Inter & Co. Inc. Class A Common Shares

Inter & Co reported second quarter 2026 results with total net revenue of BRL 2,637 million, representing 31.7% year-over-year growth driven by credit expansion and interest margin improvement. Net income reached a record BRL 421 million, up 34% from BRL 315 million in the prior year period, while return on equity expanded 240 basis points to 16.3%. The company achieved a net interest margin of 10.1%, surpassing double digits for the first time, and an efficiency ratio of 42.1%, an all-time low. Management highlighted that the company reached capital neutrality for the first time, generating more capital than it consumes for organic growth, with a Basel ratio of 14.4% at the banking subsidiary and 19.3% at the holding company level.

Inter & Co. Inc. reported quarterly earnings of $0.19 per share, beating the Zacks Consensus Estimate of $0.17 per share by 11.77%. Revenue for the quarter ended June 2026 reached $521.81 million, surpassing the consensus estimate by 1.95% and up from $353.55 million a year ago. The company has now topped consensus revenue estimates in all of the last four quarters. Shares have lost about 32.8% year-to-date, underperforming the S&P 500's 13% gain. The current Zacks Rank for the stock is #3 (Hold).

Inter&Co reported record second-quarter results, achieving its Rule of 50 target as net income reached US$81 million, a 34% increase from the previous quarter. Total net revenue grew approximately 32% year-over-year to US$509.5 million, while return on equity hit 16.3%, combining to surpass the 50% threshold that signals both high growth and profitability. The efficiency ratio fell to a record low of 42%, with expenses rising only 19% year-over-year, well below revenue growth. Non-performing loan trends remained manageable, concentrated in private payroll loans and credit cards, in line with portfolio expansion. The company highlighted a 29% year-over-year increase in its credit portfolio and an 11% rise in loans per active client, reflecting deeper engagement across its 45 million customers.

Inter has launched its wearable payment line, the Inter Ring and Inter Wristband, in the United States, enabling contactless payments without a phone. The devices use passive NFC technology, are water-resistant and battery-free, and are activated once through the Inter App. The ring comes in gold, silver, rose, black, and gray, while the wristband is available in black, orange, and white. Payments are an extension of the customer's existing Inter credit card, sharing the same limit and due date, with transactions protected by tokenization and encryption. The wearables will be initially available to a limited group of select Inter customers, with a broader rollout planned for later in 2026.

Inter & Co. Chief Financial Officer Santiago Stel said the Brazilian digital bank's focus on disciplined, profitable growth is delivering results, with 2025 profits hitting a record and customer numbers rising to more than 44 million from 18 million at its 2022 NASDAQ listing. The company recently opened a U.S. banking branch in Miami, authorized by the Federal Reserve and the Florida Office of Financial Regulation, to serve Brazilian, Argentine and other international clients with remittances, cards, mortgages and brokerage access while lowering overall funding costs. Stel highlighted the 'Rule of 50' framework targeting combined annual revenue growth and return on equity of at least 50%, with a longer-term ROE goal of 28% to 30% by 2029, and noted that risk-adjusted net interest margin expanded from 3.9% to 5.9% despite a tougher macro backdrop. He pointed to a funding cost advantage at 64% of Brazil's benchmark CDI rate, a loan-to-deposit ratio near 80%, and funding of 74 billion reais in the first quarter of 2026, up 25% year-over-year, supported by a deposit franchise processing 8% of all Pix transactions in Brazil. Looking ahead, Stel said the bank will continue scaling its private payroll lending product, which reached a 2.5 billion-real portfolio and roughly 600,000 clients within about a year, and leverage its AI platform Seven, which helped lift the efficiency ratio to 43% in the first quarter with gross revenue per client of 57 reais against a cost-to-serve of just 13.1 reais.

Seeking Alpha analysts Labutes IR and Christopher Davis shared their current top bank stock picks. Labutes IR highlighted U.S. Bancorp for its above-average dividend yield and solid growth prospects, and Citigroup for its ongoing restructuring that should support higher profitability and a gradual valuation re-rating. Christopher Davis called JPMorgan the gold standard among large caps and also pointed to Goldman Sachs, while noting discounted regional banks OceansFirst and Farmers and Merchants Bancshares. He additionally flagged Brazilian digital bank Inter & Co., trading with a 0.2 PEG ratio and 40% EPS growth, as offering a very favorable risk-reward near $5.