,713) | | Current translation adjustment in foreign entities | (554) | (3,316) | | Others | 24 | — | | Total other comprehensive income that may be reclassified subsequently to the income statement | 17,191 | (52,029) | | Total comprehensive income for the quarters | 41,407 | (80,851) | | Allocation of comprehensive income | | | | To owners of the company | 28,596 | (48,757) | | To non-controlling interest | 12,811 | (32,094) |
The notes are an integral part of these condensed consolidated interim financial statements.
8
| Consolidated interim statements of cash flows<br><br>for the quarters ended March 31, 2023 and 2022<br><br>(Amounts in thousands of Brazilian reais) | | --- || | 03/31/2023 | 03/31/2022 | | --- | --- | --- | | Operating activities | | | | Profit (loss) for the period | 24,216 | (28,822) | | Adjustments to profit (loss) | | | | Depreciation and amortization | 37,382 | 36,797 | | Result of equity interests in associates | 3,061 | 5,572 | | Impairment losses on financial assets | 350,681 | 312,946 | | Expenses with provisions | 10,226 | 2,417 | | Deferred income tax and social contribution | (46,644) | 104,484 | | Current income tax and social contribution | 28,325 | 33,212 | | Provisions/ (reversals) for deferred assets | (11,127) | 28,491 | | Other capital gains (losses) | (2,938) | (38,486) | | Provision for performance income | (28,285) | (40,734) | | Result of foreign exchange variation | 131 | (669) | | (Increase)/ decrease in: | | | | Compulsory deposits at Central Bank of Brazil | (138,838) | 37,714 | | Loans and advances to customers | (1,341,932) | (1,152,148) | | Amounts due from financial institutions | 488,782 | 244,604 | | Securities | 106,514 | (175,451) | | Derivative financial assets | (1,122) | 76,538 | | Non-current assets held for sale | (11,470) | (35,339) | | Other assets | (41,517) | (173,605) | | Increase/ (decrease) in: | | | | Liabilities with financial institutions | 309,641 | 576,380 | | Liabilities with customers | 539,202 | 624,575 | | Securities issued | 438,392 | 708,863 | | Derivative financial liabilities | (5,154) | 9,497 | | Borrowing and onlending | 991 | 7,931 | | Tax liabilities | (23,087) | 16,696 | | Provisions | (4,462) | 342 | | Other liabilities | 58,694 | (228,876) | | | 739,662 | 952,929 | | Income tax paid | (17,762) | (25,819) | | Net cash from operating activities | 721,900 | 927,110 | | Cash flow from investing activities | | | | Acquisition of investments, net of cash acquired | (2,378) | (545,983) | | Acquisition of property and equipment | (2,704) | (32,393) | | Proceeds from sale of property and equipment | 7,248 | 7 | | Net acquisition of property and equipment from subsidiaries | — | (5,467) | | Acquisition of intangible assets | (70,765) | (80,383) | | Net acquisition of intangible assets from subsidiaries | — | (126,809) | | Acquisition of financial assets at FVOCI | (930,710) | (1,949,032) | | Proceeds from sale of financial assets at FVOCI | 743,716 | 2,657,740 | | Acquisition of financial assets at FVTPL | (17,106) | (146,622) | | Proceeds from sale of financial assets at FVTPL | 27,967 | 26,494 | | Net cash used in investing activities | (244,732) | (202,448) | | Cash flow from financing activities | | | | Repurchase of treasury shares | (16,409) | — | | Resources from non-controlling interest, including capital increase | (569) | (54,123) | | Net cash from financing activities | (16,978) | (54,123) | | (Decrease)/ Increase in cash and cash equivalents | 460,190 | 670,539 | | Cash and cash equivalents at the beginning of the period | 1,331,648 | 500,446 | | Effect of the exchange rate variation on cash and cash equivalents | (131) | 669 | | Cash and cash equivalents at March 31 | 1,791,707 | 1,171,654 |
The notes are an integral part of these condensed consolidated interim financial statements.
9
| Consolidated interim statements of changes in equity<br>for the quarters ended March 31, 2023 and 2022<br>(Amounts in thousands of Brazilian reais) | | --- || | Share capital | Reserves | Other comprehensive income | Retained earnings / accumulated losses | Treasury shares | Equity attributable to owners of the Company | Non-controlling interest | Total equity | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Balances at January 1, 2022 - Inter & Co, Inc. | 13 | 2,728,396 | (72,284) | — | — | 2,656,125 | 5,793,659 | 8,449,784 | | Profit (loss) for the quarter | — | — | — | 3,272 | — | 3,272 | (32,094) | (28,822) | | Proposed allocations: | | | | | | | | | | Constitution/Reversion of reserves | — | 3,272 | — | (3,272) | — | — | — | — | | Net change in fair value - financial assets at FVTOCI | — | — | (9,157) | — | — | (9,157) | — | (9,157) | | Exchange rate change adjustment | — | — | (3,316) | — | — | (3,316) | — | (3,316) | | Resources from non-controlling interest, including capital decrease | — | (31,089) | — | — | — | (31,089) | (23,034) | (54,123) | | Balances at March 31, 2022 - Inter & Co, Inc. | 13 | 2,700,579 | (84,757) | — | — | 2,615,835 | 5,738,531 | 8,354,366 | | Balances at January 1, 2023 - Inter & Co, Inc. | 13 | 7,817,670 | (825,301) | — | — | 6,992,382 | 96,722 | 7,089,104 | | Profit (loss) for the period | — | — | — | 11,405 | — | 11,405 | 12,811 | 24,216 | | Contributions and distributions | | | | | | | | | | Constitution/Reversion of reserves | — | 11,405 | — | (11,405) | — | — | — | — | | Exchange rate change adjustment | — | — | (554) | — | — | (554) | — | (554) | | Net change in fair value - financial assets at FVOCI | — | — | 17,721 | — | — | 17,721 | — | 17,721 | | Reflex reserve | — | 26,397 | — | — | — | 26,397 | — | 26,397 | | (-) Repurchase of treasury shares | — | — | — | — | (16,409) | (16,409) | — | (16,409) | | Others | — | — | 24 | — | — | 24 | (593) | (569) | | Balances at March 31, 2023 - Inter & Co, Inc. | 13 | 7,855,472 | (808,110) | — | (16,409) | 7,030,966 | 108,940 | 7,139,906 |
The notes are an integral part of these condensed consolidated interim financial statements.
10
| Consolidated interim statements of added value<br>for the quarters ended March 31, 2023 and 2022<br>(Amounts in thousands of Brazilian reais) | | --- || | Note | 03/31/2023 | 03/31/2022 | | --- | --- | --- | --- | | Revenues | | 1,346,204 | 854,935 | | Interest income | | 1,384,333 | 880,182 | | Provision of services, net | | 246,675 | 177,703 | | Impairment losses on financial assets | | (350,681) | (312,946) | | Other revenues | | 65,877 | 109,996 | | Expenses | | (672,771) | (336,771) | | Interest | | (672,771) | (336,771) | | Input from third parties | | (372,890) | (274,828) | | Materials, energy and others | | (53,270) | (30,723) | | Third-party services | | (79,450) | (42,563) | | Others | | (240,170) | (201,542) | | Telecommunications and data processing | | (209,015) | (159,019) | | Publicity and advertising | | (31,155) | (42,523) | | Gross added value | | 300,543 | 243,336 | | Deduction | | (37,577) | (36,478) | | Depreciation and amortization | | (37,577) | (36,478) | | Net added value produced by the company | | 262,966 | 206,858 | | Added value received in transfer | | (3,061) | (5,572) | | Income from equity interests in affiliates | | (3,061) | (5,572) | | Total added value to distribute | | 259,905 | 201,286 | | Distribution of added value | | 259,905 | 201,286 | | Personnel and tax | | 149,418 | 124,540 | | Remuneration | | 111,492 | 101,118 | | Benefits | | 31,437 | 17,269 | | FGTS | | 6,489 | 6,153 | | Taxes, contributions and fees | | 74,143 | 95,167 | | Federal | | 62,996 | 85,044 | | Municipal | | 11,147 | 10,123 | | State | | 271 | — | | Rent | | 11,857 | 10,401 | | Profit (losses) retained/reversed in the period | 25 | 11,405 | 3,272 | | Non-controlling interest | 25 | 12,811 | (32,094) |
The notes are an integral part of these condensed consolidated interim financial statements.
11
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 |
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Notes to the condensed consolidated interim financial statements (Amounts in thousands of Brazilian reais)
1.Activity and structure of Inter & Co, Inc. and its subsidiaries
Inter & Co, Inc. (“Inter & Co”), formerly Inter Platform Inc, is a Cayman Island exempted company with limited liability, incorporated on January 26, 2021. On May 7, 2021, Inter & Co, Inc. (the Company and, together with its consolidated subsidiaries, the “Group”) began a corporate reorganization involving two new non-operating companies with no material assets, liabilities or contingencies: the Company, located in the Cayman Islands, and Inter Holding Financeira S.A. (HoldFin), located in Brazil. The Company and HoldFin have become the indirect and direct shareholders of Banco Inter S.A (“Inter” or “Banco Inter”), respectively, thus the ultimate shareholders of Inter and their voting and non-voting interest were the same before and after this corporate reorganization.
Inter & Co, Inc. is currently the entity which is registered with the U.S. Securities and Exchange Commission (“SEC”). The common shares are traded on the Nasdaq under the symbol “INTR” and its Brazilian Depositary Receipts (“BDRs”) are traded on B3 - Brasil, Bolsa, Balcão (“B3”), the Brazilian stock exchange, under the symbol “INBR32”.
Banco Inter was a publicly held company with equity securities listed on B3 since April 2018. On June 23, 2022, Inter & Co and Banco Inter completed a corporate reorganization as an immediate result of which Inter & Co became indirectly, through Inter Holding Financeira S.A. (“HoldFin”), the owner of all shares of Banco Inter S.A. The ultimate shareholders of Banco Inter were the same before and after this corporate reorganization, however our controlling shareholder received Class B common shares, which are entitled to 10 votes per share while all other shareholders received Class A common shares, which are entitled to 1 vote per share. Inter & Co accounted for this corporate reorganization as a reorganization of entities under common control, and the pre-reorganization historical values of Banco Inter’s consolidated assets and liabilities are reflected in these condensed consolidated interim financial statements, with no fair value adjustments. As a result, these audited condensed consolidated interim financial statements reflect:
•The financial position of Inter & Co, Inc. at March 31, 2023 and December 31, 2022.
•The recognition of non-controlling interest on June 23, 2022, relating to the transfer from non-controlling interest to equity of the Company, in which the shareholders of Banco Inter S.A. opted to exchange their shares or BDRs of Inter & Co, Inc. or opted to receive cash instead of shares or BDRs of the Company.
The Group’s objective is to operate as a digital multi-service bank for individuals and companies, and among its main activities are real estate loans, payroll credit, credit for companies, rural loans, credit card operations, checking account, investments, insurance services, as well as a marketplace of non-financial services provided by means of its subsidiaries.
In January 2022, Inter&Co Payments, a remittance platform and global provider of digital accounts, was acquired to accelerate the global expansion plan. As a result, global products were segmented into two categories: (i) Brazilian; and (ii) US residents. This new initiative contributes to the expansion of the app to the United States of America, offering a global account for Brazilian customers.
The operations are conducted within the context of the set of companies in the Group, working in the market in an integrated way.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 |
|---|
2.Basis for preparation
a.Compliance statement
The condensed consolidated interim financial statements of the Group have been prepared in accordance with IAS 34 - Interim Financial Reporting issued by the International Accounting Standards Board (IASB).
These condensed consolidated interim financial statements have been prepared using the basis for preparation and accounting policies consistent with those adopted in the preparation of the consolidated financial statements of Inter & Co, Inc. as of December 31, 2022, and therefore they are intended only to provide an update on the content of the latest financial statements and should be read together, as set forth in IAS 34.
The information of the notes that has not been significantly changed or that has not presented new disclosures in relation to December 31, 2022 has not been fully repeated in these condensed consolidated interim financial statements. However, information has been included to explain the main events and transactions occurred, allowing an understanding of the changes in the financial position and in the performance of the Group’s operations since the publication of the consolidated financial statements as of December 31, 2022.
These condensed consolidated interim financial statements were approved by the Board of Director’s meeting on May 5, 2023.
b.Functional and presentation currency
These condensed consolidated interim financial information are presented in Brazilian Reais (BRL or R$). The functional currency of the Group companies is shown in note 4a. All balances were rounded to the nearest thousand, unless otherwise indicated.
c.Use of estimates and judgments
In preparing these condensed consolidated interim financial statements, management has made judgments, estimates and assumptions that affect the application of the accounting policies of the Group and the reported amounts of assets, liabilities, revenues and expenses. Actual results may differ from such estimates. Estimates and assumptions are reviewed on an ongoing basis. Adjustments, if any, related to changes in estimates are recognized prospectively.
d.Judgments
The significant judgments made by management during the application of the Group’s accounting policies and the main sources of estimation uncertainty were materially the same as those described in the last annual financial statements.
3.Changes to significant accounting policies
New standards, amendments and interpretations have been issued by IASB. These standards, amendments, or interpretations are not expected to have a material impact on the Company in the current or future reporting periods.
New or revised accounting pronouncements adopted in 2023
The following new or revised standards have been issued by IASB, were effective for the year covered by these condensed consolidated interim financial statements, and had no significant impact.
•Definition of Accounting Estimates – Amendments to IAS 8
•Classification of Liabilities as Current or Non-Current – Amendments to IAS 1
•Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2
•Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12.
•Insurance Contracts – IFRS 17
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 |
|---|
4.Significant accounting policies
The accounting policies applied in these condensed consolidated interim financial statements are the same as those applied in the consolidated financial statements of Inter & Co, Inc. for the year ended December 31, 2022, except for the changes in items a and b described below.
a.Basis for consolidation
Companies that Inter controls are classified as subsidiaries. The Company controls an entity when it is exposed to, or has rights to the variable returns arising from its involvement with the entity and has the ability to use its power over such entity to affect the amount of their returns.
The subsidiaries are consolidated in full as from the date the Company gains control of their activities until the date on which control ceases to exist. With regard to the significant restrictions on the Group’s ability to access or use the assets and settle the Group's liabilities, only the regulatory restrictions, linked to the compulsory reserves maintained in compliance with the requirement of the Central Bank of Brazil, which restrict the ability of subsidiaries of Inter to transfer cash to other entities within the economic group. There are no other legal or contractual restrictions and no guarantees or other requirements that may restrict that dividends and other capital distributions are paid or that loans and advances are made or paid to (or by) other entities within the economic group.
The following table shows the subsidiaries in each period:
| Entity | Branch of Activity | Common shares <br>and/or quotas | Functional currency | Country | Share in the capital (%) | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 03/31/2023 | 12/31/2022 | ||||||||||
| Direct subsidiaries | |||||||||||
| Inter&Co Securities LLC | Holding Company | — | US | USA | 100.00 | % | 100.00 | % | |||
| Inter&Co Participações Ltda. | Holding Company | 1,500,000 | BRL | Brazil | 100.00 | % | 100.00 | % | |||
| INTRGLOBALEU Serviços Administrativos, LDA | Holding Company | — | Portugal | 100.00 | % | 100.00 | % | ||||
| Mortgage Holding, Inc | Holding Company | 50,000 | US | USA | 100.00 | % | — | % | |||
| Branch of Activity | Common shares <br>and/or quotas | Functional currency | Country | Share in the capital (%) | |||||||
| Entity/Fund | 03/31/2023 | ||||||||||
| Indirect subsidiaries | |||||||||||
| Inter Holding Financeira S.A. | Holding Company | 401,159,540 | BRL | Brazil | 100.00 | % | 100.00 | % | |||
| Banco Inter S.A. | Multiple Bank | 1,297,308,713 | BRL | Brazil | 100.00 | % | 100.00 | % | |||
| Inter Distribuidora de Títulos e Valores Mobiliários Ltda. (e) | TVM Distributor | 25,000,000 | BRL | Brazil | 100.00 | % | 98.30 | % | |||
| Inter Digital Corretora e Consultoria de Seguros Ltda. | Insurance broker | 59,750 | BRL | Brazil | 60.00 | % | 60.00 | % | |||
| Inter Marketplace Ltda. | Marketplace | 5,000,000 | BRL | Brazil | 100.00 | % | 100.00 | % | |||
| Inter Asset Holding S.A. | Asset management | 7,000,000 | BRL | Brazil | 70.00 | % | 70.00 | % | |||
| Inter Titulos Fundo de Investimento | Investment Fund | 489,302 | BRL | Brazil | 98.30 | % | 98.30 | % | |||
| BMA Inter Fundo De Investimento Em Direitos Creditórios Multissetorial | Investment Fund | 5,000,000 | BRL | Brazil | 87.40 | % | 90.70 | % | |||
| TBI Fundo De Investimento Renda Fixa Credito Privado | Investment Fund | 388,157,511 | BRL | Brazil | 100.00 | % | 100.00 | % | |||
| TBI Fundo De Investimento Crédito Privado Investimento Exterior | Investment Fund | 443,689,064 | BRL | Brazil | 100.00 | % | 100.00 | % | |||
| IM Designs Desenvolvimento de Software Ltda. | Provision of services | 50,000,000 | BRL | Brazil | 50.00 | % | 50.00 | % | |||
| Acerto Cobrança e Informações Cadastrais S.A. | Provision of services | 60,000,000,000 | BRL | Brazil | 60.00 | % | 60.00 | % | |||
| Inter & Co Payments, Inc (Usend) | Provision of services | 16,000,000 | US | USA | 100.00 | % | 100.00 | % | |||
| Inter Asset Gestão de Recursos Ltda | Asset management | 30,680 | BRL | Brazil | 99.98 | % | 70.00 | % | |||
| Inter Café Ltda. | Provision of services | 10,000 | BRL | Brazil | 100.00 | % | 100.00 | % | |||
| Inter Boutiques Ltda. | Provision of services | 10,000 | BRL | Brazil | 100.00 | % | 100.00 | % | |||
| Inter Food Ltda. | Provision of services | 7,000,000 | BRL | Brazil | 70.00 | % | 70.00 | % | |||
| Inter Viagens e Entretenimento Ltda. (d) | Provision of services | 1,000 | BRL | Brazil | 100.00 | % | 100.00 | % | |||
| YellowFi Management, LLC | Provision of services | 50,000 | US | USA | 100.00 | % | — | ||||
| YellowFi Mortgage, LLC | Provision of services | 50,000 | US | USA | 100.00 | % | — |
All values are in US Dollars.
(a) On September 14, 2022, the incorporation of Inter & Co Securities LLC in the US jurisdiction was approved, with no assets, liabilities or contingencies.
(b) On November 14, 2022, the incorporation of Inter & Co Participações Ltda. was approved, company incorporated in Brazil, whose corporate purpose is the participation in other companies.
(c) On December 20, 2022, the incorporation of INTRGLOBALEU Serviços Administrativos, LDA was approved. The company was established in Portugal, as part of the internationalization process. It is a non-operating holding company with no assets, liabilities or contingencies.
(d) On October 31, 2022, Banco Inter S.A carried out the partial spin-off of its investment in Inter Marketplace Ltda. to a new company, Inter Viagens e Entretenimento Ltda., which was later incorporated by Inter Marketplace Ltda. Inter Viagens e Entretenimento Ltda. has as its corporate object the practice of intermediation and agency of services and businesses in general. As a result of the spin-off, the corporate capital of Inter Marketplace Ltda. was reduced by R$94.
(e) On February 15, 2023, Banco Inter S.A. completed the acquisition of the remaining shares of its subsidiary "Inter Distribuidora de Títulos e Valores Mobiliários Ltda", acquiring the remaining 416,667 shares at nominal value of R$1.00 each, fully subscribed and paid up. With the acquisition, the parent company now owns 25,000,000 shares.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 |
|---|
Non-controlling interest
The Group recognizes the portion related to non-controlling interests in shareholders’ equity in the consolidated balance sheet. In transactions involving purchase of interests with non-controlling shareholders, the difference between the amount paid and the interest acquired is recorded in shareholders’ equity. Gains or losses on sales to non-controlling shareholders are also recorded in shareholders’ equity. The company owns 50% or more of the voting capital of all indirect subsidiaries.
Balances and transactions eliminated on consolidation
Intra-group balances and transactions, including any unrealized gains or losses arising from intra-group transactions, are eliminated in the consolidation process. Unrealized losses are eliminated only to the extent that there is no evidence of impairment.
b. Business combination
Business combinations are recorded using the acquisition method when the set of acquired activities and assets meets the definition of a business and control is transferred to the Group. In determining whether a set of activities and assets is a business, Inter assesses whether the acquired set of assets and activities includes at least one input and one substantive process that together contribute significantly to the ability to generate outputs.
Inter has the option to apply a "concentration test" that allows for a simplified assessment of whether a set of acquired activities and assets is not a business. The optional concentration test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.
The consideration transferred is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill arising on the transaction is tested annually for impairment. Gains on an bargain purchase are recognized immediately in the income statement. Transaction costs are recorded in the income statement as incurred, except for costs related to the issue of debt or equity instruments. The consideration transferred does not include amounts relating to the payment of pre-existing relationships. These amounts are generally recognized in the income statement.
Any contingent consideration payable is measured at its acquisition-date fair value. If the contingent consideration is classified as an equity instrument, then it is not remeasured and settlement is recorded within equity. The remaining contingent consideration is remeasured at fair value at each reporting date and subsequent changes in fair value are recorded in the income statement.
YellowFI Mortgage, LLC and YellowFI Management, LLC
On January 24, 2023, through the holding company "Inter Mortgage Holding, Inc.," 100% of the share capital of YellowFi Mortgage LLC and YellowFi Management LLC were acquired.
YellowFi Mortgage LLC is a company based in the United States with operations in Florida, Georgia, and Colorado, providing real estate-focused credit. The company holds licenses in all three operating states and obtains funding from investors. The business specializes in originating and distributing mortgages, enabling the development of other loan portfolios in the US. With this acquisition, Inter & Co customers will have access to a wider range of financial services.
i. Consideration transferred
The following table summarizes the amounts of consideration transferred:
| In thousands of Brazilian reais | YellowFi Mortgage, LLC | YellowFi Management, LLC | ||
|---|---|---|---|---|
| Cash | 1,990 | 939 | ||
| Cash to be paid | — | 388 | ||
| Total consideration transferred | 1,990 | 1,327 | Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | |
| --- |
Identifiable assets acquired, liabilities assumed and goodwill
The fair value of identifiable assets and liabilities of YellowFi Mortgage, LLC and YellowFI Management, LLC. at the acquisition date is as follows:
| In thousands of Brazilian reais | YellowFi Mortgage, LLC | YellowFi Management, LLC |
|---|---|---|
| Assets | 879 | 238 |
| Cash and cash equivalents | 860 | 3 |
| Other assets | 19 | 235 |
| Liabilities | (807) | (26) |
| Borrowing and onlending | (807) | — |
| Other liabilities | — | (26) |
| Total net identifiable assets at fair value | 72 | 212 |
| Goodwill on acquisition (a) | 1,918 | 1,114 |
| Total consideration transferred | 1,990 | 1,326 |
(a)Inter has engaged an independent valuation service to develop a study on the allocation of the purchase price ("PPA") of the identifiable assets acquired, assumed liabilities, and goodwill. However, as of the date of these quarterly financial information releases, the study is still being prepared. The preliminary goodwill resulting from the acquisition of YellowFi Mortgage LLC and YellowFi Management LLC is R$ 2,288 and R$ 727, respectively. This value represents the future economic benefits resulting from the synergies generated by our expansion in US operations and the offer of a wider range of financial services to our customers. Although the PPA study is not yet complete, we believe that the preliminary goodwill values are fair and substantially reflect the potential for growth of our business in the United States. We will continue to carefully evaluate the allocation of the purchase price and will provide timely updates on any relevant changes in our financial statements.
ii. Acquisition costs
Inter incurred acquisition-related costs of R$ 362 on lawyer’s fees, audit and due diligence costs. These costs were recorded as “Administrative expenses” in the income statement.
Inter & Co Payments, Inc.
On January 14, 2022, the Group concluded the acquisition of 100% of the share capital of Inter & Co Payments, Inc. (formerly USEND or Pronto Money Transfer, Inc), a U.S. based company with experience in foreign exchange and financial services, offering, among other products, a digital Global Account solution to perform money transfers between countries. It has licenses to act as a Money Transmitter in more than 40 US states, and can offer services such as digital wallet, debit card, bill payment, among others.
i. Consideration transferred
The following table summarizes the amounts of consideration transferred:
| In thousands of Brazilian reais | |
|---|---|
| Cash | 671,704 |
| Cash to be paid | 49,520 |
| Total consideration transferred (a) | 721,224 |
(a) Amounts will be paid in annual installments over a three-year period.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 |
|---|
Identifiable assets acquired, liabilities assumed and goodwill
The fair value of identifiable assets and liabilities of Inter& Co Payments, Inc. at the acquisition date is as follows:
| In thousands of Brazilian reais | |
|---|---|
| Assets | 502,361 |
| Cash and cash equivalents | 130,502 |
| Property and equipment | 6,464 |
| Accounts receivable | 209,772 |
| Intangible assets | 155,623 |
| Liabilities | (335,896) |
| Borrowing and onlending | (2) |
| Other liabilities | (303,213) |
| Deferred tax liabilities | (32,682) |
| Total net identifiable assets at fair value | 166,465 |
| Goodwill on acquisition (a) | 554,759 |
| Total consideration transferred | 721,224 |
(a) Inter conducted the study for purchase price allocation ("PPA") on identifiable assets acquired, liabilities assumed and goodwill. The goodwill in the amount of R$554,759, resulting from the acquisition, comprises the value of future economic benefits from synergies arising from part of our internationalization strategy. The goodwill is not expected to be deductible for income tax and social contribution purposes. but no indication was identified. The discount rate used to calculate the present value of the expected cash flows was 14.5% determined based on the WACC methodology, in which the cost of capital is determined by the weighted average market value of the components of the capital structure (own and third-party).
ii. Fair value measurement
The techniques used to measure the fair value of significant assets acquired were as follows.
| Assets acquired | Valuation technique |
|---|---|
| Intangible assets | We estimated the fair value of software using the Relief-from-Royalty method, which derives from the income approach. For this, the following assessment criteria were applied:<br><br><br><br>Revenue attributable to software, income tax deduction, application of discount rate, determination of useful life, tax benefit of amortization.<br><br><br><br>To calculate the value of licenses, the With or Without methodology was used, by measuring the impact on cash flow during the process of acquiring operating licenses in the US market. It was estimated that the average time to obtain such operating permits is 1 year. In this way, a postponement of revenue levels was considered, in addition to the expenditure for obtaining and renewing licenses throughout the projected period. |
The Other assets line was identified and was mostly comprised of accounts receivable and prepaid expenses. No expected credit losses were identified in connection with the accounts receivables acquired.
The Other Liabilities line was assumed and was mainly composed of accounts payable to service providers abroad.
iii. Acquisition costs
Inter incurred acquisition-related costs of R$ 5,821 on lawyer’s fees, audit and due diligence costs. These costs were recorded as “Administrative expenses” in the income statement.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 |
|---|
5.Operating segments
Operating segments are disclosed based on internal information that is used by the chief operating decision maker to allocate resources and to assess performance. The chief operating decision-maker, responsible for allocating resources, evaluating the performance of the operating segments and responsible for making strategic decisions for the Group, is the CEO, together with the Board of Directors.
In 2022, there were changes in the information reported to the Executive Board and the Board of Directors, and the number of reportable segments was reduced from six to four. The main changes were:
–the merger of the asset management segment with the securities segment to form the Investments segment;
–the transfer of some of the services segment's activities to the banking segment, forming the "Banking & Spending" segment;
–the transfer of the remaining activities of the services segment to "others"; It is
–change in the name of the "marketplace" segment, which is now called the "Inter Shop & Commerce Plus" segment.
The Group's operations are divided into four reportable segments: Banking & Spending; Investments; Insurance Brokerage; Inter Shop & Commerce Plus. Prior period segment disclosures have been reclassified to conform to current year presentation.
Profit by operating segment
Each operating segment is composed of one or more legal entities. The measurement of profit by operating segment takes into account all revenues and expenses recognized by the companies that make up each segment.
Transactions between segments are carried out under terms and rates compatible with those practiced with third parties, where applicable.
a.Banking & Spending
This segment comprises a wide range of banking products and services, such as checking accounts, cards, deposits, loans and advances and other services, which are available to the customers primarily by means of Inter’s mobile application. This segment offers foreign exchange and financial services, as well as a Global Account digital solution for money remittances between countries, among others.
b.Investments
This segment is responsible for operations related to the acquisition, sale and custody of securities, the structuring and distribution of securities in the capital market and operations related to the management of fund portfolios and other assets (purchase, sale, risk management). Revenues consist primarily of administration fees and commissions charged to investors for the rendering of such services.
c.Insurance Brokerage
This segment offers insurance products underwritten by insurance companies with which Inter has an agreement (‘partner insurance companies’), including warranties, life, property and automobile insurance and pension products, as well as consortium products provided by a third party with whom Inter has a commercial agreement. The income from brokerage commissions is recognized in the income statement when services are provided, that is, when the performance obligation is fulfilled upon sale to the customer.
d.Inter Shop & Commerce Plus
This segment includes sales of goods and/or services with partner companies through our digital platform. The commission income comprises basically commissions received for sales and/or for the rendering of these services.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 |
|---|
Segment information
| 03/31/2023 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Banking & Spending | Investments | Insurance Brokerage | Inter Shop & Commerce Plus | Total | Others | Eliminations | Consolidated | |||
| Interest income | 992,033 | 6,655 | — | — | 998,688 | 23,252 | (9,013) | 1,012,927 | ||
| Interest expenses | (665,800) | (11,438) | — | (515) | (677,753) | (3,438) | 8,420 | (672,771) | ||
| Income from securities | 370,958 | 9,541 | 589 | 4,870 | 385,958 | 6,830 | (21,864) | 370,924 | ||
| Net interest income | 697,191 | 4,758 | 589 | 4,355 | 706,893 | 26,644 | (22,457) | 711,080 | ||
| Revenues from services and commissions | 166,352 | 20,250 | 27,261 | 66,959 | 280,822 | 1,531 | — | 282,353 | ||
| Expenses from services and commissions | (33,110) | — | — | — | (33,110) | (2,568) | — | (35,678) | ||
| Net result from services and commissions | 133,242 | 20,250 | 27,261 | 66,959 | 247,712 | (1,037) | — | 246,675 | ||
| Net gains / (losses) on derivatives | 518 | — | — | — | 518 | (36) | — | 482 | ||
| Other revenues | 93,965 | 8,543 | 12,712 | 19,531 | 134,751 | 51,928 | (120,802) | 65,877 | ||
| Revenues | 924,916 | 33,551 | 40,562 | 90,845 | 1,089,874 | 77,499 | (143,259) | 1,024,114 | ||
| Impairment losses on financial assets | (345,921) | 317 | — | (4,827) | (350,431) | (250) | — | (350,681) | ||
| Personnel expenses | (159,998) | (4,302) | (1,796) | (4,514) | (170,610) | (1,802) | — | (172,412) | ||
| Depreciation and amortization | (34,578) | (711) | (238) | (2,007) | (37,534) | (43) | — | (37,577) | ||
| Tax expenses | (54,768) | (2,177) | (3,823) | (7,918) | (68,686) | (185) | — | (68,871) | ||
| Other administrative expenses | (352,251) | (11,379) | (10,791) | (7,765) | (382,186) | (3,250) | (179) | (385,615) | ||
| Income before taxes and interests in associates | (22,600) | 15,299 | 23,914 | 63,814 | 80,427 | 71,969 | (143,438) | 8,958 | ||
| Income from equity interests in associates | (3,061) | — | — | — | (3,061) | — | — | (3,061) | ||
| Profit (loss) before taxes | (25,661) | 15,299 | 23,914 | 63,814 | 77,366 | 71,969 | (143,438) | 5,897 | ||
| Current income tax and social contribution | — | (5,259) | (9,688) | (13,340) | (28,287) | (38) | — | (28,325) | ||
| Deferred income tax and social contribution | 41,566 | 799 | 1,563 | 1,641 | 45,569 | 1,075 | — | 46,644 | ||
| Income Tax | 41,566 | (4,460) | (8,125) | (11,699) | 17,282 | 1,037 | — | 18,319 | ||
| Profit / (loss) for the period | 15,905 | 10,839 | 15,789 | 52,115 | 94,648 | 73,006 | (143,438) | 24,216 | ||
| Total assets | 47,963,471 | 641,651 | 145,386 | 507,602 | 49,258,110 | 15,366,441 | (16,923,457) | 47,701,094 | ||
| Total liabilities | 40,718,917 | 552,142 | 74,186 | 142,627 | 41,487,872 | 237,227 | (1,163,911) | 40,561,188 | ||
| Total equity | 7,244,554 | 89,509 | 71,200 | 364,975 | 7,770,238 | 15,129,214 | (15,759,546) | 7,139,906 | Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | |
| --- | 03/31/2022 | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| Banking & Spending | Investments | Insurance Brokerage | Inter Shop & Commerce Plus | Total | Others | Eliminations | Consolidated | |||
| Interest income | 505,566 | 747 | — | 1 | 506,314 | 17,233 | (2,387) | 521,160 | ||
| Interest expenses | (336,831) | (2,461) | — | — | (339,292) | — | 2,521 | (336,771) | ||
| Income from securities | 344,818 | 5,820 | 1,997 | 1,621 | 354,256 | 15,211 | (21,454) | 348,013 | ||
| Net interest income | 513,553 | 4,106 | 1,997 | 1,622 | 521,278 | 32,444 | (21,320) | 532,402 | ||
| Revenues from services and commissions | 89,461 | 20,402 | 18,475 | 75,377 | 203,715 | 2,504 | — | 206,219 | ||
| Expenses from services and commissions | (27,627) | — | — | (4) | (27,631) | (885) | — | (28,516) | ||
| Net result from services and commissions | 61,834 | 20,402 | 18,475 | 75,373 | 176,084 | 1,619 | — | 177,703 | ||
| Net gains / (losses) on derivatives | 17,511 | — | — | — | 17,511 | (6,502) | — | 11,009 | ||
| Other revenues | 147,728 | 7,262 | 9,222 | 10,675 | 174,887 | 148 | (62,628) | 112,407 | ||
| Revenues | 740,626 | 31,770 | 29,694 | 87,670 | 889,760 | 27,709 | (83,948) | 833,521 | ||
| Impairment losses on financial assets | (313,503) | 567 | — | — | (312,936) | (10) | — | (312,946) | ||
| Personnel expenses | (134,163) | (3,390) | (2,079) | (4,291) | (143,923) | (1,197) | — | (145,120) | ||
| Depreciation and amortization | (34,985) | (699) | (116) | (650) | (36,450) | (28) | — | (36,478) | ||
| Tax expenses | (38,848) | (2,137) | (3,340) | (11,740) | (56,065) | (628) | — | (56,693) | ||
| Other administrative expenses | (357,393) | (7,908) | (2,641) | (5,542) | (373,484) | (3,876) | 554 | (376,806) | ||
| Income before taxes and interests in associates | (138,266) | 18,203 | 21,518 | 65,447 | (33,098) | 21,970 | (83,394) | (94,522) | ||
| Income from equity interests in associates | (5,572) | — | — | — | (5,572) | 8,735 | (8,735) | (5,572) | ||
| Profit (loss) before taxes | (143,838) | 18,203 | 21,518 | 65,447 | (38,670) | 30,705 | (92,129) | (100,094) | ||
| Current income tax and social contribution | — | (7,368) | (8,100) | (17,453) | (32,921) | (291) | — | (33,212) | ||
| Deferred income tax and social contribution | 103,691 | 3 | 790 | — | 104,484 | — | — | 104,484 | ||
| Income Tax | 103,691 | (7,365) | (7,310) | (17,453) | 71,563 | (291) | — | 71,272 | ||
| Profit / (loss) for the period | (40,147) | 10,838 | 14,208 | 47,994 | 32,893 | 30,414 | (92,129) | (28,822) | ||
| Total assets | 46,473,673 | 464,654 | 148,411 | 490,752 | 47,577,490 | 22,199,379 | (23,433,769) | 46,343,100 | ||
| Total liabilities | 39,353,463 | 380,246 | 93,001 | 183,568 | 40,010,278 | 159,782 | (916,064) | 39,253,996 | ||
| Total equity | 7,120,210 | 84,408 | 55,410 | 307,184 | 7,567,212 | 22,039,597 | (22,517,705) | 7,089,104 | ||
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | ||||||||||
| --- |
6.Financial risk management
Risk management at Interlagos includes credit, market, liquidity and operational risks. Risk management activities are carried out by independent and specialized structures, in accordance with previously defined policies and strategies. In general, the activities and processes seek to identify, measure, and control the financial and non-financial risks to which Inter is subject.
The model adopted by Inter involves a structure of areas and committees that seek to ensure:
•Segregation of function;
•Specific structure for risk management;
•Defined policies and norms;
•Clear norms and competence structure;
•Decisions at various hierarchical levels; and
•Statutory and non-statutory committees.
a.Credit risk
Credit risk is defined as the possibility of losses associated with the failure of the borrower or counterparty to meet their respective financial obligations in the agreed-upon terms, the devaluation of a credit agreement arising from the increased risk of default by the borrower, among others.
The financial instruments subject to credit risk are submitted to careful credit evaluation prior to contracting, as well as throughout the term of the respective operations. The credit analyses are based on the borrower's (or counterparty's) economic and financial capacity, behavior, including payment history, credit reputation, in addition to the terms and conditions of the respective credit operation, including terms, rates and guarantees.
Loans and advances to customers, as shown in Note 10, are mainly represented by the following operations:
•Working capital operations: are guaranteed by receivables, promissory notes, sureties provided by their owners and occasionally by property or other tangible assets, when applicable;
•Payroll loans repayments: are mainly represented by payroll loan cards and personal loans. These are deducted directly from the borrowers’ pensions, income or salaries and settled directly by the entity responsible for making those payments (e.g. company or government body); The operations of FGTS (Guarantee Fund for Time of Service) anniversary withdrawal are guaranteed by transfer;
•Personal loans and credit cards: generally, do not have guarantees;
•Real estate financing: is collateralized by the real estate financed.
Repossessed collateral is generally sold at public auctions, free of any charges or encumbrances.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 |
|---|
Guarantees of real estate loans and financing
The tables below present the credit exposure of real estate loans and advances to retail customers by loan-to-value (LTV) ratio. LTV is calculated as the proportion of the gross value of the loans or the value of the outstanding loans to the value of collateral. The gross value of the loans excludes any provision for impairment. The assessment of guarantee of real estate loans is based on the value adjusted for changes in real estate price indexes:
| 03/31/2023 | 12/31/2022 | |
|---|---|---|
| Lower than 30% | 679,176 | 693,322 |
| 31 - 50% | 1,794,943 | 1,689,190 |
| 51 - 70% | 2,356,428 | 2,308,021 |
| 71 - 90% | 1,728,000 | 1,503,703 |
| Higher than 90% | 58,255 | 57,577 |
| 6,616,802 | 6,251,813 |
b.Liquidity risk
Liquidity risk is the possibility of the Group not being able to meet its expected or unexpected financial obligations efficiently, including those obligations arising from guarantees provided or even unexpected customer redemptions. Thus, within liquidity risk also includes the possibility that Inter is unable to negotiate the sale of assets at market prices and, in turn, incur additional losses. There were no material changes in the nature of liquidity risk exposures in the quarter ended March 31, 2023.
c.Analyses of financial instruments by remaining contractual term
The table below presents the projected future realizable value of Inter’s financial assets and liabilities by contractual term:
| 03/31/2023 | |||||||
|---|---|---|---|---|---|---|---|
| Note | Up to 3 months | 3 months Up to 1 year | Above 1 year | Total | |||
| Financial assets | |||||||
| Cash and cash equivalents | 8 | 1,791,707 | — | — | 1,791,707 | ||
| Compulsory deposits at Central Bank of Brazil | 2,993,616 | — | — | 2,993,616 | |||
| Amounts due from financial institutions | 9 | 3,770,074 | — | — | 3,770,074 | ||
| Securities | 10 | 636,676 | 354,225 | 11,544,450 | 12,535,351 | ||
| Derivative financial assets | 11 | 1,122 | — | — | 1,122 | ||
| Loans and advances to customers | 12 | 6,059,991 | 6,239,118 | 11,533,765 | 23,832,874 | ||
| Other assets | 17 | — | — | 90,256 | 90,256 | ||
| Total financial assets | 15,253,186 | 6,593,343 | 23,168,471 | 45,015,000 | |||
| Financial liabilities | |||||||
| Liabilities with financial and similar institutions | 18 | 8,216,538 | — | — | 8,216,538 | ||
| Liabilities with customers | 19 | 13,258,743 | 1,197,857 | 9,725,406 | 24,182,006 | ||
| Securities issued | 20 | 882,691 | 450,582 | 5,307,284 | 6,640,557 | ||
| Derivative financial liabilities | 11 | — | — | 32,614 | 32,614 | ||
| Borrowing and onlending | 21 | 6,013 | 3,019 | 27,600 | 36,632 | ||
| Total financial liabilities | 22,363,985 | 1,651,458 | 15,092,904 | 39,108,347 | Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | ||
| --- | 12/31/2022 | ||||||
| --- | --- | --- | --- | --- | --- | ||
| Note | Up to 3 months | 3 months Up to 1 year | Above 1 year | Total | |||
| Financial assets | |||||||
| Cash and cash equivalents | 8 | 1,331,648 | — | — | 1,331,648 | ||
| Compulsory deposits at Central Bank of Brazil | 2,854,778 | — | — | 2,854,778 | |||
| Amounts due from financial institutions | 9 | 4,258,856 | — | — | 4,258,856 | ||
| Securities | 10 | 666,788 | 272,489 | 11,509,288 | 12,448,565 | ||
| Loans and advances to customers | 12 | 6,199,963 | 5,916,020 | 10,582,345 | 22,698,328 | ||
| Other assets | 17 | — | — | 87,318 | 87,318 | ||
| Total financial assets | 15,312,033 | 6,188,509 | 22,178,951 | 43,679,493 | |||
| Financial liabilities | |||||||
| Liabilities with financial and similar institutions | 18 | 7,906,897 | — | — | 7,906,897 | ||
| Liabilities with customers | 19 | 14,873,030 | 849,420 | 7,920,354 | 23,642,804 | ||
| Securities issued | 20 | 1,149,070 | 421,032 | 4,632,063 | 6,202,165 | ||
| Derivative financial instruments | 11 | — | — | 37,768 | 37,768 | ||
| Borrowing and onlending | 21 | 4,988 | 4,138 | 27,323 | 36,448 | ||
| Total financial liabilities | 23,933,985 | 1,274,590 | 12,617,508 | 37,826,082 | Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | ||
| --- |
d.Financial assets and liabilities using a current/non-current classification
The following table represents the Group's financial assets and liabilities, segregated into current and non-current, taking into account their contractual maturity at the date of the condensed consolidated interim financial information:
| 03/31/2023 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Current | Non-current | Total | ||||||
| Assets | ||||||||
| Cash and cash equivalents | 1,791,707 | — | 1,791,707 | |||||
| Amounts due from financial institutions | 3,770,074 | — | 3,770,074 | |||||
| Compulsory deposits at Central Bank of Brazil | 2,993,616 | — | 2,993,616 | |||||
| Securities | 990,901 | 11,544,450 | 12,535,351 | |||||
| Derivative financial assets | 1,122 | — | 1,122 | |||||
| Loans and advances to customers, net of provisions for expected loss | 11,220,982 | 11,150,185 | 22,371,167 | |||||
| Other assets | — | 90,256 | 90,256 | |||||
| Total assets | 20,768,402 | 22,784,891 | 43,553,293 | |||||
| Liabilities | ||||||||
| Liabilities with financial institutions | 8,216,538 | — | 8,216,538 | |||||
| Liabilities with customers | 14,456,600 | 9,725,406 | 24,182,006 | |||||
| Securities issued | 1,333,273 | 5,307,284 | 6,640,557 | |||||
| Derivative financial liabilities | — | 32,614 | 32,614 | |||||
| Borrowing and onlending | 9,032 | 27,600 | 36,632 | |||||
| Total liabilities | 24,015,443 | 15,092,904 | 39,108,347 | 12/31/2022 | ||||
| --- | --- | --- | --- | |||||
| Current | Non-current | Total | ||||||
| Assets | ||||||||
| Cash and cash equivalents | 1,331,648 | — | 1,331,648 | |||||
| Amounts due from financial institutions | 4,258,856 | — | 4,258,856 | |||||
| Compulsory deposits at Central Bank of Brazil | 2,854,778 | — | 2,854,778 | |||||
| Securities | 939,277 | 11,509,288 | 12,448,565 | |||||
| Loans and advances to customers, net of provisions for expected loss | 11,159,852 | 10,220,066 | 21,379,916 | |||||
| Other assets | — | 87,318 | 87,318 | |||||
| Total assets | 20,544,411 | 21,816,672 | 42,361,081 | |||||
| Liabilities | ||||||||
| Liabilities with financial institutions | 7,906,897 | — | 7,906,897 | |||||
| Liabilities with customers | 15,722,450 | 7,920,354 | 23,642,804 | |||||
| Securities issued | 1,570,102 | 4,632,063 | 6,202,165 | |||||
| Derivative financial liabilities | — | 37,768 | 37,768 | |||||
| Borrowing and onlending | 9,126 | 27,323 | 36,448 | |||||
| Total liabilities | 25,208,575 | 12,617,508 | 37,826,082 | Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | ||||
| --- |
e.Market risk
Market risk is defined as the possibility of losses resulting from fluctuations in the market values of positions held by the Institution and its subsidiaries, including the risk of foreign exchange variation, changes in interest curves, changes in share prices and/or commodity prices. Thus, market risk derives from the mismatching of terms/indexes between Inter's assets/liabilities. In the Group, the management of market risk has, among others, the objective of supporting the business areas, establishing processes and implementing the necessary tools for evaluation and control, enabling the measurement and monitoring of risk levels, as defined by the Senior Management.
The management of market and liquidity risks is monitored by the Assets and Liabilities Committee, where control reports, managerial positions and strategies/policies on the respective risks are analyzed.
Measurement
The Inter & Co, aiming at greater efficiency in the management of its operations exposed to market risk, segregates its operations, including derivative financial instruments, as follows:
Trading Book: composed of operations contracted with the intention of being traded or for hedge of the trading book, for which there is an intention to be traded before their contractual term, subject to normal market conditions, and which do not contain a clause of non-tradability.
Banking Book: composed of operations not classified in the Trading Book, whose main characteristic is the intention of being held until their maturities.
In line with market practices, Inter&Co manages its risks dynamically, seeking to identify, measure, evaluate, monitor, report, control and mitigate the exposures to market risks of its own positions. One of the methods of assessing the positions subject to market risk is the Value at Risk (VaR) model. The methodology used to calculate the VaR is the parametric model with a confidence level (CL) of 99% and a time horizon (TH) of one day, scaled to 21 days.
We present below the set of operations recorded in the Trading Book:
| R$ thousand | 03/31/2023 | 12/31/2022 |
|---|---|---|
| Risk factor | VaR 21 days | VaR 21 days |
| Price index coupons | 670 | 4,133 |
| Pre fixed interest rate | 1,077 | 541 |
| Foreign currency coupons | 540 | 883 |
| Foreign currencies | 1,082 | 624 |
| Share price | 329 | 528 |
| Subtotal | 3,698 | 6,709 |
| Diversification effects (correlation) | 2,004 | 1,958 |
| Value-at-Risk | 1,694 | 4,751 |
The VaR of the Banking book by risk factor is presented in the following table:
| R$ thousand | 03/31/2023 | 12/31/2022 | ||
|---|---|---|---|---|
| Risk factor | VaR 21 days | VaR 21 days | ||
| Price index coupons | 199,609 | 234,172 | ||
| Interest rate coupons | 49,206 | 77,448 | ||
| Pre fixed interest rate | 43,616 | 55,003 | ||
| Others | 12,207 | 1,398 | ||
| Subtotal | 304,638 | 368,021 | ||
| Diversification effects (correlation) | 42,073 | 30,767 | ||
| Value-at-Risk | 262,565 | 337,254 | Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | |
| --- |
f.Sensitivity analysis
The Group performs sensitivity analysis by market risk factors considered relevant. The largest losses, by risk factor, in each of the scenarios were presented with an impact on the result, providing a view of the exposure by risk factor in specific scenarios.
Simulations were performed with three possible scenarios, in order to estimate the impact on the fair value of the financial assets presented below:
•Scenario I: Probable situation which reflects the perception of the senior management in relation to the scenario with the highest probability of occurrence considering macroeconomic factors and market information (B3, Anbima etc.) observed in the period. Assumption used: deterioration and evolution in market variables through parallel shocks of 1 basis point in price index coupon rates, interest rate coupons, fixed interest rates, considering the worst resulting losses by risk factor and, consequently, not considering the rationality between the macroeconomic variables.
•Scenario II: Possible situation of deterioration and evolution in market variables through a 25% shock in the curves of price index coupon rates, interest rate coupons, fixed interest rates based on market conditions observed in each period, considering the worst resulting losses by risk factor and, consequently, not considering the rationality between the macroeconomic variables.
•Scenario III: Possible situation of deterioration and evolution in market variables through a 50% shock in the curves of price index coupon rates, interest rate coupons, fixed interest rates based on market conditions observed in each period, considering the worst resulting losses by risk factor and, consequently, not considering the rationality between the macroeconomic variables.
The following table presents the results obtained for the Trading Book and for the Banking Book in an aggregate manner.
| Exposures | R thousand | |||||
|---|---|---|---|---|---|---|
| Banking and Trading book | 03/31/2023 | |||||
| Risk factor | Risk of variation in: | Scenario I | Rate variation in scenario 2 | Scenario II | Rate variation in scenario 3 | Scenario III |
| IPCA coupon | Price index coupon | (3,205) | increase | (429,501) | increase | (799,900) |
| IGP-M coupon | Price index coupon | (19) | increase | (2,687) | increase | (5,128) |
| Pre-fixed rate | Pre-fixed rate | (446) | increase | (140,576) | increase | (298,016) |
| TR coupon | Interest rate coupon | (872) | increase | (195,357) | increase | (345,814) |
All values are in US Dollars.
| Exposures | R thousand | |||||
|---|---|---|---|---|---|---|
| Banking and Trading book | 12/31/2022 | |||||
| Risk factor | Risk of variation in: | Scenario I | Rate variation in scenario 2 | Scenario II | Rate variation in scenario 3 | Scenario III |
| IPCA coupon | Price index coupon | (3,085) | increase | (421,495) | increase | (784,028) |
| IGP-M coupon | Price index coupon | (21) | increase | (2,949) | increase | (5,542) |
| Pre-fixed rate | Pre-fixed rate | (470) | increase | (162,809) | increase | (338,073) |
| TR coupon | Interest rate coupon | (850) | increase | (188,954) | increase | (334,415) |
All values are in US Dollars.
g.Operational risk
Operational Risk is defined as the possibility of losses resulting from failure, deficiency or inadequacy of any internal processes involving people, systems or from external and unexpected events. This definition includes possible losses from fraud, labor risk, as well as legal risks associated with regulatory or even contractual aspects, arising from the Group's activities. In line with best governance practices, Inter Brasil has an area dedicated to managing and monitoring operational risk, with defined policies and controls implemented according to the nature and complexity of the products, services and activities.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 |
|---|
7.Fair values of financial instruments
a.Financial instruments – Classification and fair values
Financial Instruments are classified as financial assets into the following measurement categories:
•Amortized cost;
•Fair value through other comprehensive income (FVOCI); and
•Fair value through profit or loss (FVTPL);
The measurement of fair value of a financial asset or liability can be classified in one of three approaches based on the type of information used for assessment, which are known as the fair value hierarchy levels, namely:
•Level I – prices negotiated on in active markets for identical assets or liabilities;
•Level II – uses inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). For example, fair value is determined using valuation techniques using observable market data; and
•Level III – uses significant inputs that are not based on observable market data (unobservable inputs).
The following table sets forth the breakdown of financial assets and liabilities according to the accounting classification. It also shows the carrying amounts and fair values of financial assets and liabilities, including their levels in the fair value hierarchy. It does not include information on the fair value of financial assets and liabilities not measured at fair value, when the carrying amount is a reasonable approximation of the fair value.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | | --- || | Carrying amount | | | | Fair value | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Fair value through profit or loss | Fair value through other comprehensive income | Amortized cost | Total | Level 1 | Level 2 | Level 3 (*) | Total | | March 31, 2023 | | | | | | | | | | Financial assets | | | | | | | | | | Cash and cash equivalents | — | — | 1,791,707 | 1,791,707 | — | — | — | — | | Amounts due from financial institutions | — | — | 3,770,074 | 3,770,074 | — | — | — | — | | Compulsory deposits at Central Bank of Brazil | — | — | 2,993,616 | 2,993,616 | — | — | — | — | | Securities | 1,386,710 | 9,918,159 | 1,230,482 | 12,535,351 | 9,818,767 | 1,486,103 | — | 11,304,870 | | Fair value through other comprehensive income - FVOCI | — | 9,918,159 | — | 9,918,159 | 9,314,337 | 603,822 | — | 9,918,159 | | Financial Treasury Bills (LFT) | — | 4,724,747 | — | 4,724,747 | 4,724,747 | — | — | 4,724,747 | | National Treasury Bills (LTN) | — | 615,945 | — | 615,945 | 615,945 | — | — | 615,945 | | National Treasury Notes (NTN) | — | 3,586,355 | — | 3,586,355 | 3,586,355 | — | — | 3,586,355 | | Debentures | — | 719,494 | — | 719,494 | 385,164 | 334,330 | — | 719,494 | | Certificates of Real Estate Receivables | — | 216,825 | — | 216,825 | — | 216,825 | — | 216,825 | | Financial Bills | — | 2,126 | — | 2,126 | 2,126 | — | — | 2,126 | | Commercial Promissory Notes | — | 52,667 | — | 52,667 | — | 52,667 | — | 52,667 | | Fair value through profit or loss - FVTPL | 1,386,710 | — | — | 1,386,710 | 504,430 | 882,281 | — | 1,386,710 | | Financial Treasury Bills (LFT) | 97,586 | — | — | 97,586 | 97,586 | — | — | 97,586 | | Investment fund quotas | 514,925 | — | — | 514,925 | 332,075 | 182,851 | — | 514,925 | | Certificates of Real Estate Receivables | 45,829 | — | — | 45,829 | 29,582 | 16,247 | — | 45,829 | | Certificates of Agricultural Receivables | 163,506 | — | — | 163,506 | — | 163,506 | — | 163,506 | | Debentures | 422,282 | — | — | 422,282 | 44,607 | 377,675 | — | 422,282 | | Financial Bills | 102,576 | — | — | 102,576 | — | 102,576 | — | 102,576 | | Bank Deposit Certificates | 22,095 | — | — | 22,095 | — | 22,095 | — | 22,095 | | Commercial Promissory Notes | 4,538 | — | — | 4,538 | — | 4,538 | — | 4,538 | | Agribusiness Credit Bills (LCA) | 11,789 | — | — | 11,789 | — | 11,789 | — | 11,789 | | Real Estate Credit Bills (LCI) | 1,201 | — | — | 1,201 | 197 | 1,004 | — | 1,201 | | Others | 383 | — | — | 383 | 383 | — | — | 383 | | Amortized cost | — | — | 1,230,482 | 1,230,482 | — | — | — | — | | Debentures | — | — | 80,841 | 80,841 | — | — | — | — | | National Treasury Notes (NTN) | — | — | 652,236 | 652,236 | — | — | — | — | | Rural Product Bill | — | — | 497,405 | 497,405 | — | — | — | — | | Derivative financial assets | — | — | 1,122 | 1,122 | — | — | — | — | | Loans and advances to customers, net of provisions for expected loss | — | — | 22,371,167 | 22,371,167 | — | — | — | — | | Other assets | 90,256 | — | — | 90,256 | — | — | 90,256 | 90,256 | | Total | 1,476,966 | 9,918,159 | 32,158,168 | 43,553,293 | 9,818,767 | 1,486,103 | 90,256 | 11,395,126 | | Financial liabilities | | | | | | | | | | Liabilities with financial institutions | — | — | 8,216,538 | 8,216,538 | — | — | — | — | | Liabilities with customers | — | — | 24,182,006 | 24,182,006 | — | — | — | — | | Securities issued | — | — | 6,640,557 | 6,640,557 | — | — | — | — | | Derivative financial liabilities | 32,614 | — | — | 32,614 | — | 32,614 | — | 32,614 | | Borrowing and onlending | — | — | 36,632 | 36,632 | — | — | — | — | | Total | 32,614 | — | 39,075,733 | 39,108,347 | — | 32,614 | — | 32,614 |
(*) The financial assets classified as “Level III” consists substantially of amounts relating to the variable portion of the sale of 40% of the subsidiary Inter Digital Corretora e Consultoria de Seguros Ltda. (“Inter Seguros”) to Wiz Soluções e Corretagem de Seguros S.A. (“Wiz”) on May 8, 2019. The purchase and sale contract included cash consideration of R$ 45,000 and contingent consideration based on Inter Seguros’ EBITDA in 2021, 2022, 2023 and 2024.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | | --- || | Carrying amount | | | | Fair value | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Fair value through profit or loss | Fair value through other comprehensive income | Amortized cost | Total | Level 1 | Level 2 | Level 3 (*) | Total | | December 31, 2022 | | | | | | | | | | Financial assets | | | | | | | | | | Cash and cash equivalents | — | — | 1,331,648 | 1,331,648 | — | — | — | — | | Amounts due from financial institutions | — | — | 4,258,856 | 4,258,856 | — | — | — | — | | Compulsory deposits at Central Bank of Brazil | — | — | 2,854,778 | 2,854,778 | — | — | — | — | | Securities | 1,458,664 | 9,699,546 | 1,290,355 | 12,448,565 | 9,545,890 | 1,612,320 | — | 11,158,210 | | Fair value through other comprehensive income - FVOCI | — | 9,699,546 | — | 9,699,546 | 9,112,343 | 587,203 | — | 9,699,546 | | Financial Treasury Bills (LFT) | — | 4,652,445 | — | 4,652,445 | 4,652,445 | — | — | 4,652,445 | | National Treasury Bills (LTN) | — | 589,496 | — | 589,496 | 589,496 | — | — | 589,496 | | National Treasury Notes (NTN) | — | 3,541,780 | — | 3,541,780 | 3,541,780 | — | — | 3,541,780 | | Debentures | — | 684,153 | — | 684,153 | 328,622 | 355,531 | — | 684,153 | | Certificates of Real Estate Receivables | — | 203,350 | — | 203,350 | — | 203,350 | — | 203,350 | | Financial Bills | — | 5,771 | — | 5,771 | — | 5,771 | — | 5,771 | | Commercial Promissory Notes | — | 22,551 | — | 22,551 | — | 22,551 | — | 22,551 | | Fair value through profit or loss - FVTPL | 1,458,664 | — | — | 1,458,664 | 433,547 | 1,025,117 | — | 1,458,664 | | Financial Treasury Bills (LFT) | 37,131 | — | — | 37,131 | 37,131 | — | — | 37,131 | | Investment fund quotas | 529,903 | — | — | 529,903 | 341,185 | 188,718 | — | 529,903 | | Certificates of Real Estate Receivables | 44,453 | — | — | 44,453 | — | 44,453 | — | 44,453 | | Certificates of Agricultural Receivables | 237,750 | — | — | 237,750 | — | 237,750 | — | 237,750 | | Debentures | 435,755 | — | — | 435,755 | 51,099 | 384,656 | — | 435,755 | | Financial Bills | 101,467 | — | — | 101,467 | — | 101,467 | — | 101,467 | | Bank Deposit Certificates | 44,638 | — | — | 44,638 | 3,523 | 41,115 | — | 44,638 | | Commercial Promissory Notes | 5,157 | — | — | 5,157 | — | 5,157 | — | 5,157 | | Agribusiness Credit Bills (LCA) | 20,413 | — | — | 20,413 | — | 20,413 | — | 20,413 | | Real Estate Credit Bills (LCI) | 1,613 | — | — | 1,613 | 225 | 1,388 | — | 1,613 | | Others | 384 | — | — | 384 | 384 | — | — | 384 | | Amortized cost | — | — | 1,290,355 | 1,290,355 | — | — | — | — | | Debentures | — | — | 112,914 | 112,914 | — | — | — | — | | National Treasury Notes (NTN) | — | — | 645,373 | 645,373 | — | — | — | — | | Rural Product Bill | — | — | 532,068 | 532,068 | — | — | — | — | | Loans and advances to customers, net of provisions for expected loss | — | — | 21,379,916 | 21,379,916 | — | — | — | — | | Other assets | 87,318 | — | — | 87,318 | — | — | 87,318 | 87,318 | | Total | 1,545,982 | 9,699,546 | 31,115,553 | 42,361,081 | 9,545,890 | 1,612,320 | 87,318 | 11,245,528 | | Financial liabilities | | | | | | | | | | Liabilities with financial institutions | — | — | 7,906,897 | 7,906,897 | — | — | — | — | | Liabilities with customers | — | — | 23,642,804 | 23,642,804 | — | — | — | — | | Securities issued | — | — | 6,202,165 | 6,202,165 | — | — | — | — | | Derivative financial liabilities | 37,768 | — | — | 37,768 | — | 37,768 | — | 37,768 | | Borrowing and onlending | — | — | 36,448 | 36,448 | — | — | — | — | | Total | 37,768 | — | 37,788,314 | 37,826,082 | — | 37,768 | — | 37,768 |
(*) The financial assets classified as “Level III” consists substantially of amounts relating to the variable portion of the sale of 40% of the subsidiary Inter Digital Corretora e Consultoria de Seguros Ltda. (“Inter Seguros”) to Wiz Soluções e Corretagem de Seguros S.A. (“Wiz”) on May 8, 2019. The purchase and sale contract included cash consideration of R$ 45,000 and contingent consideration based on Inter Seguros’ EBITDA in 2021, 2022, 2023 and 2024.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 |
|---|
The methodology used for the measurement of financial assets and liabilities classified as “Level II” (derivative financial instruments and securities) is the discounted present value technique, using the market rates disclosed by ANBIMA - “Brazilian Association of Financial and Capital Market Entities”, IBGE – “Brazilian Institute of Geography and Statistics” and B3.
During the quarter ended March 31, 2023 and year ended December 31, 2022, there were no changes in the measurement method of financial assets and liabilities that entailed reclassification of financial assets and liabilities among the different levels of the fair value hierarchy.
8.Cash and cash equivalents
| 03/31/2023 | 12/31/2022 | |
|---|---|---|
| Cash and cash equivalents in national currency | 223,018 | 388,622 |
| Cash and cash equivalents in foreign currency | 677,422 | 223,528 |
| Reverse repurchase agreements* | 891,267 | 719,498 |
| Total | 1,791,707 | 1,331,648 |
* Refers to operations (substantially interbank deposit investments) whose maturity, on the investment date, was equal to or less than 90 days and present an insignificant risk of change in fair value.
9.Amounts due from financial institutions
a.Breakdown of amounts due from financial institutions:
| 03/31/2023 | 12/31/2022 | |
|---|---|---|
| Interbank deposit investments | 2,445,298 | 2,383,526 |
| Interbank onlending | 29,348 | 31,805 |
| Loans to financial institutions | 1,296,424 | 1,845,665 |
| Expected loss | (996) | (2,140) |
| Total | 3,770,074 | 4,258,856 |
10.Securities
a.Breakdown of securities:
| 03/31/2023 | 12/31/2022 | |||
|---|---|---|---|---|
| Fair value through other comprehensive income - FVOCI | ||||
| Financial Treasury Bills (LFT) | 4,724,747 | 4,652,445 | ||
| Debentures | 719,494 | 684,153 | ||
| Certificates of Real Estate Receivables | 216,825 | 203,350 | ||
| Financial Bills | 2,126 | 5,771 | ||
| National Treasury Notes (NTN) | 3,586,355 | 3,541,780 | ||
| National Treasury Bills (LTN) | 615,945 | 589,496 | ||
| Commercial Promissory Notes | 52,667 | 22,551 | ||
| Subtotal | 9,918,159 | 9,699,546 | ||
| Amortized cost | ||||
| Debentures | 80,841 | 112,914 | ||
| National Treasury Notes (NTN) | 652,236 | 645,373 | ||
| Rural Product Bill | 497,405 | 532,068 | ||
| Subtotal | 1,230,482 | 1,290,355 | Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | |
| --- | 03/31/2023 | 12/31/2022 | ||
| --- | --- | --- | ||
| Fair value through profit or loss - FVTPL | ||||
| Investment fund quotas | 514,925 | 529,903 | ||
| Certificates of Real Estate Receivables | 45,829 | 44,453 | ||
| Certificates of Agricultural Receivables | 163,506 | 237,750 | ||
| Debentures | 422,282 | 435,755 | ||
| Financial Treasury Bills (LFT) | 97,586 | 37,131 | ||
| Financial Bills | 102,576 | 101,467 | ||
| Bank Deposit Certificates | 22,095 | 44,638 | ||
| Commercial Promissory Notes | 4,538 | 5,157 | ||
| Agribusiness Credit Bills (LCA) | 11,789 | 20,413 | ||
| Real Estate Credit Bills (LCI) | 1,201 | 1,613 | ||
| Others | 383 | 384 | ||
| Subtotal | 1,386,710 | 1,458,664 | ||
| Total | 12,535,351 | 12,448,565 |
b.Income from securities
| 2023 | 2022 | |
|---|---|---|
| Income from securities - FVOCI | 288,695 | 272,383 |
| Income from securities - FVTPL | 39,277 | 47,341 |
| Income from securities - Amortized cost | 42,952 | 28,289 |
| Total | 370,924 | 348,013 |
c.Breakdown of the carrying amount of securities by maturity, net of losses
| 03/31/2023 | 12/31/2022 | ||||||
|---|---|---|---|---|---|---|---|
| Up to 3 months | 3 months to 1 year | 1 year to 3 years | From 3 to 5 years | Above 5 years | Accounting balance | Accounting balance | |
| Fair value through other comprehensive income - FVOCI | — | — | 1,229,697 | 3,837,673 | 4,850,789 | 9,918,159 | 9,699,546 |
| Financial Treasury Bills (LFT) | — | — | 299,244 | 2,498,707 | 1,926,796 | 4,724,747 | 4,652,445 |
| Debentures | — | — | 115,548 | 297,306 | 306,640 | 719,494 | 684,153 |
| Certificates of Real Estate Receivables | — | — | 15,628 | 16,170 | 185,027 | 216,825 | 203,350 |
| Financial Bills | — | — | 2,126 | — | — | 2,126 | 5,771 |
| National Treasury Notes (NTN) | — | — | 158,615 | 995,414 | 2,432,326 | 3,586,355 | 3,541,780 |
| National Treasury Bills (LTN) | — | — | 615,945 | — | — | 615,945 | 589,496 |
| Commercial Promissory Notes | — | — | 22,591 | 30,076 | — | 52,667 | 22,551 |
| Amortized cost | 117,850 | 246,363 | 190,024 | 22,987 | 653,258 | 1,230,482 | 1,290,355 |
| Debentures | — | 19,812 | 61,029 | — | — | 80,841 | 112,914 |
| National Treasury Notes (NTN) | — | — | — | — | 652,236 | 652,236 | 645,373 |
| Rural Product Bill | 117,850 | 226,551 | 128,995 | 22,987 | 1,022 | 497,405 | 532,068 |
| Fair value through profit or loss - FVTPL | 518,826 | 107,862 | 285,947 | 187,660 | 286,415 | 1,386,710 | 1,458,664 |
| Investment fund quotas | 510,428 | — | — | — | 4,497 | 514,925 | 529,903 |
| Certificates of Real Estate Receivables | 1,781 | 558 | 23,056 | 4,299 | 16,135 | 45,829 | 44,453 |
| Certificates of Agricultural Receivables | — | 1,812 | 10,460 | 6,778 | 144,456 | 163,506 | 237,750 |
| Debentures | 535 | 55,266 | 132,753 | 117,455 | 116,273 | 422,282 | 435,755 |
| Financial Treasury Bills (LFT) | 5,836 | 15,252 | 35,235 | 41,263 | — | 97,586 | 37,131 |
| Financial Bills | — | 28,817 | 62,871 | 7,206 | 3,682 | 102,576 | 101,467 |
| Bank Deposit Certificates | 60 | 5,743 | 7,656 | 7,712 | 924 | 22,095 | 44,638 |
| Commercial Promissory Notes | — | — | 4,538 | — | — | 4,538 | 5,157 |
| Agribusiness Credit Bills (LCA) | 142 | 210 | 8,504 | 2,932 | 1 | 11,789 | 20,413 |
| Real Estate Credit Bills (LCI) | 44 | 204 | 874 | 15 | 64 | 1,201 | 1,613 |
| Others | — | — | — | — | 383 | 383 | 384 |
| Total | 636,676 | 354,225 | 1,705,668 | 4,048,320 | 5,790,462 | 12,535,351 | 12,448,565 |
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | |||||||
| --- |
11.Derivative financial instruments
Inter engages in operations involving financial derivative instruments, which are registered in equity and compensation accounts (reference/nominal values), and are intended to meet its own needs in managing its risk exposure, as well as to meet its clients' requests in managing their exposure. These operations involve swaps, indices, and terms derivatives. Inter's risk management is based on the use of financial derivative instruments with the predominantly objective of mitigating risks resulting from its operations.
a.Derivative financial instruments – amortized cost, fair value and maturity
| 03/31/2023 | 12/31/2022 | |||||
|---|---|---|---|---|---|---|
| Amortized cost | Fair value | Up to 3 months | 3 months to 1 year | Total | Total | |
| Assets | ||||||
| Forward derivative transactions | 8,555 | 1,122 | 1,122 | 1,122 | ||
| Total assets (A) | 8,555 | 1,122 | 1,122 | — | 1,122 | — |
| Liabilities | ||||||
| Operations with swap derivatives | 66,000 | (31,641) | — | (31,641) | (31,641) | (37,502) |
| Forward derivative transactions | 27,550 | (973) | (973) | — | (973) | (266) |
| Total liabilities (B) | 93,550 | (32,614) | (973) | (31,641) | (32,614) | (37,768) |
| Net effect (A-B) | (84,995) | (31,492) | 149 | (31,641) | (31,492) | (37,768) |
b.Forward and swap contracts – notional value
| Up to 3 months | 3 months to 1 year | 1 year to 3 years | Above 3 years | 03/31/2023 | Total 12/31/2022 | |
|---|---|---|---|---|---|---|
| Operations with swap derivatives | — | — | 66,000 | — | 66,000 | 78,000 |
| Forward derivative transactions | — | — | 27,550 | — | 27,550 | — |
| Total | — | — | 93,550 | — | 93,550 | 78,000 |
The swaps that make up Inter's portfolio were established as a strategy to lock in the spread of the active operation by achieving hedge equivalence with the specific risk portion.
Inter's swap operations are classified as Hedge Accounting ("Fair Value Hedge"), with the objective of protecting risks related to mismatching of indexers between asset and liability portfolios, specifically between interest rates and variations in price indexes, and are recognized at fair value in the period's result. Fair value is the value that, according to market conditions, would be received for assets and paid on the settlement of liabilities, calculated based on rates practiced in exchange markets.
In order to protect cash flows and the fair value of instruments designated as hedge items, Inter uses financial derivative instruments and financial assets. The operations are conducted through B3 and have margin guarantees and are controlled by the exchange. Risk management is performed through the economic relationship between hedge instruments and hedge items, where it is expected that these instruments move in opposite directions, in the same proportions, with the aim of neutralizing risk factors.
As of March 31st, 2023, Inter held active CDI vs. IGP-M swaps contracts, with a notional value registered on B3 and with margin guarantees that may be adjusted at any time.
| 03/31/2023 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Indexes | Notional value | Amortized value | Fair value | Gain (loss) | ||||||||
| Bank | Counterparty | Bank | Counterparty | |||||||||
| CDI x IGPM | 66,000 | 84,111 | 118,576 | 84,196 | 115,837 | (31,641) | ||||||
| Grand total | 66,000 | 84,111 | 118,576 | 84,196 | 115,837 | (31,641) | Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | |||||
| --- | 03/31/2022 | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| Indexes | Notional value | Amortized value | Fair value | Gain (loss) | ||||||||
| Bank | Counterparty | Bank | Counterparty | |||||||||
| CDI x IGPM | 78,000 | 96,287 | 138,270 | 96,287 | 134,055 | (37,768) | ||||||
| Grand total | 78,000 | 96,287 | 138,270 | 96,287 | 134,055 | (37,768) |
c.Currency forward contract (NDF)
| 03/31/2023 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Indexes | Notional value | Amortized value | Fair value | Gain (loss) | ||||||
| Bank | Counterparty | Bank | Counterparty | |||||||
| NDF | 10,603 | — | — | 9,935 | 10,568 | (633) | ||||
| NDF | 5,147 | — | — | 5,008 | 5,165 | (157) | ||||
| NDF | 5,755 | — | — | 5,731 | 5,777 | (46) | ||||
| NDF | 6,045 | — | — | 5,806 | 5,941 | (137) | ||||
| Grand total | 27,550 | — | — | 26,480 | 27,451 | (973) |
d.Hedge of the investment made in the subsidiary Inter&Co Payments, Inc.
Inter is exposed to currency risk when investing in currencies other than BRL. Therefore, the proposed strategy is to minimize the risks associated with exchange rate movements on the investment in Inter & Co Payments, Inc., through the sale of USD futures contracts.
Considering that the exposure (investment in permanent assets) does not have a defined maturity date, the derivatives (hedge item) used to hedge the exchange rate risk must be periodically renewed (rolling hedge strategy).
i.General aspects
The hedge was carried out through dollar futures contracts traded on B3 that have a central counterparty (exchange). The economic relationship associated with changes in the market value of the hedged item and the hedging instrument were tested considering that the critical terms of both items are similar and, consequently, 100% offset. In summary, the object of the hedge (exchange rate variation of the investment) and the hedging instrument (future dollar) have the same primary risk base (exchange rate).
12.Loans and advances to customers
a.Breakdown of balance of loans and advances to customers
| 03/31/2023 | 12/31/2022 | |||||||
|---|---|---|---|---|---|---|---|---|
| Credit card | 7,273,032 | 30.52 | % | 6,870,565 | 30.27 | % | ||
| Business loans | 3,110,840 | 13.12 | % | 3,392,500 | 14.95 | % | ||
| Real estate loans | 6,616,802 | 27.76 | % | 6,251,813 | 27.54 | % | ||
| Personal loans | 6,081,266 | 25.45 | % | 5,463,781 | 24.07 | % | ||
| Rural loans | 750,934 | 3.15 | % | 719,669 | 3.17 | % | ||
| Total | 23,832,874 | 100.00 | % | 22,698,328 | 100.00 | % | ||
| Provision for expected loss | (1,461,707) | (1,318,412) | ||||||
| Net balance | 22,371,167 | 21,379,916 | Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | |||||
| --- |
The concentration of Inter’s portfolio of loans and advances to customers is as follows:
| 03/31/2023 | 12/31/2022 | |||||
|---|---|---|---|---|---|---|
| Balance | % on Loans and advances to customers | Balance | % on Loans and advances to customers | |||
| Largest debtor | 359,094 | 1.51 | % | 344,660 | 1.52 | % |
| 10 largest debtors | 1,942,068 | 8.15 | % | 1,431,237 | 6.31 | % |
| 20 largest debtors | 2,643,508 | 11.09 | % | 1,980,249 | 8.72 | % |
| 50 largest debtors | 3,935,803 | 16.51 | % | 2,734,599 | 12.05 | % |
| 100 largest debtors | 5,499,545 | 23.08 | % | 3,758,241 | 16.56 | % |
The breakdown of loans and advances to customers by maturity is as follows:
| By maturity | 03/31/2023 | 12/31/2022 |
|---|---|---|
| Overdue by 1 day or more | 3,002,292 | 2,817,985 |
| To fall due in up to 3 months | 3,057,699 | 3,404,401 |
| To fall due between 3 to 12 months | 6,239,118 | 5,916,020 |
| To fall due in more than 12 months | 11,533,765 | 10,582,345 |
| Total | 23,832,874 | 22,720,751 |
Breakdown by economic activity sectors:
| Segment activities | 03/31/2023 | 12/31/2022 |
|---|---|---|
| Manufacturing industries | 1,025,758 | 1,359,184 |
| Construction | 1,424,633 | 1,392,607 |
| Trade; repair of motor vehicles and motorcycles | 1,134,280 | 1,041,875 |
| Administrative and support service activities | 900,478 | 893,914 |
| Agriculture, livestock, forestry production, fishing and aquaculture | 174,976 | 178,403 |
| Financial and insurance activities and related services | 1,985,471 | 2,427,341 |
| Real estate activities | 454,175 | 328,009 |
| Other segments | 1,348,815 | 1,453,566 |
| Legal person | 8,448,586 | 9,074,899 |
| Natural person | 15,384,288 | 13,623,429 |
| Total | 23,832,874 | 22,698,328 |
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | ||
| --- |
b.Analysis of changes in expected losses by stage:
| Stage 1 | Opening balance at 01/01/2023 | Transfer to<br>Stage 2 | Transfer to<br>Stage 3 | Transfer from<br>Stage 2 | Transfer from<br>Stage 3 | Write-off for loss | Constitution/ (Reversal) | Ending balance at 03/31/2023 | Ending balance at 12/31/2022 |
|---|---|---|---|---|---|---|---|---|---|
| Credit card | 296,909 | (72,642) | (52) | 9,630 | 24 | — | 110,626 | 344,495 | 296,909 |
| Business loans | 12,099 | (131) | — | 100 | — | — | 1,392 | 13,460 | 12,099 |
| Real estate loans | 66,484 | (13,712) | — | 11,707 | 6,539 | — | (1,144) | 69,874 | 66,484 |
| Personal loans | 98,516 | (5,502) | — | 1,133 | 829 | — | (6,300) | 88,676 | 98,516 |
| Rural loans | 11,606 | (7) | — | — | — | — | (850) | 10,749 | 11,606 |
| 485,614 | (91,994) | (52) | 22,570 | 7,392 | — | 103,724 | 527,254 | 402,143 | |
| Stage 2 | Opening balance at 01/01/2023 | Transfer to<br>Stage 1 | Transfer to<br>Stage 3 | Transfer from<br>Stage 1 | Transfer from<br>Stage 3 | Write-off for loss | Constitution/ (Reversal) | Ending balance at 03/31/2023 | Ending balance at 12/31/2022 |
| Credit card | 174,466 | (9,630) | (182,439) | 72,642 | — | — | 134,535 | 189,574 | 174,466 |
| Business loans | 899 | (100) | (18) | 131 | 27 | — | (148) | 791 | 899 |
| Real estate loans | 16,939 | (11,707) | (6,603) | 13,712 | 4,523 | — | 1,484 | 18,348 | 16,939 |
| Personal loans | 90,088 | (1,133) | (32,980) | 5,502 | 223 | — | 31,960 | 93,660 | 90,088 |
| Rural loans | — | — | — | 7 | — | — | (7) | — | — |
| 282,392 | (22,570) | (222,040) | 91,994 | 4,773 | — | 167,824 | 302,373 | 282,392 | |
| Stage 3 | Opening balance at 01/01/2023 | Transfer to<br>Stage 1 | Transfer to<br>Stage 2 | Transfer from<br>Stage 1 | Transfer from<br>Stage 2 | Write-off for loss | Constitution/ (Reversal) | Ending balance at 03/31/2023 | Ending balance at 12/31/2022 |
| Credit card | 402,826 | (24) | — | 52 | 182,439 | (193,833) | 49,059 | 440,519 | 402,826 |
| Business loans | 328 | — | (27) | — | 18 | (738) | 706 | 287 | 328 |
| Real estate loans | 19,127 | (6,539) | (4,523) | — | 6,603 | (5,038) | 8,219 | 17,849 | 19,127 |
| Personal loans | 127,149 | (829) | (223) | — | 32,980 | (21,301) | 35,649 | 173,425 | 127,149 |
| Rural loans | 976 | — | — | — | — | (1,554) | 578 | — | 976 |
| 550,406 | (7,392) | (4,773) | 52 | 222,040 | (222,464) | 94,211 | 632,080 | 550,406 | |
| Consolidated | Opening balance at 01/01/2023 | Write-off for loss | Constitution/ (Reversal) | Ending balance at 03/31/2023 | Ending balance at 12/31/2022 | ||||
| Credit card | 874,201 | (193,833) | 294,220 | 974,588 | 874,201 | ||||
| Business loans | 13,326 | (738) | 1,950 | 14,538 | 13,326 | ||||
| Real estate loans | 102,550 | (5,038) | 8,559 | 106,071 | 102,550 | ||||
| Personal loans | 315,753 | (21,301) | 61,309 | 355,761 | 315,753 | ||||
| Rural loans | 12,582 | (1,554) | (279) | 10,749 | 12,582 | ||||
| 1,318,412 | (222,464) | 365,759 | 1,461,707 | 1,318,412 | |||||
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | |||||||||
| --- |
c.Analysis of the changes in the gross value of loans and advances to customers by stage
| Stage 1 | Opening balance at 01/01/2023 | Transfer to<br>Stage 2 | Transfer to<br>Stage 3 | Transfer from<br>Stage 2 | Transfer from<br>Stage 3 | Settled contracts | Write-off for loss | Origination / (Receipt) | Ending balance at 03/31/2023 | Ending balance at 12/31/2022 |
|---|---|---|---|---|---|---|---|---|---|---|
| Credit card | 5,893,995 | (268,505) | (172) | 20,855 | 37 | (740,895) | — | 1,292,745 | 6,198,060 | 5,893,995 |
| Business loans | 3,378,982 | (19,518) | — | 15,423 | — | (2,447,238) | — | 2,168,825 | 3,096,474 | 3,378,982 |
| Real estate loans | 5,843,066 | (315,313) | — | 192,461 | 43,796 | (166,532) | — | 578,616 | 6,176,094 | 5,843,066 |
| Personal loans | 4,941,344 | (83,048) | — | 8,691 | 1,401 | (115,792) | — | 727,492 | 5,480,088 | 4,941,344 |
| Rural loans | 718,115 | (1,833) | — | — | — | (56,056) | — | 90,708 | 750,934 | 718,115 |
| Total | 20,775,502 | (688,217) | (172) | 237,430 | 45,234 | (3,526,513) | — | 4,858,386 | 21,701,650 | 20,775,502 |
| Stage 2 | Opening balance at 01/01/2023 | Transfer to<br>Stage 1 | Transfer to<br>Stage 3 | Transfer from<br>Stage 1 | Transfer from<br>Stage 3 | Settled contracts | Write-off for loss | Origination / (Receipt) | Ending balance at 03/31/2023 | Ending balance at 12/31/2022 |
| Credit card | 335,422 | (20,855) | (295,280) | 268,505 | — | (316,867) | — | 404,143 | 375,063 | 335,422 |
| Business loans | 10,476 | (15,423) | (806) | 19,518 | 249 | (1,401) | — | (926) | 11,687 | 10,476 |
| Real estate loans | 280,633 | (192,461) | (105,708) | 315,313 | 30,294 | (9,202) | — | 2,283 | 321,152 | 280,633 |
| Personal loans | 290,510 | (8,691) | (109,854) | 83,048 | 499 | (48,910) | — | 100,517 | 307,119 | 290,510 |
| Rural loans | — | — | — | 1,833 | — | (1,712) | — | (121) | — | — |
| Total | 917,041 | (237,430) | (511,648) | 688,217 | 31,042 | (378,092) | — | 505,896 | 1,015,021 | 917,041 |
| Stage 3 | Opening balance at 01/01/2023 | Transfer to<br>Stage 1 | Transfer to<br>Stage 2 | Transfer from<br>Stage 1 | Transfer from<br>Stage 2 | Settled contracts | Write-off for loss | Origination / (Receipt) | Ending balance at 03/31/2023 | Ending balance at 12/31/2022 |
| Credit card | 641,147 | (37) | — | 172 | 295,280 | (58,488) | (193,833) | 15,663 | 700,074 | 641,147 |
| Business loans | 3,042 | — | (249) | — | 806 | (56) | (738) | (126) | 2,679 | 3,042 |
| Real estate loans | 128,113 | (43,796) | (30,294) | — | 105,708 | (35,500) | (5,038) | 363 | 119,556 | 128,113 |
| Personal loans | 231,929 | (1,401) | (499) | — | 109,854 | (20,576) | (21,301) | (3,947) | 294,059 | 231,929 |
| Rural loans | 1,554 | — | — | — | — | — | (1,554) | — | — | 1,554 |
| Total | 1,005,785 | (45,234) | (31,042) | 172 | 511,648 | (114,620) | (222,464) | 11,953 | 1,116,368 | 1,005,785 |
| Consolidated | Opening balance at 01/01/2023 | Settled contracts | Write-off for loss | Origination / (Receipt) | Ending balance at 03/31/2023 | Ending balance at 12/31/2022 | ||||
| Credit card | 6,870,564 | (1,116,250) | (193,833) | 1,712,551 | 7,273,197 | 6,870,564 | ||||
| Business loans | 3,392,500 | (2,448,695) | (738) | 2,167,773 | 3,110,840 | 3,392,500 | ||||
| Real estate loans | 6,251,812 | (211,234) | (5,038) | 581,262 | 6,616,802 | 6,251,812 | ||||
| Personal loans | 5,463,783 | (185,278) | (21,301) | 824,062 | 6,081,266 | 5,463,783 | ||||
| Rural loans | 719,669 | (57,768) | (1,554) | 90,587 | 750,934 | 719,669 | ||||
| Total | 22,698,328 | (4,019,225) | (222,464) | 5,376,235 | 23,833,039 | 22,698,328 | ||||
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | ||||||||||
| --- |
13.Non-current assets held for sale
| 03/31/2023 | 12/31/2022 | |
|---|---|---|
| Real estate | 178,413 | 166,943 |
| Total | 178,413 | 166,943 |
The balance of non-current assets held for sale comprises assets originally received as collateral for loans and advances to customers, which were repossessed. Non-current assets held for sale are normally sold at auctions, which usually occur within one year.
14.Equity accounted investees
| % in share capital | Equity accounted investees | Income from equity interests in investees | ||||
|---|---|---|---|---|---|---|
| Investees | 03/31/2023 | 12/31/2022 | 03/31/2023 | 12/31/2022 | 2023 | 2022 |
| Granito Soluções em Pagamento S.A. | 45% | 45% | 59,525 | 62,582 | (3,061) | (5,572) |
| Total | 59,525 | 62,582 | (3,061) | (5,572) | ||
| Other investments | 11,295 | 9,508 | — | — | ||
| Total | 70,820 | 72,090 | (3,061) | (5,572) |
15.Property and equipment
a.Breakdown of property and equipment:
| Annual depreciation rate | 03/31/2023 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Historical cost | Accumulated depreciation | Carrying amount | ||||||||||||||
| Buildings | 4% | 38,142 | (26,641) | 11,501 | ||||||||||||
| Furniture and equipment | 10% | 25,075 | (1,645) | 23,430 | ||||||||||||
| Data processing systems | 20% | 15,657 | (371) | 15,286 | ||||||||||||
| Construction in progress | — | 1,879 | — | 1,879 | ||||||||||||
| Right-of-use assets - buildings and equipment | 4% | 137,186 | (8,359) | 128,827 | ||||||||||||
| Total | 217,939 | (37,016) | 180,923 | Annual depreciation rate | 12/31/2022 | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | |||||||||
| Historical cost | Accumulated depreciation | Carrying amount | ||||||||||||||
| Buildings | 4% | 37,446 | (25,149) | 12,297 | ||||||||||||
| Furniture and equipment | 10% | 23,601 | (2,069) | 21,532 | ||||||||||||
| Data processing systems | 20% | 15,636 | (11) | 15,625 | ||||||||||||
| Construction in progress | — | 1,794 | — | 1,794 | ||||||||||||
| Right-of-use assets - buildings and equipment | 4% | 144,387 | (7,616) | 136,771 | ||||||||||||
| Total | 222,864 | (34,845) | 188,019 | Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | ||||||||||||
| --- |
b.Changes in property and equipment:
| Balance at 12/31/2022 | Addition | Transfer | Write-offs | Exchange rate changes | Balance at 03/31/2023 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Buildings | 37,446 | 685 | 11 | — | — | 38,142 | ||||||||
| Furniture and equipment | 23,601 | 1,913 | (11) | (149) | (279) | 25,075 | ||||||||
| Data processing systems | 15,636 | 21 | — | — | — | 15,657 | ||||||||
| Construction in progress | 1,794 | 85 | — | — | — | 1,879 | ||||||||
| Right-of-use assets - buildings and equipment | 144,387 | — | — | (7,201) | — | 137,186 | ||||||||
| Total property and equipment - historical cost | 222,864 | 2,704 | — | (7,350) | (279) | 217,939 | ||||||||
| Accumulated depreciation | ||||||||||||||
| Buildings | (25,149) | (1,492) | — | — | — | (26,641) | ||||||||
| Furniture and equipment | (2,069) | (117) | 303 | 99 | 139 | (1,645) | ||||||||
| Data processing systems | (11) | (60) | (303) | 3 | — | (371) | ||||||||
| Right-of-use assets - buildings and equipment | (7,616) | (743) | — | — | — | (8,359) | ||||||||
| Total Accumulated depreciation | (34,845) | (2,412) | — | 102 | 139 | (37,016) | ||||||||
| Total property and equipment - residual value | 188,019 | 292 | — | (7,248) | (140) | 180,923 | Balance at 12/31/2021 | Addition | Business Combination | Transfer | Write-offs | Balance at 03/31/2022 | ||
| --- | --- | --- | --- | --- | --- | --- | ||||||||
| Buildings | 27,608 | 1,176 | — | 1,586 | — | 30,370 | ||||||||
| Furniture and equipment | 14,012 | 1,617 | 10,119 | (1,164) | — | 24,584 | ||||||||
| Data processing systems | 14,390 | — | — | — | (7) | 14,383 | ||||||||
| Right-of-use assets - buildings and equipment | 131,064 | 36,176 | — | — | — | 167,240 | ||||||||
| Total property and equipment - historical cost | 187,074 | 38,969 | 10,119 | 422 | (7) | 236,577 | ||||||||
| Accumulated depreciation | ||||||||||||||
| Buildings | (14,721) | (55) | — | (6,299) | — | (21,075) | ||||||||
| Furniture and equipment | (5,064) | (1,362) | (4,652) | 5,877 | — | (5,201) | ||||||||
| Data processing systems | (72) | (7) | — | — | — | (79) | ||||||||
| Right-of-use assets - buildings and equipment | (3,741) | (2,442) | — | — | — | (6,183) | ||||||||
| Total Accumulated depreciation | (23,598) | (3,866) | (4,652) | (422) | — | (32,538) | ||||||||
| Total property and equipment - residual value | 163,476 | 35,103 | 5,467 | — | (7) | 204,039 | ||||||||
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | ||||||||||||||
| --- |
16.Intangible assets
a.Breakdown of intangible assets
| Annual amortization rate | 03/31/2023 | 12/31/2022 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Historical cost | (Accumulated amortization) | Carrying amount | Historical cost | (Accumulated amortization) | Carrying amount | ||||||||
| Software | 10% | 361,985 | (212,982) | 149,003 | 336,495 | (204,278) | 132,217 | ||||||
| Development costs | 20% | 268,080 | (74,722) | 193,358 | 234,400 | (48,835) | 185,565 | ||||||
| Customer portfolio | 20% | 13,965 | (5,969) | 7,996 | 13,965 | (5,589) | 8,376 | ||||||
| Goodwill | — | 635,778 | — | 635,778 | 632,796 | — | 632,796 | ||||||
| Intangible assets in progress | — | 288,288 | — | 288,288 | 279,675 | — | 279,675 | ||||||
| Total | 1,568,096 | (293,673) | 1,274,423 | 1,497,331 | (258,702) | 1,238,629 |
b.Changes in intangible assets
| 12/31/2022 | Addition | Write-offs | Transfers | Business Combination | Amortization | 03/31/2023 | |
|---|---|---|---|---|---|---|---|
| Software | 132,217 | 23,195 | — | 2,295 | — | (8,704) | 149,003 |
| Development costs (b) | 185,565 | — | — | 33,680 | — | (25,887) | 193,358 |
| Customer portfolio (b) | 8,376 | — | — | — | — | (380) | 7,996 |
| Goodwill (a) (b) | 632,796 | — | — | — | 2,982 | — | 635,778 |
| Intangible assets in progress | 279,675 | 44,588 | — | (35,975) | — | — | 288,288 |
| Total | 1,238,629 | 67,783 | — | — | 2,982 | (34,971) | 1,274,423 |
| 12/31/2021 | Addition | Write-offs | Transfers | Business Combination | Amortization | 03/31/2022 | |
| Software | 47,150 | 41,247 | (950) | 7,175 | 155,622 | (25,125) | 225,119 |
| Development costs (b) | 115,417 | — | — | 34,985 | — | (6,848) | 143,554 |
| Customer portfolio (b) | 10,329 | — | — | — | — | (846) | 9,483 |
| Goodwill (a) (b) | 78,037 | — | (7,175) | 554,759 | — | 625,621 | |
| Intangible assets in progress | 177,979 | 41,350 | (1,264) | (34,985) | — | (113) | 182,967 |
| Total | 428,912 | 82,597 | (2,214) | — | 710,381 | (32,932) | 1,186,744 |
(a) Refers to the acquisition of Inter & Co Payments, Inc., see Note 4.3 - Business Combination.
(b) The balance of December 31, 2021, previously presented, was adjusted after the conclusion of the PPA of the group companies. Accordingly, the preliminary goodwill was reallocated to the opening balances of the transaction.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 |
|---|
17.Other assets
| 03/31/2023 | 12/31/2022 | |
|---|---|---|
| Amount receivable from the sale of investments (a) | 90,256 | 87,318 |
| Commissions and bonus receivable (b) | 141,084 | 113,546 |
| Prepaid expenses (c) | 342,729 | 321,830 |
| Pending settlements (d) | 92,004 | 277,953 |
| Sundry debtors (e) | 84,642 | 91,627 |
| Advances to third parties | 17,740 | 23,911 |
| Unbilled services provided | 37,974 | 31,870 |
| Transactions amount to be received | 117,566 | 122,859 |
| Premium or discount on transfer of financial assets | 91,925 | 71,460 |
| Early settlement of credit operations | 24,933 | 23,328 |
| Agreements on sales of properties receivable | 39,854 | 38,467 |
| Taxes and contributions to be offset against future amounts payable | 150,467 | 176,513 |
| Other amounts | 293,934 | 44,826 |
| Total | 1,525,108 | 1,425,508 |
(a)Amounts receivable from the sale of non-controlling interest in a subsidiary consist substantially of amounts relating to the variable portion of the sale of 40% of the subsidiary Inter Digital Corretora e Consultoria de Seguros Ltda. (“Inter Seguros”) to Wiz Soluções e Corretagem de Seguros S.A. (“Wiz”) on May 8, 2019. The purchase and sale contract included cash consideration of R$ 45,000 and contingent consideration based on Inter Seguros’ EBITDA. 2 installments were paid in 2021 and 2022, the other 2 installments will be paid in 2023 and 2024.
(b) Commissions and bonus receivable: relates primarily to the bonus receivable from the business contract signed with Mastercard, Liberty and Sompo.
(c) Prepaid expenses: refers substantially to the cost of acquisition of customer digital accounts and portability expenses to process.
(d) Pending settlements: relates primarily to transactions to be processed by Mastercard, in addition to settlement balances receivable from the B3 exchange.
(e) Sundry debtors: relates primarily to amounts to process from credit cards, negotiation and intermediation of amounts and debtors by escrow deposit.
18.Liabilities with financial institutions
| 03/31/2023 | 12/31/2022 | |
|---|---|---|
| Payables with credit card network | 5,495,733 | 5,228,314 |
| Securities sold under agreements to repurchase | 1,882,289 | 1,902,873 |
| Interbank deposits | 791,201 | 732,528 |
| Others | 47,315 | 43,182 |
| Total | 8,216,538 | 7,906,897 |
19.Liabilities with customers
| 03/31/2023 | 12/31/2022 | |
|---|---|---|
| Demand deposits | 11,005,662 | 11,566,826 |
| Time deposits | 11,687,031 | 10,517,060 |
| Savings deposits | 1,274,938 | 1,307,055 |
| Creditors by resources to release | 214,375 | 251,863 |
| Total | 24,182,006 | 23,642,804 |
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | ||
| --- |
20.Securities issued
| 03/31/2023 | 12/31/2022 | |
|---|---|---|
| Financial Bills | 69,664 | 67,014 |
| Real estate credit bills (a) | 6,236,931 | 5,794,144 |
| Agribusiness credit bills | 333,962 | 341,007 |
| Total | 6,640,557 | 6,202,165 |
(a) The Real Estate Credit Bill (LCI) is a tax-exempt fixed-income instrument for individuals, backed by real estate loans. They are issued on demand, remunerated at a fixed or floating rate and have a fixed maturity. Inter offers LCIs issued by Banco Inter S.A. to its retail customers as a tax-exempt investment alternative to time deposits. The real estate loans in the gross amount of R$ 6,236,931 (2022: R$ 5,794,144) are backed by these instruments.
21.Borrowing and onlending
| 03/31/2023 | 12/31/2022 | |
|---|---|---|
| Onlending obligations – Caixa Econômica Federal (*) | 21,920 | 22,231 |
| Onlending obligations – BNDES (*) | 7,931 | 8,139 |
| Others | 6,781 | 6,078 |
| Total | 36,632 | 36,448 |
(*) Refers to onlending of real estate loans obtained from Caixa Econômica Federal (with rates between 4.5% and 6% p.y.) and BNDES for working capital operations (with a fixed rate of up to 6% p.y.).
22.Tax liabilities
| 03/31/2023 | 12/31/2022 | |
|---|---|---|
| Income tax and social contribution | 93,253 | 114,493 |
| Tax on financial transactions | 13,041 | 9,354 |
| PIS/COFINS | 22,521 | 20,542 |
| INSS/FGTS | 17,060 | 14,842 |
| Other taxes | 8,466 | 7,634 |
| Total | 154,341 | 166,865 |
23.Provisions and contingent liabilities
| 03/31/2023 | 12/31/2022 | |
|---|---|---|
| Provision for legal and administrative proceedings | 32,862 | 28,118 |
| Provision for expected credit losses on loan commitments (a) | 30,351 | 29,331 |
| Total | 63,213 | 57,449 |
(a) Inter constitutes expected losses for financial assets that include both a drawn component (credit transaction) and an undrawn loan commitment component (available limit). To the extent that the combined amount of expected credit losses exceeds the gross carrying amount of the financial asset, the remaining balance is presented as a provision (in liabilities).
a.Provisions
The legal entities in Inter, in the normal course of their activities, are parties to tax, social security, labor and civil lawsuits. The respective provisions were made taking into account the laws in force, the opinion of legal advisors, the nature and complexity of the cases, case law, past loss experience and other relevant criteria that allow the most adequate estimate.
i.Labor lawsuits
These are lawsuits filed seeking to obtain indemnities of a labor nature. Amounts provisioned are related to processes in which alleged labor rights are discussed, such as overtime and salary equalization. On an individual basis, amounts provided for labor lawsuits are not significant.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 |
|---|
ii.Civil lawsuits
The majority of lawsuits refer to indemnities for material and moral damages related to the Group’s products, such as payroll deductible loans, in addition to declaratory and remedial actions, compliance with the limit of a 30% deduction from a borrower's salary, presentation of documents and adjustment actions.
Changes in provisions
| Labor | Civil | Total | |
|---|---|---|---|
| Balance at December 31, 2022 | 3,788 | 24,330 | 28,118 |
| Constitution net of (reversals and write-offs) | 532 | 9,694 | 10,226 |
| Payments | (49) | (5,433) | (5,482) |
| Balance at March 31, 2023 | 4,271 | 28,591 | 32,862 |
| Balance at December 31, 2021 | 3,312 | 18,370 | 21,682 |
| Constitution/increase in provision | 135 | 3,957 | 4,092 |
| Payments | (64) | (3,686) | (3,750) |
| Balance at March 31, 2022 | 3,383 | 18,641 | 22,024 |
b.Contingent tax liabilities classified as possible losses
i.Income tax and social contribution on net income – IRPJ and CSLL
On August 30, 2013, a tax assessment notice was issued (referring to some expenses considered as non-deductible) requiring the payment of amounts of income tax and social contribution related to the calendar years 2008 to 2009. In the quarter ended March 31, 2023, these amounted to R$ 34,168 (2022: R$ 29,963).
ii.COFINS
Inter is discussing its COFINS obligations from 1999 to 2008 in court, due to the Federal Revenue Service's understanding that financial revenues should be included in the calculation basis of this contribution. Inter has a Federal Supreme Court decision, dated December 19, 2005, granting the right to collect COFINS based only on the revenue from services rendered, instead of the total revenue that would include financial revenues. During the period from 1999 to 2006, Inter made judicial deposits and/or made the payment of the obligation. In 2006, through a favorable decision by the Supreme Federal Court and the express consent of the Federal Revenue Service, Inter's judicial deposit was released. Additionally, the authorization to use the credits, for amounts previously overpaid, against current obligations, was homologated without challenge by the Federal Revenue Service on May 11, 2006.
| Process type | 03/31/2023 | 12/31/2022 |
|---|---|---|
| Tax assessment notice | 22,777 | 22,340 |
| Action for the annulment of a tax debt | 28,849 | 28,459 |
| Collection Letter | 1,473 | 1,473 |
| Total | 53,099 | 52,272 |
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | ||
| --- |
24.Other liabilities
| 03/31/2023 | 12/31/2022 | |
|---|---|---|
| Lease liabilities (Note 24.a) | 139,395 | 146,705 |
| Payments to be processed (a) | 736,647 | 648,887 |
| Contract liabilities (b) | 44,469 | 45,364 |
| Agreements | 43,936 | 33,736 |
| Provisions for salaries, vacations and other labor charges | 66,522 | 77,383 |
| Other liabilities | 146,346 | 190,100 |
| Pending settlements (c) | 28,334 | 31,352 |
| Total other liabilities | 1,205,649 | 1,173,527 |
(a) The balance is substantially composed of: credit operation installments to be transferred, payment orders to be settled, suppliers to be paid, liabilities from business combination and fees to be paid;
(b) The balance consists of amounts received, not yet recognized in the income statement arising from the exclusive contract for insurance products signed between the subsidiary Inter Digital Corretora and Consultoria de Seguros Ltda. (“Inter Seguros”) and Liberty Seguros;
(c) Refer to customer operations intended for carrying out business with fixed income securities, shares, commodities and financial assets, which will be settled within a maximum period of D+5.
a.Lease liabilities
The changes in lease liabilities for the quarter ended March 31, 2023 and year ended December 31, 2022 are as follows:
| Balance at January 1, 2023 | 146,705 |
|---|---|
| Payments | (9,877) |
| Accrued interest | 2,567 |
| Ending balance at March 31, 2023 | 139,395 |
| Balance at January 1, 2022 | 137,085 |
| New contracts | 1,225 |
| Payments | (38,882) |
| Accrued interest | 47,277 |
| Ending balance at December 31, 2022 | 146,705 |
Lease maturity
The maturity of the lease liabilities for the quarter ended March 31, 2023 and year ended December 31, 2022 is as follows:
| 03/31/2023 | 12/31/2022 | |
|---|---|---|
| Up to 1 year | 4,300 | 2,890 |
| From 1 year to 5 years | 20,817 | 26,009 |
| Above 5 years | 114,278 | 117,806 |
| Total | 139,395 | 146,705 |
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | ||
| --- |
25.Equity
a.Share capital
| Date | Class A | Class B | Total |
|---|---|---|---|
| 2022 | 284,765,936 | 117,037,105 | 401,803,041 |
| 2023 | 284,836,041 | 117,037,105 | 401,873,146 |
At March 31, 2023,Inter & Co, Inc.'s authorized share capital is US$ 50,000 divided into 20,000,000,000 shares with par value of US$ 0.0000025 each, of which 284,836,041 have been issued as class A shares with a par value of US$ 0.0000025 each and 117,037,105 have been issued as class B shares with a par value of US$ 0.0000025 each. The share capital comprising shares issued refers to the authorized capital. Inter & Co. Inc’s paid-up share capital was R$ 13 at March 31, 2023 (December 31, 2022: R$ 13).
The special rights granted to holders of Class A and Class B shares in this condensed consolidated interim financial information are the same as those applied in the consolidated financial statements of Inter & Co, Inc., for the year ended December 31, 2022.
b.Reserve
In the quarter ended March 31, 2023, the reserves amounted to R$ 7,855,472. In the year ended December 31, 2022, Inter & Co, Inc. concluded the final stage of its corporate reorganization, as mentioned in Note 1. Accordingly, reserve amount of R$ 7,817,670 is the transfer from non-controlling interest to equity of Inter & Co, Inc. of the Banco Inter shareholders that exchanged their shares of Banco Inter for shares and/ or BDRs of Inter & Co, Inc.
c.Other comprehensive income
For the quarter ended March 31, 2023, the other comprehensive income amounted to R$ (808,110), (December 31, 2022: R$ (84.757)), comprises the fair value of financial assets at FVOCI and exchange rate change adjustment of subsidiary abroad.
d.Dividends and interest on equity
In the quarter ended March 31, 2023 and for the year ended December 31, 2022, Inter & Co, Inc. Inter & Co Inc. has not declared or paid dividends. In the year ended December 31, 2022, Banco Inter distributed R$ 38,056 in interest on equity to controlling shareholders. Inter Digital and Inter Food paid R$ 25,812 and R$ 12,030, respectively, in interest on equity to their non-controlling interest in the same period.
e.Basic and diluted earnings (loss) per share
Basic and diluted earnings/(loss) per share is as follows:
| 03/31/2023 | 03/31/2022 | |
|---|---|---|
| Profit (loss) attributable to Owners of the company (In thousands of Reais) | 11,405 | (28,822) |
| Average number of shares | 401,588,541 | 2,568,429,243 |
| Basic earnings (loss) per share (R$) | 0.0284 | (0.0112) |
| Diluted earnings (loss) per share (R$) | 0.0281 | (0.0112) |
Basic and diluted earnings (loss) per share are presented based on the two classes of shares, A and B, and are calculated by dividing the profit (loss) attributable to the parent company by the weighted average number of shares of each class outstanding in the quarter.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 |
|---|
f.Non-controlling interest
For the quarter ended March 31, 2023, the balance of non-controlling interests is R$ 108,941 (December 31, 2022: R$ 96,722).
g.Reflex reserve
At March 31, 2023, the Group has a reflex reserve of R$ 7,855,472 arising from its subsidiaries (December 31, 2022: R$ 7,817,670). This change arises from the increase in the equity interest held by Inter & Co, Inc. in its indirect subsidiaries, as described in the corporate reorganization events (see note 1).
h.Treasury shares
As of March 31, 2023, Inter&co, Inc., has R$16,409 of treasury shares, consisting of 160,875 class A shares.
26.Net interest income
| 03/31/2023 | 03/31/2022 | |
|---|---|---|
| Interest income | ||
| Amounts due from financial institutions | 98,256 | 30,139 |
| Loans and advances to customers | 902,766 | 478,460 |
| Credit card | 334,187 | 114,706 |
| Business loans | 125,875 | 84,634 |
| Real estate loans | 215,670 | 160,880 |
| Personal loans | 208,200 | 105,777 |
| Rural loans | 18,834 | 12,463 |
| Income from cash and cash equivalents in foreign currency | 11,225 | 8,827 |
| Others | 680 | 3,734 |
| Total interest income | 1,012,927 | 521,160 |
| Interest expenses | ||
| Securities issued | (250,263) | (126,564) |
| Deposits from customers | (362,910) | (184,058) |
| Saving | (22,812) | (17,703) |
| Securities acquired with agreements to resell | (34,960) | (8,198) |
| Borrowing and onlending | (1,773) | (248) |
| Others | (53) | — |
| Total interest expense | (672,771) | (336,771) |
| Total | 340,156 | 184,389 |
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | ||
| --- |
27.Net result from services and commissions
| 03/31/2023 | 03/31/2022 | |
|---|---|---|
| Management | 14,053 | 14,542 |
| Banking | 14,541 | 12,254 |
| Interchange | 174,929 | 127,049 |
| Commissions | 132,652 | 120,069 |
| Securities placement | 6,167 | 8,972 |
| Other | 7,279 | 5,875 |
| Gross revenues | 349,621 | 288,761 |
| Cashback expenses (a) | (67,268) | (82,542) |
| Net revenues | 282,353 | 206,219 |
| Bank expenses | (35,237) | (28,436) |
| Other expenses | (441) | (80) |
| Gross expenses | (35,678) | (28,516) |
| Net revenues from services and commissions | 246,675 | 177,703 |
(a) Refer to values paid to customers as an incentive for the purchase or use of products. This balance is deducted directly from revenues from commissions and intermediation.
28.Other revenues
| 03/31/2023 | 03/31/2022 | |
|---|---|---|
| Performance fees (a) | 28,285 | 40,734 |
| Capital gains (losses) | 2,938 | 38,486 |
| Foreign exchange | 14,919 | 17,033 |
| Other revenues | 16,447 | 13,257 |
| Revenue from goods | 3,288 | 2,897 |
| Total | 65,877 | 112,407 |
(a) Consists substantially of the result of the commercial agreement between Inter and Mastercard, B3 and Liberty, which offers performance bonuses as the established goals are met.
29.Impairment losses on financial assets
| 03/31/2023 | 03/31/2022 | |
|---|---|---|
| Loss on impairment adjustment of loans and advances to customers | (365,759) | (322,194) |
| Recovery of written-off credits | 14,040 | 7,938 |
| Others | 1,038 | 1,310 |
| Total | (350,681) | (312,946) |
30.Personnel expenses
| 03/31/2023 | 03/31/2022 | |
|---|---|---|
| Salaries | (82,896) | (76,145) |
| Social security charges | (29,563) | (26,738) |
| Expenses for vacation and thirteenth salary | (15,290) | (13,642) |
| Benefits | (35,540) | (17,444) |
| Other personnel expenses | (9,123) | (11,151) |
| Total | (172,412) | (145,120) |
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | ||
| --- |
31.Other administrative expenses
| 03/31/2023 | 03/31/2022 | |
|---|---|---|
| Data processing and information technology | (181,112) | (127,018) |
| Bank expenses | (39,985) | (45,930) |
| Rent, condominium fee and property maintenance | (16,030) | (14,318) |
| Third party services | (52,040) | (35,042) |
| Advertisement and marketing | (20,038) | (42,551) |
| Communication | (27,826) | (32,036) |
| Reimbursement to customers | (2,269) | (23,441) |
| Travel and transportation expenses | (2,947) | (2,497) |
| Insurance expenses | (8,195) | (1,297) |
| Notary public and legal expenses | (856) | (4,327) |
| Portability expenses | (2,371) | (4,072) |
| Other expenses | (21,718) | (39,749) |
| Provisions for contingencies | (10,228) | (4,528) |
| Total | (385,615) | (376,806) |
32.Current and deferred income tax and social contribution
a.Amounts recognized in profit or loss for the year
| 03/31/2023 | 03/31/2022 | |||
|---|---|---|---|---|
| Current income tax and social contribution expenses | ||||
| Current year | (28,325) | (33,212) | ||
| Deferred income tax and social contribution benefits (expenses) | ||||
| Provision for impairment losses on loans and advances | 24,045 | 82,277 | ||
| Provision for contingencies | 2,135 | (142) | ||
| Adjustment of financial assets to fair value | 10,688 | 29,584 | ||
| Other temporary differences | (9,375) | (14,054) | ||
| Hedge transactions | (4,924) | 3,049 | ||
| Tax losses carried forward | 24,075 | 3,770 | ||
| Total deferred income tax and social contribution | 46,644 | 104,484 | ||
| Total income tax | 18,319 | 71,272 | Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | |
| --- |
b.Reconciliation of effective rate
| 03/31/2023 | 03/31/2022 | |||||||
|---|---|---|---|---|---|---|---|---|
| Income tax | Income tax | |||||||
| Profit before tax | 5,897 | (100,094) | ||||||
| Tax average using (a) | 45 | % | (2,654) | 45 | % | 45,042 | ||
| Tax effect of | ||||||||
| Interest on capital distribution | — | 17,126 | ||||||
| Non-taxable income (non-deductible expenses) net | 722 | (10,599) | ||||||
| Subsidiaries not subject to Real Profit taxation | 20,251 | 19,574 | ||||||
| Others | — | 129 | ||||||
| Total income tax | 18,319 | 71,272 | ||||||
| Effective tax rate | 311 | % | (71) | % | ||||
| Total income tax | 18,319 | 71,272 | ||||||
| Total deferred income tax and social contribution | 46,644 | 104,484 | ||||||
| Total income tax and social contribution expenses | (28,325) | (33,212) |
(a) The result from Banco Inter represents the greatest impact on the total amount of taxes, so we present the tax rate of 45%, which is the nominal rate currently in force for banks under Brazilian legislation.
c.Changes in the balances of deferred taxes
| Balance at 12/31/2022 | Constitution | Realization | Balance at 03/31/2023 | |
|---|---|---|---|---|
| Composition of the deferred tax assets | ||||
| Provision for impairment losses on loans and advances | 407,766 | 162,317 | (138,272) | 431,811 |
| Adjustment of financial assets to fair value | 292,262 | 29,776 | (33,587) | 288,451 |
| Tax losses carried forward | 202,184 | 22,153 | — | 224,337 |
| Other temporary differences | 33,668 | 12,534 | (19,852) | 26,350 |
| Hedge transactions | 19,897 | 17,650 | (22,573) | 14,974 |
| Provision for contingencies | 12,664 | 4,705 | (2,570) | 14,799 |
| Expected loss on financial instruments | 9,707 | — | (2,058) | 7,649 |
| 978,148 | 249,135 | (218,912) | 1,008,371 | |
| Composition of the deferred tax liabilities | ||||
| Others | (30,073) | — | 435 | (29,638) |
| (30,073) | — | 435 | (29,638) | |
| Total tax credits on temporary differences (*) | 948,075 | 249,135 | (218,477) | 978,733 |
(*) The accounting records of these tax credits are based on the expectation of generating future taxable income and supported by technical studies and income projections.
| Balance at 12/31/2021 | Constitution | Realization | Balance at 03/31/2022 | |
|---|---|---|---|---|
| Composition of the deferred tax assets | ||||
| Provision for impairment losses on loans and advances | 295,799 | 117,083 | (34,806) | 378,076 |
| Provision for contingencies | 9,720 | 188 | (330) | 9,578 |
| Adjustment of financial assets to fair value | 184,886 | 49,203 | (19,619) | 214,470 |
| Other temporary differences | 62,939 | 16,794 | (731) | 79,002 |
| Tax losses carried forward | 95,573 | 30,288 | (26,518) | 99,343 |
| Provision for loss of non-current assets held for sale | 8,990 | — | — | 8,990 |
| Provision for expected loss on financial instruments | 6,436 | — | — | 6,436 |
| Hedge transactions | 31,182 | 4,494 | (1,668) | 34,008 |
| 695,525 | 218,050 | (83,672) | 829,903 | |
| Composition of the deferred tax liabilities | ||||
| Commission deferral | (3,869) | — | — | (3,869) |
| Leases | — | (15,180) | — | (15,180) |
| Receivable from the sale of investments | (21,820) | — | (1,009) | (22,829) |
| Others | (63,546) | 13,045 | — | (50,501) |
| (89,235) | (2,135) | (1,009) | (92,379) | |
| Total tax credits on temporary differences (*) | 606,290 | 215,915 | (84,681) | 737,524 |
(*) The accounting records of these tax credits are based on the expectation of generating future taxable income and supported by technical studies and income projections.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 |
|---|
33.Share-based payment
a.Share-based compensation agreements
a.1) Stock Option Plan - Banco Inter S.A.
Between February 2018 and January 2022, Banco Inter S.A. established stock option programs through which Inter managers and executives were granted options for the acquisition of Banco Inter S.A. Shares.
On January 4, 2023, the Extraordinary General Meeting of Inter&Co, Inc. in which the migration of share-based payment plans was approved, with the consequent assumption by Inter&Co of the obligations of Banco Inter S.A. arising from the active plans and the respective programs As a result of the corporate reorganization, the number of options held by each beneficiary was proportionally changed. Thus, for every 6 options to purchase common shares or preferred shares of Banco Inter S.A, the beneficiaries will have 1 option to purchase a class A share of Inter&Co. In addition, the repricing of the exercise price of the options granted in 2022, which had not yet been granted, was approved. On the occasion of the repricing, the fair value of the options granted and not exercised was recalculated, and an additional amount of R$15,990 of incremental expense was calculated, to be appropriated until the final vesting period.
The main characteristics of the Plans are described below:
| Gran Date | Options (shares INTR) | Vesting | Average strike price | Participants | Final strike date |
|---|---|---|---|---|---|
| 02/15/2018 | 5,452,464 | Up to 5 years | R$1.80 | Officers, managers and key employees | 02/15/2025 |
| 09/07/2020 | 3,182,250 | Up to 5 years | R$21.60 | Officers, managers and key employees | 09/07/2027 |
| 01/31/2022 | 3,250,000 | Up to 5 years | R$15.50 | Officers, managers and key employees | 12/31/2028 |
The changes in the options of the period ended March 31, 2023 and supplementary information are shown below:
| Gran Date | 12/31/2022 | Granted | Expired/Cancelled | Exercised | 03/31/2023 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 135,599 | — | — | — | 135,599 | |||||||||||||||||
| 2020 | 2,829,225 | — | 32,325 | — | 2,796,900 | |||||||||||||||||
| 2022 | 2,838,500 | — | 30,000 | — | 2,808,500 | |||||||||||||||||
| Total | 5,803,324 | — | 62,325 | — | 5,740,999 | |||||||||||||||||
| Weighted average price of the shares | R$ | 18.15 | R$ | — | R$ | 18.66 | R$ | — | R$ | 18.15 | Gran Date | 12/31/2021 | Granted | Expired/Cancelled | Exercised | 12/31/2022 | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||
| 2018 | 2,458,065 | — | 10,800 | 2,311,666 | 135,599 | |||||||||||||||||
| 2020 | 2,965,350 | — | 48,600 | 87,525 | 2,829,225 | |||||||||||||||||
| 2022 | — | 2,903,500 | 65,000 | — | 2,838,500 | |||||||||||||||||
| Total | 5,423,415 | 2,903,500 | 124,400 | 2,399,191 | 5,803,324 | |||||||||||||||||
| Weighted average price of the shares | R$ | 14.34 | R$ | 15.50 | R$ | 16.69 | R$ | 2.31 | R$ | 18.15 |
The fair values of the period of 2018 and 2020 plans were estimated based on the Black & Scholes option valuation model considering the terms and conditions under which the options were granted, and the respective compensation expense is recognized during the vesting period.
| 2018 | 2020 | |||
|---|---|---|---|---|
| Strike price | 1.80 | 21.50 | ||
| Risk-free rate | 9.97% | 9.98% | ||
| Duration of the strike (years) | 7 | 7 | ||
| Expected annualized volatility | 64.28% | 64.28% | ||
| Fair value of the option at the grant/share date: | 0.05 | 0.05 | Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | |
| --- |
For the 2022 program, the fair value was estimated based on the Binomial model:
| 2022 | |
|---|---|
| Strike price | 15.50 |
| Risk-free rate | 11.45% |
| Duration of the strike (years) | 7 |
| Expected annualized volatility | 38.81% |
| Weighted fair value of the option at the grant/share date: | 4.08 |
In the quarter ended March 31, 2023, the amount of R$ 9,912 of costs were recognized in employee benefit expenses, appropriated to Inter’s results, according to note 30.
a.2) Share-based payment related to Inter & Co Payments, Inc., acquisition
In the context of the acquisition of Inter&Co Payments by Inter, it was established that part of the payment to key executives of the acquired entity would be made through cash or the granting of stock options with the possibility delivery Inter&Co class A shares and Inter&Co restricted class A shares, as the case may be. Considering the characteristics of the contract signed between the parties, the expense associated with the options granted are treated as a compensation expense which will be expensed over the term of the vested options and based on continued employment of such key executives.
Inter has the right to repurchase the restricted shares if these key executives cease to provide services to the Company within the term of the acquisition contract. Nevertheless, all shares will remain subject to other transfer restrictions established in the contract and in the applicable legislation.
The main characteristics of these stock-based payments are described below:
| Gran Date | Options | Vesting | Average strike price | Participants | Final exercise date |
|---|---|---|---|---|---|
| 2022 | 1,132,885 | Up 3 years | USD 1.92 for Classe A | Key Executives | 12/30/2024 |
| Gran Date | Shares | Vesting | Participants | Final exercise date | |
| 2022 | 644 | Up 3 years | Key Executives | 12/30/2024 |
The movements in the Inter & Co Payments, Inc. plan for the quarter ended March 31, 2023 and supplementary information are shown below:
| Gran Date | 12/31/2021 | Granted Options | Expired/Cancelled | Exercised | 12/31/2022 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | — | 489,386 | — | — | 489,386 | ||||||||||||
| Total | — | 489,386 | — | — | 489,386 | ||||||||||||
| Weighted average price of the shares | USD | — | USD | 1.92 | USD | — | USD | — | USD | 1.92 | Gran Date | 12/31/2021 | Granted Shares | Expired/Cancelled | Delivered | 12/31/2022 | |
| --- | --- | --- | --- | --- | --- | ||||||||||||
| 2022 | - | 643,500 | - | (160,875) | 482,625 | ||||||||||||
| Total | - | 643,500 | - | (160,875) | 482,625 |
In the quarter ended March 31, 2023, the amount of R$ 6,355 of costs were recognized in employee benefit expenses, appropriated to Inter’s results, according to note 30.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 |
|---|
34.Transactions with related parties
Transactions with related parties are defined and controlled in accordance with the Related-Party Policy approved by Inter’s Board of Directors. The policy defines and ensures transactions involving Inter and its shareholders or direct or indirect related parties. Transactions related to subsidiaries are eliminated in the consolidation process, not affecting the condensed consolidated interim financial statements.
Related-party transactions were undertaken as follows:
| Parent Company (a) | Associates (b) | Key management personnel (c) | Other related parties (d) | Total | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 03/31/2023 | 12/31/2022 | 03/31/2023 | 12/31/2022 | 03/31/2023 | 12/31/2022 | 03/31/2023 | 12/31/2022 | 03/31/2023 | 12/31/2022 | |||
| Assets | ||||||||||||
| Loans and advances to customers | 4,497 | 4,397 | 6,509 | 4 | 15,938 | 16,063 | 496,432 | 632,408 | 523,376 | 652,872 | ||
| Arena Vencer Complexo Esportivo Multiuso SPE Ltda (e) | — | — | — | — | — | — | 52,327 | 52,200 | 52,327 | 52,200 | ||
| Log Commercial Properties e Participação S/A | — | — | — | — | — | — | 7,101 | 79 | 7,101 | 79 | ||
| MRV Engenharia e Participação S/A (f) | — | — | — | — | — | — | 278,861 | 277,686 | 278,861 | 277,686 | ||
| Mil Aviação S.A | — | — | — | — | — | — | 29,136 | — | 29,136 | — | ||
| Conedi Participações LTDA (f) | — | — | — | — | — | — | — | 54,331 | — | 54,331 | ||
| Conedi Participações LTDA (g) | — | — | — | — | — | — | — | 14,641 | — | 14,641 | ||
| MRV Engenharia e Participação S/A (g) | — | — | — | — | — | — | 82,146 | 80,057 | 82,146 | 80,057 | ||
| Radio Itatiaia Ltda (g) | — | — | — | — | — | — | 4,979 | 5,626 | 4,979 | 5,626 | ||
| Urba Desenvolvimento Urbano S.A. (g) | — | — | — | — | — | — | 14,699 | 14,226 | 14,699 | 14,226 | ||
| Key management personnel (c) | — | — | — | — | 15,938 | 16,063 | — | — | 15,938 | 16,063 | ||
| Others (j) | 4,497 | 4,397 | 6,509 | 4 | — | — | 27,183 | 133,562 | 38,189 | 137,963 | ||
| Amounts due from financial institutions (i) | 10,399 | — | 660,587 | 572,111 | — | — | 358 | 1,228,551 | 671,344 | 1,800,662 | ||
| Granito soluções em pagamentos S.A. | — | — | 660,587 | 572,111 | — | — | — | — | 660,587 | 572,111 | ||
| Stone Pagamentos S.A.* | — | — | — | — | — | — | — | 1,228,551 | — | 1,228,551 | ||
| Others (j) | 10,399 | — | — | — | — | — | 358 | — | 10,757 | — | ||
| Securities (h) | 18,074 | 23,386 | — | — | 17,328 | 14,050 | 78,618 | 112,252 | 114,020 | 149,688 | ||
| Urba Desenvolvimento Urbano S.A. | — | — | — | — | — | — | — | 8,150 | — | 8,150 | ||
| Log Commercial Properties E Participações S/A | — | — | — | — | — | — | 8,388 | 29,826 | 8,388 | 29,826 | ||
| Ong Movimento Bem Maior | — | — | — | — | — | — | 5,266 | — | 5,266 | — | ||
| Conedi Participações Ltda | — | — | — | — | — | — | — | 7,107 | — | 7,107 | ||
| Key management personnel (c) | — | — | — | — | 17,328 | 14,050 | — | — | 17,328 | 14,050 | ||
| Others (j) | 18,074 | 23,386 | — | — | — | — | 64,964 | 67,169 | 83,038 | 90,555 | Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | |
| --- | Parent Company (a) | Associates (b) | Key management personnel (c) | Other related parties (d) | Total | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| 03/31/2023 | 12/31/2022 | 03/31/2023 | 12/31/2022 | 03/31/2023 | 12/31/2022 | 03/31/2023 | 12/31/2022 | 03/31/2023 | 12/31/2022 | |||
| Liabilities | ||||||||||||
| Liabilities with customers - demand deposits | (797) | (1,350) | (82) | (7) | (1,012) | (981) | (10,393) | (10,324) | (12,284) | (12,662) | ||
| Novus Midia S.A. | — | — | — | — | — | — | (1,976) | (1,768) | (1,976) | (1,768) | ||
| Ong Movimento Bem Maior | — | — | — | — | — | — | (2,327) | (2,961) | (2,327) | (2,961) | ||
| Key management personnel (c) | — | — | — | — | (1,012) | (981) | — | — | (1,012) | (981) | ||
| Others (j) | (797) | (1,350) | (82) | (7) | — | — | (6,090) | (5,595) | (6,969) | (6,952) |
(a) Inter & Co is directly controlled by Costellis International Limited, SBLA Holdings and Hottaire;
(b) Entities with significant influence by Inter & Co;
(c) Directors and members of the Board of Directors and Supervisory Board of Inter & Co;
(d) Any immediate family members of key management personnel or companies controlled by them, including: companies which are controlled by immediate family members of the controlling shareholder of Inter & Co; companies over which the controlling shareholder or his immediate family members have significant influence; other investors that have significant influence over Inter & Co and their close family members.
(e) Refers to working capital operations. The average rate applied is approximately 0.5% per month together with 110% to 120% of the monthly CDI;
(f) These refer to the purchase of trade receivables from suppliers of the related party, characterized as "drawee risk" operations. Accordingly, these are not financial operations, loans or even related party financing.
(g) Refers to the advance/assignment of trade receivables from the related party, in which the risk is linked to that company's customers;
(h) Consist of post-fixed CDB's and LCI's, carried out at rates compatible with the average of customers, with an average term of 16 to 20 months, and average rates of 99% to 102% of the CDI.
(i) The "Other" group refers to scattered balances that are not relevant for breakdown
(*) In December 2022, Stone owned 4.20% of Inter’s capital with voting right in General Meetings. In February 2023, Stone sold 100% of its interest in Inter and, thus, it is no longer a related party.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 | | --- || | Parent Company (a) | | Associates (b) | | Key management personnel (c) | | Other related parties (d) | | Total | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 03/31/2023 | 03/31/2022 | 03/31/2023 | 03/31/2022 | 03/31/2023 | 03/31/2022 | 03/31/2023 | 03/31/2022 | 03/31/2023 | 03/31/2022 | | Interest income (e) | 129 | — | — | — | 450 | — | 229 | — | 808 | — | | Conedi Participações Ltda | — | — | — | — | — | — | — | — | — | — | | MRV Engenharia e Participação S/A | — | — | — | — | — | — | — | — | — | — | | Stone Pagamentos S.A* | — | — | — | — | — | — | — | — | — | — | | Arena Vencer Complexo Esportivo Multiuso Spe Ltda | — | — | — | — | — | — | — | — | — | — | | Key management personnel (c) | — | — | — | — | 450 | — | — | — | 450 | — | | Others (g) | 129 | — | — | — | — | — | 229 | — | 358 | — | | Interest expenses (f) | (692) | (78) | — | (145) | (764) | (251) | (2,520) | (1,050) | (3,976) | (1,524) | | Conedi Participações Ltda | — | — | — | — | — | — | (151) | (482) | (151) | (482) | | Log Commercial Properties E Participações S/A | — | — | — | — | — | — | — | — | — | — | | Key management personnel (c) | — | — | — | — | (764) | (251) | — | — | (764) | (251) | | Other (g) | (692) | (78) | — | (145) | — | — | (2,369) | (568) | (3,061) | (791) | | Other administrative expenses | 1 | — | — | — | 44 | — | 2,137 | (120) | 2,182 | (120) | | MRV Engenharia e Participação S/A | — | — | — | — | — | — | 851 | — | 851 | — | | Novus Midia S.A. | — | — | — | — | — | — | 210 | — | 210 | — | | Radio Itatiaia Ltda | — | — | — | — | — | — | 320 | — | 320 | — | | Conedi Participações Ltda | — | — | — | — | — | — | 195 | — | 195 | — | | Lott Oliveira Braga | — | — | — | — | — | — | 154 | — | 154 | — | | Key management personnel (c) | — | — | — | — | 44 | — | — | — | 44 | — | | Others (g) | 1 | — | — | — | — | — | 407 | (120) | 408 | (120) |
(a) Inter & Co is directly controlled by Costellis International Limited, SBLA Holdings and Hottaire;
(b) Entities with significant influence by Inter&Co;
(c) Directors and members of the Board of Directors and Supervisory Board of Inter&Co;
(d) Any immediate family members of key management personnel or companies controlled by them;
(e) Income related to the receipt of interest on credit operations with related parties.
(f) Refer to expenses on intermediation of fixed income products;
(g) “Others” refer to dispersed balances, which are not relevant for breakdown.
Remuneration of key management personnel
The remuneration of the key management personnel of the Group is presented in note 30 in the caption ‘remuneration of the executive board and the board of directors’ ad referendum to the Annual Shareholders’ Meeting. The Group has a stock option plan for preferred shares for its key management personnel. Further information on the plan is detailed in explanatory note 33.
| Notes to the condensed consolidated interim financial statements<br><br>as of March 31, 2023 |
|---|
35.Subsequent events
(a) Partial Spin-off Inter Marketplace
On April 1, 2023, Banco Inter S.A. carried out the partial spin-off of its investment in Inter Marketplace Ltda. to a new company, Inter Conectividade Ltda., which was later incorporated by Inter Marketplace Ltda. Inter Conectividade Ltda. has as its corporate object the practice of intermediation and agency of services and businesses in general.
(b) Authorized Capital Change and Stock Split
On April 28, 2023, at the ordinary and extraordinary general meeting, the Company approved the change of the authorized capital to US$52,500.00, divided into 7,000,000,000 shares with a par value of US$0.0000075 each. These shares include: (i) 3,500,000,000 Class A Ordinary Shares; (ii) 1,750,000,000 Class B Ordinary Shares; and (iii) 1,750,000,000 shares with rights stipulated by the Board of Directors, regardless of class.
The change will occur through the stock split of all authorized or issued shares, with a par value of US$0.0000025, by a factor of 3, and the creation of 333,333,333 new shares, with a par value of US$0.0000075 each. Of these new shares, (I) 166,666,666.67 will be Class A Ordinary Shares; (II) 83,333,333.33 will be Class B Ordinary Shares; and (III) 83,333,333.33 will be undesignated shares.
The stock split and the Authorized Capital Change will only be effective on a date to be established in the future by the Company's Board of Directors.Up to the date of presentation of these financial statements, there have been no subsequent events to be disclosed.
(c) Change in Corporate Name - Subsidiaries
The subsidiaries subsequently renamed following the reporting period covered by this financial information:
(i) YellowFi Mortgage, Inc., renamed to Inter US Finance, LLC
(ii) Inter Mortgage Holding, Inc. renamed to Inter US Holding, LLC
(iii) YellowFi Management, Inc. renamed to Inter US Management, LLC.
54