Equibles

6-K

Inter & Co, Inc. (INTR)

6-K 2023-03-14 For: 2023-03-31
View Original
Added on April 04, 2026

United StatesSecurities and Exchange Commission

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private IssuerPursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

For the month of March 2023

Commission File Number 001-41419

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 FloorBelo Horizonte, Brazil, ZIP Code 30 190-131Telephone: +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 x Form 40-F o

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 o No x

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 x

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<br> Stel
Name: Santiago Horacio Stel
Title: Chief Strategy and Investor Relations Officer<br> of Inter&Co

Date: March 13, 2023

2

EXHIBIT INDEX

Exhibit No. Exhibit
99.1 Demonstrações Financeiras Inter & Co 31.12.2022 - EN 
3

ConsolidatedFinancial Statements as of December 31, 2022 and 2021 and for each of the years in the three-year period endedDecember 31, 2022

Contents

Report of the independent auditors on the consolidated financial statements 3
Consolidated balance sheets 8
Consolidated income statements 9
Consolidated statements of comprehensive income 10
Consolidated statements of changes in equity 11
Consolidated statements of cash flows 12
Consolidated statements of added value 13
Notes to the consolidated financial statements 14 
2

KPMG Auditores Independentes Ltda.

Rua Paraíba, 550 - 12º andar

  • Bairro Funcionários

30130-141 - Belo Horizonte/MG - Brasil

Caixa Postal 3310 - CEP 30130-970 - Belo Horizonte/MG

  • Brasil

Telefone +55 (31) 2128-5700

kpmg.com.br

Report<br> of the independent auditors on the consolidated financial statements
To the Shareholders, Board of Directorsand Management of the Inter & Co, Inc<br><br> <br>Cayman Islands
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Opinion
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We examined the consolidated financial statements of Inter &<br> Co, Inc. ("Company") comprising the balance sheet as of December 31, 2022 and the respective statements of income,<br> comprehensive income, changes in shareholders' equity and cash flows for the year ended that date, as well as corresponding explanatory<br> notes, comprising significant accounting policies and other information.<br><br> <br><br><br> <br>Opinion on consolidated financial statements<br><br> <br>****<br><br> <br>In our opinion, the consolidated financial statements referred<br> to above adequately present, in all relevant respects, the Company's consolidated financial and equity position as of December 31,<br> 2022, the consolidated performance of its operations and its consolidated cash flows for the year ended on that date, in accordance<br> with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).
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Basis for opinion
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Our audit<br> was conducted in accordance with Brazilian and international audit ing standards. Our responsibilities, in accordance with these<br> standards, are described in the following section entitled "Auditors' responsibilities for auditing consolidated financial statements."<br> We are independent of the Company and its subsidiaries, in accordance with the relevant ethical principles set forth in the Accountant's<br> Code of Professional Ethics and professional standards issued by the Federal Accounting Council, and comply with other ethical responsibilities<br> in accordance with these standards. We believe that the audit evidence obtained is sufficient and appropriate to substantiate our<br> opinion.
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Key audit matters
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Key audit matters are those<br> that, in our professional judgment, were the most significant in our current fiscal year audit. These matters were addressed in the<br> context of our audit of the consolidated financial statements as a whole and in summing up our opinion on these consolidated financial<br> statements and therefore we do not express a separate opinion on these matters.
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3
Expected loss of credit for loans, advances to customers, financial assets at fair value through other comprehensive results and securities at amortized cost
See<br> Notes 4e, 6a and 12 of the consolidated financial statements
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Main audit issues How our audit conducted this matter
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Inter & Co, Inc. and its subsidiaries recorded on<br> December 31, 2022 provision for expected credit loss, loans, advances to customers, financial assets at fair value through other<br> comprehensive results, and securities at amortized cost.<br><br> <br><br><br> <br>For credit risk assessment financial assets are divided based<br> on similar credit risk characteristics. After the evaluation, the operations are classified in stages, and in stage 1 the probability<br> of loss considers the loss for the next 12 months and in stages 2 and 3 the probability of loss considers the loss for the remaining<br> term of the operation.<br><br> <br><br><br> <br>To assess whether there has been a change in credit risk, which<br> determines the classification of internships, Inter & Co, Inc. and its subsidiaries analyze whether the risk has<br> increased significantly by product type. The measurement of the provision of expected losses is determined based on models that involve<br> judgments and assumptions based on the historical behavior of losses and projections of expected losses considering macroeconomic<br> variables.<br><br> <br><br><br> <br>Due to the relevance of the expected credit loss balances relating<br> to loans, advances to clients, financial assets at fair value through other comprehensive results and securities at amortized cost<br> linked to the degree of judgment and uncertainty underlying the determination of the measurement and the impact that any change in<br> the assumptions used in determining such loss could generate in the securities recorded in the consolidated financial statements,<br> we consider this issue as the main audit issue. Our audit procedures included, but were not<br> limited to:<br><br> <br><br><br> <br>- Evaluation of the design of<br> internal controls related to the processes of initial credit risk classifications and approvals on the internal models used in the<br> calculation of expected credit losses.<br><br> <br><br><br> <br>- With the help of our professionals<br> with experience and expertise in credit risk we perform: (i) evaluation of the reasonableness of models for measuring expected<br> losses of loans, advances to clients, financial assets at fair value through other comprehensive results and securities at amortized<br> cost, including the criteria used for the classification of such operations in stages; (ii) evaluation of the stages of development<br> of the models of probability of loss of the above-mentioned portfolios; (iii) evaluation of the methods used to calculate expected<br> credit losses; (iv) evaluation of portfolio performance indicators; (v) evaluation of the incorporation of macroeconomic<br> variables; (vi) mathematical recalculation of expected credit losses.<br><br> <br><br><br> <br>- Based on sampling, we evaluate<br> the classification of the stages of the loan portfolio assets, advances to clients, financial assets at fair value through other<br> comprehensive results and securities at amortized cost.<br><br> <br><br><br> <br>- Assessment whether disclosures<br> in the consolidated financial statements consider all relevant information.<br><br> <br><br><br> <br>Based on the evidence obtained through the above summarized<br> procedures, we consider acceptable the balance of expected credit loss related to loans, advances to clients, financial assets at<br> fair value through other comprehensive results and securities at amortized cost, as well as the respective disclosures, in the context<br> of the consolidated financial statements taken jointly for the year ended December 31, 2022.

KPMG Auditores Independentes Ltda., a Brazilian limited liability company and member firm of the global KPMG organization of independent member firms licensed by KPMG International Limited, a privateLy held British limited liability company

4
Goodwill registration generated in the acquisition of Inter & Co Payments, Inc (Pronto Money Transfer Inc.)
See<br> Notes 2.d and 4.b of the consolidated financial statements
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Main audit issues How our audit conducted this matter
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On January 14, 2022, Banco Inter completed the acquisition<br> of 100% of the share capital and took control of inter & co payments, Inc (Pronto Money Transfer Inc.), after the approval<br> of regulators and compliance with legal and contractual formalities and effective payment in the amount of R$ 721,223,000, recognizing<br> goodwill of R$ 554,758 thousand related to this acquisition.<br><br> <br><br><br> <br>The determination of goodwill by expectation of future profitability<br> takes into account the measurement of fair value attributed to acquired assets and assumed liabilities, including identifiable intangibles.<br> Such measurement involves the management's judgment to estimate these fair values based on valuation techniques, which involves assumptions<br> such as: calculation of the discount rate, attributable revenue, among others, used in the determination of estimates of future cash<br> flows.<br><br> <br><br><br> <br>Due to the relevance of the amounts involved in the acquisition<br> of Inter & Co Payments, Inc., and the level of uncertainty inherent in the significant assumptions mentioned, which<br> if changed may impact the value of the business combination in the consolidated financial statements, we consider this issue as the<br> main audit subject. Our audit procedures included, but were not<br> limited to:<br><br> <br><br><br> <br>- Evaluation of the<br> design of key internal controls related to the Company's accounting acquisition process, including: (i) control related to the<br> selection of methodology and the significant assumptions used in the measurement of the fair value of identified assets and assumed<br> liabilities; and (ii) review and approval of the Purchase Price Allocation (PPA).<br><br> <br><br><br> <br>- Analysis, with the<br> technical support of our corporate finance specialists: (i) whether the management's assessment of acquired assets, assumed<br> liabilities and identifiable intangibles, was prepared in a manner consistent with the valuation practices and methodologies normally<br> used by the market; (ii) the consistency of the main assumptions used in the projection of cash flows; (iii) inspection<br> of the base data used, including macroeconomic assumptions, in order to evaluate whether they are appropriate and come from reliable<br> sources.<br><br> <br><br><br> <br>- Evaluation whether<br> the disclosures in the consolidated financial statements include all relevant information.<br><br> <br><br><br> <br>Based on the evidence obtained through the above procedures,<br> we consider acceptable the goodwill recorded in the acquisition of Inter & Co Payments, Inc (Pronto Money Transfer<br> Inc.), as well as the respective disclosures, in the context of the consolidated financial statements taken together, for the year<br> ended December 31, 2022.
Other subjects - Statements of added value
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The consolidated statements<br> of added value for the year ended December 31, 2022, prepared under the responsibility of the Company's management, and presented<br> as supplementary information for IFRS purposes, were submitted to audit procedures executed in conjunction with the audit of the<br> Company's financial statements. For the formation of our opinion, we evaluate whether these statements are reconciled with the financial<br> statements and accounting records, as applicable, and whether their form and content are in accordance with the criteria defined<br> in Technical Pronouncement CPC 09 - Statement of Added Value. In our opinion, these statements of added value were adequately prepared,<br> in all relevant respects, according to the criteria defined in this Technical Pronouncement and are consistent with the consolidated<br> financial statements taken together.
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KPMG Auditores Independentes Ltda., a Brazilian limited liability company and member firm of the global KPMG organization of independent member firms licensed by KPMG International Limited, a privateLy held British limited liability company

5
Other information accompanying the consolidated financial statements and the auditors' report
The Company's management is responsible for this other information<br> that includes the Management Report.<br><br> <br><br><br> <br>Our opinion of the consolidated financial statements does not<br> cover the Management Report and we do not express any form of audit conclusion on that report.<br><br> <br><br><br> <br>In connection with the audit of the consolidated financial statements,<br> our responsibility is to read the Management Report and, in doing so, to consider whether that report is, in a relevant manner, inconsistent<br> with the financial statements or our knowledge obtained in the audit or otherwise appears to be distorted in a relevant manner. If,<br> based on the work done, we conclude that there is relevant distortion in the Management Report, we are required to report this fact.<br> We have nothing to report on this.
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Management and governance responsibilities for consolidated financial statements
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Management is responsible for the preparation and proper presentation<br> of individual financial statements in accordance with accounting practices adopted in Brazil and consolidated financial statements<br> in accordance with accounting practices adopted in Brazil, and with international financial reporting standards (IFRS), issued by<br> the International Accounting Standards Board (IASB), and by the internal controls it has determined as necessary to allow<br> the preparation of financial statements free of material distortion, regardless of whether caused by fraud or error.<br><br> <br><br><br> <br>In the preparation of the consolidated financial statements, management<br> is responsible for evaluating the company's ability to continue operating, disclosing, where applicable, matters related to its operational<br> continuity and the use of this accounting base in the preparation of the financial statements, unless management intends to liquidate<br> the Company and its subsidiaries or cease its operations, or have no realistic alternative to avoid closing operations.<br><br> <br><br><br> <br>Those responsible for the governance of the Company and its subsidiaries<br> are those responsible for supervising the process of preparing the financial statements.
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Auditors' responsibilities for auditing consolidated financial statements
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Our objectives are to obtain reasonable security that the consolidated<br> financial statements, taken together, are free from material distortion, regardless of whether caused by fraud or error, and issue<br> an audit report containing our opinion. Reasonable safety is a high level of security, but not a guarantee that the audit performed<br> in accordance with Brazilian and international audit standards always detectany relevant distortions existing. Distortions may be<br> due to fraud or error and are considered relevant when, individually or jointly, they may influence, within a reasonable perspective,<br> the economic decisions of users made on the basis of such financial statements.<br><br> <br><br><br> <br>As part of the audit carried out in accordance with Brazilian<br>and international audit ing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. In<br>addition:
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– We identify and assess the risks of material distortion<br>in the consolidated financial statements, regardless of whether caused by fraud or error, we plan and execute audit procedures in response<br>to such risks, as well as obtain appropriate and sufficient audit evidence to support our opinion. The risk of non-detection of relevant<br>distortion resulting from fraud is greater than that arising from error, since fraud may involve the act of circumventing internal controls,<br>collusion, forgery, omission or intentional false representations.
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– We obtain an understanding of the internal controls relevant<br>to the audit to plan audit procedures appropriate to the circumstances, but not, in order to express an opinion on the effectiveness<br>of the internal controls of the Company and its subsidiaries.
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– We evaluate the adequacy of the accounting policies used and<br>the reasonableness of the accounting estimates and respective disclosures made by management.
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KPMG Auditores Independentes Ltda., a Brazilian limited liability company and member firm of the global KPMG organization of independent member firms licensed by KPMG International Limited, a privateLy held British limited liability company

6
– We conclude on the adequacy of the use by management of the<br>accounting base of operational continuity and, based on the audit evidence obtained, whether there is relevant uncertainty regarding<br>events or conditions that may raise significant doubt regarding the operational continuity capacity of the Company and its subsidiaries.<br>If we conclude that there is relevant uncertainty, we should draw attention in our audit report to the respective disclosures in the<br>consolidated financial statements or include modification in our opinion if disclosures are inappropriate. Our findings are based on<br>audit evidence obtained as of the date of our report. However, future events or conditions may lead the Company and its subsidiaries<br>to no longer remain in operational continuity.
– We evaluate the general presentation, structure and content<br>of the financial statements, including disclosures and whether the consolidated financial statements represent the corresponding transactions<br>and events in a manner compatible with the appropriate presentation objective.
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– We obtain appropriate and sufficient audit evidence regarding<br>the financial information of the group's entities or business activities to express an opinion on the consolidated financial statements.<br>We are responsible for the direction, supervision and performance of the audit of the group and, consequently, for the audit opinion.
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We communicate with governance officials about, among other aspects,<br> the planned scope, audit time and significant audit findings, including any significant deficiencies in the internal controls we<br> identified during our work.<br><br> <br><br><br> <br>We also provide governance officers with a statement that we comply<br> with the relevant ethical requirements, including applicable independence requirements, and communicate any relationships or matters<br> that could considerably affect our independence, including, where applicable, their safeguards.<br><br> <br><br><br> <br>Of the issues that have been the subject of communication with<br> those responsible for governance, we determine those that were considered the most significant in the audit of the financial statements<br> of the current financial year and, in this way, constitute the main audit issues. We describe these matters in our audit report unless<br> law or regulation has prohibited public disclosure of the matter, or when, in extremely rare circumstances, we determine that the<br> matter should not be communicated in our report because the adverse consequences of such communication may, within a reasonable perspective,<br> outweigh the benefits of communication to the public interest.
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Belo Horizonte, March 13, 2023

KPMG Auditores Independentes Ltda

CRC SP-014428/O-6 F-MG

Original report in Portuguese signed by

Jonas Moreira Salles

CRC SP-295315/O

KPMG Auditores Independentes Ltda., a Brazilian limited liability company and member firm of the global KPMG organization of independent member firms licensed by KPMG International Limited, a privateLy held British limited liability company

7

Consolidated balance sheets as of December 31, 2022 and 2021
(Amounts in thousands of Brazilian reais, unless otherwise stated)
Note 12/31/2022 12/31/2021
--- --- --- --- --- --- --- --- ---
Assets
Cash and cash equivalents 8 1,331,648 500,446
Amounts due from financial institutions 9 4,258,856 2,051,862
Compulsory deposits at Central Bank of Brazil 2,854,778 2,399,488
Securities 10 12,448,565 12,757,687
Derivative financial assets 11 - 86,948
Loans and advances to customers 12 22,698,328 17,216,362
Provision for expected loss 12 (1,318,412 ) (680,932 )
Loans and advances to customers, net of provisions for expected loss 21,379,916 16,535,430
Non-current assets held for sale 13 166,943 129,793
Equity accounted investees 14 72,090 82,445
Property and equipment 15 188,019 163,475
Intangible assets 16 1,238,629 430,504
Deferred tax assets 32 978,148 695,525
Other assets 17 1,425,508 792,735
Total assets 46,343,100 36,626,337
Liabilities
Liabilities with financial and similar institutions 18 7,906,897 5,341,464
Liabilities with customers 19 23,642,804 18,333,543
Securities issued 20 6,202,165 3,572,093
Derivative financial liabilities 12 37,768 66,545
Borrowing and onlending 21 36,448 25,071
Income tax and social contribution 114,493 41,764
Other tax liabilities 52,372 36,642
Tax liabilities 22 166,865 78,406
Provisions 23 57,449 52,848
Deferred tax liabilities 32 30,073 89,235
Other liabilities 24 1,173,527 617,349
Total liabilities 39,253,996 28,176,554
Equity
Share capital 25a 13 13
Reserves 25b 7,817,670 2,728,396
Other comprehensive income 25c (825,301 ) (72,284 )
Equity attributable to owners of the Company 6,992,382 2,656,125
Non-controlling interest 25f 96,722 5,793,659
Total equity 7,089,104 8,449,784
Total liabilities and equity 46,343,100 36,626,337
The notes are an integral part of these consolidated financial statements.
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8

Consolidated income statements for the years ended December 31, 2022, 2021 and 2020
(Amounts in thousands of Brazilian reais, unless otherwise stated)
Note 2022 2021 2020
--- --- --- --- --- --- --- --- --- --- --- ---
Interest income 2,802,658 1,435,428 942,808
Interest expenses (1,972,850 ) (543,242 ) (184,335 )
Net interest income 26 829,808 892,186 758,473
Revenues from services and commissions 968,039 542,569 257,145
Expenses from services and commissions (129,233 ) (100,297 ) (71,611 )
Net result from services and commissions 27 838,806 442,272 185,534
Income from securities 10 1,471,737 745,613 12,060
Net gains / (losses) from derivatives 11 33,884 (48,330 ) (54,418 )
Other revenues 28 388,462 190,082 109,882
Net revenues 3,562,697 2,221,823 1,011,531
Other income 28b - - 109,216
Impairment losses on financial assets 29 (1,083,237 ) (595,581 ) (213,688 )
Personnel expenses 30 (733,605 ) (443,328 ) (229,096 )
Depreciation and amortization 15 (163,972 ) (94,251 ) (43,659 )
Other administrative expenses 31 (1,743,072 ) (1,310,961 ) (641,327 )
Income before taxes and interests in associates (161,189 ) (222,298 ) (7,023 )
Income from equity interests in associates 14 (17,384 ) (8,764 ) -
Profit / (loss) before income tax (178,573 ) (231,062 ) (7,023 )
Current income tax and social contribution 32 (106,625 ) (52,441 ) (13,166 )
Deferred income tax and social contribution 32 271,119 228,434 50,875
Income tax benefit 164,494 175,993 37,709
Profit / (loss) for the year (14,079 ) (55,068 ) 30,686
Profit (loss) attributable to:
Owners of the Company (11,090 ) (72,663 ) 17,911
Non-controlling interest (2,989 ) 17,597 12,775
Earnings (loss) per share (in Brazilian Reais – BRL)
Basic earnings (loss) per share 25e (0.0276 ) (0.0143 ) 0.0043
Diluted earnings (loss) per share 25e (0.0276 ) (0.0143 ) 0.0043

The notes are an integral part of these consolidated financial statements.

9

Consolidated statements of comprehensive income for the years ended December 31, 2022, 2021 and 2020
(Amounts in thousands of Brazilian reais)
2022 2021 2020
--- --- --- --- --- --- --- --- --- ---
Profit (loss) for the year (14,079 ) (55,068 ) 30,686
Other comprehensive income
Items that are or may be reclassified subsequently to the income statement:
Net change in fair value - financial assets at FVOCI (240,057 ) (454,552 ) 52,718
Related tax - financial assets FVOCI 102,684 207,167 (26,031 )
Foreign exchange differences on the translation of foreign operations (10,671 ) - -
Effects of corporate reorganization in non-controlling interest without a change in control (604,973 ) - -
Other comprehensive income for the year, net of income tax and social contribution (753,017 ) (247,385 ) 26,687
Total comprehensive income for the year (767,096 ) (302,453 ) 57,373
Allocation of comprehensive income
To owners of the company (764,107 ) (245,493 ) 44,598
To non-controlling interest (2,989 ) (56,960 ) 12,775
The notes are an integral part of these consolidated financial statements.
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10

Consolidated statements of changes in equity for the years ended December 31, 2022, 2021 and 2020
(Amounts in thousands of Brazilian reais, unless otherwise stated)
Note Share<br> capital Reserves Other<br> comprehensive <br><br>income Retained<br> <br><br>earnings Treasury<br> shares Equity<br> attributable <br><br>to owners of the <br><br>Company Non-controlling<br> <br><br>interest Total<br> equity
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Balances<br> at January 1, 2020 - Banco Inter 2,068,305 90,152 (696 ) - - 2,157,761 4,177 2,161,938
Capital<br> increase 1,181,351 - - - 1,181,351 - 1,181,351
Share<br> issuance cost (33,335 ) 820 - - - (32,515 ) - (32,515 )
Share-based<br> payment 134 (134 ) - - - - - -
Profit<br> (loss) for the year - - - 17,911 - 17,911 12,775 30,686
Profit<br> reserve reversal - (22,038 ) - 22,038 - - - -
Proposed<br> allocations:
Constitution/Reversion<br> of reserves - - - - - - - -
Dividends<br> and interest on equity - - - (39,949 ) - (39,949 ) - (39,949 )
Repurchase<br> of shares - - - - (153,109 ) (153,109 ) (153,109 )
Sale<br> of treasury shares - - - - 35,588 35,588 35,588
Gain<br> on sale of treasury shares - 81,909 - - 81,909 - 81,909
Sale<br> of NCI without a change in control - - - - - - 31,629 31,629
Net<br> change in fair value - financial assets at FVOCI - - 26,687 - - 26,687 - 26,687
Balances<br> at December 31, 2020 – Banco Inter 3,216,455 150,709 25,991 - (117,521 ) 3,275,634 48,581 3,324,215
Balances<br> at January 1, 2021 - Banco Inter 3,216,455 150,709 25,991 - (117,521 ) 3,275,634 48,581 3,324,215
Profit<br> (loss) for the period - - - (48,939 ) - (48,939 ) 8,502 (40,437 )
Contributions<br> and distributions
Constitution/reversion<br> of reserves - (94,085 ) - 48,939 - (45,146 ) - (45,146 )
Dividends<br> and interest on equity 25d - (3,122 ) - - - (3,122 ) (7,251 ) (10,373 )
Sale<br> of treasury shares - (74,119 ) - - 81,159 7,040 - 7,040
Resources<br> from non-controlling interest - - - - - - 33,998 33,998
Net<br> change in fair value - financial assets at FVOCI - - (141,312 ) - - (141,312 ) - (141,312 )
Balances<br> at May 6, 2021 – Banco Inter 3,216,455 (20,617 ) (115,321 ) - (36,362 ) 3,044,155 83,830 3,127,985
Corporate<br> restructuring on May 7, 2021 (3,216,442 ) 1,205,850 74,555 - 36,362 (1,899,675 ) 1,899,675 -
Balances<br> at May 7, 2021 – Inter & Co, Inc. 13 1,185,233 (40,766 ) - - 1,144,480 1,983,505 3,127,985
Profit<br> (loss) for the period (23,724 ) (23,724 ) 9,095 (14,629 )
Allocation<br> from investee:
Other<br> comprehensive income - - (31,518 ) - - (31,518 ) (74,555 ) (106,073 )
Treasury<br> shares - - - - - - (36,362 ) (36,362 )
Contributions<br> and distributions - (23,724 ) - 23,724 - - - -
Dividends<br> and interest on equity 25d - - - - - - (9,307 ) (9,307 )
Resources<br> from non-controlling interest, including capital increase - 1,566,887 - - - 1,566,887 3,921,283 5,488,170
Balances<br> at December 31, 2021 - Inter & Co, Inc. 13 2,728,396 (72,284 ) - - 2,656,125 5,793,659 8,449,784
Balances<br> at January 1, 2022 - Inter & Co, Inc. 13 2,728,396 (72,284 ) - - 2,656,125 5,793,659 8,449,784
Profit<br> (loss) for the period - - - (11,090 ) - (11,090 ) (2,989 ) (14,079 )
Contributions<br> and distributions
Constitution/Reversion<br> of reserves - (11,090 ) - 11,090 - - - -
Dividends<br> and interest on equity 25d - (38,056 ) - - - (38,056 ) (37,842 ) (75,898 )
Foreign<br> exchange differences on the translation of foreign operations - - (10,671 ) - - (10,671 ) - (10,671 )
Net<br> change in fair value - financial assets at FVOCI - - (137,373 ) - - (137,373 ) - (137,373 )
Effects<br> of corporate reorganization 25f - 5,283,314 (604,973 ) - - 4,678,341 (5,656,106 ) (977,765 )
Reflex<br> reserve (125,299 ) - - - (125,299 ) - (125,299 )
Others - (19,595 ) - - - (19,595 ) - (19,595 )
Balances<br> at December 31, 2022 - Inter & Co, Inc. 13 7,817,670 (825,301 ) - - 6,992,382 96,722 7,089,104

The notes are an integral part of these consolidated financial statements.

11

Consolidated statements of cash flows for the years ended December 31, 2022, 2021 and 2020
(Amounts in thousands of Brazilian reais)
2022 2021 2020
--- --- --- --- --- --- --- --- --- ---
Operating activities
Profit (loss) for the year (14,079 ) (55,068 ) 30,686
Adjustments to profit (loss)
Depreciation and amortization 163,972 58,336 43,659
Result of equity interests in associates 17,384 8,764 -
Impairment losses on financial assets 1,083,237 (595,581 ) 213,688
Expenses with provisions 25,931 19,002 15,280
Deferred income tax and social contribution (271,119 ) 228,434 (50,875 )
Current income tax and social contribution 106,625 (52,441 ) 13,166
Provisions/ (reversals) for loss of assets 5,225 (43,618 ) (4,401 )
Other capital gains (losses) (66,363 ) - -
Provision for performance income (150,401 ) - -
Result of foreign exchange variation - 30 (1,006 )
(Increase)/ decrease in:
Compulsory deposits at Central Bank of Brazil (455,290 ) (689,759 ) (1,317,449 )
Loans and advances to customers, net of provision for expected loss (5,927,723 ) (7,432,145 ) (4,146,866 )
Amounts due from financial institutions (2,206,994 ) (1,549,493 ) (246,272 )
Securities (602,509 ) (573,349 ) 260,916
Derivative financial assets 86,948 (59,435 ) (27,513 )
Non-current assets held for sale (37,150 ) 33,754 6,104
Other assets (496,097 ) (790,072 ) (356,182 )
Increase/ (decrease) in:
Liabilities with financial institutions 2,565,433 3,584,551 604,421
Liabilities with customers 5,309,261 5,896,911 7,722,193
Securities issued 2,630,072 1,842,657 9,856
Derivative financial liabilities (28,777 ) 9,787 35,817
Borrowing and onlending 11,377 (2,334 ) (2,395 )
Tax liabilities 119,891 149,605 13,090
Provisions (21,330 ) 10,209 (13,698 )
Other liabilities 530,772 141,929 192,852
2,378,296 140,673 2,995,072
Income tax paid (138,057 ) (49,029 ) (14,187 )
Net cash from operating activities 2,240,239 91,644 2,980,885
Cash flow from investing activities
Acquisition of subsidiaries, net of cash acquired (671,704 ) (93,782 ) (24,905 )
Acquisition of property and equipment (34,290 ) (32,249 ) (17,250 )
Proceeds from sale of property and equipment 14 602 7,223
Acquisition of intangible assets (255,927 ) (255,731 ) (135,619 )
Acquisition of financial assets at FVOCI (7,977,979 ) (27,780,867 ) (4,899,868 )
Proceeds from sale of financial assets at FVOCI 9,208,137 21,512,954 75,618
Acquisition of financial assets at FVTPL (582,098 ) (920,123 ) (135,389 )
Proceeds from sale of financial assets at FVTPL 126,198 393,417 81,213
Net cash used in investing activities (187,649 ) (7,175,779 ) (5,048,977 )
Cash flow from financing activities
Capital increase - - 1,148,836
Repurchase of treasury shares - - (153,109 )
Sale of treasury shares - (29,322 ) 117,497
Paid dividends and interest on equity (75,898 ) (19,680 ) (37,868 )
Resources from non-controlling interest, including capital increase - 5,478,926 31,629
Payment to shareholders of subisidiary (1,145,273 ) - -
Net cash from financing activities (1,221,171 ) 5,429,924 1,106,985
(Decrease)/ Increase in cash and cash equivalents 831,419 (1,654,212 ) (961,108 )
Cash and cash equivalents at the beginning of the year 500,446 2,154,687 3,114,789
Effect of the exchange rate variation on cash and cash equivalents (217 ) (30 ) 1,006
Cash and cash equivalents at December 31 1,331,648 500,446 2,154,687

The notes are an integral part of these consolidated financial statements.

12

Consolidatedstatements of added value for the years ended December 31, 2022 and 2021

(Amountsin thousands of Brazilian reais, unless otherwise stated)

2022 2021
Revenues 4,452,310 2,169,484
Interest income 4,308,279 2,132,711
Revenues from services and commissions, net 838,806 442,272
Impairment losses on financial assets (1,083,237 ) (595,581 )
Other revenues 388,462 190,082
Expenses (1,972,850 ) (543,242 )
Interest (1,972,850 ) (543,242 )
Input from third parties (1,447,334 ) (1,135,405 )
Materials, energy and others (340,129 ) (322,063 )
Third party services (230,223 ) (154,661 )
Others (876,982 ) (658,681 )
Telecommunications and data processing (696,450 ) (513,562 )
Publicity and advertising (180,532 ) (145,119 )
Gross added value 1,032,126 490,837
Deduction (163,972 ) (94,251 )
Depreciation and amortization (163,972 ) (94,251 )
Net added value produced by the Bank 868,154 396,586
Added value received in transfer (17,384 ) (8,764 )
Income from equity interests in affiliates (17,384 ) (8,764 )
Total added value to distribute 850,770 387,822
Distribution of added value 850,770 387,822
Personnel and tax 640,089 380,510
Remuneration 487,489 300,011
Benefits 126,469 62,506
FGTS 26,131 17,993
Taxes, contributions and fees 178,550 33,750
Federal 136,845 8,494
Municipal 41,705 25,250
State 1,784 6
Rent 44,426 28,622
Profit (losses) retained/reversed in the period 25 (11,090 ) (72,663 )
Non-controlling interest 25 (2,989 ) 17,597

The notes are an integral part of these consolidated financial statements.

13
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

Notes to the consolidated financialstatements

(Amounts in thousands of Brazilian reais)

1 Activity and structure of Inter & Co, Inc. and its subsidiaries

Inter & Co, Inc., 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, 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 Comission (“SEC”). The common shares are trading 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”), ofthe owner of all shares of Banco Inter. 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 carrying amounts of Banco Inter’s consolidated assets and liabilities were reflected in Inter & Co’s consolidated financial statements with no fair value adjustments. As a result, the Audited Financial Statements reflect:

§ The historical consolidated operating results, cash flows and financial position of Banco Inter (as predecessor)<br>for all dates and periods prior to May 7, 2021.
§ The contribution of Banco Inter consolidated assets and liabilities at book value on May 7, 2021;
--- ---
§ Inter & Co and its consolidated subsidiaries (including Banco Inter) operating results and cash<br>flows from May 7, 2021 and the financial position of Inter & Co as of December 31, 2021 and December 31, 2022.
--- ---
§ The number of common shares issued by Inter & Co, as a result of this initial reorganization<br>is reflected retroactively to January 1, 2019, for the purposes of calculating earnings per share.
--- --- 
14
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
§ As the statutory equity reserves of Banco Inter are no longer applicable to Inter & Co, these<br>statutory reserves were transferred to the retained earnings account on May 7, 2021, the date of this initial reorganization.
--- ---
§ The recognition of non-controlling interest on June 23, 2022, relating to the transfer from non-controlling<br>interest to equity of the Company of the Banco Inter shareholders that exchanged their Banco Inter shares to shares and/or BDRs of the<br>Company and the payment to shareholders of Banco Inter who opned to receive cash in lieu of shares of the Company (instead of shares and<br>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. The operations are conducted within the context of the set of companies in the Group, working in the market in an integrated way.

2 Basis for preparation
a. Compliance statement
--- ---

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

These consolidated financial statements were approved by the Board of Director’s meeting on March 13, 2023 .

b. Functional and presentationcurrency

These consolidated financial statements are presented in Brazilian Reais (BRL or R$), which is the functional currency of the Group. The operating companies adopt the Brazilian Real as their functional currency, except for the subsidiary Inter&co Payments, Inc., which has the US dollar as its functional currency, being its conversion made as described in NE 4c. All balances were rounded to the nearest thousand, unless otherwise noted.

c. Use of estimates and judgments

In preparing these consolidated 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.

15
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
d. Judgments and estimates
--- ---

The information on judgments made in the application of the accounting policies that have significant effects on the amounts recognized in the consolidated financial statements are included. Information on the uncertainties related to assumptions and estimates with a significant risk of resulting in a material adjustment in accounting balances of assets and liabilities are included in the following notes :

· Classification of financial assets (see notes<br>6 and 7) - evaluation of the business model in which the assets are held and evaluation if the contractual terms of the financial asset<br>relate only to payments of principal and interest (SPPI test).
· The measurement of the provision for expected<br>credit losses on financial assets (see notes 4e and 12) measured at amortized cost and fair value through other comprehensive income (FVOCI)<br>requires the use of complex quantitative models and assumptions about future economic conditions and credit behavior. Several significant<br>judgments are also needed to apply the accounting requirements for measuring expected credit loss, such as: determining the criteria to<br>evaluate the significant increase in credit risk; selecting quantitative models and appropriate assumptions for measuring expected credit<br>loss; and establishing different prospective scenarios and their weighting, among others.
--- ---
· Basis for consolidation (note 4a): whether Inter<br>has de facto control over an investee;
--- ---
· Business combination (note 4b): determination<br>of fair values of assets acquired and liabilities assumed in business combinations.
--- ---
· Equity accounted investees (note 14): whether<br>Inter has significant influence over an investee.
--- ---
· Note 16 - impairment test of intangible assets<br>and goodwill: key assumptions underlying recoverable amounts, including the recoverability of development costs;
--- ---
· Deferred tax asset (note 32): the expected realization<br>of the deferred tax asset is based on projected future taxable income and other technical studies.
--- --- 
16
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
3 Changes to significant accounting policies
--- ---

New accounting standards, amendments to accounting standards, and interpretations have been published that are not mandatory for the December 31, 2022, reporting period and have not been early adopted by the Company. These standards, amendments, or interpretations are not expected to have a material impact on the Company in the current or future reporting periods.

· Definition of Accounting Estimates – Amendments<br>to IAS 8
· Classification of Liabilities as Current or Non-Current<br> – Amendments to IAS 1
--- ---
· Disclosure of Accounting Policies – Amendments<br>to IAS 1 and IFRS Practice Statement 2
--- ---
· Deferred Tax related to Assets and Liabilities<br>arising from a Single Transaction – Amendments to IAS 12.
--- ---
· Insurance Contracts – IFRS 17
--- ---

New or revised accounting pronouncements adopted in 2022

The following new or revised standards have been issued by IASB, were effective for the year covered by these consolidated financial statements, and had no significant impact.

· Reference to the Conceptual Framework (Amendments<br>to IFRS 3); and
· Annual Improvements to IFRS Standards 2018-2020<br>(Amendments to IFRS 9 and IFRS 16).
--- ---
4 Significant accounting policies
--- ---

The accounting policies described below were applied in all periods presented in the consolidated financial statements.

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.

17
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

The following table shows the subsidiaries in each year:

Share in the capital (%) Inter<br> Level (*)
Entity Branch of Activity Common Shares<br> and/or Quotas functional<br> currency Country 12/31/2022 12/31/2021 12/31/2020
Direct subsidiaries
Inter&Co Securities LLC (a) Holding Company - US$ USA 100.0 % - -
Inter&Co Participações Ltda. (b) Holding Company 1,500,000 BRL Brazil 100.0 % - -
Inter Us Holding, LLC Holding Company 100 US$ USA 100.0 % - -
INTRGLOBALEU Serviços Administrativos, LDA (c) Holding Company 1 EUR Portugal 100.0 % - -
Share in the capital (%) Inter <br><br>Level(*)
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Entity/Fund Branch of Activity Common Shares<br> and/or Quotas functional<br><br> currency Country 12/31/2022 12/31/2021 12/31/2020
Indirect subsidiaries
Inter Holding Financeira S.A. Holding Company 401,159,540 BRL Brazil 100.0 % 100.0 % -
Banco Inter S.A. Multiple Bank 1,297,308,713 BRL Brazil 100.0 % 31.4 % -
Inter Distribuidora de Títulos e Valores Mobiliários Ltda. TVM Distributor 24,583,333 BRL Brazil 98.3 % 30.9 % 98.3 %
Inter Digital Corretora e Consultoria de Seguros Ltda. Insurance broker 59,750 BRL Brazil 60.0 % 18.8 % 60.0 %
Inter Marketplace Intermediação de Negócios e Serviços Ltdade. Marketplace 5,000,000 BRL Brazil 100.0 % 31.4 % 99.9 %
Inter Asset Holding S.A. Asset management 7,000,000 BRL Brazil 70.0 % 22.0 % 70.0 %
Inter Titulos Fundo de Investimento Investment Fund 489,302 BRL Brazil 98.3 % 30.7 % 96.5 %
BMA Inter Fundo De Investimento Em Direitos Creditórios Multissetorial Investment Fund 5,000,000 BRL Brazil 90.7 % 28.3 % 81.2 %
TBI Fundo De Investimento Renda Fixa Credito Privado Investment Fund 388,157,511 BRL Brazil 100.0 % 31.4 % 100.0 %
TBI Fundo De Investimento Crédito Privado Investimento Exterior Investment Fund 443,689,064 BRL Brazil 100.0 % 31.4 % -
IM Designs Desenvolvimento de Software Ltda. Provision of services 50,000,000 BRL Brazil 50.0 % 15.7 % -
Acerto Cobrança e Informações Cadastrais S.A. Provision of services 60,000,000,000 BRL Brazil 60.0 % 18.9 % -
Inter & Co Payments, Inc Provision of services 16,000,000.00 US$ USA 100.0 % 0.0 % -
Inter Asset Gestão de Recursos Ltda Asset management 30,680 BRL Brazil 70.0 % 22.0 % -
Inter Café Ltda. Provision of services 10,000 BRL Brazil 100.0 % 31.4 % -
Inter Boutiques Ltda. Provision of services 10,000 BRL Brazil 100.0 % 31.4 % -
Inter Food Ltda. Provision of services 7,000,000 BRL Brazil 70.0 % 22.0 % 70.0 %
Inter Viagens e Entretenimento Ltda. Provision of services 1,000 BRL Brazil 100.0 % - -

(*) The variations in the percentages presented above are related to the corporate reorganization presented in note 1. The share in the capital presented on December 31, 2020, considers the level of Banco Inter S .A. as parent company, while the interest on equity capital presented on December 31, 2022 and 2021 considers Inter&co as parent company.

(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.

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 share in the capital of subsidiaries as of December 31, 2020, refers to the percentage held by Banco Inter, the participation percentages as of December 31, 2022 and 2021 were impacted by the corporate reorganization and show the indirect share in the capital held by Inter & Co, Inc. The company holds more than 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.

18
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
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 Company. 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.

Inter & Co Payments, Inc

On January 14, 2022, Banco Inter S.A. concluded the acquisition of 100% of the share capital of Inter & Co Payments, Inc formerly either USEND or Pronto Money Transfer Inc and state subsequently renamed to Inter & Co Payments, Inc. Inter & Co Payments, Inc., is 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, to U.S residents.

19
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
i. Consideration transferred
--- ---
The<br> following table summarizes the amounts of consideration transferred:<br><br> <br><br><br> <br>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.

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
Other assets 209,772
Intangible assets 155,623
Liabilities (335,896 )
Borrowing and onlending (2 )
Other liabilities (303,213 )
Deferred tax liabilities (32,681 )
Total net identifiable assets acquired 166,465
Total consideration transferred 721,224
Goodwill on acquisition (a) 554,759

(a) Inter prepared the study for the purchase price allocation (“PPA”) in the identifiable assets acquired, liabilities assumed and goodwill. The goodwill of R$ 554,759, resulting from the acquisition comprises the value of future economic benefits arising from the synergies from part of our internationalization strategy. The goodwill is not expected to be deductible for income tax and social contribution purposes. Management assessed whether there is a likelihood of impairment, but no indications were identified. The discount rate to calculate the present value of the income determined is based on the WACC methodology , in which the cost of capital is determined by the weighted average of the market value of the components of the capital structure (own and third parties), therefore the percentage used in the discount rate was 14.5%

ii. Fair value measurement

The techniques used to measure the fair value of significant assets acquired were as follows.

Assets acquired Valuations technique
Intangible assets We estimated the fair value of software using<br> the Relief-from-Royalty method, which derives from the income approach. For this, the following assessment criteria were applied:<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><br> <br>To calculate the value of licenses, the With or<br> Without methodology was used, by measuring the impact on cash flow during the process of acquiring operating licenses in the US market.<br> It was estimated that the average time to obtain such operating permits is 01 year. In this way, a postponement of revenue levels was<br> 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. There is no expected for the accounts receivable identified.

20
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

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 related to lawyer’s fees, audit and due diligence costs. These costs were recorded as “Administrative expenses” in the income statement.

iv. Contribution to the Group's results

In the year ended December 31, 2022, Inter & Co Payments Inc., contributed with a revenue of R$ 119.958 and a loss of R$22.252 to the Group´s result. If the acquisition had occurred on January 1, 2022, management estimates that there would be not incremental consolidated revenue and consolidated profit for the year.

Inter Café Ltda.

On December 20, 2021, the subsidiary Inter Marketplace Ltda. acquired “Inter Café”, a service provider focused on the sale of food and non-alcoholic beverages.

The consideration transferred related to the acquisition of Inter Café is R$10 and will be paid in a single payment in the first quarter of 2022.

In the year ended December 31, 2021, Inter Café contributed with a revenue of R$2,080 and a loss of R$702 to the Group´s result.

Inter Boutiques Ltda.

On December 20, 2021, the subsidiary Inter Marketplace Ltda. acquired “Inter Boutiques”, which is specialized in the sale of clothing and personalized objects, with an exclusive focus on sales through the app.

This new investment will have online and offline experiences throughout Brazil. Adding following the provision of services for the sale of goods on the digital platform offered by Marketplace.

The consideration transferred related to the acquisition of Inter Boutiques is R$10 and will be paid in a single payment in the first quarter of 2022.

In the year ended December 31, 2021, Inter Boutiques contributed with a revenue of R$2,202 and a profit of R$599 to the Group´s result.

21
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

Inter Food Ltda.

On May 13, 2021, Banco Inter acquired the shareholding control of “Inter Food”, mainly engaged in the provision of the program of benefits through an application to consumers and restaurants under Inter Food brand, through the acquisition of 70% of its voting shares.

The operations of Inter Food are held within the subsidiary of Inter Marketplace Intermediação de Negócios e Serviços Ltda.

In the year ended December 31, 2021, Inter Food contributed with a revenue of R$1,322 and a profit of R$163 to the Group´s result.

(i) Considerationtransferred

The consideration tranferred was R$8,350, of which R$7,350 was paid to the minority shareholders and R$1,000 was paid as capital contribution.

IM Designs Desenvolvimentode Software Ltda.

On July 1st, 2021, inter acquired “IM Designs”, a company specialized in developing 3D tools for the creation of visualization projects for indoor and outdoor environments, through virtual reality, augmented reality and mixed reality.

In the year ended December 31, 2021, Inter Food contributed with a revenue of R$1,322 and a profit of R$163 to the Group´s result.

(i) Consideration transferred

The consideration tranferred for the acquisition of IM Design was R$15,000 of which R$10,000 has already been paid at closing date and another R$5,000 will be paid in the first semester of 2022.

Acerto Cobrança e InformaçõesCadastrais S.A.

On February 12, 2021, Inter acquired 60% of voting interest of Acerto Cobrança e Informações Cadastrais S.A. (“Meu Acerto”), obtaining control of Meu Acerto, focused on the renegotiation of debts, collection, revival, customer retention and upsell.

In the year ended December 31, 2021, Meu Acerto contributed a revenue of R$9,343 and a loss of R$3,750 to the Group´s result.

22
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

(i) Considerationtransferred

The consideration tranferred for the acquisition of Meu Acerto was R$45,000 of which R$25,000 is payable to the minority shareholders (R$7,250 upfront and R$17,750 to be paid in two installments; in 2022 and 2023) and and R$20,000 payable as capital contribution carried out at closing date.

(iii) Acquisition costs

Out of the costs related to the acquisition, Inter incurred expenses of R$25 of lawyer’s fees and due diligence costs, both recorded as “Administrative expenses” in the income statement.

If the acquisitions had been concluded on January 1, 2021, the Company estimates our consolidated (including Inter Café Ltda., Inter Boutiques Ltda., Inter Food Ltda., IM Designs Desenvolvimento de Software Ltda. and Acerto Cobrança e Informações Cadastrais S.A. ) total revenues would have been R$20,545 and net loss of R$3,855 for the year ended December 31, 2021.

Inter Asset Holding S.A. (formerlyMatriz Participações S.A.)

On January 3, 2020, Inter agreed to acquire 70% (seventy percent) of the capital stock of the company Inter Asset Holding S.A which, in turn, holds ninety-eight percent (98%) of Inter Asset Gestão de Recursos Ltda.(formerly DLM Invista Gestão de Recursos Ltda.) ("Inter Asset"). With this acquisition Inter explored and developed as existing synergies on the Inter Open Platform (PAI), which has more than 425 thousand clients, and expects to increase the services and products offered to its clients. The acquisition was authorized by the Brazilian Central Bank on January 3, 2020.

In the year ended December 31, 2020, Inter Asset contributed a revenue of R$278 and a loss of R$139 to the Group´s result.

Considerationtransferred

The acquisition price was R$49,000, of which (i) R$24,500 is fixed and was paid on the closing date and (ii) R$24,500 variable, under the terms of the purchase and sale agreement, which are subject to adjustment according to the financial performance of Inter Asset Holding S.A., measured by its EBITDA, and payable in four annual payments, the first was paid in 2021, the remainder will be paid in annual installments in 2022, 2023 and 2024.

c. Foreign currency

Transactions in foreign currency

Transactions in foreign currency are translated into the respective functional currencies of the Group’s entities by the spot exchange rates on the dates of the transactions.

23
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

Monetary assets and liabilities denominated in foreign currencies at reporting dates are translated into the functional currency at the spot exchange rate at that date. Non-monetary assets and liabilities measured at fair value in foreign currency are translated into the functional currency at the spot exchange rate at the date on which the fair value is determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated using the spot exchange rate at the date of the transaction. Foreign currency differences arising on translation are generally recognized in profit or loss.

Exchange variation adjustment

Assets and liabilities from foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the Brazilian Real at the exchange rates prevailing at the reporting date. Revenues and expenses from foreign operations are translated to the Real at the exchange rates ascertained on the dates of the transactions.

The foreign currency differences generated in the translation into the presentation currency are recognized in other comprehensive income. If the subsidiary is not a wholly owned subsidiary, the corresponding portion of the translation difference is attributed to the non-controlling shareholders.

When a foreign entity is wholly or partially disposed of such that control, significant influence or joint control is lost, the cumulative amount of exchange rate changes related to such foreign entity is reclassified to profit or loss as a component. If the Group disposes of part of its interest in a subsidiary but retains control, the relevant proportion of the cumulative amount is attributed to the interest of non-controlling shareholders.

d. Cash and cash equivalents

The balance of cash and cash equivalents consists of cash held and bank deposits on demand (in Brazil and abroad) and other short-term highly liquid investments with original maturity dates not exceeding three (3) months that are subject to insignificant risk of changes in their fair value. These instruments are used by the Group to manage its short-term commitments.

e. Financial assets and liabilities

Financial assets and liabilities are initially booked at fair value, and subsequently, measured at amortized cost or fair value.

24
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

i. Classification and Measurement of Financial Assets

Financial Instruments are classified as financial assets into the following measurement categories:

· Amortized cost;
· Fair value through other comprehensive income<br>(FVOCI); or
--- ---
· Fair value through profit or loss (FVTPL).
--- ---

The classification and subsequent measurement of financial assets depend on:

· The business model in which they are managed;
· The characteristics of their cash flows (SolelyPayment of Principal and Interest Test - SPPI Test).
--- ---

Business model: represents the way in which the financial assets are managed to generate cash flows and does not depend on management’s intentions regarding an individual instrument.

Financial assets may be managed for the purpose of:

i) collecting contractual cash flows;

ii) collecting contractual cash flows and selling assets; or

iii) others.

To evaluate business models, the Group considers the risks affecting the performance of the business model; and how the performance of the business model is assessed and reported to management.

When the financial asset is held in business models “i” and “ii” above, the SPPI Test needs to be applied.

SPPI Test: assessment of cash flows generated by the financial instrument in order to verify whether they refer only to payments of principal and interest, which includes only consideration for the time value of money, credit risk and other basic lending risks.

If the contractual terms introduce exposure to risks or volatility in cash flows, such as exposure to changes in the prices of equity instruments, the financial asset is classified as at fair value through profit or loss. Hybrid contracts shall be assessed as a single unit, including all embedded features.

Classification

Based on these factors, Inter applies the following criteria for each classification category:

25
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

Amortized Cost

· Assets managed to obtain cash flows consisting<br>only of payments of principal and interest (SPPI Test);
· Initially recognized at fair value plus transaction<br>costs;
--- ---
· Subsequently measured at amortized cost, using<br>the effective interest rate;
--- ---
· Interest, including the amortization of premiums<br>and discounts, is recognized in the Income Statement under the line item Interest income calculated using the effective interest method.
--- ---

Financial Assets at Fair Value Through OtherComprehensive Income

· Assets managed both to obtain cash flows consisting<br>only of payments of principal and interest (SPPI Test) and from sale;
· Initially recognized at fair value plus transaction<br>costs and subsequently measured at fair value;
--- ---
· Interest income is recognized in the Income Statement<br>using the effective interest rate under the line item Interest income calculated using the effective interest method;
--- ---
· Expected credit losses are recognized in the<br>Income Statement;
--- ---
· Unrealized gains and losses (except expected<br>credit losses, currency rate differences, dividends and interest income) are recognized, net of applicable taxes, as other comprehensive<br>income under the line item Financial assets at FVOCI - Net change in fair value.
--- ---

Financial Assets at Fair Value Through Profitor Loss

· Assets that do not meet the classification criteria<br>of the previous categories; or assets designated at initial recognition as at fair value through profit or loss to reduce "accounting<br>mismatches";
· Initially recognized and subsequently measured<br>at fair value;
--- ---
· Transaction costs are recorded directly in the<br>Income Statement;
--- ---
· Gains and losses arising from changes in fair<br>value are recognized in the Income Statement in the line item Net gains/(losses) from derivatives or Income from securities.
--- ---

Regular purchases and sales of financial assets are recognized and derecognized, respectively, on the trading date.

Financial assets are derecognized when the rights to receive cash flows expire or when the Group transfers substantially all the risks and rewards. When the Group neither transfers nor retains substantially all the risks and rewards, the Group assesses if it has maintained control. If the Group has not retained control, then it derecognizes the asset. If the Group has retained control then it continues to recognize the asset to the extent of its continuing involvement.

Financial assets and liabilities are offset and the net amount is reported in the balance sheet only when there is a legal right to offset the amounts recognized and there is the intention to settle them on a net basis or to realize the asset and settle the liability simultaneously.

26
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

Equity Instruments

An equity instrument is any contract proving a residual interest in the assets of an entity, after deducting all its liabilities, such as Shares and Quotas.

The Group measures all its equity instruments held at fair value through profit or loss. Gains and losses on equity instruments measured at fair value through profit or loss are recorded in the Income Statement.

Effective Interest Rate

The effective interest rate is established on initial recognition of financial assets and liabilities and is the rate that discounts estimated future receipts or payments over the expected life of the financial asset or liability to the value at initial recognition.

For the calculation of the effective interest rate, the Group estimates the cash flows considering all the contractual terms of the financial instrument, but does not consider future credit losses. The calculation includes all commissions paid or received between the parties to the agreement, transaction costs and all other premiums or discounts.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of the financial asset.

Fair value

Fair value is the price that would be received for the sale of an asset or that would be paid by the transfer of a liability in an orderly transaction between market participants at the measurement date.

Details on the fair value of financial instruments as well as on the fair value hierarchy are presented in Note nº 7.

Expected Credit Loss

The Group assesses, on a prospective basis, the expected credit loss associated with financial assets measured at amortized cost or at fair value through other comprehensive income. The recognition of the provision for expected credit loss is made on each reporting date and an expense is recognized in the income statement.

In the case of financial assets measured at fair value through other comprehensive income, the Group recognizes the expense for provision for credit losses in the income statement and adjusts the fair value gains or losses recognized in other comprehensive income.

27
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

Measurement of Expected Credit Loss

· Financial assets: the loss is measured<br>at the present value of the difference between the contractual cash flows and the cash flows that the Group expects to receive discounted<br>at the effective rate charged;
· Loan commitments: the loss is measured<br>at the present value of the difference between the contractual cash flows that would be payable if the commitment was honored and the<br>cash flows that the Group expects to receive;
--- ---
· Financial guarantees: the loss is measured<br>by the difference between the expected payments to the counterparty and the amounts that the Group expects to recover.
--- ---

At every reporting period, the Group evaluates the expected loss of its credit portfolio.

The expected loss is calculated using the following inputs: probability of default (PD), loss given default (LGD) and exposure at default (EAD).

To calculate the expected credit loss, the loan portfolio is divided into products with similar characteristics, as follows: real estate loans; credit cards; consigned loans and corporate loans.

Subsequently, customers are classified into rating levels according to the PD associated with each one. For the PD estimation, customer behavior is considered, considering information from credit bureaus and internal historical data.

For the LGD estimate, an exercise period - asset recovery - of up to 60 months is considered, considering the nature of the operations. However, to calculate the recovered value, the loss of value over time is considered to measure the economic impacts on that asset.

Inter & Co, Inc. uses the three-stage approach in measuring expected credit loss, given that financial assets are transferred from one stage to another based on changes in credit risk. The stages are as follows:

· Stage 1: the risk of loss in this stage<br>does not present significant variations, the provision reflects expected losses resulting from potential defaults over the following 12<br>months;
· Stage 2: This stage will be applied for<br>financial assets originated or acquired with no credit impairment issues, and which present a significant increase in risk since their<br>initial recognition, but have not yet been impaired. In this assessment, qualitative and quantitative metrics will be considered in the<br>determination of the risk of loss.
--- --- 
28
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
· Stage 3: In this stage, the financial<br>instrument presents clear recoverability issues arising from one or more events that have already taken place and that resulted in loss.<br>In this case, the amount of the provision for losses reflects the expected losses due to credit risk over the expected residual life of<br>the financial instrument.
--- ---

In the event that the credit risk increases or decreases, the financial instrument may be transferred to stages 2 and 3 (high risk), or return to stage 1(low risk) in the event it no longer presents credit impairment problems or it has been bought/originated with signs of impairment.

Finally, in order to incorporate the macroeconomic perspectives that might affect the financial conditions of the portfolio, a correction factor based on a macroeconomic model is used; it considers the main market indicators: Interbank deposit rate (DI), broad national consumer price index(IPCA), gross domestic product (PIB) and minimum wage.

The probability of default of each product group is calibrated using a multiplier, which contemplates the forecasts for the variables mentioned above, with variations that represent a base scenario and a market stress scenario. The forecasts of the macroeconomic variables used are obtained by means of a study by the Research department of Inter, in addition to the evaluation of external forecasts.

To determine the provision for expected losses, the PD calibrated by the macroeconomic model is multiplied by the LGD and EAD of each operation, which results in the final expected credit loss of each asset.

The areas of credit risk and data intelligence are responsible for defining the methodologies and modeling used to measure the expected loss in credit operations and to assess the evolution of the provision amounts, on a recurrent basis.

Such areas monitor the trends noticed in the provision for expected credit loss by segment, in addition to establishing an initial understanding of the variables that may trigger changes in provision, PD or LGD.

Write-off of Financial Assets

When there is no reasonable expectation of the recovery of a financial asset, considering historical curves, its total or partial write-off is made simultaneously with the reversal of the related provision for expected credit loss, with no net effect in the Income Statement. Subsequent recoveries of amounts previously written-off are recorded as gains in the Income Statement.

ii. Classification and Measurement of Financial Liabilities

Financial liabilities are initially recognized at fair value and subsequently measured at amortized cost, except for:

Financial Liabilitiesat Fair Value Through Profit or Loss: classification applied to derivatives and other financial liabilities designated at fair value through profit or loss to reduce "accounting mismatches". The Group designates financial liabilities, irrevocably, at fair value through profit or loss on initial recognition (fair value option), when the option reduces or significantly eliminates measurement or recognition inconsistencies.

29
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

Derecognition and Modification of Financial Liabilities

The Group derecognizes a financial liability from the balance sheet when it is extinguished, i.e., when the obligation specified in the agreement is discharged, canceled or expired. An exchange of debt instrument or substantial modification of the terms of a financial liability results in the derecognition of the original financial liability and the recognition of a new one.

iii. Derivatives

All derivatives are recorded as financial assets when the fair value is positive, and as financial liabilities when the fair value is negative.

The Group has opted to continue to apply the accounting hedge requirements set forth in IAS 39 as at December 31, 2022, however, it may adopt the IFRS 9 requirements in future periods. Pursuant to this rule, derivatives may be designated and qualified as hedge instruments for accounting purposes and, depending on the nature of the hedged item, the method for recognizing fair value gains or losses will be different. All the following conditions shall be met to qualify as an accounting hedge:

· At the beginning of hedge, there is a formal<br>designation and documentation of the hedge relationship and the objective and strategy of the entity's risk management;
· It is expected that hedge will be highly effective<br>in achieving offsetting changes in the fair value or in the cash flows attributable to the hedged risk, consistent with the risk management<br>strategy originally documented for this hedge relationship;
--- ---
· For a cash flow hedge, an expected transaction<br>that is subject to the hedge shall be highly likely and generate changes in cash flows that could ultimately affect profit or loss;
--- ---
· The hedge effectiveness can be reliably measured,<br>i.e., the fair value or the cash flows of the hedged item attributable to the hedged risk and the fair value of the hedging instrument<br>can be reliably measured; and
--- ---
· The hedge effectiveness is measured on an ongoing<br>basis and determined to be highly effective during all periods for which it was designated.
--- --- 
30
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

There are three possible types of hedges under the standards: fair value hedge, cash flow hedge and hedge of net investment in a foreign subsidiary. The Group uses only fair value hedge with derivatives as the hedging instruments.

For derivatives designated and qualified as part of a fair value hedge, the following practices are applied:

· The gain or loss resulting from the re-measurement<br>of the hedging instrument at fair value is recognized in profit or loss; and
· The gain or loss resulting from the fair value<br>measurement of the hedged item attributable to the designated risk is recognized in profit or loss. When the derivative expires or has<br>been sold and the hedge or the accounting hedge criteria cease to be met, or the Group revokes the designation, the Group discontinues<br>prospectively the hedge accounting. Any adjustment to the carrying amount of the hedged item is amortized in profit or loss.
--- ---

In compliance with its risk management policies, as described in note 7, the Group uses derivative financial instruments, mainly swap registered with B3 (Brazil, Bolsa, Balcão), in market risk hedges of certain loans and advances to customers. The derivative financial instruments are presented in note 11.

iv. Loan Commitments and Financial Guarantees

Loan commitments and financial guarantees are initially recognized at fair value. Subsequently this fair value is amortized over the life of the contract. If the Group concludes that the expected credit loss in respect of the contract is higher than the initial fair value less accumulated amortization, the contract is measured at the expected credit loss amount.

f. Non-current assets held for sale

Non-current assets held for sale include properties recovered from loans and advances to customers, if their carrying amount is expected to be recovered principally through sale rather than use. This condition is met only when the sale is highly probable, and the non-current asset is available for immediate sale in its current condition. Management must be committed to the sale, which, on recognition, is expected to be considered completed within one year of the classification date. The reclassification of assets to this balance sheet line item, when this condition is met, is carried out at the lower of its carrying amount and the fair value less costs to sell of the asset. The fair value less costs to sell of the properties is determined using the sales history of the previous year's inventory segregated according to the occupancy status (occupied or unoccupied) of the property. Subsequently, impairment is recognized if the fair value less costs to sell is lower than the book value.

31
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
g. Property and equipment
--- ---

Recognition and measurement

Property and equipment items are measured at historical cost, excluding maintenance expenses, less accumulated depreciation and any accumulated impairment losses.

The cost includes expenses directly attributable to the acquisition of the asset. The cost of assets generated internally includes the cost of materials and direct labor as well as any other directly attributable costs required to make it ready for its intended use. Purchased software that is integral to the functionality of the related equipment is recorded as part of that equipment. The useful lives and residual values of the assets are reevaluated and adjusted, if necessary, at each balance sheet date or when applicable.

Gains and losses on the sale of property and equipment (calculated as the difference between the proceeds from the sale and the carrying value of property and equipment) are recorded in the Income Statement.

Subsequent expenditure

The cost of repairing or maintaining an item of property and equipment is recognized as part of the cost of the asset, when it is likely that the future economic benefits of the item will flow to the Group over more than one year and its cost can be measured reliably. Other costs of repairs and maintenance are recognized in profit or loss as they are incurred.

Depreciation

Depreciation of property and equipment is recognized using the straight-line method over their estimated useful lives to reduce their carrying amount to their estimated residual values. Land is not depreciated.

The estimated useful lives of items of property and equipment are as follows:

Description Estimated useful lives
Buildings, furniture and equipment 10 years
Data processing system 5 years

The depreciation methods, the useful lives and the residual values are reviewed at each reporting date and adjusted if appropriate.

32
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
h. Intangible assets
--- ---

Goodwill

Goodwill results from the acquisition of subsidiaries and represents the excess of the sum of: (i) transferred consideration; (ii) the value of the non-controlling interest in the acquired company; and (iii), in a business combination achieved in stages, the fair value of the Group’s previously held equity interest in the company, over the fair value of the identifiable net assets acquired. Goodwill is not amortized, but is evaluated annually for impairment.

Customer relationships

Customer relationships are recognized at fair value on the acquisition date. Subsequently they are measured at cost less accumulated amortization. The amortization is calculated using the linear method over the expected life of the relationship with the customer.

Software

Purchased software and licenses are capitalized based on the costs incurred to acquire them and make them ready for use. These costs are amortized over their useful lives.

Software maintenance costs are recognized as an expense as incurred. Development costs, which are directly attributable to the design and testing of identifiable and unique software products controlled by the Group, are recognized as intangible assets.

Directly attributable costs, which are capitalized as part of the software, include the cost of employees allocated to software development and an allocation of applicable overhead expenses. Costs also include borrowing costs incurred during the software development period.

Software development costs recognized as assets are amortized over their estimated useful life.

Development cost

The cost of intangible assets generated internally includes all directly attributable expenses, necessary for creation, production and preparation of the asset to be able to function as intended by management. Development costs, which are directly attributable to a software development project controlled by the Group, are recognized as intangible assets. Directly attributable costs include the cost for employees allocated to the development of the software and an allocation of the applicable indirect expenses. The costs also include the financing costs incurred during the year of development of the software.

33
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

The development costs recognized as assets are amortized over their estimated useful life. The costs associated with software maintenance are recognized as expenses, as incurred.

Amortization

The estimated useful lives of intangible asset items are as follows:

Customer relationships 5 years
Internally developed software 3 to 10 years
Software and Licences 6 to 10 years

The amortization methods and the useful lives are reviewed at each reporting date and adjusted if appropriate.

i. Impairment of non-financial assets

On each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than deferred tax assets) to determine if there is any indication of impairment. In case there is such indication, then the recoverable value of the asset is estimated. Goodwill is tested annually for impairment.

For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows (i.e., cash-generating units - CGUs).

The recoverable amount of an asset or CGU is the higher of its value in use and its fair value less selling cost. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Impairment losses recognized in prior years are assessed at each reporting date to detect indications that the loss has decreased or no longer exists. An impairment loss is reversed only to the extent that the carrying amount of the asset does not exceed the carrying amount that would have been determined, net of depreciation and amortization, if no impairment had been recognized.

j. Provisions

A provision is recognized if, as a result of a past event, the Group has a present, legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Provisions are determined based on expected future cash flows discounted at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

34
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

In establishing provisions, Management considers the opinion of its legal advisors, the nature of the lawsuits, the similarity with previous proceedings, the complexity and the position of the courts and the assessment of the probability of loss.

Contingent liabilities are:

· a possible obligation arising from past events<br>and whose existence may only be confirmed by the occurrence of one or more uncertain future events not fully within the Group’s<br>control; or
· a present obligation stemming from past events<br>that is not recognized because:
--- ---
· it is not probable that an outflow of resources<br>encompassing economic benefits shall be required in order to settle the obligation; or
--- ---
· the amount of the obligation cannot be measured<br>with sufficient certainty.
--- ---

The provisions are measured at the best estimate of the disbursement required to settle the present obligation at the balance sheet date, considering:

· The risks and uncertainties involved;
· Where relevant, the financial effect produced<br>by the discounted present value of future cash flows required to settle the obligation;
--- ---
· Future events that may change the amount required<br>to settle the obligation.
--- ---

Contingent assets are recognized only when there is a secured guarantee or favorable court rulings over which there are no more appeals, characterizing the gain as practically certain. Contingent assets, whose expectation of success is probable, are disclosed when material.

k. Employee Benefits

Short-term employee benefits

Short-term employee benefits are recognized as personnel expenses to the extent the corresponding service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation may be estimated reliably.

Share-based remuneration arrangements, settleable in shares

The fair value at the grant date of share-based compensation agreements granted to employees is recognized as an expense, with a corresponding increase in shareholders’ equity, during the period in which employees unconditionally acquire the right to the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which there is an expectation that service and performance conditions will be met, in such a way that the final value recognized as an expense is based on the number of awards actually meeting the conditions of service and performance on the vesting date.

35
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

Cash-settled share-based compensation arrangements

The fair value of the amount payable to employees in respect of the cash-settled share appreciation rights is recognized as an expense with a corresponding increase in the liability over the period that the employees become unconditionally entitled to the payment. The liability is remeasured at each balance sheet date and at the settlement date, based on the fair value of the stock appreciation rights. Any changes in the fair value of the liability are recognized in the income statement as personnel expense.

l. Income tax and social contribution

Provisions are calculated considering the tax base in accordance with the relevant legislation and the applicable rates:

Deferred tax assets are recognized and measured based on expectations for realization, considering technical studies and analyses made by management.

The Group performs a study regarding the likelihood of acceptance by the ultimate taxation authority of any uncertain tax positions it adopts based on its evaluation of different factors, including interpretation of the fiscal laws and past experience. No additional provision was recognized for any of the open fiscal periods. Such evaluation is grounded on estimates and assumptions, which may involve judgments of future events. New information can be made available, which would lead the Group to change its judgment regarding the suitability of the existing provision. Any such changes will impact the income tax expenses in the year they are made.

Current taxes

Current tax comprises the expected tax payable or receivable on the taxable profit or loss for the year and any adjustment to tax payable in respect of previous years. It is measured based on tax rates enacted or substantively enacted at the reporting date.

Deferred taxes

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for accounting purposes and the amounts used for taxation purposes. The tax benefit of tax loss carryforwards is recognized only when it is probable that future taxable profits shall be generated in sufficient amounts to allow it to be realized. Income tax and social contribution expenses are recognized in the Income Statement, unless related to the valuation of financial instruments at FVOCI when these are recognized in other comprehensive income.

36
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
m. Interest
--- ---

Interest income and expenses are calculated using the effective interest method (see note 4c) for all financial instruments at amortized cost and FVOCI.

The fair value changes of derivative financial instruments qualified for fair value hedges of interest rates are recorded as interest income or expenses in the same line item where the changes in the fair value of the hedged items are recorded.

n. Net result from services and commissions

The Group recognize revenue using a five step model as follows:

· Step 1 - Identify the contract(s) with<br>the customer
· Step 2 - Identify the performance obligations<br>in each contract
--- ---
· Step 3 - Determine the transaction price<br>in accordance with the contractual terms. If a contract includes variable consideration, the Group estimates the amount of consideration<br>that it will be entitled to in exchange for transferring the promised goods or services to the customer, applying the constraint.
--- ---
· Step 4 - Allocate the transaction price<br>to the performance obligations in the contract based on their stand-alone selling price. The stand-alone selling price of the service<br>is the price at which the Group would sell a service separately to a customer on a segregated basis. The best evidence of a stand-alone<br>selling price is the observable price of a service when the Group sells that service separately under similar circumstances and to similar<br>customers. If the service is not sold to a customer separately, the stand-alone selling price is estimated using an appropriate method.<br>When estimating a stand-alone selling price, all information (including market conditions) that is available is considered and the use<br>of observable data is maximized.
--- ---
· Step 5 - Recognize revenue when (or as)<br>the entity satisfies a performance obligation (i.e. the service is effectively rendered).
--- ---

The significant revenues of the Group are:

· Interchange fees are commission income from card<br>transactions carried out by customers with cards issued by the Group. The performance obligation is satisfied when the transaction is<br>made. The transaction price is pre-defined percentage of the total payment made using the card.
· Asset management activities (management of third<br>party resources) generate management and performance fees. Management fees are recognized as the service is performed in each year. The<br>performance fees are variable and are recognized at the end of each performance period when it is highly probable that a significant reversal<br>will not subsequently occur.
--- ---
· Income from bank fees is primarily related to<br>account opening fees and fees charged for interbank transfers made by Inter account holders, and are recognized when the services are<br>provided. The transaction price is the contractual amount.
--- --- 
37
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
· Commission and intermediation revenues relate<br>to the intermediation of the sale of products and services. Revenues are recognized when the service of intermediation is performed at<br>which point the performance obligation is satisfied. The transaction price is the contractual amount which, generally, is a percentage<br>of the sale value.
--- ---
· Income from credit operations refer to income<br>from loans and financing in operations carried out at pre- and post-fixed rates. The transaction price is the contract value.
--- ---
o. Equity
--- ---

Share capital

The class A and class B shares are classified in equity. Additional costs directly attributable to the issuance of new shares or options are included in equity as a deduction of the amount raised, net of taxes.

Earnings per share

Basic earnings per share is calculated by dividing the net earnings attributable to shareholders of the Company by the weighted average number of shares outstanding during the year, excluding the average number of shares held in treasury.

Diluted earnings per share adjusts the figures used in determining basic earnings per share to take into account the effect of interest and other financing costs associated with dilutive potential shares, and the weighted average number of additional shares that would be outstanding assuming conversion of all dilutive potential shares.

p. Lease

The Group does not have significant leases as a lessor.

At the inception of a contract, the Group evaluates whether a contract is or contains a lease. A contract is or contains a lease, if the contract transfers the right to control the use of an identified asset for a given period of time in return for compensation.

As lessee

At the beginning or upon amendment of a contract containing a lease component, the Group allocates the compensation in the contract to each lease and non-lease component based on its stand-alone price. However, for property leases, the Group opted not to separate the non-lease components and book the lease and non-lease components as a single lease component.

38
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

The Group recognizes a right-of-use asset and lease liability on the lease start date. The right-of-use asset is measured initially at cost, which is equal to the value of the initial measurement of the lease liability, adjusted by any lease payments made prior to the start date, plus any initial direct costs incurred by the lessee and estimate of costs to be incurred by the lessee to dismantle, remove or restore the asset, minus any lease incentives received.

The right-of-use asset is subsequently depreciated by the straight line method from the start date to the end date of the lease term, unless the lease transfers the ownership of the underlying asset to the Group at the end of the lease term, or if the lease includes purchase options which the Group is reasonably certain to exercise. In these cases, the right-of-use asset is depreciated over the useful life of the asset. Furthermore, the right-of-use asset is periodically assessed for impairment, if any, and adjusted for certain re-measurements of the lease liability.

The lease liability is initially measured at present value of the outstanding lease payments discounted by the implicit interest rate of the lease or, if this rate cannot be determined, by the Incremental borrowing rate of Inter.

Inter determines its incremental borrowing rate from interest rates on funding received from third parties adjusted to reflect the contract terms and the type of asset leased.

The lease payments included in the lease liability measurement comprise the following:

· fixed payments;
· variable lease payments, which depend on an index<br>or rate, initially measured using the index or the rate on the start date;
--- ---
· amounts expected to be paid by the Inter, according<br>to the residual value guarantees;
--- ---
· the price to exercise the purchase option, if<br>the Inter is reasonably certain to exercise such option; and
--- ---
· payments of fines for lease termination, if the<br>lease term reflects the exercise of the option of the Inter to terminate the lease.
--- ---
· The lease liability is measured at amortized<br>cost, using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an<br>index or rate, if there is a change in the of Inter estimate of the amount expected to be payable under a residual value guarantee, if<br>the Inter changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance<br>fixed lease payment.
--- ---

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

39
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

The Inter presents right-of-use assets as ‘Property and equipment” and lease liabilities in “Other liabilities” in the balance sheet.

Lease of low-value assets and short term leases

The Inter opted not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. The Inter recognizes lease payments associated with these leases as an expense on a straight-line basis over the lease term.

5 Operating segments

Operating segments are disclosed based on the internal disclosures that are 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 Inter, is the Board of Directors. Operating results are regularly reviewed.

In 2022, Inter changed the structure of the segments to reflect consistently with internal reporting. The new structure has been reflected for the current and prior periods, as presented in Note 5 - Segment information.

The operations of the Inter are divided into five reportable segments: Banking & Spending; Investments; Insurance Brokerage; Inter Shop & Commerce Plus and others.

Profit by operatingsegment

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. The Inter does not have any single customer accounting for more than 10% of its total net revenue.

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. Part of this segment also comprises debt collection service. This segment offers foreign exchange and financial services, as well as a Global Account digital solution for money remittances between countries, among others.

40
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
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, upon sale to the customer, when the performance obligation is fulfilled. This income is presented net of deductions.

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.

e. All other segments

Comprises investment funds that are consolidated by Inter and the software development segment.

41
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

Segment information

As of and for December 31, 2022
Banking &<br><br> Spending Investments Insurance<br><br> Brokerage Inter Shop &<br><br> Commerce Plus Total of<br><br> reportable<br><br> segments All others<br><br> segments Combined<br><br> segments Eliminations<br><br> and<br><br> adjustments Consolidated
Interest income 2,656,179 4,901 26 11 2,661,117 96,533 2,757,650 45,008 2,802,658
Interest expenses (1,903,112 ) (17,228 ) (99 ) - (1,920,439 ) (71,042 ) (1,991,481 ) 18,631 (1,972,850 )
Net interest income 753,067 (12,327 ) (73 ) 11 740,678 25,491 766,169 63,639 829,808
Revenues from services and commissions 499,708 87,078 81,903 291,953 960,642 8,969 969,611 (1,572 ) 968,039
Expenses from services and commissions (125,879 ) (1 ) - (4 ) (125,884 ) (6,927 ) (132,811 ) 3,578 (129,233 )
Net result from services and commissions 373,829 87,077 81,903 291,949 834,758 2,042 836,800 2,006 838,806
Income from securities 1,503,538 25,075 1,330 17,313 1,547,256 67,271 1,614,527 (142,790 ) 1,471,737
Net gains / (losses) on derivatives 32,168 - - - 32,168 1,716 33,884 - 33,884
Other revenues 501,181 25,349 47,393 58,082 632,005 12,078 544,083 (255,621 ) 388,462
Revenues 3,163,783 125,174 130,553 367,355 3,786,865 108,598 3,895,463 (332,766 ) 3,562,697
Impairment losses on financial assets (1,109,288 ) 855 - - (1,108,433 ) (554 ) (1,108,987 ) 25,750 (1,083,237 )
Personnel expenses (685,072 ) (15,575 ) (8,278 ) (19,087 ) (728,012 ) (5,593 ) (733,605 ) - (733,605 )
Depreciation and amortization (210,893 ) (2,780 ) (616 ) (4,615 ) (218,904 ) (121 ) (219,025 ) 55,053 (163,972 )
Other administrative expenses (1,567,408 ) (48,232 ) (25,024 ) (82,004 ) (1,722,668 ) (15,179 ) (1,737,847 ) (5,225 ) (1,743,072 )
Income before taxes and investments in associates (408,878 ) 59,442 96,635 261,649 8,848 87,151 95,999 (257,188 ) (161,189 )
Income from equity interests in associates (17,384 ) - - - (17,384 ) - (17,384 ) - (17,384 )
Profit (loss) before taxes (426,262 ) 59,442 96,635 261,649 (8,536 ) 87,151 78,615 (257,188 ) (178,573 )
Current income tax and social contribution - (17,294 ) (31,624 ) (56,369 ) (105,287 ) (1,338 ) (106,625 ) - (106,625 )
Deferred income tax and social contribution 312,021 242 151 - 312,414 21,415 333,829 (62,710 ) 271,119
Income tax benefit 312,021 (17,052 ) (31,473 ) (56,369 ) 207,127 20,077 227,204 (62,710 ) 164,494
Profit (loss) for the year (114,241 ) 42,390 65,162 205,280 198,591 107,228 305,819 (319,898 ) (14,079 )
Total assets 46,327,732 464,654 148,411 490,752 47,431,549 22,199,379 69,630,928 (23,287,828 ) 46,343,100
Total liabilities 39,177,427 380,246 93,001 183,568 39,834,242 159,782 39,994,024 (740,028 ) 39,253,996
Total equity 7,150,305 84,408 55,410 307,184 7,597,307 22,039,597 29,636,904 (22,547,800 ) 7,089,104 
42
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
As of and for December 31, 2021
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Banking &<br> Spending Investments Insurance<br> Brokerage Inter Shop &<br> Commerce Plus Total of<br> reportable<br> segments All others<br> segments Combined<br> segments Eliminations <br> and <br> adjustments Consolidated
Interest income 1,398,269 875 - - 1,399,144 43,447 1,442,591 (7,163 ) 1,435,428
Interest expenses (539,942 ) (8,012 ) - - (547,954 ) - (547,954 ) 4,712 (543,242 )
Net interest income 858,327 (7,137 ) - - 851,190 43,447 894,637 (2,451 ) 892,186
Revenues from services and commissions 248,446 59,950 51,670 180,528 540,594 1,975 542,569 - 542,569
Expenses from services and commissions (100,297 ) - - - (100,297 ) - (100,297 ) - (100,297 )
Net result from services and commissions 148,149 59,950 51,670 180,528 440,297 1,976 442,272 - 442,272
Income from securities 766,196 12,856 5,427 371 784,850 15,383 800,233 (54,620 ) 745,613
Net gains / (losses) on derivatives (56,006 ) - - - (56,006 ) 7,676 (48,330 ) - (48,330 )
Other revenues 349,657 30,184 53 2,862 382,756 20 382,776 (192,694 ) 190,082
Revenues 2,066,323 95,853 57,150 183,761 2,403,087 68,502 2,471,588 (249,765 ) 2,221,823
Impairment losses on financial assets (448,802 ) - - - (448,802 ) 29 (448,773 ) (146,808 ) (595,581 )
Personnel expenses (414,082 ) (10,317 ) (6,615 ) (9,804 ) (440,818 ) (2,510 ) (443,328 ) - (443,328 )
Depreciation and amortization (102,052 ) (631 ) (338 ) (2,637 ) (105,658 ) (60 ) (105,718 ) 11,467 (94,251 )
Other administrative expenses (1,207,546 ) (33,704 ) 25,354 (26,802 ) (1,242,698 ) (14,008 ) (1,256,706 ) (54,255 ) (1,310,961 )
Income before taxes and investments in associates (106,159 ) 51,201 75,551 144,518 165,111 51,953 217,063 (439,361 ) (222,298 )
Income from equity interests in associates (8,764 ) - - - (8,764 ) - (8,764 ) - (8,764 )
Profit (loss) before taxes (114,923 ) 51,201 75,551 144,518 156,347 51,953 208,299 (439,361 ) (231,062 )
Current income tax and social contribution - (13,953 ) (10,791 ) (25,970 ) (50,714 ) (1,727 ) (52,441 ) - (52,441 )
Deferred income tax and social contribution 145,511 (918 ) - - 144,593 - 144,593 83,841 228,434
Income tax benefit 145,511 (14,871 ) (10,791 ) (25,970 ) 93,879 (1,727 ) 92,152 83,841 175,993
Profit (loss) for the year 30,588 36,330 64,760 118,548 250,226 50,226 300,451 (355,520 ) (55,068 )
Total assets 36,452,503 379,389 124,670 232,470 37,189,032 6,231,057 43,420,089 (6,793,751 ) 36,626,337
Total liabilities 27,946,815 320,743 69,890 90,756 28,428,204 16,837 28,445,041 (268,487 ) 28,176,554
Total equity 8,505,688 58,646 54,780 141,714 8,760,828 6,214,220 14,975,048 (6,525,264 ) 8,449,784 
43
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
As of and for December 31, 2020
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Banking & <br><br>Spending Investments Insurance<br><br> Brokerage Inter Shop &<br><br> Commerce Plus Total of<br><br> reportable<br><br> segments All others<br><br> segments Combined<br><br> segments Eliminations<br><br> and<br><br> adjustments Consolidated
Interest income 912,455 1 546 - 913,002 31,506 944,508 (1,700 ) 942,808
Interest expenses (154,088 ) (53 ) - - (154,141 ) (28,949 ) (183,090 ) (1,245 ) (184,335 )
Net interest income 758,367 (52 ) 546 - 758,861 2,557 761,418 (2,945 ) 758,473
Revenues from services and commissions 154,985 34,866 34,072 33,574 257,497 (352 ) 257,145 - 257,145
Expenses from services and commissions (71,611 ) - - - (71,611 ) - (71,611 ) - (71,611 )
Net result from services and commissions 83,374 34,866 34,072 33,574 185,886 (352 ) 185,534 - 185,534
Income from securities 9,760 1,138 - 82 10,980 (1,080 ) 12,060 - 12,060
Net gains / (losses) on derivatives (54,418 ) - - - (54,418 ) - (54,418 ) - (54,418 )
Other revenues 150,770 - - - 150,770 - 150,770 (40,888 ) 109,882
Revenues 947,853 35,952 34,618 33,656 1,052,079 3,285 1,055,364 (43,833 ) 1,011,531
Other income 109,216 109,216
Impairment losses on financial assets (174,551 ) - - - (174,551 ) - (174,551 ) (39,137 ) (213,688 )
Personnel expenses (213,633 ) (5,778 ) (5,517 ) (4,168 ) (229,096 ) - (229,096 ) - (229,096 )
Depreciation and amortization (41,860 ) (350 ) (131 ) - (42,341 ) - (42,341 ) (1,318 ) (43,659 )
Other administrative expenses (614,688 ) (28,415 ) 5,072 (5,975 ) (644,006 ) (1,724 ) (645,730 ) 4,403 (641,327 )
Profit (loss) before taxes (96,879 ) 1,409 34,042 23,513 (37,915 ) 1,561 (36,354 ) 29,331 (7,023 )
Current income tax and social contribution - (1,400 ) (4,808 ) (6,958 ) (13,166 ) - (13,166 ) - (13,166 )
Deferred income tax and social contribution 66,329 1,503 - - 67,832 - 67,832 (16,957 ) 50,875
Income tax benefit 66,329 103 (4,808 ) (6,958 ) 54,666 - 54,666 (16,957 ) 37,709
Profit for the year (30,550 ) 1,512 29,234 16,555 16,751 1,561 18,312 12,374 30,686
Total assets 19,743,678 85,881 81,289 69,382 19,980,230 425,360 20,405,590 (483,977 ) 19,921,613
Total liabilities 16,440,990 49,015 45,771 47,957 16,583,733 65,491 16,649,224 (51,826 ) 16,597,398
Total equity 3,302,688 36,866 35,517 21,426 3,396,497 420,794 3,817,291 (493,076 ) 3,324,215 
44
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
6 Financial risk management
--- ---

The Inter’s financial risk management covers credit, market, liquidity and operational risks. Management activities are carried out by specific and specialized structures, according to policies, strategies and processes described for each of these risks with the objective of identifying and measuring possible impacts and solutions and ensuring the continuity and the quality of the Group’s business.

The model adopted by the Inter involves a structure of areas and committees ensuring:

· Segregation of function;
· Specific structure for risk management;
· Defined management process;
· Decisions at various hierarchical levels;
· Clear norms and competence structure;
· Defined limits and margins; and
· Reference to best management practices.
a. Credit risk
--- ---

The definition of credit risk includes, among others:

· Counterparty risk: possibility of a failure,<br>by a given counterparty, to honor obligations regarding the settlement of transactions involving the trading of financial assets, including<br>those related to the settlement of derivative financial instruments.
· Principal risk: possibility of disbursements<br>to honor sureties, guarantees, co-obligations, credit commitments, or other such operations of a similar nature.
· Risk of intermediary: possibility of losses<br>associated with a failure to comply with agreed financial obligations by an intermediary or a party to a covenant for loans and advances<br>to customers.
· Concentration risk: possibility of credit<br>losses arising from significant exposure to a borrower or counterparty, a risk factor, a group of borrowers or counterparties related<br>through common characteristics, as per note 12.

Credit risk management aims to identify, evaluate, control, mitigate and monitor risk exposure, to contribute to safeguarding Inter’s financial solidity and solvency and ensure alignment with shareholders´ interests.

In order to ensure that the loan process is aligned with the strategic objectives, the Inter establishes in its Credit Risk Policy:

· The evaluation of the ability to pay and likelihood<br>of loss for each customer;
· The establishment of limits for transactions<br>with individuals and legal entities; 
45
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
· The definition of how credit shall be released<br>to the customer; and
--- ---
· The monitoring and tracking of portfolios subject<br>to credit risk.

Inter has a structured process in order to maintain the diversification of its portfolio regarding the concentration of the largest debtors per geographical region, segment and sector of activity.

Mitigation of Exposure

In order to maintain the exposures within the risk levels established by senior management, Inter adopts measures to mitigate credit risk. Exposure to credit risk is mitigated through the structuring of guarantees, adapting the risk level to be incurred to the characteristics of the collateral taken at the time of granting. Risk indicators are monitored on an on-going basis and proposal for alternatives forms of mitigation are assessed, whenever the exposure behavior to credit risk of any unit, region, product or segment requires it. Additionally, credit risk mitigation takes place through product repositioning and adjusting operational processes or operation approval levels.

In addition to the activities described above, goods pledged in guarantee are subject to a technical assessment / valuation at least once every twelve months. In the case of personal guarantees, an analysis of the financial and economic circumstances of the guarantor is made considering their other debts with third parties, including tax, social security and labor debt.

Credit standards guide operational units and cover, among other aspects, the classification, requirement, selection, assessment, formalization, control and reinforcement of guarantees, aiming to ensure the adequacy and sufficiency of mitigating instruments throughout the cycle of the loan.

In 2022 there was no material changes to the nature of the credit risk exposures, how they arise or the Group’s objectives, policies and processes for managing them, although Inter continues to refine its internal risk management processes.

Measurement

The measurement of credit risk by Inter is carried out considering the following:

· At the time that credit is granted, an assessment<br>of a customer’s financial condition is undertaken through the application of qualitative and quantitative methods and using information<br>collected from the market, in order to support the adequacy of the risk exposure being proposed;
· The assessment is carried out at the counterparty<br>level, considering information on guarantors where applicable. The exposure to the credit risk is also measured in extreme scenarios,<br>using stress techniques and scenario analysis. The models applied to determine the rating of customers and loans are reviewed periodically<br>in order to ensure they reflect the macroeconomic scenario and actual loss experience, as per information in note 12; 
46
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
· The aging of late payments in portfolios is monitored<br>in order to identify trends or changes in the behavior of non-performing loans and allow the adoption of mitigating measures when required;
--- ---
· Expected credit loss reflects the risk level<br>of loans and allows monitoring and control of the portfolio’s exposure level and the adoption of risk mitigation measures;
· The expected credit loss is a forecast of the<br>risk levels of the credit portfolio. Its calculation is based on the historical payment behavior and the distribution of the portfolio<br>by product and risk level. This is a key input to the process of pricing loans and advances to customers; and
· In addition to the monitoring and measurement<br>of indicators under normal conditions, simulations of changes in business environment and economic scenario are also performed in order<br>to predict the impact of such changes in levels of exposure to risks, provisions and balance of such portfolios and to support the process<br>of reviewing the exposure limits and the credit risk policy.
b. Description of guarantees
--- ---

The financial instruments subject to credit risk are subject to careful assessment of credit prior to being contracted and disbursed and risk assessment is ongoing throughout the term of the instruments. Credit assessments are based on an understanding of the customers’ operational characteristics, their indebtedness capacity, considering cash flow, payment history and credit reputation, and any guarantees given.

Loans and advances to customers, as shown in Note 10, are mainly represented by the following operations:

· Working capital operations: are guaranteed<br>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<br>by payroll loan cards and personal loans. These are deducted directly from the borrowers’ pensions, income or salaries and settled<br>directly by the entity responsible for making those payments (e.g. company or government body); The operations of FGTS (Guarantee Fund<br>for Time of Service) anniversary withdrawal are guaranteed by transfer;
· Personal loans and credit cards: generally,<br>do not have guarantees;
· Real estate financing: is collateralized<br>by the real estate financed.

Repossessed collateral is generally sold at public auctions, free of any charges or encumbrances with no guaranty.

47
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

Guarantees of real estate loansand 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:

12/31/2022 12/31/2021
Lower than 30% 693,322 582,421
31 - 50% 1,689,190 1,584,454
51 - 70% 2,308,021 2,116,015
71 - 90% 1,503,703 756,870
Higher than 90% 57,577 81,651
6,251,813 5,121,411
c. Liquidity risk
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Liquidity risk is the possibility that the Group is not able to efficiently meet its expected or unexpected obligations, including those resulting from binding guarantees, without incurring significant losses. This also includes the possibility of the Group not being able to negotiate a sale of an asset at market price due to its volume in relation to the volume normally transacted or due to any discontinuity in the market.

The liquidity risk management structure is segregated and works proactively with the aim of monitoring and preventing any breach of limits on liquidity ratios. The monitoring of liquidity risk encompasses the entire flow of receipts and payments for the Group so that risk mitigating actions may be implemented. This monitoring is carried out primarily by the Assets and Liabilities Committee and the Risk and Capital Management Committee. These committees evaluate liquidity risk information that is available in the Group’s systems, such as:

· Top 10 investors;
· Mismatch between assets and liabilities;
· Net Funding;Liquidity limits;Maturity forecast;
· Stress tests based on internally defined scenarios;
· Liquidity contingency plans;
· Monitoring of asset and liability concentrations;
· Monitoring of Liquidity Ratio and funding renewal<br>rates; and
· Reports with information on positions held by<br>Inter and its subsidiaries.

In 2022 there was no material changes to the nature of the liquidity risk exposures, how they arise or the Group’s objectives, policies and processes for managing them, although the Group continues to refine its internal risk management processes.

48
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

The responsibilities of the Liquidity Risk Management Framework are distributed between different committees and hierarchical levels, including: Board of Directors, Asset and Liability Committee (ALC), Officer in charge of Risk Management, Superintendent of Compliance, Risk Management and Internal Controls and Risk Coordination. These consider the internal and external factors affecting the liquidity of the Group, and a detailed daily monitoring of incoming and outgoing movements of loans and advances to customers, time deposits, Agribusiness Credit Bills (LCA), Real Estate Secured Bonds (LCI), Guaranteed Real Estate Letters (LIG) and demand deposits is performed. Time deposits are analyzed according to the concentration, maturities, renewals, repurchases and new funding.

d. 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:

12/31/2022
Note Up<br> to 3<br><br> months 3<br> months <br><br> to 1 year Above<br> 1 year Total
Financial assets
Cash and cash equivalents 8 1,331,648 - - 1,331,648
Compulsory deposits at Central<br> 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<br> financial assets 15,334,456 6,188,509 22,156,528 43,679,493
Financial liabilities
Derivative financial liabilities 9 - - 37,768 37,768
Liabilities with financial 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
Borrowing<br> and onlending 21 4,988 4,138 27,323 36,448
Total<br> financial liabilities 23,933,985 1,274,590 12,617,508 37,826,082 
49
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
12/31/2021
--- --- --- --- --- --- --- --- --- ---
Note Up to 3<br><br> months 3 months to 1<br><br> year Above 1 year Total
Financial assets
Cash and cash equivalents 8 500,446 - - 500,446
Compulsory deposits at Central Bank of Brazil 2,399,488 - - 2,399,488
Amounts due from financial institutions 9 2,051,862 - - 2,051,862
Securities 10 474,509 203,451 12,079,727 12,757,687
Derivative financial instruments 11 86,948 - - 86,948
Loans and advances to customers 12 4,616,124 3,868,156 8,732,082 17,216,362
Other assets 17 - - 77,387 77,387
Total financial assets 10,129,377 4,071,607 20,889,196 35,090,180
Financial liabilities
Derivative financial liabilities 9 - 29,452 37,093 66,545
Liabilities with financial institutions 18 5,306,020 35,444 - 5,341,464
Liabilities with customers 19 11,360,378 6,956,400 16,765 18,333,543
Securities issued 20 112,591 3,349,639 109,863 3,572,093
Borrowing and onlending 21 99 1,087 23,886 25,071
Total financial liabilities 16,779,088 10,372,022 187,607 27,338,716
e. Financial assets and liabilities using a current/non-current classification
--- ---

The table below represents Group’s current financial assets (expected to be realised within 12 months of the reporting date), non-current financial assets (expected to be realised more than 12 months after the reporting date) and current financial liabilities (it is due to be settled within 12 months of the reporting date) and non-current financial liabilities (is due to be settled more than 12 months after the reporting date)

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 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 
50
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
12/31/2021
--- --- --- --- --- --- ---
Current Non-current Total
Assets
Cash and cash equivalents 500,446 - 500,446
Amounts due from financial institutions 2,051,862 - 2,051,862
Compulsory deposits at Central Bank of Brazil 2,399,488 - 2,399,488
Derivative financial instruments 86,948 - 86,948
Securities 677,960 12,079,727 12,757,687
Loans and advances to customers, net of loss 7,995,755 8,539,675 16,535,430
Other assets - 77,387 77,387
Total assets 13,712,452 20,696,789 34,409,248
Liabilities
Liabilities with financial institutions 5,341,464 - 5,341,464
Liabilities with customers 18,316,778 16,765 18,333,543
Securities issued 3,462,230 109,863 3,572,093
Derivative financial liabilities 29,452 37,093 66,545
Borrowing and onlending 1,186 23,886 25,071
Total liabilities 27,151,110 187,607 27,338,716
f. Market risk
--- ---

Market risk is the possibility of losses arising from fluctuations in the fair value of financial instruments held by the Institution and its subsidiaries, including risks of transactions subject to changes in exchange rates, interest rates, stock prices and commodity prices.

At Group, market risk management has, among others, the objective of supporting the business areas, establishing processes and implementing tools necessary for the assessment and control of related risks, enabling the measurement and monitoring of risk levels, as defined by Senior Management.

Market risk positions are analyzed and monitored by the Asset and Liability Committee where the control reports and management positions are analyzed. Market risk controls allow the analytical assessment of information and are in a constant process of improvement, seeking to provide a view that is more in line with the current needs of Inter and its subsidiaries. The Group and its subsidiaries have improved the internal aspects of risk management and mitigation.

Measurement

The Group, 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.

51
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

In line with market practices, the Group 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 12/31/2022 12/31/2021
Risk factor VaR 21 days VaR 21 days
Price index coupons 4,133 4,882
Pre fixed interest rate 541 83
Foreign currency coupons 883
Foreign currencies 624 80
Share price 528 1,599
Subtotal 6,709 6,645
Diversification effects (correlation) 1,958 1,758
Value-at-Risk 4,751 4,887

The VaR of the Banking book by risk factor is presented in the following table:

R$ thousand 12/31/2022 12/31/2021
Risk factor VaR 21 days VaR 21 days
Price index coupons 234,172 364,502
Interest rate coupons 77,448 36,555
Pre fixed interest rate 55,003 49,577
Others 1,398 -
Subtotal 368,021 450,634
Diversification effects (correlation) 30,767 84,587
Value-at-Risk 337,254 367,458
g. Sensitivity analysis
--- ---

The Group performs the 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 profit or loss, providing a view of the exposure by risk factor in exceptional scenarios.

The following table presents the estimated impact of three possible scenarios on the fair value of the financial assets:

· Scenario I: Probable situation which reflects<br>the perception of the Group’s senior management in relation to the scenario with the highest probability of occurrence considering<br>macroeconomic factors and market information (B3, Anbima etc.) observed in the period. Assumption used: deterioration and evolution in<br>market variables through parallel shocks of 1 basis point in price index coupon rates, interest rate coupons, fixed interest rates, considering<br>the worst resulting losses by risk factor and, consequently, not considering the rationality between the macroeconomic variables. 
52
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
· Scenario II: Possible situation of deterioration<br>and evolution in market variables through a 25% shock in the curves of price index coupon rates, interest rate coupons, fixed interest<br>rates based on market conditions observed in each period, considering the worst resulting losses by risk factor and, consequently, not<br>considering the rationality between the macroeconomic variables.
--- ---
· Scenario III: Possible situation of deterioration<br>and evolution in market variables through a 50% shock in the curves of price index coupon rates, interest rate coupons, fixed interest<br>rates based on market conditions observed in each period, considering the worst resulting losses by risk factor and, consequently, not<br>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<br>thousand
Banking and Trading book 12/31/2022
Risk factor Risk of variation in: Scenario I Rate variation inscenario 2 Scenario II Rate variation inscenario 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 ) Decrease (162,809 ) Decrease (338,073 )
TR coupon Interest rate coupon (850 ) Increase (188,954 ) Increase (334,415 )

All values are in US Dollars.

Exposures R thousand
Banking and Trading  book 12/31/2021
Risk factor Risk of variation in: Scenario I Rate variation inscenario 2 Scenario II Rate variation inscenario 3 Scenario III
IPCA coupon Price index coupon (3,045 ) Increase (350,577 ) Increase (658,147 )
IGP-M coupon Price index coupon (42 ) Increase (5,281 ) Increase (10,118 )
Pre-fixed rate Pre-fixed rate (334 ) Decrease (166,292 ) Decrease (551,209 )
TR coupon Interest rate coupon (813 ) Increase (149,209 ) Increase (226,744 )

All values are in US Dollars.

h. Operational risk

Operational Risk Management aims to identify, assess and monitor risks.

Policy

Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events. This definition includes legal risk, but excludes strategic and reputational risk.

The operational risk events can be classified:

· Internal fraud;
· External fraud;
· Employment practices and workplace safety;
· Clients, products and business practices;
· Damage of physical assets; 
53
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
· Business disruption and system failures, execution;<br>and
--- ---
· Delivery and process management.

We adopt the three lines of defense model, the structure and activities of the three lines often varies, depending on the bank’s portfolio of products, activities, processes and systems; the bank’s size; and its risk management approach. A strong risk culture and good communication among the three lines of defense are important characteristics of good operational risk governance.

The Internal Controls is based on the COSO (Committee of Sponsoring Organizations of the Treadway Commission) methodology, which includes the strategic, operational and compliance components besides the financial statement, attending the regulatory requirements including (Sarbanes Oxley - SOX).

Phases of the Management Process

Qualitative Evaluation

The qualitative assessment uses a scale which considers measures for probability and impact, taking into account the vulnerabilities and threats that, combined, determine the level of risk exposure to each event. Identification and verification is performed by in-person monitoring, interviews and workshops with the managers and employees from all operational areas, business partners and business units.

The identified risks are categorized and organized by risk factors.

Quantitative Evaluation

In the quantitative assessment of operational risk, the Group maintains an internal database fed by various sources of information. This contains descriptions and details of operational losses. In the quantitative assessment, information from external sources deemed reliable and relevant to the businesses of the Group may also be used.

Monitoring

An effective risk management process requires a communication and review structure that ensures the correct, effective and timely identification and assessment of the risks. In addition, it also seeks to assure that controls and responses to these risks are implemented.

Control tests and regular audits intended to verify compliance with applicable policies and standards are performed. The monitoring and review process seeks to verify whether:

· The adopted measures have achieved the intended<br>results;
· The procedures adopted and the information gathered<br>to perform the assessment were appropriate; 
54
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
· Higher levels of knowledge may have contributed<br>to make better decisions; and
--- ---
· There is an effective possibility of obtaining<br>information for future assessments.
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<br>(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 in active<br>markets for identical assets or liabilities;
· Level II – uses inputs other than<br>quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e.,<br>derived from prices). For example, fair value is determined using valuation techniques using observable market data; and
· Level III – uses significant inputs<br>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.

55
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
Carrying amount Fair value
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Fair value<br><br> through<br><br> profit or loss Fair value<br><br> through other<br><br> comprehensive<br><br> 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 9,587,184 1,571,026 - 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
Investment fund quotas - 5,771 - 5,771 - 5,771 - 5,771
Financial Bills - 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 Note 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 - - 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 the years 2021, 2022, 2023, and 2024.

56
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
Carrying amount Fair value
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Fair value<br><br> through<br><br> profit or loss Fair value<br><br> through other<br><br> comprehensive<br><br> income Amortized cost Total Level 1 Level 2 Level 3 (*) Total
December 31, 2021
Financial assets
Cash and cash equivalents - - 500,446 500,446 - - - -
Amounts due from financial institutions - - 2,051,862 2,051,862 - - - -
Compulsory deposits at Central Bank of Brazil - - 2,399,488 2,399,488 - - - -
Securities 778,417 11,137,938 841,332 12,757,687 - 11,914,753 - 11,914,753
Fair value through other comprehensive income - FVOCI - 11,137,938 - 11,137,938 10,568,162 556,129 - 11,094,204
Financial Treasury Bills (LFT) - 6,201,734 - 6,201,734 6,201,734 - - 6,201,734
National Treasury Bills (LTN) - 412,963 - 412,963 412,964 - - 412,964
National Treasury Notes (NTN) - 3,675,236 - 3,675,236 3,675,236 - - 3,675,236
Debentures - 440,093 - 440,093 229,862 210,233 - 440,095
Certificates of Real Estate Receivables - 307,667 - 307,667 48,366 259,370 - 307,736
Investment fund quotas - 13,719 - 13,719 - - - -
Financial Bills - 56,439 - 56,439 - 56,439 - 56,439
Certificates of Agricultural Receivables - 30,087 - 30,087 - 30,087
Fair value through profit or loss - FVTPL 778,417 - - 778,417 90,978 687,439 - 778,417
National Treasury Bills (LTN) 40,384 - - 40,384 40,384 - - 40,384
Investment fund quotas 298,992 - - 298,992 50,191 248,801 - 298,992
Certificates of Real Estate Receivables 41,579 - - 41,579 - 41,579 - 41,579
Certificates of Agricultural Receivables 273,716 - - 273,716 - 273,716 - 273,716
Debentures 65,729 - - 65,729 - 65,729 - 65,729
Financial Bills 25,092 - - 25,092 - 25,092 - 25,092
Bank Deposit Certificates 10,648 - - 10,648 - 10,648 - 10,648
Agribusiness Credit Bills (LCA) 14,552 - - 14,552 - 14,552 - 14,552
Real Estate Credit Bills (LCI) 7,322 - - 7,322 - 7,322 - 7,322
Others 403 - - 403 - 403
Amortized cost - - 841,332 841,332 - - - -
Debentures - - 185,136 185,136 - - - -
Financial Bills - - 11,676 11,676 - - - -
National Treasury Notes (NTN) - - 605,092 605,092 - - - -
Rural Product Bill - - 28,075 28,075 - - - -
Certificates of Real Estate Receivables - - 11,353 11,353 - - - -
Derivative financial instruments 86,948 - - 86,948 - 86,948 - 86,948
Loans and advances to customers - - 17,216,362 17,216,362 - - - -
Other assets 77,387 - - 77,387 - - 77,387 77,387
Total 942,752 11,137,938 23,009,490 35,090,180 10,659,543 1,330,516 77,387 12,067,446
Financial liabilities
Liabilities with financial institutions - - 5,341,464 5,341,464 - - - -
Liabilities with customers - - 18,333,543 18,333,543 - - - -
Securities issued - - 3,572,093 3,572,093 - - - -
Derivative financial liabilities 66,545 - - 66,545 - 66,545 - 66,545
Borrowing and onlending - - 25,071 25,071 - - - -
Total 66,545 - 27,272,171 27,338,716 - 66,545 - 66,545

(*) 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 the years 2021, 2022, 2023, and 2024.

57
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

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 year ended December 31, 2022 and 2021, 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
12/31/2022 12/31/2021
--- --- --- --- ---
Cash and cash equivalents in national currency 388,622 444,212
Cash and cash equivalents in foreign currency 223,528 20,643
Reverse repurchase agreements* 719,498 35,591
Total 1,331,648 500,446

* Refers to operations 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:
--- ---
12/31/2022 12/31/2021
--- --- --- --- --- --- ---
Interbank deposit investments 2,383,526 1,729,676
Interbank onlending 31,805 25,559
Loans to financial institutions 1,845,665 298,104
Expected loss (2,140 ) (1,477 )
Total 4,258,856 2,051,862 
58
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
10 Securities
--- ---
a. Breakdown of securities:
--- ---
12/31/2022 12/31/2021
--- --- --- --- ---
Fair value through other comprehensive income  - FVOCI
Financial Treasury Bills (LFT) 4,652,445 6,201,734
Debentures 684,153 440,093
Certificates of Real Estate Receivables 203,350 307,667
Investment fund quotas - 13,719
Financial Bills 5,771 56,439
National Treasury Notes (NTN) 3,541,780 3,675,236
National Treasury Bills (LTN) 589,496 412,963
Commercial Promissory Note 22,551 30,087
Subtotal 9,699,546 11,137,938
Amortized cost
Debentures 112,914 185,136
Financial Bills - 11,676
National Treasury Notes (NTN) 645,373 605,092
Rural Product Bill 532,068 28,075
Certificates of Real Estate Receivables - 11,353
Subtotal 1,290,355 841,332
Fair value through profit or loss - FVTPL
Investment fund quotas 529,903 298,992
Certificates of Real Estate Receivables 44,453 41,579
Certificates of Agricultural Receivables 237,750 10,648
Debentures 435,755 273,716
Financial Treasury Bills (LFT) 37,131 65,729
Financial Bills 101,467 40,384
Bank Deposit Certificates 44,638 25,092
Commercial Promissory Note 5,157 -
Agribusiness Credit Bills (LCA) 20,413 14,552
Real Estate Credit Bills (LCI) 1,613 7,322
Others 384 403
Subtotal 1,458,664 778,417
Total 12,448,565 12,757,687
b. Income from securities
--- ---
2022 2021 2020
--- --- --- --- --- --- --- --- ---
Income from securities - FVOCI 1,100,970 660,584 (7,110 )
Income from securities - FVTPL 209,400 (58,754 ) 2,021
Income from securities - Amortized cost 161,367 143,783 17,149
Total 1,471,737 745,613 12,060 
59
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
12/31/2022
--- --- --- --- --- --- --- --- --- --- --- --- ---
Up to 3<br><br> months From 3 to 12<br><br> months 1 year to 3<br><br> years From 3 to 5<br><br> years Above 5 years Accounting<br><br> balance
Fair value through other comprehensive income - FVOCI 24,102 - 732,004 2,999,773 5,943,846 9,699,546
Financial Treasury Bills (LFT) 24,102 - 2 1,548,011 3,080,330 4,652,445
Debentures - - 120,434 270,448 293,450 684,153
Certificates of Real Estate Receivables - - 7,721 15,877 179,752 203,350
Investment fund quotas - - - - - -
Financial Bills - - 2,099 1,161 2,511 5,771
National Treasury Notes (NTN) - - 151,677 1,002,300 2,387,803 3,541,780
National Treasury Bills (LTN) - - 450,070 139,426 - 589,496
Commercial Promissory Notes - - 1 22,550 - 22,551
Amortized cost 95,316 197,820 253,811 95,712 647,696 1,290,355
Debentures 15,777 21,162 75,975 - - 112,914
Financial Bills - - - - - -
National Treasury Notes (NTN) - - - - 645,373 645,373
Certificates of Real Estate Receivables - - - - - -
Rural Product Bill 79,539 176,658 177,836 95,712 2,323 532,068
Fair value through profit or loss - FVTPL 547,370 74,669 182,240 300,408 353,977 1,458,664
Investment fund quotas 529,903 - - - - 529,903
Certificates of Real Estate Receivables 5,236 583 17,926 5,180 15,528 44,453
Certificates of Agricultural Receivables - 1,907 8,595 76,123 151,125 237,750
Debentures 2,139 5,434 71,217 181,272 175,693 435,755
Financial Treasury Bills (LFT) - - 14,407 22,724 - 37,131
Financial Bills - 50,848 40,820 5,023 4,776 101,467
Bank Deposit Certificates 9,648 12,988 12,638 5,813 3,551 44,638
Commercial Promissory Notes - - 5,157 - - 5,157
Agribusiness Credit Bills (LCA) 391 1,602 11,227 4,273 2,920 20,413
Real Estate Credit Bills (LCI) 53 1,307 253 - - 1,613
Others - - - - 384 384
Total 666,788 272,489 1,167,876 3,395,893 6,945,519 12,448,565
12/31/2021
--- --- --- --- --- --- --- --- --- --- --- --- ---
Up to 3 months From 3 to 12 months 1 year to 3 years From 3 to 5 years Above 5 years Accounting balance
Fair value through other comprehensive income - FVOCI 84,388 131,735 1,023,883 2,129,437 7,768,495 11,137,938
Financial Treasury Bills (LFT) 70,669 129,144 781,179 1,400,473 3,820,269 6,201,734
Debentures - 2,591 78,600 172,128 186,774 440,093
Certificates of Real Estate Receivables - - 49,524 50,293 207,850 307,667
Investment fund quotas 13,719 - - - - 13,719
Financial Bills - - 13,089 14,686 28,664 56,439
National Treasury Notes (NTN) - - - 150,298 3,524,938 3,675,236
National Treasury Bills (LTN) - - 101,491 311,472 - 412,963
Commercial Promissory Notes - - - 30,087 - 30,087
Amortized cost 11,353 59,509 140,336 25,042 605,092 841,332
Debentures - 34,817 125,277 25,042 - 185,136
Financial Bills - 11,676 - - - 11,676
National Treasury Notes (NTN) - - - - 605,092 605,092
Certificates of Real Estate Receivables 11,353 - - - - 11,353
Rural Product Bill - 13,016 15,059 - - 28,075
Fair value through profit or loss - FVTPL 378,768 11,773 120,033 154,372 113,471 778,417
Investment fund quotas 298,992 - - - - 298,992
Certificates of Real Estate Receivables 7,694 2,311 13,683 7,310 10,581 41,579
Certificates of Agricultural Receivables 16,690 103 42,542 127,525 86,856 273,716
Debentures 22,752 - 18,127 14,782 10,068 65,729
Financial Treasury Bills (LFT) 403 - - - - 403
Financial Bills - 1,146 31,224 3,248 4,766 40,384
Bank Deposit Certificates 265 7,860 14,260 1,507 1,200 25,092
Commercial Promissory Notes 10,648 - - - - 10,648
Agribusiness Credit Bills (LCA) 14,552 - - - - 14,552
Real Estate Credit Bills (LCI) 6,772 353 197 - - 7,322
Total 474,509 203,017 1,284,252 2,308,851 8,487,058 12,757,687
11 Derivative financial instruments
--- ---

Inter carries out derivative transactions to meet its own risk exposure management needs and to meet its customers’ requests to manage their exposures. Such transactions involve swaps and forward derivatives. Inter's risk management policy is based on the use of derivative financial instruments with the main purpose of mitigating the risks arising from other operations carried out.

60
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
a. Derivative financial instruments – amortized cost, fair value andmaturity
--- ---
12/31/2022 12/31/2021
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Amortized cost Fair value Up to 3 months From 3 to 12 months From 1 to 3 years From 3 to 5 years Total Total
Assets (A)
Receivable forward<br> purchase - - - - - - - 86,948
Liabilities (B)
Payable adjustment – swap (37,502 ) (37,502 ) - - (37,502 ) - (37,502 ) (66,545 )
Payable adjustment – option (266 ) (266 ) - - (266 ) - (266 ) -
Net effect (A-B) (37,768 ) (37,768 ) - - (37,768 ) - (37,768 ) 20,403
b. Forward and swap contracts – notional value
--- ---
Up<br> to 3 <br><br> months 3<br> months <br><br> to 1 year 1<br> year to 3<br><br> years Above<br> 3 years 12/31/2022 Total<br><br> 12/31/2021
--- --- --- --- --- --- --- --- --- --- --- --- ---
Forward contract<br> - assets - - - - - 86,948
Swap<br> contracts - liabilities (c) - - 78,000 - 78,000 172,933
Total - - 78,000 - 78,000 259,881
c. Index swap contracts
--- ---

The operations were carried out via over-the-counter market and feature guarantee margin and control by this market. At December 31, 2022, Inter had 1 active swap contract CDI x IGP-M,with total notional of R$ 78,000 (2021: R$ 172,933), registered at B3 and a guarantee margin deposit, whose value can be adjusted at any time. The swap operation is the exchange of risks between two parties, consisting of an agreement for two parties to exchange the risk of an asset (creditor) or liability (debtor) position, on a specified date, with previously established conditions.

Inter's swap operations are classified as Hedge Accounting ("Fair Value Hedge"), as hedge from exposure to changes in the fair value of recognized loan operations, or an identified part of such asset attributable to a particular risk that may affect the result.

The hedging instrument (swap) was used to protect the risks related to the mismatch of indices between the asset and liability portfolios, specifically between interest rate and price index variations and are recognized at fair value in profit (loss) for the year. The fair value is the value which, according to market conditions, would be received for the assets and paid upon settlement of liabilities, calculated based on the rates practiced in the stock exchange markets.

12/31/2022
Amortized value Fair value
Indexes Notional value Bank Counterparty Bank Counterparty Gain (loss)
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 ) 
61
Consolidated Financial Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31,<br>2022
12/31/2021
--- --- --- --- --- --- --- --- --- --- --- --- --- ---
Notional Amortized value Fair value
Indexes value Bank Counterparty Bank Counterparty Gain (loss) ****
CDI x IGPM 112,856 124,282 184,140 124,282 180,520 (56,238 )
CDI x IPCA 60,000 66,767 77,401 66,695 77,002 (10,307 )
Grand total 172,856 191,049 261,541 190,977 257,522 (66,545 )
d. Hedge accounting
--- ---

Inter applies hedge accounting for certain of its loans and advances to customers.

Inter’s swaps are classified as hedging instruments in a Fair Value Hedge hedging the risks related to a portion of the real estate portfolio which is indexed to inflation rates. The hedged contracts from the real estate portfolio are measured at fair value in relation to the specific risk of being hedged.

12 Loans and advances to customers
a. Breakdown of balance of loans and advances to customers
--- ---
12/31/2022 12/31/2021
--- --- --- --- --- --- --- --- ---
Real estate loans 6,251,813 27.54 % 5,121,411 29.75 %
Personal loans 5,463,781 24.07 % 3,579,283 20.79 %
Business loans 3,392,500 14.95 % 3,017,159 17.52 %
Credit card 6,870,565 30.27 % 4,798,318 27.87 %
Rural loans 719,669 3.17 % 700,191 4.07 %
Total 22,698,328 100.00 % 17,216,362 100.00 %
Provision for expected loss (1,318,412 ) (680,932 )
Net balance 21,379,916 16,535,430

The concentration of Inter’s portfolio of loans and advances to customers is as follows:

12/31/2022 12/31/2021
Balance % on Loans and advances to customers Balance % on Loans and advances to customers
Largest debtor 344,660 1.52 % 274,262 1.59 %
10 largest debtors 1,431,237 6.31 % 1,610,203 9.35 %
20 largest debtors 1,980,249 8.72 % 2,034,977 11.82 %
50 largest debtors 2,734,599 12.05 % 2,627,038 15.26 %
100 largest debtors 3,758,241 16.56 % 3,138,861 18.23 %

The breakdown of loans and advances to customers by maturity is as follows:

By maturity 12/31/2022 12/31/2021
Overdue by 1 day or more 2,817,985 1,766,989
To fall due in up to 3 months 3,381,978 2,849,136
To fall due between 3 to 12 months 5,916,020 3,868,156
To fall due in more than 12 months 10,582,345 8,732,081
Total 22,698,328 17,216,362 
62
Consolidated Financial<br> Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended <br><br>December 31,<br> 2022
b. Analysis of changes in expected losses by stage
--- ---

Changes in expected losses are presented as follows:

Stage<br> 1 Opening<br><br> balance at<br><br> 01/01/2022 Transfer<br> to<br><br> Stage 2 Transfer<br> to<br><br> Stage 3 Transfer<br> from<br><br> Stage 2 Transfer<br> from<br> Stage 3 Completed<br><br> contracts Write-off<br> for<br><br> loss Constitution<br><br> / (Reversal) Ending<br><br> balance at<br><br> 12/31/2022
Real<br> estate loans 49,569 (3,161 ) (1,737 ) 4,258 2,305 (8,380 ) (6 ) 23,636 66,484
Personal<br> loans 57,344 (2,737 ) (3,110 ) 924 396 (13,276 ) (1,023 ) 59,998 98,516
Business<br> loans 12,586 (4 ) (288 ) 41 559 (5,571 ) (77 ) 4,853 12,099
Credit<br> card 202,481 (2,825 ) (89 ) 852 2 (82,985 ) - 179,473 296,909
Rural<br> loans 25,677 - (56 ) - - (21,578 ) - 7,563 11,606
347,657 (8,727 ) (5,280 ) 6,075 3,262 (131,790 ) (1,106 ) 275,523 485,614
Stage<br> 2 Opening balance at 01/01/2022 Transfer to Stage 1 Transfer to Stage 3 Transfer from Stage 1 Transfer from Stage 3 Completed contracts Write-off for loss Constitution/(Reversal) Ending balance at 12/31/2022
Real<br> estate loans 13,361 (4,258 ) (1,876 ) 3,161 1,848 (2,352 ) (36 ) 7,091 16,939
Personal<br> loans 11,095 (924 ) (3,324 ) 2,737 314 (3,616 ) (1,067 ) 84,873 90,088
Business<br> loans 324 (41 ) (282 ) 4 1,070 (1 ) - (175 ) 899
Credit<br> card 29,101 (852 ) (383 ) 2,825 12 (22,478 ) (4,974 ) 171,215 174,466
53,881 (6,075 ) (5,865 ) 8,727 3,244 (28,447 ) (6,077 ) 81,404 282,392
Stage<br> 3 Opening balance at 01/01/2022 Transfer to Stage 1 Transfer to Stage 2 Transfer from Stage 1 Transfer from Stage 2 Completed contracts Write-off for loss Constitution/(Reversal) Ending balance at 12/31/2022
Real<br> estate loans 17,062 (2,305 ) (1,848 ) 1,737 1,876 (8,181 ) (1,846 ) 12,632 19,127
Personal<br> loans 73,065 (396 ) (314 ) 3,110 3,324 (13,139 ) (47,568 ) 109,067 127,149
Business<br> loans 3,110 (559 ) (1,070 ) 288 282 (824 ) (654 ) (245 ) 328
Credit<br> card 186,157 (2 ) (12 ) 89 383 (160,628 ) (25,348 ) 402,187 402,826
Rural<br> loans - - - 56 - - - 920 976
279,394 (3,262 ) (3,244 ) 5,280 5,865 (182,772 ) (75,416 ) 524,561 550,406
Consolidated Opening balance at 01/01/2022 Completed contracts Write-off for loss Constitution/(Reversal) Ending balance at 12/31/2022
Real<br> estate loans 79,992 (18,913 ) (1,888 ) 43,359 102,550
Personal<br> loans 141,504 (30,031 ) (49,658 ) 253,938 315,753
Business<br> loans 16,020 (6,396 ) (731 ) 4,433 13,326
Credit<br> card 417,739 (266,091 ) (30,322 ) 752,875 874,201
Rural<br> loans 25,677 (21,578 ) - 8,483 12,582
680,932 (343,009 ) (82,599 ) 1,063,088 1,318,412 
63
Consolidated Financial<br> Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended <br><br>December 31,<br> 2022
Stage<br> 1 Opening<br><br> balance at<br><br> 01/01/2021 Transfer<br> to<br><br> Stage 2 Transfer<br> to<br><br> Stage 3 Transfer<br> from<br><br> Stage 2 Transfer<br> from<br><br> Stage 3 Completed<br><br> contracts Write-off<br><br> for loss Constitution/<br><br> (Reversal) Ending<br><br> balance at<br><br> 12/31/2021
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Real<br> estate loans 34,897 (3,945 ) (1,706 ) 3,660 1,676 (7,955 ) (8 ) 22,950 49,569
Personal<br> loans 20,196 (852 ) (1,108 ) 177 187 (9,331 ) (317 ) 48,392 57,344
Business<br> loans 5,679 (108 ) (205 ) - - (972 ) - 8,193 12,587
Credit<br> card 103,694 (1,422 ) (5,519 ) 277 208 (30,638 ) (326 ) 136,207 202,481
Rural<br> loans 5,675 - - - - (5,052 ) - 25,053 25,676
Total 170,141 (6,327 ) (8,538 ) 4,114 2,071 (53,948 ) (651 ) 240,795 347,657
Stage<br> 2 Opening balance at 01/01/2021 Transfer to Stage 1 Transfer to Stage 3 Transfer from Stage 1 Transfer from Stage 3 Completed contracts Write-off for loss Constitution/ (Reversal) Ending balance at 12/31/2021
Real<br> estate loans 10,848 (3,660 ) (1,183 ) 3,945 1,295 (3,012 ) (92 ) 5,220 13,361
Personal<br> loans 4,432 (177 ) (761 ) 852 34 (2,190 ) (483 ) 9,387 11,094
Business<br> loans 4 - - 108 - (3 ) (1 ) 216 324
Credit<br> card 4,909 (277 ) (100 ) 1,422 10 (4,299 ) (218 ) 27,654 29,101
Total 20,193 (4,114 ) (2,044 ) 6,327 1,339 (9,504 ) (794 ) 42,477 53,880
Stage<br> 3 Opening balance at 01/01/2021 Transfer to Stage 1 Transfer t o Stage 2 Transfer from Stage 1 Transfer from Stage 2 Completed contracts Write-off for loss Constitution/ (Reversal) Ending balance at 12/31/2021
Real<br> estate loans 15,127 (1,676 ) (1,295 ) 1,706 1,183 (7,494 ) (2,375 ) 11,886 17,062
Personal<br> loans 21,262 (187 ) (34 ) 1,108 761 (6,627 ) (12,884 ) 69,666 73,065
Business<br> loans 241 - - 205 - - (240 ) 2,904 3,110
Credit<br> card 55,389 (208 ) (10 ) 5,519 100 (53,709 ) (1,390 ) 180,466 186,157
Total 92,019 (2,071 ) (1,339 ) 8,538 2,044 (67,830 ) (16,889 ) 264,922 279,394
Consolidated Balance at 01/01/2021 Completed contracts Write-off for loss Constitution/ (Reversal) Ending balance at 12/31/2021
Real<br> estate loans 60,872 (18,461 ) (2,475 ) 40,056 79,992
Personal<br> loans 45,890 (18,148 ) (13,684 ) 127,445 141,503
Business<br> loans 5,924 (975 ) (241 ) 11,314 16,022
Credit<br> card 163,992 (88,646 ) (1,934 ) 344,327 417,739
Rural<br> loans 5,675 (5,052 ) - 25,053 25,676
Total 282,353 (131,282 ) (18,334 ) 548,195 680,932 
64
Consolidated Financial<br> Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended <br><br>December 31,<br> 2022
c. Analysis of the change in the gross value of loans and advances to customersby stage
--- ---
Stage<br> 1 Opening<br><br> balance at<br><br> 01/01/2022 Transfer<br> to<br><br> Stage 2 Transfer<br> to<br><br> Stage 3 Transfer<br><br> from<br><br> Stage 2 Transfer<br> from<br><br> Stage 3 Completed<br><br> contracts Write-off<br><br> for loss Origination<br><br> /receipt Ending<br><br> balance at<br><br> 12/31/2022
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Real<br> estate loans 4,782,311 (121,381 ) (61,009 ) 83,149 15,438 (697,843 ) (554 ) 1,842,955 5,843,066
Personal<br> loans 3,375,420 (90,452 ) (84,468 ) 6,801 836 (360,888 ) (2,960 ) 2,097,055 4,941,344
Business<br> loans 2,962,934 (909 ) (6,099 ) 2,118 5,227 (2,098,348 ) (802 ) 2,514,861 3,378,982
Credit<br> card 4,335,866 (49,584 ) (933 ) 1,479 3 (1,037,568 ) - 2,644,732 5,893,995
Rural<br> loans 700,191 - (1,535 ) - - (589,045 ) - 608,504 718,115
Total 16,156,722 (262,326 ) (154,044 ) 93,547 21,504 (4,783,692 ) (4,316 ) 9,708,107 20,775,502
Stage<br> 2 Opening balance at 01/01/2022 Transfer to Stage 1 Transfer to Stage 3 Transfer from Stage 1 Transfer from Stage 3 Completed contracts Write-off for loss Origination /receipt Ending balance at 12/31/2022
Real<br> estate loans 224,817 (83,149 ) (28,657 ) 121,381 12,376 (38,157 ) (567 ) 72,589 280,633
Personal<br> loans 86,022 (6,801 ) (31,142 ) 90,452 548 (25,422 ) (3,538 ) 180,391 290,510
Business<br> loans 4,923 (2,118 ) (2,634 ) 909 10,006 (133 ) (35 ) (442 ) 10,476
Credit<br> card 90,648 (1,479 ) (1,323 ) 49,584 25 (65,999 ) (20,321 ) 284,287 335,422
Total 406,410 (93,547 ) (63,756 ) 262,326 22,955 (129,711 ) (24,461 ) 536,825 917,041
Stage<br> 3 Opening balance at 01/01/2022 Transfer to Stage 1 Transfer to Stage 2 Transfer from Stage 1 Transfer from Stage 2 Completed contracts Write-off for loss Origination /receipt Ending balance at 12/31/2022
Real<br> estate loans 114,283 (15,438 ) (12,376 ) 61,009 28,657 (54,798 ) (12,367 ) 19,143 128,113
Personal<br> loans 117,843 (836 ) (548 ) 84,468 31,142 (29,061 ) (59,232 ) 88,153 231,929
Business<br> loans 49,301 (5,227 ) (10,006 ) 6,099 2,634 (27,934 ) (6,110 ) (5,715 ) 3,042
Credit<br> card 371,803 (3 ) (25 ) 933 1,323 (321,232 ) (50,179 ) 638,527 641,147
Rural<br> loans - - - 1,535 - - - 19 1,554
Total 653,230 (21,504 ) (22,955 ) 154,044 63,756 (433,025 ) (127,888 ) 740,127 1,005,785
Consolidated Opening balance at 01/01/2022 Completed contracts Write-off for loss Origination /receipt Ending balance at 12/31/2022
Real<br> estate loans 5,121,411 (790,798 ) (13,488 ) 1,934,687 6,251,812
Personal<br> loans 3,579,285 (415,371 ) (65,730 ) 2,365,599 5,463,783
Business<br> loans 3,017,158 (2,126,415 ) (6,947 ) 2,508,704 3,392,500
Credit<br> card 4,798,317 (1,424,799 ) (70,500 ) 3,567,546 6,870,564
Rural<br> loans 700,191 (589,045 ) - 608,523 719,669
Total 17,216,362 (5,346,428 ) (156,665 ) 10,985,059 22,698,328 
65
Consolidated Financial<br> Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended <br><br>December 31,<br> 2022
Stage<br> 1 Opening<br><br>balance at<br><br> 01/01/2021 Transfer<br> to <br><br>Stage 2 Transfer<br> to<br><br> Stage 3 Transfer<br><br>from<br><br>Stage 2 Transfer<br> from<br><br> Stage 3 Completed<br><br><br> contracts Write-off<br> for<br><br> loss Origination<br><br>/receipt Ending<br><br><br> balance at<br><br> 12/31/2021
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Real<br> estate loans 3,186,942 (136,470 ) (64,869 ) 63,128 11,007 (719,768 ) (202 ) 2,442,543 4,782,311
Personal<br> loans 1,573,668 (32,529 ) (55,621 ) 935 429 (900,960 ) (8,144 ) 2,797,639 3,375,417
Business<br> loans 1,579,384 (3,190 ) (20,918 ) - - (968,510 ) (22 ) 2,376,191 2,962,935
Credit<br> card 1,773,870 (19,334 ) (76,206 ) 831 416 (390,827 ) (2,307 ) 3,049,425 4,335,868
Rural<br> loans 177,637 - - - - (158,117 ) - 680,671 700,191
Total 8,291,501 (191,523 ) (217,614 ) 64,894 11,852 (3,138,182 ) (10,675 ) 11,360,856 16,156,722
Stage<br> 2 Opening balance at 01/01/2021 Transfer to Stage 1 Transfer to Stage 3 TransferfromStage 1 Transfer from Stage 3 Completed contracts Write-off for loss Origination/receipt Ending balance at 12/31/2021
Real<br> estate loans 185,080 (63,128 ) (20,080 ) 136,470 8,505 (50,792 ) (1,676 ) 30,438 224,817
Personal<br> loans 32,718 (935 ) (6,349 ) 32,529 97 (14,280 ) (4,981 ) 47,224 86,023
Business<br> loans 1,298 - - 3,190 - (1,235 ) (61 ) 1,731 4,923
Credit<br> card 20,002 (831 ) (287 ) 19,334 20 (17,735 ) (1,102 ) 71,246 90,647
Total 239,098 (64,894 ) (26,716 ) 191,523 8,622 (84,042 ) (7,820 ) 150,639 406,410
Stage<br> 3 Opening balance at<br><br> <br>01/01/2021 Transfer to Stage 1 Transfer to Stage 2 Transfer from Stage 1 Transfer from Stage 2 Completed contracts Write-off for loss Origination /receipt Ending balance at 12/31/2021
Real<br> estate loans 99,333 (11,007 ) (8,505 ) 64,869 20,080 (49,212 ) (15,598 ) 14,323 114,283
Personal<br> loans 47,171 (429 ) (97 ) 55,621 6,349 (14,326 ) (28,559 ) 52,113 117,843
Business<br> loans 2,187 - - 20,918 - - (2,186 ) 28,382 49,301
Credit<br> card 110,768 (416 ) (20 ) 76,206 287 (107,413 ) (2,778 ) 295,169 371,803
Total 259,459 (11,852 ) (8,622 ) 217,614 26,716 (170,951 ) (49,121 ) 389,987 653,230
Consolidated Balance at 01/01/2021 Completed contracts Write-off for loss Origination/receipt Ending balance at 12/31/2021
Real<br> estate loans 3,471,355 (819,772 ) (17,476 ) 2,487,304 5,121,411
Personal<br> loans 1,653,557 (929,566 ) (41,684 ) 2,896,976 3,579,283
Business<br> loans 1,582,869 (969,745 ) (2,269 ) 2,406,304 3,017,159
Credit<br> card 1,904,640 (515,975 ) (6,187 ) 3,415,840 4,798,318
Rural<br> loans 177,637 (158,117 ) - 680,671 700,191
Total 8,790,058 (3,393,175 ) (67,616 ) 11,887,095 17,216,362 
66
Consolidated Financial<br> Statements as of<br><br>December 31,2022 and 2021 and for each of<br><br>the years in the three-year period ended <br><br>December 31,<br> 2022
13 Non-current assets held for sale
--- ---
**** 12/31/2022 12/31/2021 ****
--- --- --- ---
Real estate 166,943 149,770
Impairment - (19,977 )
Total 166,943 129,793

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.

In the year ended December 31, 2022, Inter tested assets held for sale for impairment and concluded there is no longer indication of impairment.

67
Consolidated Financial<br> Statements as of<br><br>December 31,2022 and 2021 and for each of<br><br> the years in the three-year period ended <br><br>December 31,<br> 2022
14 Equity accounted investees
--- ---

On March 5, 2021, Inter concluded the acquisition of 45% of equity interest of BMG Granito Soluções em Payment S.A. (“Granito”). The interest in Granito is part of Inter’s strategy to acquire new companies with a strong technological basis and innovative profile.

Founded in 2015, Granito operates in the payment sector (solutions in payment) developing customized products for its clients

% in share capital Equity acounted investees Income from equity interests in associates
Associates 12/31/2022 12/31/2021 12/31/2022 12/31/2021 2022 2021 2020
Granito Soluções em Pagamento S.A. 45.00 % 45.00 % 62,582 81,294 (17,384 ) (8,764 ) -
Total 62,582 81,294 (17,384 ) (8,764 ) -
Other investments 9,508 1,151 - - -
Total investments 72,090 82,445 (17,384 ) (8,764 ) -

(i) All the above associates are accounted for in these consolidated financial statements using the equity method.

15 Property and equipment
a. Breakdown of property and equipment:
--- ---
12/31/2022 12/31/2021
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Annual depreciation rate Historical Cost Business Combination Accumulated Depreciation Carrying Amount Historical Cost Business Combination Accumulated Depreciation Carrying Amount
Buildings 4 % 37,446 - (25,149 ) 12,297 27,547 17 (14,677 ) 12,887
Furniture<br> and equipment 10 % 17,137 5,281 (886 ) 21,532 12,445 1,257 (4,754 ) 8,948
Data<br> processing systems 20 % 15,636 - (11 ) 15,625 14,390 - (73 ) 14,317
Construction<br> in progress - 1,794 - - 1,794 - - - -
Righ<br> of use asset - buildings 4 % 144,387 - (7,616 ) 136,771 131,064 - (3,741 ) 127,323
Total 216,400 5,281 (33,662 ) 188,019 185,446 1,273 (23,245 ) 163,475 
68
Consolidated Financial<br> Statements as of<br><br> December 31,2022 and 2021 and for each of<br><br> the years in the three-year period ended <br><br>December 31,<br> 2022
b. Changes in property and equipment:
--- ---
Balance at<br><br> 12/31/2021 Addition Business<br><br> combination Transfer Write-offs Balance at<br><br> 12/31/2022
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Buildings 27,608 8,627 - 1,279 (68 ) 37,446
Furniture and equipment 14,012 3,552 10,649 (409 ) (18 ) 27,786
Data processing systems 14,390 1,253 - - (7 ) 15,636
Construction in progress - 2,254 - (460 ) - 1,794
Righ of use asset - buildings 131,064 13,323 - - - 144,387
Total property and equipment - historical cost 187,074 29,009 10,649 410 (93 ) 227,049
Property and equipment - accumulated depreciation
Buildings (14,721 ) (5,478 ) - (5,005 ) 55 (25,149 )
Furniture and equipment (5,064 ) (373 ) (5,368 ) 4,529 22 (6,254 )
Data processing systems (72 ) (7 ) - 66 2 (11 )
Righ of use asset - buildings (3,741 ) (3,875 ) - - - (7,616 )
Total property and equipment - accumulated depreciation (23,598 ) (9,733 ) (5,368 ) (410 ) 79 (39,030 )
Total property and equipment - residual value 163,476 19,276 5,281 - (14 ) 188,019
Balance at<br><br> 12/31/2020 Addition Business<br><br> combination Transfer Write-offs Balance at<br><br> 12/31/2021
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Buildings 21,969 5,783 61 (205 ) - 27,608
Furniture and equipment 10,219 2,926 1,566 (99 ) (600 ) 14,012
Data processing systems 12,348 1,740 - 304 (2 ) 14,390
Righ of use asset - buildings 109,264 21,800 - - - 131,064
Total property and equipment - historical cost 153,800 32,249 1,626 - (602 ) 187,074
Property and equipment - accumulated depreciation
Buildings (14,502 ) (175 ) (44 ) - - (14,721 )
Furniture and equipment (74 ) (4,681 ) (309 ) - - (5,064 )
Data processing systems (60 ) (12 ) - - - (72 )
Righ of use asset - buildings (1,318 ) (2,423 ) - - - (3,741 )
Total property and equipment - accumulated depreciation (15,954 ) (7,291 ) (353 ) - - (23,598 )
Total property and equipment - residual value 137,846 24,958 1,273 - (602 ) 163,475 
69
Consolidated Financial<br> Statements as of<br><br> December 31,2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br> December 31,<br> 2022
16 Intangible assets
--- ---
a. Breakdown of intangible assets
--- ---
12/31/2022 12/31/2021
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Annual amortization rate Historical cost Accumulated amortization Business combination Carrying amount Historical cost Accumulated amortization Business combination Carrying amount
Software 10 % 180,873 (204,278 ) 155,622 132,217 129,399 (82,249 ) - 47,150
Development costs 20 % 244,644 (48,835 ) - 195,809 129,948 (14,531 ) - 115,417
Customer portfolio 20 % 10,067 (5,589 ) - 4,478 9,341 (3,739 ) - 5,602
Goodwill - 78,037 - 554,759 632,796 90,700 - 1 90,702
Intangible assets in progress - 273,329 - - 273,329 170,334 - 1,299 171,633
Total 786,950 (258,702 ) 710,381 1,238,629 529,722 (100,519 ) 1,300 430,504
b. Changes in intangible assets
--- ---
12/31/2021 Addition Write-offs Transfers Business<br><br> combination Amortization 12/31/2022
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Software 47,150 54,931 (2,038 ) (1,419 ) 155,622 (122,029 ) 132,217
Development costs 115,417 21,646 (253 ) 83,059 - (34,304 ) 185,565
Customer portfolio 6,431 - (103 ) - - (1,850 ) 4,478
Goodwill (a) (b) 78,037 - - - 554,759 - 632,796
Intangible assets in progress 181,877 249,068 (65,732 ) (81,640 ) - - 283,573
Total 428,912 325,645 (68,126 ) - 710,381 (158,183 ) 1,238,629
12/31/2020 Addition Write-offs Transfers Business combination Amortization 12/31/2021
Software 29,489 99,483 (40,435 ) (3,350 ) - (38,037 ) 47,150
Development costs 69,144 3,903 - 51,638 - (9,268 ) 115,417
Customer portfolio 7,710 1,631 - - - (3,739 ) 5,602
Goodwill 38,964 51,737 - - 1 - 90,702
Intangible assets in progress 79,209 146,876 (7,463 ) (48,288 ) 1,299 - 171,633
Total 224,516 303,630 (47,898 ) - 1,300 (51,044 ) 430,504

(a) Refers to the acquisition of Inter & Co Payments, Inc, see Note 4.3 - Business Combination.

(b)  The amount of December 31, 2021, previously presented, was adjusted after the completion of the PPA of the group subsidiaries. Accordingly, the preliminary goodwill was reallocated to the opening balances of the transaction.

70
Consolidated Financial<br> Statements as of<br><br>December 31,2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31,<br> 2022
17 Other assets
--- ---
12/31/2022 12/31/2021
--- --- --- --- ---
Amount receivable from the sale of investments (a) 87,318 77,154
Commissions and bonus receivable (b) 113,546 142,543
Prepaid expenses (c) 321,830 159,688
Pending settlements (d) 277,953 148,995
Sundry debtors (e) 91,627 71,234
Advances to third parties (f) 23,911 58,604
Unbilled services provided 31,870 -
Transactions amount to settle (g) 122,859 -
Premium or discount on transfer of financial assets 71,460 -
Early settlement of credit operations 23,328 7,524
Agreements on sales of properties receivable 38,467 27,948
Tax and contributions to be offset against future amounts payable 176,513 51,928
Other amounts 44,826 47,117
Total 1,425,508 792,735
(a) Amounts receivable from the sale of non-controlling interest in a subsidiary consist substantially of<br>amounts relating to the variable portion of the sale of 40% of the subsidiary Inter Digital Corretora e Consultoria de Seguros Ltda. (“Inter<br>Seguros”) to Wiz Soluções e Corretagem de Seguros S.A. (“Wiz”) on May 8, 2019. The purchase and sale<br>contract included cash consideration of R$ 45,000 and contingent consideration to be paid based on Inter Seguros’ EBITDA, 2 installments<br>were made 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<br>signed with Mastercard.
(c) Prepaid expenses: refers substantially to the cost of acquisition of customer digital accounts and portability<br>expenses to process, includes payments for card expenses that involve the generation of economic benefits for Inter, in subsequent period.
(d) Pending settlements: relates primarily to transactions to be processed by Mastercard, in addition to settlement<br>balances receivable from the B3 exchange.
(e) Sundry debtors: relates primarily to amounts of portability to process, amounts to process from credit<br>cards, negotiation and intermediation of amounts and debtors by escrow deposit.
(f) Advances to third parties: relates to advances to employees of R$ 7,711 (2021: R$ 1,203), advance payment<br>of administrative expenses of R$ 9,293 (2021: R$ 17,677), and advance payment of third-party services of R$ 6,907 (R$ 39,724).
(g) These are substantially transitory amounts of<br>exchange systems. They recognize amounts to be settled or that are in transit.
18 Liabilities with financial institutions
--- ---
12/31/2022 12/31/2021
--- --- --- --- ---
Payables with credit card network 5,228,314 3,876,964
Securities sold under agreements to repurchase 1,902,873 973,533
Interbank deposits 732,528 139,477
Others 43,182 351,490
Total 7,906,897 5,341,464
19 Liabilities with customers
--- ---
12/31/2022 12/31/2021
--- --- --- --- ---
Demand deposits 11,566,826 9,932,809
Time deposits 10,517,060 6,922,061
Savings deposits 1,307,055 1,230,039
Creditors by resources to release 251,863 248,634
Total 23,642,804 18,333,543 
71
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
20 Securities issued
--- ---
12/31/2022 12/31/2021
--- --- --- --- ---
Financial Bills 67,014 25,154
Real estate credit bills (a) 5,794,144 3,546,939
Agribusiness credit bills 341,007 -
Total 6,202,165 3,572,093

(a) The Real Estate Credit Bill (LCI) is a tax-exempt fixed-income instrument for individuals, backed by real estate loans. The Group offers LCIs issued by Inter to its retail customers as a tax-exempt investment alternative to time deposits. The real estate loans in the gross amount of R$ 5,794,144 (2021: R$ 3,546,939) are backed by these instruments.

21 Borrowing and onlending
12/31/2022 12/31/2021
--- --- --- --- ---
Onlending obligations – Caixa Econômica Federal 22,231 24,877
Onlending obligations - BNDES 8,139 -
Others 6,078 194
Total 36,448 25,071

Refers to onlending of real estate loans obtained from Caixa Econômica Federal (with rates between 4.5% and 6% p.a.) and BNDES for working capital operations (with a fixed rate of up to 6% p.a.).

22 Income tax and social contribution and tax liabilities
12/31/2022 12/31/2021
--- --- --- --- ---
Income tax and social contribution 114,493 41,764
Tax on financial transactions 9,354 2,821
PIS/COFINS 20,542 14,419
INSS/FGTS 14,842 14,069
Other taxes 7,634 5,333
Total 166,865 78,406
23 Provisions and contingent liabilities
--- ---
12/31/2022 12/31/2021
--- --- --- --- ---
Provision for legal and administrative proceedings 28,118 21,682
Provision for expected credit losses on loan commitments (i) 29,331 31,166
Total 57,449 52,848
(i) Inter recognizes expected losses for financial assets on loan commitments that include both a used component<br>and an unused loan commitment component. To the extent that the combined value of expected credit losses exceeds the gross carrying amount<br>of the financial asset, the remaining balance is presented as a provision.
--- ---

Provisions for legal and administrativeproceedings

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.

72
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
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.

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 Tax Total
Balance on December 31, 2021 3,312 18,370 - 21,682
(+) Consitution / increase in provision 1,029 24,902 - 25,931
Payment (553 ) (18,942 ) - (19,495 )
Balance on December 31, 2022 3,788 24,330 - 28,118
Balance on December 31, 2020 3,173 16,423 1,017 20,613
(+) Consitution / increase in provision 1,601 17,401 - 19,002
Payment (1,462 ) (15,454 ) (1,017 ) (17,933 )
Balance on December 31, 2021 3,312 18,370 - 21,682
b. Contingent tax liabilities classified as possible losses
--- ---

Income tax and social contributionon 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. As of December 31, 2022, these amounted to R$ 29,963 (2021: R$ 63,805).

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.

73
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
Process type 12/31/2022 12/31/2021
--- --- --- --- ---
Infraction Notice 17,896 17,896
Action for the annulment of a tax debt 21,764 21,239
Collection Letter 1,254 1,254
Clearing Statement 3,496 4,863
Total 44,410 45,252
24 Other liabilities
--- ---
12/31/2022 12/31/2021
--- --- --- --- ---
Lease liabilities (Note 24.a) 146,705 137,085
Payments to be processed (a) 648,887 288,540
Contract liabilities (b) 45,364 48,943
Agreements 33,736 37,301
Digital customer portfolio - Inter & Co. Payments, Inc. 89,518 -
Provisions for salaries, vacations and other labor charges 77,383 44,684
Other liabilities 100,583 30,412
Pending settlements (c) 31,352 12,680
Financing to be released - 17,704
Total other liabilities 1,173,527 617,349
(a) Payments to be processed: The balance is substantially composed of: credit operation installments<br>to be transferred, payment orders to be settled, suppliers to be paid, liabilities from business combination and fees to be paid.
--- ---
(b) Contract liabilities: The balance consists of amounts received, not yet recognized in the income<br>statement arising from the exclusive contract for insurance products signed between the subsidiary Inter Digital Corretora and Consultoria<br>de Seguros Ltda. (“Inter Seguros”) and Liberty Seguros.
--- ---
(c) Pending settlements: These refer to performed customer transactions and/or anticipated resources<br>that will be settled in a short period of time.
--- ---
a. Lease liabilities
--- ---

The changes in lease liabilities for the year are as follows:

Balance on January 1, 2022 137,085
New contracts 1,225
Payments (38,882 )
Update 49,591
Accrued interest (2,314 )
Ending balance on December 31, 2022 146,705
Balance on January 1, 2021 111,328
New contracts 12,486
Payments (29,793 )
Accrued interest 43,064
Ending balance on December 31, 2021 137,085 
74
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

Lease maturity

The maturity of the lease liabilities is as follows:

12/31/2022 12/31/2021
Up to 1 year 2,890 2,765
From 1 year to 5 years 26,009 12,486
Above 5 years 117,806 121,834
Total 146,705 137,085
25 Equity
--- ---
a. Share capital
--- ---
Data Class A Class B Total
--- --- --- --- --- --- ---
2021 228,521,790 37,718,654 266,240,444
2022 284,765,936 117,037,105 401,803,041

At December 31, 2022, 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 284,765,936 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 December 31, 2022.

Without prejudice to any special rights conferred thereby on the holders of any other shares or class of shares established holders of Class A Shares and holders of Class B Shares shall:

(a) have the same rights, except regarding voting right. Holders of Class A Shares have the right to 1 (one) vote in any of the matters being decided in the general meetings, while holders of Class B Shares have the right to 10 (ten) votes in any of the matters being decided in the general meetings of Inter&Co.

(b) be entitled to such dividends as the Board may from time to time declare; Holders of Class A common shares and Class B common shares will be entitled to receive equal dividends proportional to their interest in the Company.

(c) in the event of a winding-up or dissolution of the Company, whether voluntary or involuntary or for the purposes of a reorganization or otherwise or upon any distribution of capital, be entitled to the surplus assets of the Company, subject to the terms of any shareholders agreement to which all Members are a party; and

(d) generally be entitled to enjoy all of the rights attaching to Class A and Class B shares.

(e) on May 19, 2022, in anticipation of closing, shares were received into class A and class B shares, which were previously Preferred and Common Shares.

75
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
b. Reserves
--- ---

In the year ended December 31, 2022, Inter & Co, Inc. concluded the final stage of its corporate reorganization, as described 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

The amount corresponds to the net change in fair value - financial assets at FVOCI, which includes the expected credit loss for those financial assets , exchange-rate change adjustment of foreign investment and the amounts resulting from the corporate reorganization, as described in note 1.

d. Dividends and interest on equity

Inter & Co Inc. has not declared or paid dividends in the year ended December 31, 2022.

Company 2022 2021 2020
Inter&Co - 9,307 -
Banco Inter 38,056 10,373 39,949
Inter Digital (*) 25,812 - -
Inter Food (*) 12,030 - -
Total 75,898 19,680 39,949

(*) Amount paid to non-controlling interest.

e. Earnings (loss) per share

Basic and diluted loss per share is shown as follows:

2021 2020
Profit (loss) attributable to Owners of the company (In thousands of Reais) (11,090 ) (36,348 ) 9,648
Average number of shares 401,159,541 2,540,716,879 2,233,956,090
Diluted earnings (loss) per share (R) (0.0276 ) (0.0143 ) 0.0043
Basic earnings (loss) per share (R) (0.0276 ) (0.0143 ) 0.0043

All values are in US Dollars.

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 current year.

To 2021, the number of class A and class B shares issued by Inter & Co, as a result of this initial reorganization was reflected retroactively to January 1, 2019, for the purposes of calculating earnings per share.

76
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

The amount of earnings (loss) per share was determined as if all profits/losses were distributed and calculated in accordance with the requirements of IAS 33 - Earnings per Share

f. Non-controlling interest

Prior to the corporate reorganization described in note 1, non-controlling interest corresponds to the investments of third parties in the direct and indirect subsidiaries of Inter.

Following the corporate reorganization, non-controlling interest corresponds to third party investors in Banco Inter and third party investors in the direct and indirect subsidiaries of Banco Inter.

In 2022, Inter & Co and Banco Inter completed the corporate reorganization described in note 1 and 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 reduced the non-controlling interest of the Inter & Co, Inc by R$5.656.106. The remaining non-controlling shareholders of Inter & Co, Inc refers to minority interests in the subsidiaries of Banco Inter.

Reconciliation is shown as follows:

Reflex Impacts 2021 Changes 2022
% Participation 31.44 % 68.56 % 100.00 %
Share Capital (a) 209,476 7,147,111 7,356,587
Capital reduction - Cashout (b) - (1,150,000 ) (1,150,000 )
Capital Reserves (c) 2,466,974 (839,095 ) 1,627,879
Dividends and interest on equity (3,122 ) (38,056 ) (41,178 )
Subtotal 2,673,328 5,119,959 7,793,287
Profit for the year 55,068 (11,090 ) 43,978
Others (d) - (19,595 ) (19,595 )
Total 2,728,396 5,089,275 7,817,670

a) Refers to the balance of capital stock arising from Inter and its subsidiaries, which were fully reflected to Inter & Co, after an indirect increase in equity interest.

(b) On October 19, 2022, Inter's capital stock was reduced in the amount of R$1,150,000,000.00 (one billion, one hundred and fifty million reais). The funds received by Inter Holding Financeira S.A., Inter's sole shareholder, as a result of the capital reduction, were used to amortize the financing obtained by HoldFin to pay the cash-out, within the scope of the corporate reorganization, in the amount of R$ 1,145,749,288.79, the remaining amount was classified as cash and cash equivalents.

(c) Refers to the balance reflecting reserves arising from Inter and its subsidiaries, which were fully reflected to Inter & Co, after an indirect increase in equity interest.

(d) It is substantially the foreign exchange variation of subsidiary abroad.

77
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
26 Net interest income
--- ---
2022 2021 2020
--- --- --- --- --- --- --- --- --- ---
Interest income
Amounts due from financial institutions 221,136 71,106 126,619
Loans and advances to customers 2,557,721 1,359,169 809,628
Income from cash and cash equivalents in foreign currency 20,099 5,153 6,561
Others 3,702 - -
Total interest income 2,802,658 1,435,428 942,808
Interest expenses
Securities issued (689,849 ) (207,670 ) (73,597 )
Deposits from customers (1,057,637 ) (294,237 ) (93,319 )
Saving (80,993 ) (25,640 ) (8,745 )
Securities acquired with agreements to resell (77,312 ) (10,097 ) (5,056 )
Borrowing and onlending (a) (67,059 ) (1,641 ) (1,545 )
Others - (3,957 ) (2,073 )
Total interest expense (1,972,850 ) (543,242 ) (184,335 )
Total 829,808 892,186 758,473
(a) Refers to the interest expense of debentures issued for cash-out payments made to shareholders who opted<br>to redeem their shares after the migration to the Nasdaq.
--- ---
27 Net result from services and commissions
--- ---
2022 2021 2020
--- --- --- --- --- --- --- --- --- ---
Revenues from services and commissions 27,054 17,931 12,637
Income from bank fees 62,544 50,992 40,436
Income from exchange 617,552 369,340 137,863
Revenues from commissions and intermediation 496,835 296,655 98,003
Third parties’ funds administration 30,925 42,182 13,335
Exchange brokerage and securities 36,508 7,052 8,842
Other revenues 18,059 9,780 6,005
Expenses on cashback (321,438 ) (251,363 ) (59,976 )
Total revenues from services and commissions 968,039 542,569 257,145
Other expenses (2,019 ) (1,905 ) (6,147 )
Bank expenses (127,214 ) (98,392 ) (65,464 )
Total expenses from services and commissions (129,233 ) (100,297 ) (71,611 )
Total 838,806 442,272 185,534
28 Other revenues
--- ---
2022 2021 2020
--- --- --- --- --- --- ---
Revenues from cards (a) 150,401 102,863 75,230
Other capital gains (losses) 66,363 29,330 -
Foreign exchange revenues 99,780 24,667 17,318
Other operating revenue 54,886 33,222 17,334
Revenue from goods 17,032 - -
Total 388,462 190,082 109,882

**(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.

78
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
29 Impairment losses on financial assets
--- ---
2022 2021 2020
--- --- --- --- --- --- --- --- --- ---
Loss on impairment adjustment of loans and advances to customers (1,140,756 ) (649,510 ) (239,840 )
Recovery of written-off credits 53,825 73,719 39,612
Others 3,694 (19,791 ) (13,461 )
Total (1,083,237 ) (595,581 ) (213,688 )
30 Personnel expenses
--- ---
2022 2021 2020
--- --- --- --- --- --- --- --- --- ---
Salaries (320,097 ) (204,042 ) (117,622 )
Remuneration of the executive board and the board of directors (29,023 ) (22,794 ) (15,893 )
Social security charges (119,746 ) (80,908 ) (37,128 )
Profit sharing (27,262 ) (24,014 ) (2,685 )
Expenses for vacation and thirteenth salary (62,340 ) (45,677 ) (21,480 )
Benefits (173,831 ) (62,505 ) (32,150 )
Other personnel expenses (1,306 ) (3,388 ) (2,138 )
Total (733,605 ) (443,328 ) (229,096 )
31 Other administrative expenses
--- ---
2022 2021 2020
--- --- --- --- --- --- --- --- --- ---
Data processing and information technology (571,459 ) (409,723 ) (189,351 )
Bank expenses (144,134 ) (94,743 ) (123,492 )
Tax expenses (248,588 ) (146,757 ) (69,676 )
Rent, condominium fee and property maintenance (60,513 ) (33,236 ) (18,628 )
Third party services (142,160 ) (85,091 ) (47,501 )
Advertisement and marketing (137,942 ) (145,279 ) (55,354 )
Communication (124,633 ) (103,723 ) (81,892 )
Resources from reimbursement to customers (88,203 ) (65,564 ) (6,220 )
Expenses for Serasa (14,213 ) (1,949 ) (2,016 )
Travel and transportation expenses (16,497 ) (4,579 ) (2,675 )
Insurance expenses (15,870 ) (3,801 ) (2,029 )
Notary public and legal expenses (12,678 ) (12,822 ) (5,066 )
Granted discounts (2,707 ) (15,983 ) (7,612 )
Portability expenses (15,768 ) (25,498 ) (4,928 )
Other expenses (121,776 ) (143,209 ) (10,660 )
Provisions for contingencies (25,931 ) (19,004 ) (14,227 )
Total (1,743,072 ) (1,310,961 ) (641,327 ) 
79
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
32 Current and deferred income tax and social contribution
--- ---
a. Amounts recognized in profit or loss for the year
--- ---
2022 2021 2020
--- --- --- --- --- --- --- --- --- ---
Current income tax and social contribution expenses
Current year (106,625 ) (52,441 ) (13,166 )
Deferred income tax and social contribution expenses (benefits)
Provision for impairment losses on loans and advances 111,967 186,178 34,261
Provision for contingencies 2,944 929 890
Adjustment of financial assets to fair value 3,806 26,270 17,945
Other temporary differences 54,245 (30,708 ) (34,720 )
Hedge transactions (11,284 ) 8,986 8,553
Tax losses carried forward 109,441 36,779 23,946
Total deferred income tax and social contribution expenses (benefits) 271,119 228,434 50,875
Total Income tax benefit 164,494 175,993 37,709
b. Reconciliation of effective rate
--- ---
2022 2021 2020
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Profit before tax (178,573 ) (231,062 ) (7,023 )
Tax average using 45 % 80,358 45 % 103,977 45 % 3,160
Tax effect of
Interest on capital distribution 17,126 18,671 17,978
Non-taxable income (non-deductible expenses) net (8,016 ) (27,744 ) 34,502
Tax incentives - 188 -
Subsidiaries not subject to Real Profit taxation 65,110 81,957 (17,129 )
Others 9,916 (1,055 ) (803 )
Total income tax benefit 164,494 175,993 37,709
Effective tax rate -92 % -76 % -537 %
Total income tax benefit 164,494 175,993 37,709
Total deferred income tax and social contribution 271,119 228,434 50,875
Total income tax and social contribution expenses (106,625 ) (52,441 ) (13,166 )
c. Changes in the balances of deferred taxes
--- ---
Balance at<br> 12/31/2021 Constitution Realization Balance at<br> 12/31/2022
--- --- --- --- --- --- --- --- --- --- --- --- ---
Composition of the deferred tax assets
Provision for impairment losses on loans and advances 295,799 548,506 (436,539 ) 407,766
Provision for contingencies 9,720 21,867 (18,923 ) 12,664
Adjustment of financial assets to fair value 184,886 226,374 (118,998 ) 292,262
Other temporary differences 62,939 87,199 (116,470 ) 33,668
Tax losses carried forward 95,574 109,218 (2,608 ) 202,184
Provision for loss of non-current assets held for sale 8,990 - (8,990 ) -
Expected loss on financial instruments 6,436 7,808 (4,535 ) 9,709
Hedge transactions 31,181 5,853 (17,137 ) 19,897
695,525 1,006,823 (724,200 ) 978,148
Composition of the deferred tax liabilities
Commission deferral (3,869 ) - 3,869 -
Other temporary differences (21,820 ) - 21,820 -
Others (63,546 ) (32,681 ) 66,154 (30,073 )
(89,235 ) (32,681 ) 91,843 (30,073 )
Total deferred tax assets/(liabilities) (*) 606,290 974,142 (632,357 ) 948,075

(*) 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.

80
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
Balance at<br><br> 12/31/2020 Constitution Realization Balance at<br><br> 12/31/2021
--- --- --- --- --- --- --- --- --- --- --- --- ---
Composition of the deferred tax assets
Provision for impairment losses on loans and advances 109,620 227,915 (41,736 ) 295,799
Provision for contingencies 8,791 3,855 (2,926 ) 9,720
Adjustment of financial assets to fair value - 450,377 (246,982 ) 184,886
Other temporary differences 1,893 62,617 (1,571 ) 62,939
Tax losses carried forward 58,794 160,115 (123,337 ) 95,573
Provision for loss of non-current assets held for sale 4,383 4,607 - 8,990
Provision for expected loss on financial instruments 343 6,093 - 6,436
Hedge transactions 22,195 23,568 (14,582 ) 31,182
206,019 939,147 (431,134 ) 695,525
Composition of the deferred tax liabilities
Commission deferral (5,576 ) - 1,707.30 (3,869 )
Adjustment of financial assets to fair value (18,509 ) - 18,509 -
Receivable from the sale of investments (36,841 ) - 15,021 (21,820 )
Others - (63,546 ) (63,546 )
(60,926 ) - - (89,235 )
Total deferred tax assets/(liabilities) (*) 145,093 939,147 (431,134 ) 606,290
33 Share-based payment
--- ---
e. Share-based compensation agreements
--- ---
a.1) Share based payment - Inter
--- ---

The Stock Option Plan, established under the terms of art. 168, § 3, of Law 6404/1976, is an initiative of the Board of Directors of Inter, through which Inter's managers, executives and employees were granted options for the acquisition of shares of Inter, with a view to encouraging performance and favoring the retention of managers, executives and employees of Inter, insofar as their participation in Inter's share capital will allow them to benefit from the results to which they contributed and which are reflected in the valuation of the price of its shares, thus forming, with the shareholders, a common economic interest.

In 2016, the third Stock Option Plan (“Plan 3[3]”) was launched, with vesting periods from 2017 to 2021. The options that become exercisable may be exercised by the participant in up to three years as of the last vesting period. Employees who do not exercise the option within the deadline or whose employment at Inter is terminated, lose the right to exercise it.

On February 5, 2018, Inter’s Board of Directors approved “Plan 4” of the purchase option, as well as the grant of Tranche 1 of Plan 4 [4 (1)]. On July 9, 2020, Tranche 2 of “Plan 4” [4 (2)] was approved, with vesting period from January 2021 to January 2025. On January 31, 2022, Tranche 3 of “Plan 4” [4 (3)] was approved, with vesting period from December 2022 to December 2026. The options of Tranche 2 and Tranche 3 may be exercised within the period of 2 (two) years from the respective vesting periods. If not exercised within the established period, the right to the shares will automatically expire, with no right to indemnity.

81
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

The main characteristics of the Plans are described below (per share):

Plan Grant<br> date Options<br> <br> (shares INTR) Vesting Average<br><br> exercice price Participants Final<br> exercice<br> date
3 09/30/2016 1,764,000 Up<br> to 5 years R$ 1.56 Officers,<br> managers and key employees 12/31/2023
4 (1) 02/05/2018 5,452,464 Up to 5 years R$ 1.80 Officers, managers<br> and key employees 02/15/2025
4 (2) 07/09/2020 3,182,250 Up to 5 years R$ 21.50 Officers, managers<br> and key employees 12/31/2027
4 (3) 01/31/2022 3,250,000 Up to 5 years R$ 15.50 Officers, managers<br> and key employees 12/31/2028

The changes in the options of each plan for the year ended December 31, 2022 and supplementary information are shown below:

Transactions 12/31/2022 (Shares INTR)
Plan Qty employees Opening balance Granted Expired/Cancelled Exercised Closing balance
3 2 676,800 - - 676,800 -
4 (1) 27 2,458,065 - 10,800 2,311,666 135,599
4 (2) 70 2,965,350 - 48,600 87,525 2,829,225
4 (3) 83 - 2,903,500 65,000 - 2,838,500
Total 6,100,215 2,903,500 124,400 3,075,991 5,803,324
Weighted<br> average price of the shares R$ 14.34 R$ 15.50 R$ 16.69 R$ 2.31 R$ 18.15
Transactions 12/31/2021 (Shares INTR)
--- --- --- --- --- --- --- --- --- --- --- ---
Plan Qty employees Opening balance Granted Expired/Cancelled Exercised Closing balance
3 3 1,188,000 108,000 - 619,200 676,800
4 (1) 31 3,275,285 - 355,200 462,120 2,458,065
4 (2) 59 2,496,450 685,800 22,500 194,400 2,965,350
Total 6,959,835 793,800 377,700 1,275,720 6,100,215
Weighted<br> average price of the shares R$ 8.76 R$ 24.36 R$ 3.00 R$ 5.46 R$ 14.34
Transactions 12/31/2020 (Shares INTR)
--- --- --- --- --- --- --- --- --- --- --- ---
Plan Qty employees Opening balance Granted Expired/Cancelled Exercised Closing balance
2 1 71,841 - - 71,841 143,682
3 16 1,473,300 - 15,300 270,000 1,758,600
4 (1) 33 3,777,879 480,000 139,587 842,907 5,240,373
4 (2) 59 - 2,496,450 - - 2,496,450
Total 5,323,020 2,976,450 154,887 1,184,748 9,639,105
Weighted<br> Average period of the Shares R$ 1.74 R$ 18.36 R$ 1.56 R$ 1.56 R$ 8.76
Other<br> information 12/31/2022
--- --- --- --- --- --- --- --- --- --- --- --- ---
Plan Number<br> of<br><br> shares<br><br> exercised Number<br> of<br><br> exercisable<br><br> shares Premium<br> cost<br><br> during the<br><br> year Unrecognized<br><br> premium cost Remaining<br><br> remuneration<br><br> cost period <br><br>(in years) Remaining<br><br> contractual life<br><br> (in years)
3 676,800 - - - - 1.0
4 (1)* 2,311,666 135,599 - - - 2.1
4 (2) 87,525 2,829,225 5,085 11,839 4 5.0
4 (3) - 2,838,500 25,802 53,566 5 6.0 
82
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
Other<br> information 12/31/2021
--- --- --- --- --- --- --- --- --- --- --- --- ---
Plan Number<br> of<br><br> shares<br><br> exercised Number<br> of<br><br> exercisable<br><br> shares Premium<br> cost<br><br> during the<br><br> year Unrecognized<br><br> premium cost Remaining<br><br> remuneration <br><br>cost period<br><br> (in years) Remaining<br><br> contractual life <br><br>(in years)
3 619,200 676,800 - - - 2.0
4 (1)* 462,120 2,458,065 - - - 3.2
4 (2) 194,400 2,965,350 3,089 16,924 4 6.1

* The premium cost referring to the first tranche of plan 4 is the responsibility of the participants, and no cost is recognized by Inter.

Other<br> information 12/31/2020
Plan Number<br> of<br><br> shares<br><br> exercised Number<br> of<br><br> exercisable<br><br> shares Premium<br> cost<br><br> during the<br><br> year Unrecognized<br><br> premium cost Remaining<br><br> remuneration<br><br> cost period<br><br> (in years) Remaining<br><br> contractual life<br><br> (in years)
3 270,000 1,758,600 48 48 0,5 3.0
4 842,907 5,240,373 - - 4 4.1

The estimated impact refers to the value of the payments for the options granted to employees in the Consolidated Financial Statements based on their fair value. The fair values of plans 3, 4 (Tranche 1) and 4 (Tranche 2) were estimated based on the Black & Scholes option valuation model.

Program
3(2016) 4(2018) 4(2020)
Strike price 0.77 0.9 10.75
Risk-free rate 11.68 % 9.97 % 9.98 %
Duration of the strike (years) 7 7 7
Expected annualized volatility 60.33 % 64.28 % 64.28 %
Fair value of the option at the grant/share date: 0.19 0.05 0.05

For Tranche 3 of Plan 4, the fair value was estimated based on the Binomial model:

4(2022)
Strike price 15.50
Risk-free rate 11.45 %
Duration of the strike (years) 7
Expected annualized volatility 38.81 %
Fair value of the option at the grant/share date: 4.08

In the year ended December 31, 2022, the amount of R$ 7,036 of costs were recognized in Inter’s results, according to NE 30.

a.2) Share based Payment Inter & Co Payments, Inc.

In the context of the acquisition of Inter & Co Payments, Inc. by Inter, it was established that key executives would be paid by granting stock options of Inter & Co Payments, Inc., with the possibility of granting class A shares of Inter&Co, Inc. and restricted class A shares of Inter&Co, Inc., as appropriate. The stock options granted and the release of the restricted shares can be exercised by key executives in three installments over three years (2022, 2023 and 2024).With the exercise, the executives will receive the shares free for trading on the market.

83
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

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 strike price is equivalent to R$ 5.31 per INTR issued by Inter&Co, Inc., as contractually defined between the parties.

The main characteristics of the Plans are described below (per share):

Plan Options Vesting Average strike price Participants Final strike<br><br> date
USEND 1,132,885 Up<br> to 3 years R$<br> 5.31 per Class A Officers,<br> managers and key employees 12/30/2024

The changes in the Inter & Co Payments, plan for the year ended December 31, 2022 and supplementary information are shown below:

Transactions 12/31/2022 (Shares)
Plan Qty employees Opening balance Granted Expired/Cancelled Exercised Closing balance
Inter &<br> Co Payments, Inc 4 - 1,132,885 - - 1,132,885
Total - 1,132,885 - - 1,132,885
Weighted<br> average price of the shares - R$ 5.31 - - R$ 5.31
Other<br> Information  12/31/2022
--- --- --- --- --- --- --- --- --- --- --- --- ---
Plan Number<br> of<br><br> shares<br><br> exercised Number<br> of<br><br> exercisable<br><br> shares Premium<br><br> cost during<br><br> the year(a) Unrecognized<br><br> premium cost Remaining<br><br> remuneration<br><br> cost period<br><br> (in years) Remaining<br><br> contractual life<br><br> (in years)
1 (*) - 1,132,885 62,592 52,962 2 2,0

(*) The cost of the premium is equivalent to the value of the INTR on the exercise date, as contractually defined between the parties.

The cost of the premium appropriated to income, for the year ended December 31, 2022, is shown in the explanatory note to personnel expenses (nº30).

84
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
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. Related party transactions were undertaken as follows

Parent<br> Company (a) Associates(b) Key<br> management personnel (c) Other<br> related parties (d) Total
12/31/2022 12/31/2021 12/31/2022 12/31/2021 12/31/2022 12/31/2021 12/31/2022 12/31/2021 12/31/2022 12/31/2021
Assets
Loans<br> and advances to customers 4,397 - - 126 16,063 19,789 632,408 426,967 652,868 446,882
Stone Pagamentos<br> S.A.* (e) - - - - - - 117,175 103,732 117,175 103,732
Arena Vencer<br> Complexo Esportivo Multiuso SPE Ltda (e) - - - - - - 52,200 - 52,200 -
Log Commercial<br> Properties e Participação S/A - - - - - - 79 61,914 79 61,914
MRV Engenharia<br> e Participação S/A (f) - - - - - - 277,686 243,648 277,686 243,648
Conedi Participações<br> LTDA(f) - - - - - - 54,331 - 54,331 -
Conedi Participações<br> LTDA (g) - - - - - - 14,641 - 14,641 -
MRV Engenharia<br> e Participação S/A (g) - - - - - - 80,057 - 80,057 -
Radio Itatiaia<br> Ltda (g) - - - - - - 5,626 - 5,626 -
Urba Desenvolvimento<br> Urbano S.A. (g) - - - - - - 14,226 - 14,226 -
Key management<br> personnel (c) - - - - 16,063 19,789 - - 16,063 19,789
Others (j) 4,397 - - 126 - - 16,387 17,673 20,784 17,799
Amonts<br> due from financial institutions (g) - - 572,111 45,882 - - 1,228,551 195,912 1,800,662 241,794
Granito<br> soluções em pagamentos S.A. - - 572,111 45,882 - - - - 572,111 45,882
Stone Pagamentos<br> S.A.* - - - - - - 1,228,551 195,912 1,228,551 195,912
Securities<br> (i) 23,386 371 - 4,144 14,050 25,962 112,252 146,085 149,688 172,418
Urba Desenvolvimento<br> Urbano S.A. - - - - - - 8,150 - 8,150 -
Log Commercial<br> Properties E Participações S/A - - - - - - 29,826 - 29,826 -
Conedi Participações<br> Ltda - - - - - - 7,107 88,231 7,107 88,231
Key management<br> personnel (c) - - - - 14,050 25,962 - - 14,050 25,962
Others (j) 23,386 371 - 4,114 - - 67,169 57,854 90,555 58,225
Liabilities<br> with customers - demand deposits (1,350 ) (318 ) (7 ) (766 ) (981 ) (800 ) (10,324 ) (9,318 ) (12,662 ) (11,202 )
Novus Midia<br> S.A. - - - - - - (1,768 ) - (1,768 ) -
Ong Movimento<br> Bem Maior - - - - - - (2,961 ) - (2,961 ) -
Key management<br> personnel (c) - - - - (981 ) (800 ) - - (981 ) (800 )
Others (j) (1,350 ) (318 ) (7 ) (766 ) - - (5,595 ) (9,318 ) (6,952 ) (10,402 )

(a) Inter&Co is directly controlled by Costellis International Limited, SBLA Holdings, Hottaire, majority;

(b) Entities with significant influence by Inter&Co;

**(c)**A Directors and member of the Board of Directors 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 controller of Inter&Co; companies over which the controller or his immediate family members have significant influence; other investors that has 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 "drawn risk" operations. Therefore, it is not a financial operation, loans or even financing of the related party;

(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) Refers to reimbursements between Inter subsidiaries;

(j) “Others” refer to dispersed balances, which are not relevant for opening.

(*) In December 2022, Stone owned 4.20% of Inter share capital with voting rights in General Meetings.

85
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022
Parent<br> Company (a) Associates<br> (b) Key<br> management personnel (c) Other<br> related parties (d) Total
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
2022 2021 2020 2022 2021 2020 2022 2021 2020 2022 2021 2020 2022 2021 2020
Interest<br> income (e) - - - - - - 1,416 - - 61,801 - - 63,217 - -
Conedi Participações<br> Ltda - - - - - - - - - 3,876 - - 3,876 - -
MRV Engenharia<br> e Participação S/A - - - - - - - - - 41,346 - - 41,346 - -
Stone Pagamentos<br> S.A* - - - - - - - - - 14,066 - - 14,066 - -
Arena Vencer<br> Complexo Esportivo Multiuso Spe Ltda - - - - - - - - - 1,375 - - 1,375 - -
Key management<br> personnel (c) - - - - - - 1,416 - - - - - 1,416 - -
Others (g) - - - - - - - 1,138 - - 1,138 - -
Interest<br> expenses (f) (408 ) (14 ) (2,503 ) (145 ) (26 ) (3,016 ) (298 ) (215 ) (2,181 ) (9,246 ) (514 ) (15,954 ) (10,097 ) (769 ) (23,654 )
Conedi Participações<br> Ltda - - - - - - - - - (1,647 ) - - (1,647 ) - -
Log Commercial<br> Properties E Participações S/A - - - - - - - - - (6,094 ) - - (6,094 ) - -
Verona Empreendimentos<br> LTDA - - - - - - - - - (256 ) - - (256 ) - -
Key management<br> personnel (c) - - - - - - (298 ) (215 ) (2,181 ) - - - (298 ) (215 ) (2,181 )
Others (g) (408 ) (14 ) (2,503 ) (145 ) (26 ) (3,016 ) - - - (1,249 ) (514 ) (15,954 ) (1,802 ) (554 ) (21,473 )
Other<br> administrative expenses 36 - - - - - 947 - - 7,600 737 737 737 737 -
MRV Engenharia<br> e Participação S/A - - - - - - - - - 2,371 - - 2,371 - -
Lott Oliveira<br> Braga - - - - - - - - - 1,341 - - 1,341 - -
T. Lott<br> Advocacia - - - - - - - - - 765 - - 765 - -
Key management<br> personnel (c) - - - - - - 947 - - - - - 947 - -
Others (g) 36 - - - - - - - - 3,124 737 737 3,160 737 -
(a) Inter&Co<br> is directly controlled by Costellis International Limited, SBLA Holdings and Hottaire,;
--- ---
(b) Entities<br> with significant influence by Inter&Co;
(c) Directors<br> and member of the Board of Directors of Inter&Co;
(d) Any<br> immediate family members of key management personnel or companies controlled by them;
(e) Income<br> related to the receipt of interest on credit operations with related parties.
(f) Refer<br> to expenses on intermediation of fixed income products
(g) “Others”<br> refer to dispersed balances, which are not relevant for opening. 
86
Consolidated Financial<br>Statements as of<br><br>December 31, 2022 and 2021 and for each of<br><br>the years in the three-year period ended<br><br>December 31, 2022

Remuneration ofkey 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.

35 Subsequent events

a) Incorporationof Inter Mortgage Holding, Inc

On January 9, 2023, Inter Mortgage Holding, Inc. was incorporated, a wholly-owned subsidiary of Inter US Holding LLC, in Delaware/USA. It is a non-operating holding company, with no assets, liabilities or contingencies.

b) Change in corporatename to “Inter US Holding, LLC”

On January 12, 2023, the change in corporate name of NEW LA BI LLC to Inter US Holding, LLC was approved.

c) Acquisition ofsubsidiary “YellowFi Mortgage LLC”

On January  24, 2023, through the holding company “Inter Mortgage Holding, Inc” the Group acquired a 100% interest in YellowFi Mortgage LLC and YellowFi Management LLC, consisting in 100,000 units in each company. The amount paid for the acquisition of YellowFi Mortgage LLC and YellowFi Management LLC was $450,000, forwith partially settled in cash and partially settled in shares of the Company.

YellowFi is a mortgage company based in the United States with operations in Florida, Georgia and Colorado, which provides credit focused on the real estate market. The company has licenses to operate in these three states and obtains funding from investors. The company’s business is focused on mortgage origination and distribution and will enable the Group to expand other loan portfolios in the US, providing Inter&Co’s customers with a broader range of financial services.

d) Share based payments

On January 4, 2023, the Extraordinary General Meeting of Inter&Co, Inc. was held, in which the migration of Plan 4 and Programs 1, 2 and 3 under Plan 4 was approved, with the consequent assumption by Inter&Co of Banco Inter S.A.'s obligations under Plan 4 and the respective programs. As a result of the corporate reorganization, each 2 Units of Banco Inter S.A., each composed of 1 common share and 2 preferred shares of Banco Inter S.A. now correspond to 1 Class A Share of Inter&Co, so that the number of options held by each beneficiary changed proportionally. Thus, for every 6 options to purchase common or preferred shares of Banco Inter S.A., the beneficiary will have 1 option to purchase a Class A Share of Inter&Co. Likewise, for every 2 options to purchase units of Banco Inter S.A., the beneficiary will have 1 option to purchase a Class A Share of Inter&Co. Furthermore, the repricing of the exercise price of the options granted in the scope of Program 3 of Plan 4, which have not yet been exercised, was approved, changing the exercise price to R$15.50.

87

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