Financial technology firm Inter&Co in Brazil records impressive Q2 earnings driven by increased demand for credit.
In Q2 2025, Inter&Co, a leading Brazilian fintech, continued its impressive growth trajectory. The company added 1.1 million new active users, bringing its total client base to over 40 million.
Inter&Co's growth strategy, centred on expanding its loan portfolio in a cautious market, has proven successful. The company's gross loan portfolio grew to R$40.2 billion (approximately $7.4 billion), up 8% from Q1 and 22% year-over-year. This growth pace is more than twice that of the Brazilian credit market overall.
A significant portion of Inter&Co's loan growth comes from private-sector payroll loans, which are typically lower-risk due to automatic salary deductions. As a result, Inter&Co currently holds about a 1.6% market share in Brazil's private payroll loan market.
Operating as a financial super app that integrates banking, credit, mortgages, investments, and cross-border tools, Inter&Co facilitates cross-selling and customer retention. This multi-faceted approach has helped the company maintain a stable 4.6% of non-performing loans over 90 days.
The company's efforts to capitalize on strong demand for credit products while competitors hold back have paid off. Revenue rose by 9% in the quarter, and Inter&Co reported a 53% jump in net income to $57.8 million and a record-high return on equity of 13.9% in Q2 2025.
Inter&Co's efficiency ratio improved to 47.1%, and expenses increased by 5% in the quarter. The growth in FGTS-backed loans, mortgages, and credit cards was 8%, 11%, 6%, and 6% quarter-over-quarter, respectively.
Analysts at BTG Pactual and Citi are citing strong fundamentals and a discounted valuation for Inter&Co. The company, listed on Nasdaq, rapidly expanded into private-sector payroll loans after Brazil opened the market in March. Its coverage ratio was raised to 143%.
In summary, Inter&Co's strategy leverages technology, broad financial offerings, and a readiness to meet credit demand in a cautious market to drive above-market growth and increase its foothold in the private payroll loan segment in Brazil.
- Leveraging its strategic approach, Inter&Co's growth in Q2 2025 not only extended to lending but also encompassed ventures in technology-driven investments, further bolstering its position in the Brazilian business landscape.
- With the robust performance in Q2 2025, Inter&Co's foray into various financial segments such as banking, mortgages, and investments showcases its commitment to a comprehensive approach towards business growth and investing in technology.
