Inter & Co, Inc. (INTR) Earnings Call Transcript & Summary

Hello, everyone. Welcome to 2021 Inter Investor Day. We're recording from IM Designs' studio here in our headquarters in Belo Horizonte. As you might recall, we just acquired 6 months ago, IM Designs, the best AR, VR, XR company in Brazil. So on the next couple of hours, we're going to share a little bit about what we have accomplished in 2021 and what is ahead of us in 2022 and more years to come. I would say that first, 2021 is a year to celebrate. I would say that we were established 26 years ago, back in -- 27 years ago, back in 1994, but 2021 was a great year for us. And just one easy way for us to illustrate about this important year, it's about our follow-on offering that we did back on June 2021, to us, our fourth offering on the capital markets, but by far, the most important and the biggest one. We raised BRL 5.5 billion, equal to USD 1 billion primary offering, to propel the growth of the business and to have a very sound balance sheet. I would say that for us to conquer this very well business -- this very good business model to position ourselves as the best and probably the biggest true digital bank in Brazil, we need to have a combination of 3 things. I would say that we need technology, we need growth, and we need balance. I'm going to highlight a little bit of these 3 important elements in the next few minutes. So let's start with technology. As I'd like to say, the best way for us to emphasize how good we are in the use of technology is to say that we are the only true Super App on the western worlds. We're having many different products, many different features in one single app, not in two, three, four different apps. And for us to get there, we need to use all the cloud-native and scalable architectures to leverage our culture of innovation and centricity-powered operational excellence. Only on 2021, we launched 27 new versions for our app. On this 27 new versions, we have more than 1,300 microservices running simultaneously to deliver banking, nonbanking products: loans, investments, insurance, shopping, Intercel, FX and so on, so this is something unique in the Brazil market. And also the version 11.0 of our Super App is coming very soon, actually next week. And I would say that an image or a video is better than 1,000 words. Let's take a look on this version. [Presentation]

About growth I'd like to say that you need to have a very good product, a very good offering, but you need to make sure that a lot of clients will use it. And we have been able to conquer, to deliver this growth. If you think that we started 2016 with, I don't know, 8,000 clients and on 2021, we increased almost 100% the number of clients, I would say that is a very important achievement. And until the end of the year, we will hit 60 million checking account holders as we promised last year. So we have been delivering what we promised to our shareholders. This is very important. But this growth, it's important to come also with a good monetization on top of the clients, and we have been able to deliver that. So we see an important monetization, a very good ARPU for all of the clients. But not only the ARPU, if you think about the total revenue for Inter, we're going to increase threefold in 2021, so from BRL 1.1 billion to something close to BRL 3.1 billion, BRL 3.2 billion in 2021. Also, we need to grow, but we want to make sure that we have happy customers. They need to use our products. They need to be happy. Therefore, they are going to refer our business to their relatives, to their friends, and therefore, our CAC is going to reduce. And we have been improving our NPS during the year of 2021. It's a good improvement actually. And we have a very important metric that combines NPS, Reclame Aqui, our reputation business in Brazil, and also some benchmarks on the Brazilian Central Bank, and we have been able to improve this KPI during 2021. Also, we grow with efficiency. Our cost to serve reduced quite a bit on 2021 because of the technology that we use to serve our clients. Also, let's talk about balance. For us to have a balanced business, we need to have a diversified business. We need to have all the banking licenses. We need to have a sound balance sheet. So it's a very important thing for us to grow in a sustainable way and to promote the business ahead. And when you think about this slide, we see that we consider ourselves the true -- the only true digital bank in Brazil. With this unique position, we can have a very good deposit base. So we need to remember that we don't have only clients, we have checking account holders, so we can use the deposits to lend the money for our other clients and therefore, to grow our credit portfolio. And we have seen that our deposit base rolled a lot in 2021 as well. But also, we don't have only one product that generates revenue for Inter, we have a diversified revenue stream in the diversification between NII and also fee income. So we see that the revenue increased a lot in 2021. Our ARPU increased, but not only that, our revenue, as I told you before, increased 3x. On the NII, you have 5 key credit portfolios: Mortgage; payroll loans; SME; credit cards; and other business. If you skip to the fee income, we also have 5 important products that generate already. We're talking about interchange, floating, marketplace, investment and insurance. So we're talking about 5 NII generators and 5 fee income generators. This is how diversification is. We are more protected today -- ups and downs of the economy, we're more protected to any changes on the regulatory framework. So this is very important to have a balanced business. And when you think about 2022 and more years to come, people always ask us, what's next? What's [indiscernible] is up so [indiscernible] culture, what you're thinking about 2022? And we realized that to have achieved a very good position here in Brazil. We have a very good product, and we believe that it's possible to go abroad. It's possible to pick this business, this product, this project, this company to other countries. And we decided to go to U.S. So we just acquired USEND, a very innovative impact in the United States, with a good combination between technology, talented team and regulatory licenses to run their business. So I believe that in 2022, we're going to really start to increase the land over there, and also to try to replicate many features that we have in Brazil, also in the United States. We think that the United States is not going to be the last country where we're going to expand. There are more countries to come probably in the second half of 2022. Here, I'd like to show you a teaser of the USEND app. I would say that's -- we believe that for the first half of 2022, if you take a look at the USEND App, it's going to look pretty much the same as Inter app. But as of today, this is what we have already. So I'm going to play the videos. First one, the second one here, the third and the fourth video. So we can see that we already have our gift card initiatives. You can see here our shop initiative, the USEND shop. You can see here the day-to-day banking capability for the USEND app. And also you can see here on the screens, on the videos also, the remittance business. It's a very important -- which is actually a core business for USEND. So this is a little bit about how it looks like today. But as I told you, within 6 more months, it will be more like Inter app. So just to emphasize, we're very excited with the USEND acquisition and what it's going to deliver for us in the U.S. market ahead. So I would say that when people ask us, what Inter highlights adapt to the Super App that simplifies people's lives, I would say that now I'm going to hand over to Priscila, our CMO. She's going to share with us about growth, about products, about how to serve the clients. Then we're going to have a break. And after the break, after lunch time, we're going to deep dive on our 5 verticals: credit; day-to-day banking; investments; shopping; and insurance. I hope you to enjoy our 2021 Inter Investor Day, and I'll be back soon for a Q&A session about this first topic of our presentation. Thank you very much.

I'm Priscila Salles, Inter's CMO, and I'm here to tell you a little more about our marketing and customer experience initiatives. Growth is in the center of our sales and marketing, combining businesses, needs and goals with a daily driven mindset. The growth teams handle all media channels and marketing campaigns, bringing forth different strategies from top to bottom funnel from acquisitions to retention and loyalty. The main goal is to scale, but sustainable growth strategy also drives better lead quality and user activation. Therefore, the Squads manages all communications of a specific product line from the development of customer journeys to definition of product value, execution of crowd motions, actions and so on. In 2021, we grew the marketing and growth teams, adopted agile methodology and a goal-oriented approach, created new Squads for more than 10 total, each composed from 6 to 12 members, diverging from paid media, designers, content and growth analysts. It's Squad is responsible for all campaigns and marketing actions from specific products, and it's held accountable for the same objectives and goals with the product teams. Their mission is to elaborate and implement the product roadmap, sustain and be the guardian of the product positioning aligned to our brands, all media channels with a customer-centric approach to deliver OPRs. We are close to reach 16 million customers on our base, close to 100% year-over-year growth, and some of the reasons are: recurrent member gap members strategy; built internal teams for organic traffic combined with parts oriented by product line; and paid media channel expansion and mixed modeling. By the way, I'm proud to introduce our new brand ambassador, Ivete Sangalo, one of the most famous singers in Brazil. She is going to be part of our marketing campaigns, and the first video will be released in a few days. Let's take a look. [Presentation]

Picking up here, our business accounts have increased more than 60% year-over-year. The growth follows a new strategy, branding, enhancing strong points and repositioning the products with Brazilian markets build new teams focused on marketing products and insights from the individual account holders. Let's talk about engagement and segmentation during our Black Friday. Working together with our mass channels, the growth team developed a real-time audience to deliver campaigns as sales partners disclosed their best offers. Being agile made all the difference, since we wanted to get customers browsing specific products they wanted. Working together, CRM and data teams sent over 90 different campaigns on Black Friday's first 48 hours, all of them targeting a specific audience that ranged from beauty items, robot vacuums and smartphones. Thanks to this long-tail approach, we were able to sell over BRL 200 million in Black Friday day. I also want to talk about live commerce, a feature that allows customers to see live videos inside the app and easily buy their favorite products without leaving the streaming. It has been a very powerful tool to attract shoppers, especially when we make exclusive offers such as the Orange Box, our surprise box, only available during the video stream. Helping our customers to deal with their revenues and savings is a big part of Inter's mission. Over the years, we have been working to help people invest better, accessing content on our blog or even inside our app. Inter Week is a complete investment journey based on financial content and domestication. It is a 5-day event, during which customers can learn about new products and get the chance to start investing right away and get rewarded with cash back and credit card upgrades. Another spec of Inter Week that I love is that we don't necessarily give prices to the biggest investors, but to those who diversify their portfolios. So we basically produce a series of live financial content on our YouTube channels, from basic to the most advanced products, and gave customers the opportunity to start investing and get extra cash back on Inter Shop, and even a credit card upgrade for those who completed the journey. This was Inter Week's second edition, and we already managed to see an amazing growth rate. The number of customers enrolled grew over 300%, and the amount of clients that concluded the journey grew more than 600%. Each customer invested around BRL 5,700, and all of them together made more than BRL 207 million during the 5 days of the event. Insurance is something we all need, but are not always aware of. It is hard to see someone looking forward to buy the latest insurance product on the market. Even -- this makes insurance selling even more challenging. But the good news is that our selling opportunities grew side-by-side with our product portfolio. Being the largest insurtech in Brazil, Inter Seguros has a complete set of products that goes from auto insurance to smartphones and house insurance. This allows Inter to work not only awareness and of conversion campaigns, but mostly context for life app experience. Let's say, you just spent most of your savings to buy the latest smartphones on the market. Since you invested so much effort on that purchase, it would be nice to have a backup in case you lost or broke your phone, right? So when clients buy smartphones on Inter Shop, we always remind them that they can insure you for small, mostly fee. We do a cross-sell experience on checkout, as you can see here. The same goes with car insurance, health insurance and other products on Inter Seguros portfolio. And since people don't usually know how to use insurance and assistances, we also give our clients some free trials, so they can figure out how it works. And therefore, most of our clients keep it after 60 days, allowing us to expand our customer base more than 17x. From growth to experience, let's talk a little about CX. The customer experience structure is basically deployed into 3 layers: cognitive UX in app; converging all features; and picking transactions, which also eases dropping customers to check, which represents over 70% of human interactions. Our product creation process starts gathering all these parts to aim simplicity and convenience. It means to converge the whole journey, in-app and self-service, but also using AI to support the interactions that need special care. Efficiency is another important driver to keep solving the large portion of the main contact. Transferring empowerment to agents, we can solve their requests without transferring them to back office. These results come from a collab movement throughout Inter, which leaves all the air to make their decisions and design products around satisfaction form. Since Inter is a fully digital platform, we created our own rationale in order to measure the customer satisfaction based on either NPS, app reviews, Reclame Aqui, a Brazilian reputation website and complaints regulator. As you can see, we've been reaching high grades in all KPIs. And that's it for today. I would like to thank you for being with us, and I'll see you at the Q&A. Thank you so much.

Hello, again. It's a pleasure to host everyone in our 2021 Inter Investor Day. And here, I'm sharing the stage Helena, our CFO and Head of IR; and also Priscila, our CMO. The idea here on the Q&A section, we want to go through -- actually, we can go through some questions about 2021 and about the verticals for inter. But it is to emphasize and to explain you about what's coming after, what we're going to do and to deliver in 2022 and beyond. Helena, she is going to coordinate all the questions. I believe we're going to be here for about 30 minutes. And later on, we'll have a break. And after the break, we'll be back with the 5 verticals for inter. So Helena, if you can start with the Q&A, please.

Yes. Hello, everyone. Nice to be here with you again for another Investor Day. So João, we got a few questions here, asking about our pipeline of products for 2022 as well as the opportunities for growth in the U.S. If you could comment on that, please.

Okay. Yes, sometimes I have read -- answered about this question, about new products. I would say that as I normally mention, we are so -- a complete platform that's hard to launch new products every single year. I would say that as of today, we have hundreds of products. But we're not stopped -- we don't stop to innovate. I would say, Helena, that for 2022 ahead, for sure, we're going to launch new products. We're working some ideas here, but I would say that mostly on new features. So how can we improve the UI/UX for our investment platform? How can we make our lending capability easier for our clients? How can we, for instance, improve our Intercel service? So I would say that we have a lot of things on new features. And as I mentioned earlier, we're going to keep launching many different versions for our app. So I would say that our clients can expect a big improvement on 2022 and ahead. Also just connecting with the United States. I would say that our app, the USEND app in United States, it's a very good one. It's a good design, good UX, good UI, but they don't have as many products as we do in Brazil. So I would say that the agenda for 2022 is really to replicate our app, all the features of the products in U.S. We know that for us to achieve that, we need to have sometimes the license, for instance, the broker-dealer abroad, that we're working on it right now. We need sometimes to have some improvement on the technology, but we are very advanced in integrating our technology with the USEND. We are cloud-based, they are cloud-based. We have everything in microservice, as I mentioned earlier. So I would say that we will make that integration easier. And therefore, I would say that for the -- our U.S. app, we have -- there are many new products ahead.

And a question related to that, that we got here was, when are we going to be able to share some of these numbers with investors and analysts in general? And how much should we expect to see of these revenues representing of our total P&L?

Okay. We haven't given a guidance to the market regarding our U.S. operations. But what we see, we have, as of the 300,000 clients, 150,000 active abroad, in the United States. We have a goal here at Inter for our budget for 2022 to hit at least 1 million clients abroad, in the United States. I would say, that's feasible, not easy. It's a new market that's feasible. And I'm sure that Priscila (sic) [ Helena ], we're able to bring 60 million clients in Brazil, we will be able to bring these 1 million clients until the end of 2022. And on top of monetization, it's important because not only do you want to have a diversification in the number of clients in Brazil and in other countries, but we want to also have a diversification of revenue. And our goal here, it's a goal, not a guidance, but we are looking to have at least 50% revenue diversification on the next 4 years. So we want to have -- of course, we're going to keep growing our revenues in Brazil. As I mentioned earlier, we increased threefold in 2021. Of course, we're not going to keep increasing threefold in the years to come because it's not sustainable, but we're going to keep increasing. But I would say that the growth in the revenues -- the U.S. denominated revenue is going to be in an exponential way. So our goal to have 50% breakdown between, I would say, U.S. denominated revenues in Brazilian and denominated revenues, it's a goal and it's feasible to have within 4 to 5 years. So I will see that by end of 2024 and of 2025, it's possible to achieve that goal.

Thanks. Pri, we have a question for you here. It's regarding engagement of our clients. Like how can we sustain the engagement of our clients and retention in a scenario of more competition that we are seeing today?

Okay. So for this year, we came up with this new strategy for our marketing team. We began with our -- we have more than 10 Squads, and they are working on engagement, activation, retention, loyalty, member get member and so on. And so -- let me give you an example. This year, we combine this strategy with our marketing and our credit teams. And for our credit card, we came up with this new strategy. We combined more limit to the customers that need it. We combined more benefits with cash back. We combined more limit inside our app experience for Inter Shop. And when you look our cohorts, you can see more engagement for these types of customers. So we have much more people using our credit card. It could be our gold credit card, our platinum or black, but we have much more clients using it right now. And we actually did some win-back strategy as well. Some people that used to have our credit card in 2019 and stopped, they came back, and they are using right now. So we have many strategies on Inter Shop and other product lines. And another thing that I want to talk about is our CSI -- our KPI for our CSI. We have increased it in the past few months. We used to have -- right now, we are on 3.4 for our CSI. In a couple of years, we will be on 5. And when you look to our cohort -- our latest cohort, our customers, they already have 4.5 CSI. So in another, I think, 2 years, we'll be able to achieve 5 on our CSI, right? João Vitor, I guess it's really -- it's -- besides the marketing is a busy market, I think we're going to be able to achieve that.

Yes. If I could add, Priscila. Well, I'd like to say that the market is noisy. The competition is there, but having the best product, the best value proposition, we can fight this competition. And the numbers can show that we have been able to do that. And I'm very excited to pursue at least 5 products per client. I would say that with the new futures with more improvements, we can get there. And of course, when we improve CSI, we improve monetization with no more -- without adding costs. I would say that -- I keep saying for the past, I would say, 6, 9 months that as more as we evolve in our data analytics, and we're spending a lot of time on that, I'm spending a lot of my time on that, we're going to be able to improve the CSI. So that's the way to go. Again, we have these 5 active products, at least per client. So very excited that we have the tools, we have the levers to pull and to get there.

And we have a couple of questions here as well, asking about our migration to NASDAQ and the releasing of the company. I'll take the chance to answer this one. So we have been working on our corporate reorg for quite some time now. Of course, we are now back at the whiteboard, right? Like we are -- we have started to do meetings with advisers and all the different stakeholders that are involved in this corporate reorganization, and we are very confident that this is one of the key deliverables of this year. I believe that we've learned from the process we understood what were the effects that although we had a very large approval of the transaction on our EGM, then from our shareholder base from the float of the company, we were not able to conclude the migration, the home migration. So we understand these issues now, and we are working to overcome them. This is probably something that we will have another transaction ready to come to the market with. Still in this first Q, this is really strategic for us, and we are really working to finalize it as soon as possible. Going forward to another question. Sorry. So we have a question here, João., asking us to talk a little bit about efficiency and how we see revenue growth versus OpEx, if this is a year that we will see more efficiency in our business.

Okay. When I was commenting about the technology that we use inside Inter. I think that I emphasize about efficiency. I would say that sometimes, we have an efficiency ratio that's not good at first look, but I would say that it's a misleading information. We see that we have put -- have been adding a lot of products. We have been adding more clients, more employees. So sometimes our efficiency ratio doesn't look good. But I would like to say that we are a very efficient company. So when you think about the number of clients that we serve per employees. When you think also the revenue growth per employee, I would say that, as I mentioned, we grow the employees 80%, but we at the -- we increased the revenue threefold. So this is an easy way for you to see the efficiency kicking in. I'd say that from 2022, we don't expect to grow the number of clients as fast as we did on 2021, on 2020 on 2019. Of course, we're getting -- we're becoming a big boy. So it's hard to double every single year. So by growing more than 100% this year, Helena. For sure, we will see the efficiency ratio going down. So I'm very confident that we will be printing better efficiency rates ahead. Maybe it's not going to be a big increase on the efficiency ratio, if you look on the accounting numbers. But if you think that, again, we're putting a lot of expenses ahead. And if you make a managerial number for that, we will see a big -- therefore, it's going to be a big improvement for 2022 on the efficiency ratio.

Yes. Complementing on that as well. When we look at cohorts, we see that other cohorts have a higher monetization and usage of our products activation rate. As [indiscernible] was saying about the CSI that other cohorts have already more than 4 products as an average used product per customer. This is also a reflection of higher monetization for older cohorts. As Ron was mentioning, not being like not growing -- continue to grow 100% year-on-year. There is a dilution of these expenses from getting these new customers. And then there is also a larger revenue for the older users, which also give us a good reflect on efficiency ratio, and then revenue is growing more than OpEx. This is something that we also see as a trend. Now I have another one, and it's related to João again. It's related about -- sorry, it's related to this new scenario. And when we see a different scenario of higher interest rates for 2022, and how should that impact the ARPU. So the fleet in ARPU from NII and from the fee business.

Okay. I don't see -- despite a tough macro environment ahead, I don't see a big change on the breakdown between fee income and NII income. The reason for that is because even though we have this tough scenario, we are not much leverage on our balance sheet. So again, I would like to say that we still have less than 1% of the payroll loan market in Brazil, as the 1% of the mortgage market in Brazil. And I'm talking about these specific products because they are very well collateralized. So even in a tough market scenario, we can grow with profitability, but also without delinquencies. So we're excited to keep growing our credit portfolio around the [indiscernible]. Of course, we need to manage between these or that credit portfolio. And again, that's the benefit of having 5 different credit portfolios within Inter, not only 1 credit portfolio as some competitors. So having this ability to grow faster or slower in this and not on that one, it's very helpful. Not only because of the macro conditions, about delinquency, but also about interest rates. So we have different credit portfolios with longer duration, short duration, so we can match that with our deposit base. And again, on that scenario that the Selic is going up, it's very important to have a very good funding capability, and that's what we have covered. As of today, I believe we're going to keep improving our funding capability [indiscernible] and the fact that we have demand deposits, which I like to say that are true deposits, not time deposits, it's very important. And the only reason -- the only way for you to have demand deposits is really to be a true checking account, not a wallet. Not [indiscernible] as people know, in Brazil, payment institutions. So I would say that we are in a very balanced position to keep growing NII even with effect of scenario. Of course, on the credit card, for instance, which is unsecured, I believe that you need to be more careful. I'm not saying that we're not going to grow that credit portfolio because we're starting. So 2 years ago, we did not have a credit card portfolio in place. So we're going to keep growing that, but maybe in a slower pace than we did in 2021. So I'm very confident that we'll be able to keep this good breakdown between NII revenue, fee revenue for 2022 and also for 2023. So I believe that we position ourselves to have the right to pursue that. I would say that we have the levers. It's our call. We don't -- we're not relying on the market. We're not relying on whatever. We have the levers to pull on our hands, so we can make that happen.

Great. So a final question here and because we have many other questions. But since we are going to have different business verticals talking this afternoon, I'll leave the specific questions of each of these different business verticals for later. But a final one for us to finalize this first session of our Investor Day, maybe to both of you. So it is a question regarding U.S. strategy. And what is our strategy to differentiate ourselves from the players that are already in the U.S.? And for newcomers that -- such as us that wants to go to the U.S. as well?

Okay. Please?

First of all, something that made us like win the market in Brazil is our customer experience. So we really think about the customer here. We actually listen everything that they're saying. We actually look forward their feedback, so we can actually make our app even better. And so last year, we used to have around 70 points for our NPS, right now, we are around 83, 84. So that shows how we're increasing. So when you compare Inter to another bank, it's like we can't actually compare because we are on the top of it. We actually can compare to tech companies because that's what we are. We actually think about customers all the time and not only NPS, but when you look at our app reviews as well, we have like 4.8 on App Store. We have around 4.6 on Android store. So we actually think about customers all the time. We combine our marketing team with our customer team, with our UX team to think about the most enjoyable experience, the most enjoyable journey inside our app. And that's a thing that we can do in United States as well because we did in Brazil, we got the market here. We did a lot of things. We grew on the word of the mouth, and we actually think that we can do this in the United States as well.

Yes. What I was going to mention, besides what Priscila just described. If you think what we did in Brazil, and I believe that everyone on the audience know that the Brazilian retail banking industry is a very competitive one. Not now, it used to be for the past 10, 15 years or so. We are competing with big guys with big balance sheet with big brand recognition, and we're able to grow from 0 to 16 million clients within only 5 years. And how we were able to do that? We have the right strategy, the right product, the right technology. We were taking care of the clients and then the very proposition is good and the market comes to you. And I would say that United States is the same, despite being the biggest country in the world, but over there, you see the same situation. You see big banks relying on brands, relying on huge fees with old-fashioned IT systems. And I would say that it's like a deja vu when you think about what happen in Brazil. And when I -- we see that USEND deliver us all the tools that we have to compete. So the license, the technology and the entrepreneurship of the team over there, I would say that we will be able to compete there, to achieve. And last, we need to have the right plan as we did in Brazil. So let's look for the guys that are not happy in their -- with their banking relationship, and they came to us. United States, it's a big country. 320 million people live over there, but to have close to 60 million immigrants living over there. These guys, they need to go every single day, every single week to discount their checks, their payrolls and pay huge fees because they don't have a checking account or a good checking account or a free checking account. So we believe that there is a huge addressable market over there that we want to fuel. I'm very excited with the possibility of USEND. And it might look impossible, but it's very, very feasible for us to grow and to compete over there.

Sometimes it feels like people don't even know that they need our product, right? But once they have the full experience in one single app, it makes the whole lot of difference. And although we might have different startups that are doing something similar to what we are doing as a whole, then like it makes sense to have everything in one single app. Okay, everyone. I think that -- with that, we finalize this first session of our Investor Day. Thank you, everyone. We will have a break, and we will be back at 1:40 p.m. Brazil time, 11:40 a.m. Eastern time. We'll wait for you for the next session, right? [Break]

[Presentation] Hello, everyone, and thank you for being with us at our third Investor Day. My name is Alexandre Riccio, and I'm a Vice President of the company, and we'll talk about credit. Credit is where it all began. And was perceived internally and externally as our most challenging avenue when we think about growth and to deliver the expectations of the market. The challenge was not due to the addressable market, but due to the innovative distribution channel Inter wanted to use. Successful players up to a few years ago only have success distributing credit through credit branches and through credit brokers. And at Inter, we wanted to do it all digitally. That was like our proposition there. Whether we think about growing the portfolio, improving credit quality or maintaining credit diversification, we could not think about an easy path. With a very strong team and by tapping on the strength only viable due to our digital banking franchise, including but not limited to our funding capabilities, we have been able to deliver surprising results quarter after quarter. From a growth perspective, looking back at '18, we had a goal of 45 -- of growing 45%, and that seems almost impossible. If we think about doing it with the portfolio characteristics that we had in the past, it seemed even harder. But history have been showing us wrong, so growth has been consistently above 80% levels leaving no portfolio behind. So we were able to grow in each of the portfolios that we've done in the past and that we have the confidence to grow, but didn't know if it would be possible and that's making us very proud of this avenue. I'll talk a little bit about the portfolio itself and the size, and Inter stock. It's very nice to show that we have reached BRL 16 billion in the third quarter of 2021. That's a portfolio that grew 116% in the last 12 months, and we're very proud about that. This growth came with a very healthy NPL trends. So our NPLs came down 0.7 percentage points. And we had an upward trend on the coverage ratios. So basically, meaning that we have more provisions to cover potential losses in the portfolio, the coverage ratios moved up by 15 percentage points. Going into each of the portfolio specifically, I'll spend a little bit of time on the collateralized line which are the other portfolios that we have, and then I'll spend more time in the credit cards, which is the one that grows faster. So starting with the payroll loans, we grew 130% in the last 12 months delivering a lot of success in the strategy of raising our average ticket and bringing a more digitalized client profile. So we focused on federal, public entities because in those entities, we can find a lot of clients that have higher income, which is part of our focus for this portfolio and we delivered the growth primarily on those entities. NPLs behavior have been positive. And we will maintain our focus on expanding our market share on this business. We were able, just to mention, to grow from 0.6% share to about 1%, and it's a very good milestone for us because it gives us confidence that we've gained traction. So just for instance, in this portfolio, we spent a few years around 0.5% market share. So reaching 1% is a really good signal that we bring. And also that gives a lot of confidence for the years ahead, that we'll be able to keep this traction and keep moving our market share higher and higher. Talking about SME loans, we saw also a very good growth there, 162% in the last 12 months. I'd like to highlight that SME is a segment that suffers a lot in Brazil. They pay super high fees. They pay super high interest rates. So they are poorly served. And we believe we can do a lot to this public. So growing 162% in the SME portfolio is a very positive results that we bring that we've been able to address this market. And we think there is a lot to see here in the future, given all the checking accounts that we've been able to open and all the activity that we see in this checking account. So we're beyond 1 million business checking accounts and understand that part of the future of this portfolio will be on serving these clients. And as we normally do for SMEs, we will do it with a strong focus on collateral. NPLs and spreads for SME loans grew very healthy, and we expect it to stay there as we move forward. In real estate, we continue to grow at a strong pace with continuous improvement in credit quality. NPLs keep improving. And this NPL improvement is a lot given by having a stronger relationship with the clients. So more than 60% of the underwriting that we've been doing on mortgages are for clients that are already checking account holders, so we stay closer to this client and being closer and serving these clients for other purposes, we're delivering better NPLs, a better credit quality. We're very proud about that. One point that's very important to mention here today is that it's something that we're working on for all the portfolio. So given the lightning fast Selic rate hike that Brazil experienced in the last few months, a lot of our focus is turning into pricing. So if by, say, 2, 3 months ago, most of the focus was on growing the portfolio because we have super low Selic rate, and we had an inflation that didn't show signals of being persistent and the Central Bank still didn't have this approach of increasing the interest rate superfast. Now we know that the situation is different. And for that reason, we are perceiving this pricing adjustment. So we should expect interest credit appetite to remain high, but we will be adjusting pricing in all of our portfolios to recompose spreads as much as possible kind of according to what we see happening in the market, so we'll follow this trend. And as the months go on, we will see these spreads coming in our net interest income and coming is our net interest margin that should start to recover. Important to mention also still on the collateralized portfolios on real estate and on SME, the growth was brought us basically a market share that's more than doubled in the last 12 months. This is also something that makes the teams at Inter very proud about this growth and about delivery. Important to highlight on all the portfolios discussed up till now that despite the fact that we explore the usage of data as a key component of credit underwriting, the real guarantor of the low NPLs is about the collateral. So having the collateral gives us confidence that despite a challenging macro environment, we can continue growing and we can continue growing at a very decent NPLs. And even if the NPLs evolve a little bit, they move up a little bit, we have the collateral to be -- to guarantee that we're going to have a controlled loss. So we're very good on that, and we feel confident that we can move forward for 2022 with growth. So moving to credit cards. Credit cards is really the most challenging credit portfolio for us to grow. And it's the one that has been driving a lot of attention, not only internally but also externally. And the reason here is it's not collateralized. So obviously, there is a higher risk, but it's also a product that drives engagement, a product that Brazilians like and the product that we see a very, very good room to grow and to evolve in the relationships of the clients to monetize, to bring interchange fees, to bring interest and things like that. So we are investing in 3 pillars to keep growing on this product. These pillars are marketing the product itself and their credit underwriting models. The combination of these 3 has allowed us to grow stronger on the credit card portfolio than on any of our credit portfolios. So we've been increasing the penetration of this product in our base, and we feel good about it, and we feel good about the speed that we've been able to do it. In the 12 months that went from September 2020 to September 2021, our portfolio went from around BRL 1.3 billion to BRL 3.8 billion, that's a threefold growth showing that the pillars are really working well together. Growth has been followed by a consistent transaction growth. So our transactions in credit cards alone went from BRL 550 million a month to about BRL 1.7 billion if we compare September 2020 to September 2021, also like above threefold growth there. Same thing that we're experiencing in the overall card transactions, which is positive, but we're proud to be closing the gap that we used to have between debit cards and credit cards. For those that follow us for more time, you may remember that we used to have like 70% debit card transactions, 30% credit card transactions. As we started driving focus on the credit cards, like I said, in marketing, in the product, in the models, we've been able to close this gap. And today, credit is slightly surpassing debit volumes and debit volumes keep growing as well. So things are going really, really well in the way we would like them to go. Going a little bit into the marketing perspective of the credit card, we've been able to really market the product within our client base and doing cross-selling. The engagement level we have is with the clients despite having credit card or not is proving to be efficient on converting our existing base to credit cards. So we're showing a slide that shows the monthly active users per cohort on the credit card specifically. And we -- and what we can see there is that in every cohort, as we engage with the clients, as we underwrite a credit card limit or as we improve or increase the credit card limit, the clients engage, revenues increase and the number of clients using the product increase, and this is really, really positive for us. As we evolve our credit card models and we close the credit -- the product gaps that we used to have, credit card penetration is growing tremendously in all these existing cohorts, that's what we're trying to show in the chart. Studying our old cohorts, specifically looking at those older than September 2020, we saw even greater evidence that this engagement can really happen. And the reason here is if we look back, obviously, Inter is still new, we are like, as a digital bank, we've been opening accounts only since 2016. But the nice thing is that if we lock in this date of September 2020 and go back like a year or more, we can see that we can still engage this base. The good thing here is that a lot of the growth that we need to deliver in the past is already at home. They're already at Inter. They're already our clients. They are interacting and that should make growth easier. And we're excited to be delivering and to do all these marketing exercises to push revenues up to push interchange fees up as these clients transact more with Inter. Thinking about one of the bottlenecks that we had, which was giving out credit card limits, we've been working on 2 fronts, basically. So one of them is the scoring models, and the second one is on the limit size policies. We have evolved from being like really passive on underwriting credit card limits to being active. So we evolved our application model. The application model is what we use to say yes or no to a client or a credit card limit when they onboard. So this model today can improve already close to 25% of the clients. In the past, it was much lower, and we did that through improvements in the model and not by lowering the bar for credit. That's really working well. We also put in place a behavior model. And this behavior model basically rerates the clients as they use more and more Inter. We learn about the clients as they interact with us. We learn about the clients as they use our debit cards. And with all these information, we can do these reratings and these reratings mean, in other words, credit card approvals. With these approvals, we've been able recently to increase percentage of credit card limits approved per cohort to up to 50% already. But there is a lot of cohorts to still explore on this front. So as I said, approval is still far from full potential. A lot to do there, a lot of growth to be observed on past cohorts, meaning that there is a lot of work to be done to explore the install base capacity that we already have. Sizing limits improved a lot. So like I said, we have the approvals, yes or no for credit card limits, but we also have the size of this limit. In the past, we had a standardized practice of giving out low credit card limits to begin with. And what we've learned in the past 1.5 years or so is that this is not enough. You really have to understand each of the clients, you need to understand each profile and some clients, you need to start at a higher credit card limit. So to do that, we've spent a lot of time looking at a mix of credit scoring, client segmentation, income model and some other features that allowed us to be more assertive as we underwrite the size of the limits. So we focused a lot on that, and we understand that it is part of what's drove success in 2021 for our growth in this portfolio. Looking for 2022, we're very excited to continue executing. And this time, I'll say that we're excited to continue executing on all the credit lines. So credit card will still be a growth driver here, but the collateralized lines will be -- will continue to be a focus. Our team is ready to do it. We will keep doing it. One point that we are aware of and that we are looking at is the macro scenario and the potential implications on NPLs and on defaults. So what we're doing there is we're adjusting the bar for credit. As I said, credit underwriting, specifically in credit cards, where we don't have collateral is based on credit scoring. And what we do there is we raise the bar. Let's say, if we split the clients in 10 segments, on normal conditions without the macro channel -- without a challenging macro scenario, we will stop at, say, 6, from 1, 2, 3, 4, 5, 6, we would get a yes, the other ones no. And what we do is we move this bar up and we can say, say 1, 2, 3, 4, 5. Things like that, that's how we're thinking about it, and that's how we're executing the business to prevent losses in 2022. And finally, to finish representing our entire team, I would like to say thank you for all the investors that have been supporting us through the years and reinforced our feeling that we're still at the beginning, but very happy to be able to serve so many clients with a product that truly delivers value to the Brazilian population. And the product that addresses not only problems present in Brazil, but problems that are present in developed and underdeveloped countries. We look forward to be together again in the future, talking about our continuous efforts to improve people's lives next time, not only in Brazil. Thank you.

So happy to be back with you with all of you. So Alexandre, thanks for the presentation. So we are here back on stage myself, Alexandre and Helena. So as usual, Helena is going to handle the Q&A. And let's start.

Yes. Hello, again. So I will start with a question that we got here. It asks about the current credit appetite. We have recently increased limits on credit cards. So what to expect for the next months? I believe Alex covered a little bit of that as well. But they also asked about what about Inter cash. Should we expect more unsecured loans to pick up?

Okay. Alexandre explained a little bit about our credit card modeling. And the 3 key pillars for us to have a sound business. So the collection, the marketing, and so I mean we're comfortable with the credit card business. Of course, we are growing step by step. This year, we grow, I would say, way more than 2020 for a couple of reasons, but mostly because we are more comfortable with the product. Probably for 2022, the pace of growth on credit card should be lower. I think that we, as Alexandre mentioned, we have a lot of clients already here. Clients that we know that you can underwrite better limits. But most likely, we will focus on the ratings 1, 2, 3 and 4 for 2022. So this is the outcome for credit cards ahead. On Inter Cash, for people that are not aware of these products, Inter Cash is unsecured business model in credit portfolio. And actually, Inter Cash it's a framework for any type of loans on top of the payroll, on top of salaries. So for instance, we can anticipate the salary that's paid at the end of the month, we can cash in for the person, for the clients in the beginning of the month. So this is one type of Inter Cash, but also, it's very -- it's starting to get popular in Brazil, the anticipation of the FGTS, which is quite like a salary. So Inter Cash is also going to be the platform, the framework for this type of product as well. So we don't believe that's going to be a huge credit portfolio on 2022, 2023. But again, it's something that we're working on to put in place.

Yes. And to quickly follow up on the first part of Helena's question. As you mentioned, the limit increases the volume of limits that we underwrote throughout 2021. And a lot of it was given to the fact that our behavior model was fully tested by about April and gave us confidence to explore a lot more clients that had been with us for more than 6 months. So that -- it's a lot easier to grow on these clients. And that's what we're looking forward to doing in 2022 as well. So exploring the potential of interest client base and making the relationships deeper. That's the secret sauce for growth in credit card with a good behavior of NPLs.

Yes. I guess that even answers our another question that we had, which was this growing credit card, does that mean that we work -- are going to grow more on existing clients or in new adds? So I guess that there is an opportunity for existing clients, right?

Yes. So there is a lot there, and we've proved it this year. As we look at older cohorts, as I mentioned in the presentation, if we lock in cohorts older than September of last year, we almost double the amount of clients that use the credit card given that they engage. They're engaged with us for other products. We underwrite a credit card limit, they engage on this new product. Looking forward, as Joao Vitor mentioned, we're adjusting the bar for the clients that will get the credit card limit to limit the losses and also doing adjustments on the credit card limit policy, the size of the limits to learn to grow, but to grow at a lower loss point. So that's the plan for 2022.

We have another one here saying that basically, industry NPLs is likely to rise in 2022. How are we working to avoid volatility at Inter?

Yes. I think that if we pay attention to Alexandre's presentation and also I mentioned that earlier on, the benefit of having a diversified credit portfolio is that exactly that. I mean, we can face tough condition in the market in a very good way. So we have the credit card, which is unsecured. And as we mentioned, we can control the pace of growth and the type of clients that deserve more or less credit limits. So it's on our hands. I mean, it's a choice. But more important than that, we still have 4 other credit portfolios to grow and credit portfolios that they are secured, such as the mortgage, the payroll loan, the SMEs here are secured and also the agribusiness loan. So we believe that even with the trend on the NPLs, mostly for the unsecured products in Brazil we had, we are comfortable to keep growing our credit portfolio for 2022. So that's how we see. Of course, on the unsecured, you need to be -- to do that with more caution, but on the collateralized, we can underwrite in a good way, good secured product. And also, we can target the best clients. So for instance, on the mortgage portfolio, we see here at Inter that most of our underwriting are for the clients rated 1, 2 and 3 on top of our 1, 2, 3, 4, 5 and 6 rating -- internal rating. And the same for payroll loans. So not only you have the collateral, which avoids not the delinquency, you might have the delinquency, but avoids the losses, but also we have a better rating for these clients. So that's how we're going to approach the market in 2022, and we believe that we can expect growth on credit portfolio without hurting the bottom line due to losses.

Yes. And also doing a quick follow-up. One product that we launched in the end of last year, beginning of this year was the collateralized -- the credit card with a collateralized CD. This product grew a lot in the beginning of the year. And then we kind of caused churn on it because we started underwriting limits to these clients that use these credit card with the CD as collateral, and we kind of cannibalized it a little bit. But this is the ideal product for a tougher environment when we think about NPLs. So it is something that we're going to explore more next year, promoting this product so that clients can. Again, on a tough environment, use a credit card with the collateral. And as they prove through behavior, we'll give them like the clean credit card limit. Another one that we got here was, is the focus on credit going to be on corporate clients or individuals?

Yes. We, today, as we mentioned, we are 16 million client retail bank business. So of course, we do have our 1 million SME or business account. We do have something over there, but not on the corporate side, but on the SME, which is growing a lot, actually. But if you fast forward maybe 2, 3, 4, 5 years, most likely, we'll see that our portfolio will be more focused on the individuals. And that's what we have been doing for years. We know how to underwrite, we know how to collect, we know how to manage this type of products. We know how to handle the ALM. We have the funding to do that. So we believe that we should be focused on what we're good doing. So that's pretty much how our credit portfolio is going to look like in the coming years.

Another one we got here, also from the sell side. As we see interest rates rising, do we expect to reprice our loans? And more specifically on the real estate loan book, what is the strategy?

Yes. So Helena, I'm going to, again, go back to my speech at the beginning. It's very important to have a diversified credit portfolio. I would say that's mandatory, not only important. And when you think about the duration of mortgage, payroll, SME, agriculture, credit card, you have different durations, but offer different indexes. So some might be on top of CDI, some will be on top of inflation. And what we see that, for instance, when you think about our SME portfolio, it's a very short-term duration. It's quite easy for us to do diversification on their underwriting because I mean every 2 or 3 months, there is a revolving on almost 100% of the portfolio. So it's easy to do that. And it's pretty much aligned to the Selic rate, so convenient to do that. For instance, on the mortgage business, we do have outstanding balance credit portfolio, the same for the payroll loan, which we can do diversification that we are actually doing. It doesn't impact a lot the revenues because, I mean, you have a longer duration. So your -- the outstanding of the credit portfolio are not -- we don't have a lot of impact from the underwriters that we're going to do on 2022. And I'd like to say that you might -- on our longer duration products such as a mortgage, you might have, for instance, you are able to put a good interest on top of clients, but if the Selic goes down in the next 12, 18 months, what you will see that most of this portfolio, they're going to suffer churn. And we saw that happen this year and the last year. So we need to balance between the type of duration, the type of underwriting. But again, we have all the levers to pull and to make sure that we can improve or also -- or maybe keep our NIMs in a good pace without stop growing the origination. So that's how we manage to do diversification and to try to follow this leaky, the [indiscernible] and these type of things. So again, having 5 different credit portfolio is mandatory for us to face this condition ahead.

Yes. And a quick follow-up. As we mentioned also, thinking about real estate during the presentation, we've been underwriting a lot in our base of checking account holders. And as we look forward, we'll think about the real estate as a product for engagement. So really looking at clients that have a deep relationship with Inter and even increasing the 66% that we are to 70%, 75%, 80%, 90% of the base of the new contracts being underwritten with the existing clients.

And as you mentioned at the beginning, something that was unimaginable when we first started the checking account, right, like the digital accounts, like this. The overlap of clients that we had that looked for mortgages was completely different then the client base for the checking accounts, something that completely changed over the past years as we increase the penetration of checking accounts that we have as a whole. Great. I guess one last one, just to finalize here, and we go to our another avenue, Inter Shop. It is -- I'm sorry. I'm sorry, I think we covered that. It is expecting on higher interest rates. Yes, we were just talking about that. I'm sorry, guys. I think that with that, we finish this session of Q&A, and we invite Rodrigo to come to the stage and talk to us a little bit more about Inter Shop. Thank you.

Thanks, everyone.

Hello, everyone. I hope everyone is doing well, safe and sound. My name is Rodrigo Gouveia. I lead the Inter Shop team here at Inter. It's a pleasure to be here. Happy to be back. I remember the last year around this time I was away. And that's certainly for a good reason. My baby was being born. And he's doing very well. He's going to be 1 year old now. So let's go over. I think we have a lot of excitement here, a lot of things to share with you. And maybe the idea is to go over the agenda. Our agenda is going to be focused on 4 key topics: Topic #1, we're going to be going over a little bit our financials; #2, discuss a bit about client growth and how that is impacting directly our business; third, share with you a little bit of our products, our pipeline, what is on, what's coming up; and last but not least, share with you guys a little bit of the glimpse of 2022, what's coming for Inter. So let's get into that journey. But before we get started, it's always important to say that Inter Shop is our baby, we all say here, only 2 years old. And if you look back for last year in 2020, there's been quite an interesting journey. We started a proof of concept to understand really what was the attraction of having e-commerce or creating a marketplace inside of a digital bank, how that will look like. So we build a lot of products and then we try testing several things. And I believe that outcome was quite successful. We've reached over BRL 1 billion of GMV captured in only our first year. So that kept us motivated with a lot of fuel to think about growth as we stand today. As for 2021, we are now growing. We are now expanding our client penetration. We are bringing as well new stores, new players and also working every time on better negotiations for both our partners and our clients. And if we step forward a little bit looking at 2022, we also feel that there's going to be an acceleration in business happening. Lots of new addressable market. We're talking about Brazil. We're talking about expanding our business globally. We also think there's a better combination fit to combine both the Inter Shop purpose together with the consumer finance. We started that this year. I'll share with you guys a little bit further. I believe there's a lot of room to accelerate. And also, we call it the brilliant basics, which is something that we believe that there's a lot evolution of our process that needs to be done, and we think that for next year, we're going to be very well prepared to really get in detail on retail, creating new functionalities and being able to succeed. So let's hope go and onboard on that journey. So for the first topic, which I think is definitely one of the most relevant here, I want to talk about financials. Our key idea is really basically based into 4 key elements, I would say. The first one and second one that I was showing on the screen here is the GMV. GMV definitely shows the power of business, how much are we growing sales. And if we look over this past 7 or 7 periods of quarters here from 2020, 2021, we've seen constant growth. We started in the first quarter of 2020, over BRL 30 million of capture, and now we're close to BRL 1 billion. So that's a lot, 24x, 25x bigger. So that shows the importance that we're bringing on board here. The second one, and I think it's also very important to the revenues. What are we getting from the business? How we are monetizing this? And as we see, we started with close to BRL 1 million. And now we've reached the last quarter at BRL 62 million, so that's 62x bigger if we compare. And what's interesting, if you look at both, the growth of GMV, it is very high, 24x, 25x, but we grow much faster the revenue, right? And that's mainly due to the take rate. So take rate is basically the amount of commissions that we get paid with our partners for providing services and products in our app. And we've been growing that quite a lot. So we started around 2.9% back in the first quarter of 2020. And we now are at 6.6%, and we've reached already 7.2%. So it's been very constant growth, and that's reflected directly into our revenues. Last but not least, in terms of financials, we look in terms of transactions. And transactions has a very interesting point because despite the growth of revenue that we bring in, despite the growth of GMV, are people buying more, more and more in terms of recurrency, right? So again, 1 million to 6 million, that's a lot of growth. We're growing at 1 million each quarter. That shows that despite again the volume that is being shown or the amount of the transaction, this has been growing quite constant and quite awesome. So we're very excited with that. I think the financials is the highlight of what's been happening. You guys have been following through. If not, you can look at our slide, a little more details of the numbers. But definitely, that shows a constant and exponential growth that we're envisioning for Inter Shop. The second topic, which is also quite important, are clients, right? So if we build products, if we create services and we don't have anyone there to consume, makes no sense, right? There's no business. So I think our idea here today is going to share with you a little bit of how we see clients. So the first thing is, the market measures the amount of clients in the last 12 months, so whoever made one single purchase. That number is 2.4 million for this Q3. We've reached for the last 12 months and it's definitely going to be bigger as we approach the fourth quarter of this year. The second part is the number of new clients that we onboard every quarter. And this Q3, we got close to 500,000 new clients. And why is that important? It's because when we look back, we understand that the more clients we bring is always a challenge for all the e-commerce. But in our case is the velocity or how we accelerate the monetization. So before we had Inter Shop, last year, we were having the first purchase, probably within a 6- and 9-month period range. And now we see that were diminishing that gap. So a new client will start shopping at Inter Shop maybe 1 month, 2 months or 3 months after he opens the account. So diminishing that gap has been helping us a lot. Last but not least, in some of the slides here that we're presenting is the recurring clients. So if we're bringing clients that are recurring buying in the last 12 months or bringing new clients who is retained and keeps buying with us along the journey. And those numbers have been growing as well. This is a snapshot of the past 3 quarters. If we take a look at it, so Q1, we're at 67%. Q2, we're at 69%. And now on Q3 of this year that we just shared the results, we're at 70%. So this growth means that even though we're onboarding new, new clients, we're keeping those loyal clients that are interested, that have been shopping with us quite often. So this second topic, I'd say, it is key for us. It is something that we're taking a much, much closer look, studying whatever churn we're getting from this new onboarding, for these clients that stop shopping. And this is one of the things that we're going to discuss a little bit further in terms of addressable market and increased penetration of our clients. So the third topic, I think this gets more down to business, right, besides the financial and clients is more related into what our products, right? And I know that we've launched several products and services. I know we've been at this fire drill going back and forth all the time. So I think I put this slide here to summarize a little bit how we are dividing and seeing the ideas. And one thing that is important to share here is that we create products and services not from the top of our heads. But we understand really what is the client looking for, what are the key topics, what are the needs and how we can serve their purpose, right, to deliver better products at a better price, right, and a better experience. So we have here 4 key topics. One is the recurring services that we're calling. I'm going to explain that a bit more, what those are. The second one we divide as broader e-commerce that encompasses not only the e-commerce but some other fronts. We also have the MVNO phone carrier that was launched. And it's been quite interesting because we did a new partnership with Vivo. And I think it's been quite interesting, we just launched a few months ago. And the last one is our new trial here which are subscriptions. We understand that e-commerce needs and deserves a subscription base to facilitate time, speed up things, and we think that can really help. So let me share a little bit with you guys what those products are in a glimpse here. So the first one, if we think about recurring services, we're really much talking about 3 key products here. So the top-ups, anything that can carry a digital wallet, right? So we have cell phone top-ups. We have gift cards that we have, for instance, Uber, PlayStation games and so on. We also have what we call our first omnicentric or omnichannel perspective where we have the gas station, the partnership we did with Shell Box. And that's interesting because with your app, you pay your gas. So that's the first omnichannel experience we're having here. And last but not least, our beta version of delivery, right? We're testing. It's been quite an interesting journey. We're learning a lot. And we think there is a great potential for us just for the food segment as we move on 2022. The second one is when we talk about the broader e-commerce of things. So basically, when we talk about e-commerce is that we have the end-to-end solution, which is when you buy within our own app any specific product at any specific store. So here's a demo of e.l.f. Cosmetics, for instance, how the experience looks like when you're buying directly through our app, where we import the catalog, we import all the shipping conditions and we finish the transaction within our app. And the second one is Inter Travel. With Inter Travel, it's something that we have the product ready at some point. But due to the situation of the pandemic, we held a little bit. And now we're back. We're accelerating. It's gaining a lot of traction. And we believe there's lots of opportunities for us to deliver a better process to our clients with Inter Travel. The third part is the relaunch that we did with the phone carrier in partnership with Vivo. So we are also an MVNO. We have different plans that are being offered. And we think this is quite interesting because if we think about, we are at inside a mobile phone. And anything that we can leverage in terms of devices, whether it's hardware, software or carrier, say, in terms of connection, it is something we're interested in. So here's just a little exclusive of how that, a short deep dive of our purchase of that MVNO, of Inter Cel looks like. And last but not least, it's something that we just started and we're starting to test this a little bit is the subscription model. And with subscription, we have several range of products that we feel that now are product sensitive for us to get more traction. So the first one is the learning, is much more focused on education. We have over 2,000 partners of free lessons, free classes that could help for you to learn something that you are willing to. The second one is the Inter Tag, which is very much focused on toll, on car tolls. The third one that was, it's a new launch, a couple of weeks ago we promoted that important content is games. Games, I mean, we call Inter Arcade. It is something that it's been happening. It's been fluid. It's being solid as tons of people getting to that. So we think that's a special field there for us to explore. The fourth one is Inter Pass. And Inter Pass is really much an array of benefits. It's a benefits program that we also just launched. And then it's not only linked to Inter Shop specific where you can get cash back and partial or full cash back from your purchases in our end-to-end solution when you buy within the app, but also an array of different products that goes across Inter in general. So it's quite an interesting product. It's a promotional price. So you can get a lot of different experience from that. Last but not least, we have also the food besides the delivery that we mentioned. We also have Duo Gourmet, which is the e-presence products that we have. And this product really brings an opportunity for us for you to save money. So you can buy 2 dishes, for example, and pay only for 1. And it's a subscription. It's a very, very affordable product. And we think that as things reopen, this whole pandemic mood, we think there's going to be a lot of traffic driven, not only in delivery but also within the presence restaurants as well. And switching a little bit about products, it's also important for us to understand how we connect the consumer finance part of it because one thing is, okay, is our products and how will we enable, how do we empower our clients to really be able to afford one specific purchase, right? So here's our 2 quite interesting examples. As I mentioned in the beginning that we want to explore for 2022 much, much more than we did in '21, which are the buy now pay later, right? For us, Brazilians were very used to it, are the installments. And we are doing installments since we started our program, our shopping. So we had installments from 6 times to up to 12 times with no interest. So this is something that we want to also roll out outside of Brazil. And the Super Limit that we're calling. So basically the Super Limit is a functionality at the home of the Inter Shop e-commerce where you can choose instead of buying and getting cash back, you can switch that functionality and get the Super Limit. And that Super Limit, I would imagine, changes the entire experience you have within the app, give you additional credit on your credit card to make that specific purchase. That can range from 30% more, 40% more or 50% more. That's quite interesting. You really let the cash back go if you are not a reward sensitive, but if you're a credit-sensitive. So this is something that 2 things that we're looking a lot into it to empower each time more our customers. And then this past month, we've been talking a lot about the USEND business of us going internationally with not only the Inter Shop, but also with a digital account and exploring different products and services in the financial piece. We also enter with USEND to have 2 specific products. One are the top-ups, specifically with gift cards. So today, at the USEND app, you can already buy all the gift cards, whether in the U.S. or in Brazil. So that's interesting. That's quite fantastic, fabulous. The second one is we also launched, that was during the week of Black Friday, the USEND Shop. So within the app of USEND, you click on USEND Shop, and you already have the affiliate programs with several published stores in the U.S., where we're offering 10% cash back on every single store. So if you guys are looking for a great deal, here is one. And last but not least is our Go Inter. And Go Inter is a piece that we started with our expansion in the U.S. Now we have USEND.So we're shifting our communication to USEND Shop. We also have Europe. We have Portugal and we have Spain. And we're also using that experience also with specific stores at those specific countries where you can actually make specific purchases as well on our partner's website, right? So to summarize here, a lot of things that are happening, right? So we have our products, the recurring products. We have broader e-commerce. We have MVNO cell phone. We have subscription. We're also tying in everything that is related to the finance, the consumer finance with buy now pay later with a Super Limit. And we're expanding also our addressable market towards gift cards, the affiliate programs and so on. And to finalize here a little bit. I would like to give you guys a glimpse of what we're looking for 2022, right? So there's a lot of things on the road map, and we feel that '22 is definitely an acceleration year, which keeps our pace, but also important for us to take a step back and understand what we've delivered so far and how far we can ago. So 40 [indiscernible], I would say here that we would share with you. Number 1 is we want to talk about addressable market. To date, with our growth within -- 7 million, 8 million clients, we're aiming close to 15 million clients this year. So that's an addressable market, we want to get that number of accounts happening with our digital team and increase our penetration in our existing clients, but we believe that's not only enough. We also need to explore the other 220 million Brazilians that are out there that might not have a full account. So we'll be creating basic accounts to shop -- in to shop and why not other products as well that are coming for [Indiscernible]. And then last but not least, is the other international clients, right? So the addressable market is not only in Brazil. It's not only the 15 million clients, not only 220 million Brazilians, but also the 7 billion people there across the globe, right? And the second part we're calling the Billing Basics. And I guess the Billing Basis is really how we tighten the solution of all of the problems and service that we have, combining with the layer of consumer finance. How do we deliver that, how do we improve our products because we've [Indiscernible] so many products since last few years that we feel that we need to really deep dive on each one, create a better user experience, include payments, types of things on all of them to make something very unique and very, I would say, conceivable as a whole. So a lot of things. I always say that retail is detail, and which again to detail should make that thing happen. Third part is the long tail. So right now, what we've done with partnerships with key stores or key players, and that's our concept of digital shopping mall, and we also want to add more sellers. So in adding more sellers, there are long tail because that I would think create much, much more assortment and these assortments will definitely enhance the number of SKUs that we have. And in the other day that will facilitate our clients to search for what they want to get the categories happening. And we think that here, there's a lot of work to be done, but we definitely going to be creating a one-stop shop to all of our clients. Last but not least, again, the global on that we're discussing is really -- once we have this idea of addressable market, we had the billing basis, how do you start expanding this product and service across, outside of Brazil, right? So we hope to have our first global Orange Friday with all our partners across the globe. We like the deal special events to get those landmarks. Also, we are working on much more knowledge of understanding what works in one place, how can we scale that faster in another place. So there's a lot of things that we want to explore and to expand, right? So where we get traction, we're going to go forward and focus on that as well. So to finalize here, I hope you guys really understood a little bit of what we're looking for. So we passed through the financials, we'll then talk about client growth, also a highlight of our products and services and how we're seeing that today and for next year and a little bit of teaser in 2022 that I'm happy to clarify a bit more on our Q&A today. And so I like to thank you. And before that, before we end, since we are a shopping center, a virtual shopping center, there's a QR code that's going to be here soon in your screen. So if you point at your QR code, you're going to be directed into our app and you're going to get some special offers that are prepared only you guys who are watching us here today. And if you're not in Brazil, if you're outside of Brazil, we can also access our gointer.com sites, and you're going to get a 10% cash back on all the stores that are available there. With that, I'll end, I'd like to thank you all and have a great rest of the day. Thank you.

You can talk a little bit about the open platform for the marketplace. So account holders. How does that work? And what are the opportunities that we see there?

Yes. So I think this has been quite interesting experience because as we think about we build our products and our services for Inter Shop, as we've shown here, we have over 40 different products. We understand that if they have traction, they are showing traction, why not expand that to all Brazilians, which we're talking about over 220 million Brazilians. And why not go global, to reach over the 7 billion people that we have across the globe. So I think the first thing is the addressable market. So we felt that as a sort of low-angle fruit of opportunity compared to what we're doing with only not only, but 16 million clients. So I think the second thing is we already started that. So today in Brazil, we already have 2 things. One is our site. So we have our affiliate program, which are over 200 stores that you can shop through us directed to a site or partner site. And there's also an opportunity to shop directly with our app where we have Inter solution can buy everything through us. And that also happens outside of Brazil. So with the USEND purchase that we did, we already launched very quick in this past couple of weeks the USEND shop. So that's where you also can have access to over or 45 or 50 stores that we have available in the U.S., for example. And that's the same thing that's been happening for Portugal and Spain. So we think that with the learning that we got in Brazil, we think that is a opportunity for us to expand beyond only the account holders. That's our expectation.

Great. We have a few questions here asking to talk a little bit about the -- like how does it work, for instance, with gift cards, when we sell a gift cards from iPhone, do we also have a take rate on that? Also, on [ Inter Ads ] and other type and with [ Inter Best ]. Can you give a little more about these products? How do they work? And what is the monetization?

Yes, of course. So everything that we have in our platform, it is -- there's a monetization behind it. So we're not doing a, let's say, a benefit or a loyalty program where we are investing. I think the idea here is to monetize from day 1. So all the products and services that we sell here in partnership with our B2B team, it is -- it comes from take rates. So yes, we do have take rates from iPhone and other gift cards as well. So the second question in terms of ads. I think this is something that we've been studying, and I think it's quite an interesting opportunity, right? So because when you think about ads, you open opportunity for different companies to really promote a little bit more their products. And I think in the audience, right? Everything that we think about ads, the big players, audience is key, and we have the audience, right? And especially when you talk about marketplaces, I think the growth or the opportunity for us to have, promote the awareness of these products for our clients and also the conversion and combining both of them in only 1 thing. I think that's one of the opportunities that we see. So we are already exploring that, and we're evolving to create an actual networking tool have that more and more formal to everyone. And I think the last one is about the past. So enterprise is something that we've launched with our new business team yet a few weeks ago as well, together with the Black Friday. And this is quite -- it's an interesting prospect because what we see with [ Inter Pez ], for instance, for Inter Shop, we have additional cash back on shipping costs. So it could be 100%, could be 50%, it varies on the product and then the location that you're based. But more than that, we're in to tie in and also increasing the cross-sell throughout all of the services that we have at Inter. So there's also insurance. We also have credit. We also have investments. So the idea is to encompass and more and more, this benefit program. So the more you use, the more you engage with Inter, in general, the better benefits you get.

Right. And I guess, the last one here is basically, do you see like other nonfinancial products? Do you have a different outlook or is it to deep dive on the initiatives that we already have?

Yes. So I think I sort of -- a friend, actually a client of mine, he says that everything is financial. You only give beautiful names to segments, right. So if you're a financial business, in the travel segment or in the food segment and so on. So I think there is definitely a situation look in terms of the no financial opportunities, how we can definitely monetize more and how we can expand these experiences. And I think the most important thing when we look through here is how we combine everything. So as I've mentioned, not only beauty products or new products, I think we have tons of products already. So the better, as I mentioned, the brilliant basics. So make them better, better experience, combining with our consumer finance, which we think that how we empower our clients more and more and more. So I think that combination with better products that we have today, keep improving and evolving. I think it's core for our strategy for next year.

Great. I guess that with this last question, we end this Q&A session, and we invite Felipe Bottino to come to the stage and share a little bit more about Inter Invest with us. Thank you.

Thanks, everyone.

Hi, everyone. My name is Felipe. I'm the CEO of Inter Invest, and it's a pleasure to be here with you. I'll start this presentation with this slide, of course, Inter Invest was elected the best online broker in Brazil by the public and was among the top 3 by the academic period. The reason why I'm starting with this slide is very simple. It's a statement that Inter Invest, it's not a project anymore. It's a reality ready for monetization and growth. This is something we are really proud of since we have not acquired anyone and everything was brilliantly executed internally, probably costing 1/3 of the price and 10x better since it's a fully integrated solution. This slide is very important to materialize the phenomenal execution capabilities of the team that in 3 years has built a complete and fully integrated investment ecosystem. To be honest, in every of the app and still surprised by the number of features and evolutions that we're delivered. It's for sure the best investment technology team I have ever met. On the offer or product side, we offer from fiduciary administration service to capital market solutions. And on the demand side or channels, even though are focused on the digital model. We do have a wealth management platform and a phygital segment. And we are ready to serve different types of audience from the trader to the delegator. And why this slide is so important because you can see that the infrastructure is ready for monetization and growth. Intra Invest assets under management grew more than 200% since 2019. And as of the last quarter, the same for more than BRL 60 billion, astonishing numbers for such a young companies. And the number of grew nearly 300% in the same period, reaching 1.8 million clients. It's important to analyze the last 2 slides together because when you would couple 2 million clients with the BRL 60 billion, we can figure out the number of opportunities available to monetize the current investor base with new product offerings and increasing their share of wallet. We like to divide the investment and distribution channels in 3 types. Needless to say that in Brazil, all the relevant players are focused on the phygital or physical model. Those are proven models but extremely competitive with low barriers to entry. Even though we know it's harder and takes more time, we are totally focused on the digital distribution, a channel that we are want to have private and scale so far. I'm not saying we will ignore the other channels. We do have a wealth management division and our phygital segment, but those are not the focus of the company. We are playing a different game from our competitors. We all know the acquisition costs of investors have risen a lot recently, and we have witnessed different types of cash fund strategies across the industry. Some of those very creative, I must admit. But at Intra Invest, our clients were acquired with 0 acquisition cost. Since the nearly 2 million clients were converted from the Inter client base. It's like catching a fish in aquarium, much more efficient. And with the lower acquisition costs, we can offer much better products to our clients, creating a virtual cycle that is extremely positive for us. Inter Invest is well positioned to lead the next-generation investment industries since more than 80% of our clients are under 40 years old. This is a generational movement that will dramatically improve the average revenue per user over time. Inter Invest corresponds to nearly 10% of all active clients of the tree. And to this point, yesterday, as we announced that we will start testing the payment for order flow for equity in general. This is great news for the industry since the payment for order flow is one of the most relevant source of revenue for international brokers. Inter Week is our annual financial educated event, and is an example of our deep customer engagement. In this year, we had 40,000 subscribers and more than 5,000 Black cards were distributed. The price for those that completed the nearly 12 [indiscernible]. An idea of the magnitude of the event, we broke the record of fixed income negotiations in 1 day at B3. Most of the clients probably were trading for the first time fixed income. Another great example of customer engagement, the more than 100,000 investment communities created since the launch of the project. Finally, I would like to highlight some topics on the specific areas of the Inter Invest. At Inter assets, we now have BRL 5 billion of AUC with more than 100,000 investors, a sticky, solid growing investment base with risk-free and recurring revenue. We continue our strategy diversification, hiring new teams such as real estate, equities, and ETFs and thematics, reducing the concentration of credit fund. With the increase of our distribution capabilities and capital, our capital market segments flourish. We are proud of our partnership with ABC Bank and what we have accomplished this year and foresee a continuing growth and specialization in 2022. ;; To close this incredible year, we will launch our U.S. trading platform, a very strategic area for us. Initially, we will focus allowing Brazilians to invest in U.S., but our vision and ambition is much bigger. For USEND, we want to enter the American market and offer this service integrated to our international client platform. Ultimately, we continue to invest a lot of effort in the new features and UX of our investment platform. I'm sure we will be once again surprised by the number and quality of evolutions, the December version of the app that it's about to be launched. Thank you for your time.

Hello. Thank you, Bottino. We have a few questions here regarding investments. One that came up more than once, actually, was what about crypto? Do we have plans to offer more than just funds on our platform, how do we see this strategy?

Hi, everyone. Hi, Helena, thank you very much for your time. Very good question and very interesting. We are studying a lot the crypto market here. For now, we are sure, we want to be act as the intermediary only. And there are many providers right now that we are currently studying, which is the best one. And since we have a lot of white label and crypto-as-a-service models, we are sure once we decide to prioritize, given that the background and the technology team that we have will be very easy and quick. So for now, we're totally focused on international trading, which we believe have a higher rate of expansion, and then we will focus on that. But right now, as we told, there are many options that we can be very fast.

Right. Another one that we got here is, what is the strategy for high income clients on Inter Invest?

There's a lot of debate in the industry if it's easier to go from the bottom to the top or the top to the bottom. And we believe it's much easier if we start with the retail, then you decide to move up in the strategy, since it's much harder to build systems, prepare it for millions and millions of clients. And once you are ready, you can easily scale, since we believe the higher income, it's much more dependent on people, on person, and that is something that we can hire, and that is something that we're studying a lot. We launched it last year, the black and the wind, our wealth management division, and they are performing very, very well. We have -- what we claim here and what we want to be, it's more efficient. So our wealth management division is about 1 banker to 100 clients. And our black is about 1 banker to 800 clients. That is about 10x more efficient than the average of the industry. And we are seeing an increase in the AUC, the average ticket per client and the average ROE from clients. So we are -- for now scaling this strategy since we have been performing very well. So the strategy here is to grow, continue to grow. I don't know if most of the people know that every month, we open about 700,000 accounts and at least 100 to 150, sometimes 200, what we call millionaires a year, clients with up to above BRL 1 million. So if we compound that in the future, it's a strong CAGR that we have. So we're pretty comfortable with our strategy for now.

Right. I think my last one here for you is, what is Inter Invest's strategy given this new economic cycle of higher interest rates?

Yes. We are pretty positive on the interest rate market since most of our clients are still conservative. So in this scenario, of course, you can -- the fixed income products become more attractive to clients. And we cannot forget all the disruption of the market starts with the CDBs. They are protected by the [ FTC]. So we see a lot of expansion for management fees of funds for fixed income becoming more attractive with higher fees will impact our DCM operation as well. So we are pretty positive as well that given the profile of our investment base, this will be a strong differentiator for us, not only growing the AUC, but also the ROA of our avenue here.

Well, right. Thank you, Bottino. We will have a short break now, and we will come back soon with our 2 last verticals. We will talk a little bit more about retail banking, day-to-day banking and insurance. See you soon. [Break]

Hi, everyone. I'm Paulo Padilha, and I'm handling [ digital insurance ] here at Inter. First of all, I would like to say that's a pleasure to be here and talk a little more about our Inter Insurance. It's a great satisfaction to finish Trend, deliver another exponential growth. We grew as a team, a very talented team, and thank you guys. I'm very proud. Two and a half years ago, when we started a digital insurance platform here at Inter. And in my opinion, we are very happy to take a different way from the other players. Our call was to bet on a unique experience for our customers with a diversified portfolio and 100% digital experience. And at this time, no one believed in that will be -- could be possible to sell insurance digitally, and there was no customer focus. Currently, we're the largest digital insurance platform here in Brazil. And different for the most part of the markets, we are committed with a central experience and a broad portfolio. Always looking to insurance transparency. And most of our products can be bought with one click. And this is only possible because we invest a lot of energy using data, understand our clients. And the complexity is always behind the scenes, never had. Our products are bought without [indiscernible] either in person or remotely. As a result, with a scalable and a high margin operation. For consolidation, we are able to renegotiate the contracts with our partners. And that was very important to understand what we are doing here and how we were to build that trend. We grow from the BRL 12 million in 2018 to more than BRL 500 million in 2021. Our main focus is to grow efficiency. Today, we are doing almost 100,000 new sales every month, the customers knows what exactly they bought, and they will have a long-term relationship with us, generation recurrence is like a cycle with scale, recurrence and efficiency. High wealth, high margin, basically that. If you look at -- it's how impressive with our growth from the second half of 2019, when we are started more than 23x in 2.5 years, and those numbers are doubled. And all this growth comes from the incredible execution capacity with 80 new products in 2.5 years between our main competitors, the average of digital insurance products is [ true ]. And as I said before, we invest a lot in transparency and data. And none of products are integrated with various experiences on our Super App and can be bought with one click such as housing assistance, credit card, health insurance, dental plans. There are so many samples of products that can be bought with 1 click in our app. And talking about insurance here in Brazil was boring, and we have done our job to change this. The insurance market is under penetrated and less than 4% of our sales have any product of this type. And that is -- that was no customer's focus. And so what we are doing here has become [ relevant ] and we are just getting started. Obviously, all these levers reflects in our financial indicators, and we are very diligent to our strategy and with our numbers. And for us, it's very important to deliver the high growth respecting our cash basis. And especially when you're talking about the reduce our dependence on mortgage insurance and diversify our digital lives. In this case, we look -- we have recurrence and scale without big cost as [indiscernible]. And as a result, our revenues grew almost 5x in 2.5 years. And currently, we have conversion above 9%. And our base of clients has grown from 30,000 to almost 1 million in 2.5 half years. And now we have new challenges. With a larger base, we can work on new things. For example, I'm that offering with other business avenues here at Inter, and upsell as a streaming platform is around the world we have been testing, it was -- it's our insurance platform and it's working very well. For example, for products where we are adopt the [indiscernible] our sales grew more than 20x. And [ children ] management is very important, especially with more than 1 million clients, and our model has many competitive advantages like basically, because we have a complete entirely tenant platform will understand our client's behaviors and have that fast and cheap communication. And look at that, in the past conference here in Brazil use is our call center for rotation and send bills by post - on a very expensive cost and on officially. Generally speaking, we have the most ways to work on customer retention. When we start 2.5 years ago, we had 4 big -- for the next 40 years. And we achieved all of them. If we compare ourselves with Resonant players, we have the most complete in terms of of portfolio with our life insurance digital player in United States, just actually 1 million customers after 4 years. And we will reach 1 million customers in less than 3 years. In spite of this growth, we are a new operation. There is a lot to be done, and we are on the right path. And launching new products creating a better experience with other revenues and monetize our base. Naturally, we want to become relevant in the other countries. We have some competitive advantages, and we believe it's possible to apply our knowledge in that and closer relationship for a larger customer base, complete payments platform and all track [ recording ] growth data to work in our journeys. And we are very committed to accomplish this mission. As happening in B2C, the B2B segment is generally fully surveyed when we're talking about insurance. So low support, low customer focus where products look like commodities. And today, we have more than 1 million customers in the segment at Inter. A great potential, and we are hard to export our B2C experience for the B2B segment. Let's change one more market. Thank you, guys. It was a pleasure.

Thank you. Priscila, okay. Let's go to our Q&A session. We had a few questions here. The first one, you talked about the exclusivity deals that we signed, how is this being accounted for? Like how is the recognition of these revenues?

Hi, Helena. It's a very good question, an important one to understand our results. We recognize these values linearly, month by month, in other words still more than 90% of this value will be recognizing for the next 14 years. And the upfront value issuing the cash generation income finance and so it's very important for [ modeling ] our valuation.

Got it. Another one that we had was that we've been seeing a drop in the average premium ticket. Do you worry about it?

It's important to understand that our focus has been on individual lines. And obviously, in this case, we have lower tickets. In the other hand, we have a longer duration, higher commission rate and recoveries. We keep periodically totally agreement with our strategic will and very comfortable with the future. And this flows due -- because this recurrency will be very important for our valuation.

Yes. I guess that -- in relation to that, like -- In the past, we had a really high dependencies on the insurance related to credit.

Mortgage, B2B, and now we are changing this mix for digital lines specially with [ peers ] B2B -- B2C.

Great. Just uploading here. Yes, I guess a final one then for us. And what are the next challenges? What is -- like what we have ahead?

I used to say, keep focus. We have a lot to be done, and we have a special team, very committed. The largest portfolio in Brazil, we were very committed to expand this for the other countries, but we have to sustain our improvements here and there are a lot to be done in Brazil and our new operations in other countries.

Yes, for sure. Yes. So with that, we finalize this session about insurance. Thank you, Priscila.

Thank you, Helena.

And we invite [ Ray ] to talk a little bit more about our digital banking operations.

Hello, and welcome to our Digital Banking section of our Investors Day. My name is Ray Chalub. I'm Inter's COO. And I'm going to tell some stories and tell a little bit about our digital banking business with you today. So to start all of this digital banking in Brazil, we must analyze our profile of our Brazilian population. The Brazilian population really, really enjoys adopting technologies in the early stages. So we see this in financial, health care, and et cetera. So the Brazilian population is very well in adopting new technologies. And with the digital banking, it was not different. Our country today has 210 million people. Of this, approximately 160 million configure our addressable markets. And of these addressable markets today already Inter accounts for almost [ 9% ] of the Brazilian market share with our digital banking accounts. By the end of the year of 2021, Inter is going to have approximately 16 million digital accounts. Of this, approximately 1 million accounts are legal persons accounts, and 15 million are natural persons accounts. So this 15 million people that hold an Inter digital banking accounts configures 9% of all the Brazilian market share. And the Brazilians have very early adopt in terms of technology when they are using their technology for themselves, but they also have a very early usage of technology in their professional life. So Brazil currently has 21.5 million active companies. And this 21.5 million active companies, they are very concentrated in small business, small or medium business, like we call these SMEs. So these SMEs, they have a lot of needs and, not necessarily, their needs are very well served by the established players. So Inter wanted to challenge this for natural persons and for legal persons. For instance, the natural person of Inter can begin its relationship with Inter through his home in his sofa by opening a digital account with us, and he can perform every single transaction with a lot of comfort without the need of having the terrible user experience that we had years before in banking, before the digital banking experience. And this usage of technology, like I said before, is very strong among these SMEs. Inter today has the best product for the Brazilian' SMEs. We have a product that is completely free of charge for natural and legal persons, and that has [ peaks ], that has receivables that has collection and has a very vast set of functionalities. So all of these clients, they really trust Inter. And in this trust, they use Inter to fulfill all of their banking needs in a daily basis. And these needs are fulfilled translating themselves in 1.5 billion log-ins events only in 2021. And this expressive amount of log-ins, they also generate a varying things, use of financial transactions. For example, this year alone in 2021, Inter's clients will have performed almost 1 billion transactions. And this 1 billion transactions' accounts for almost BRL 1 trillion. So Inter's clients use with a lot of regularity our business. And being able to scale this business and having a lot of new customers by 2021 alone, we have every single day, 30,000 new customers using our digital banking business. To say this in such a relevant way, we need to really work hard, we focus in our cost to serve these clients. For example, you can see that by the third quarter of 2020, our cost to serve 1 client was BRL 123. One year after this by the third quarter of 2021, our cost to serve is down 11%. Our cost to serve by the third quarter of 2021 is BRL 110. And being extension company and having all of these log-ins and all of these users, it really pushes us through efficiency. And we have this in our blood. For example, in 2018, we used to need 70 people to serve each 1 million clients in Inter. Three years later, we only need to have 22 people to serve each 1 million clients. This is a huge gain in terms of efficiency. And this translates our DNA and what we think in a daily basis. And all of this efficiency is workers in a -- with a very high focus on the clients' user experience in terms of products and processes. Let me tell you 1 story. Today, we have in Brazil, a huge success that we call PIX. PIX is the Brazilian instant payment system provided by the Brazilian Central Bank. And in Inter for a several years from now, by 2016, early 2016, we did not believe that one financial transaction should cost so much for financial institutions. And what we have done to challenge this was to create an Inter proprietary instant payment platform that we used to call [ Interpay]. And [ Interpay ] was a 24/7 instant payment platform with 0 MDR. So the clients could pay our merchants with no MDR. And this product was a very huge success between Inter clients. And we, at Inter were thrilled when the Brazilian Central Bank came to us with the whole PIX concept and the PIX idea and the SPI infrastructure that is a newer infrastructure that has nearly 0 cost per transaction or very low cost per transaction. We have always believed in this, and our clients were already used to the [ Interpay ] and to the Inter payment transactions. And PIX is a huge success among our clients. Today, alone, 8.1% of all the Brazilian transactions in PIX, they have Inter's clients' participation somehow. Somehow, if they are receiving money if they are sending money to someone. So this is very important to us. Our clients are used to products and solutions that are here to get their life easier and better. But all of this also comes with a very, very important responsibility in terms of security. So our clients trust us to have their money, their investments, their credit operations, their shopping business, their insurance. And we work very, very hard to maintain our clients' resources very safe. So in a daily basis, we work to enhance our defenses in terms of ransomware's attacks, in terms of any external attacks, and especially, in terms of protecting our clients' usage. For example, if one client has the habit to send money to another person in every given time of the month, and he changes his cell phone. We do not allow him to send money to unknown persons, but we allow him to send money to their regular persons that where he already uses its Inter ecosystem in the best way. So this is digital banking account in a nutshell at Inter. And we have some great news. By the end of 2022, we really, really expect to have 24 million clients. And the Brazilian population is distributed somehow like this map right here. And Inter with all of these clients has the same client distribution of the Brazilian population. So by the end of the next year, Inter plans to account for 15% of all the Brazilian market share in terms of digital accounts. And this is a very strong responsibility and it's a point that we really are proud of. And to complete all of these digital account journey, we have for every client' credit and debit cards. In Brazil, we call them combo cards at the same class, at the same chip, we have debit applications and credit applications. So Inter choose Mastercard to be its main partner at the credit card business issue. And we have in our portfolio, 4 main kinds of credit and debit cards. The main kind is a Mastercard gold, credit and debt card. In Brazil, we have the debit interchange with a cap from the Brazilian Central Bank of 0.5% of each transaction. And for the credit, we do not have this cap. So the Inter Mastercard, gold card has a gross interchange of 1.65% in each transaction and almost 90% of our portfolio have this card. And we also provide credit cards to our companies, our SME clients, more than 1 million clients that Inter holds today. And all of these clients receive a micro business Inter Mastercard, combo card. And this card has an interchange of 2.05%, a gross interchange of 2.05%. It's a very expressive interchange in our company's usage. And for our investors, we also have platinum cards and black cards, which holds a higher interchange rate than our Inter Mastercard gold credit cards. And we really work to improve our clients' experience with the Inter credit and debit cards. For example, we have virtual cards for every single client that wants to have one in a very easy user experience in Inter Super App. We are connected with the main digital wallets as well. For example, Samsung Pay, Apple Pay, Google Pay, WhatsApp or Facebook Pay as well. So when one of Inter client opens his digital check-in account, he receives at the same moment a digital card. And this digital card has its credit analyzed by the application information of the clients. And then we reanalyzed the clients' behavior to give him even more credit limits, like I'm going to tell you in a few seconds -- in a few minutes. So when one client opens an Inter digital check-in account, he receives his digital card with credit and he can tokenize his card in any given wallet. So a clients can open a check-in account today and started using his credit and debit card. And being able to offering all of these features to our clients is only possible because we have a very strong system of card processing payments. So we have a core platform that is capable of processing almost 100 million credit cards at Inter. And we have this really robust and secure platform connected with a lot of functionalities to a very vast API bus. And this API bus connects this core card processing platform with our super app, and we can offer clients things like features, like having his credit limit managed by himself in real time. So for example, if one client gets BRL 6,000 as credit limit, he can move his open-to-buy value around and set his own credit card limits. Another example. If a client has a lot of installments or bought 1 specific item in 10 installments, he can pay these installments in advance, and this is very nice for our business, and this is very nice for the client itself because he is able to get more credit limit free. And we give this kind of power to our clients. And this platform can perform these kinds of features and can give the clients the possibility to change his password, his credit card password at any given moment, to activate and deactivate his credit card, and any -- in many other functionalities that we have. And more functionalities that we are specifically proud of is to understand our clients and giving him -- giving them the opportunity or the choice between receiving cash back and having more credit card limit to pay for some purchase. Let me explain this to you. When we thought about the Inter swap, we had the idea of giving cash back as an incentive for the clients to open a digital banking account with Inter and buy from Inter shop, all the items that he needs, and he receives cash back in these operations. But this serves a very, very significant part of the Brazilian population, but not all of them. And to serve this other part that it's not cash back sensitive, and it's credit limit is sensitive. We develop it in our Super App and in our credit card payments processor platform. We developed a choice where the clients can set if you want cash back at any given purchase or if you want a higher credit limit that he already has, and he does not want the cash back at that transaction. By doing this, we can use the take rate from Inter swap to pay for any given delinquency that we can have by expanding our -- these -- specifically clients' credit limits. So these kind of features, they give a really nice edge for Inter and a very vast field of possibilities. And even if the clients does not have credit limited granted at his application, we provide them a solution where he can invest his money, and this invested money becomes credit limits. So the client generates use from itself and can use Inter's credit cards. And for the Brazilian population that does not have access to credit cards or credit limits. We allow Inter's clients to use our debit functionalities in a very, very expanded way. For instance, Inter's clients can use Uber, Netflix, Spotify, iFood and many other solutions in debit, and they do not need the credit limit. So this is the kind of feature that we work on a daily basis to offer to our clients. And also, besides all of these features and this great user experience, we also provide cash back as an incentive for the client to use the Inter's credit card, because we really believe in 3 main aspects for 1 client to use a credit card, a great user experience, a reward of some kind in our card -- in our case is the cashback, and adequate credit limit. So we talked about this great user experience and this great set of possibilities that we provide and served our clients with. And we also provide him cashbacks at his credit schedules. For example, the majority of our base of clients of our client portfolio, use the credit card Inter' Mastercard gold, and we pay for them cash back of 0.25% of each bill that he pays. So if a client does not have delinquency with us and pay his bills on time, we serve them with 0.5% cash back. We do the same reward for our SMEs and for our clients that have a higher spending, for example, investors, Inter clients that are credit cards heavy users who have even more cash back to give them the right reward in the right product at Inter's platform. For example, when a client hits a specific standing or on a specific investment, we can upgrade his gold card to a platinum card. And if these clients spends more or has even more money invested with Inter, we can give him even more cashback. And all of these incentives, cashback and great user experience, they are followed by a very fast increase in our credit card limits granted to our clients. So in a time frame of 1 year, we have expanded our credit cards limits, granted from BRL 6.5 in terms of billions of course. So BRL 6.5 billion to BRL 16.2 billion. This in just a time frame of over more than 1 year. And all this credit limits granted brings with itself a very heavier usage of Inter's credit cards. So this year alone, in 2021, by the first quarter, our total purchase volume was of BRL 6 billion by the first quarter. We are going to finish up 2021 with the fourth quarter having almost BRL 14 billion in total purchase volume. This is very expressive. And we really believe in this combination of credit card limits, great user experience and rewards. This is Inter' magical equation for getting our credit card and digital, making account users higher every single day. And also, our clients have a better use of our credit cards in terms of total purchase volume, then the benchmark provided from Mastercard. So 1 Mastercard gold clients of any given issuer, expense in a monthly basis, BRL 827, Inter's clients of Inter' Mastercard gold credit card, expands in average BRL 852. This is very expressive when we are talking about TPV and when we are talking about credit card results, and we are very proud of this. And all of this usage also translates itself in an increase of our credit card loan book. So in a time frame of more than just a little more than 1 year, we are gaining 3x -- a 3x higher credit card loan book than we had in a few quarters ago. So Inter already has BRL 4 billion of credit card loan book. This is very impressive. And this is we are -- and this is getting right the user experience and the credit limits that is given to our companies and to our natural persons. And we work very hard in this every single day. And I want to leave you with some great news, more great news. Inter has this several capabilities in terms of banking, digital banking, credit card processes, and et cetera. And by 2022, we are working in a new feature. We are calling it the Inter Universal Check-out. We are connecting every single journey of Inter's Super App in 1 single checkout. That is going to accept debit from the clients' accounts, that is going to accept credit transactions from Inter's credit cards. And this is already done. We already accept this. We already accept as well all the credit cards from other issuers. But this Inter's Universal Checkout also is going to accept Open Banking as a form of payment and also is going to accept other forms of payments like PayPal, like -- something that we are working with and you are going to hear soon and off. This is our digital banking work around. I really hope you enjoyed in Inter, we work really hard in a daily basis to serve better their clients to be [ very transparent ] with the clients with our shareholders. And we thank you so much for this participation. And now we are going to some Q&A at this time. Thank you so much. Bye.

Thank you, [indiscernible], and welcome again, as your own. So we have the last questions here for us to finalize this Investor Day. Thank you, everyone, for staying with us so far. So the first question that we have here is regarding your strategy for SMEs. So what is our vision for SMEs. And there is another connection there as well in how does this connect with the international expansion as well?

Okay. So first, thank you, [indiscernible], for the presentation. And Helena, before I answer, I would like to highlight that I was listening to [indiscernible] presentation. And it's very important for everyone to understand about our payments transaction capability. I would say that everything that we have in our app. At the end of the day, it ends with a transaction with processing of payments. We'd like to say that this is our backbone for all the service that we have on our Super App, let's say, 100, 150 functionalities. We need to have a very reliable payment credit capabilities. And again, we'll have this very well-developed backbone. So congrats for the presentation, I would say that investors can really feel how important and how evolved is our capabilities on that. I would say that for SMEs, [indiscernible] I just mentioned that we began with individuals with the individual accounts. We have been improving the SMEs. We know that the monetization on top of the SMEs are huge. There -- the services are not good at all. So I would say that in Brazil, the SMEs, they are maybe 4, 5 years behind the evolution on the individuals. We're trying to catch up on our own company on our own business. We have -- it's found that to have a better version of our internet banking for the SMEs and for the individual. So I mean, we have been improving a lot. I would say that today, we have 1 million on top of 60 million, so something close to, whatever, 15%. I would say that maybe we can improve this ratio ahead because the competition in the SME is smaller, and we have other tools to compete. So I see a very good improvement for SME. And also, you're asking about international?

Yes.

Okay. And also, I think that when you think about going abroad, we also think that having this backbone is very important. And the reason why we're very excited with the recent acquisitions that not only bought an app over there with clients and with revenues, but we bought the company a fintech that have the SMB account, what we call the other service managed business. So they have a license in over 40 states in the United States, so this is very important for us to hold deposits to be in the payment framework United States, the ACH, the wire transfer. So I believe that having this very sound payment network and checking account network over there with the [indiscernible] will be able to also replicate all other service that we have here because as I mentioned, by the end of the day, everything ends up with the transaction on the app. So this is the view for SME and also how we're going to expand abroad, and the connection between the checking account and the growth of the business.

Yes. SME is definitely an underserved market today. And maybe 1 last question here that we were asked about our vision for open banking. This is a topic that -- It's becoming more and more used by many. And was it -- interesting to see your vision.

Okay. Yes, I would say that [indiscernible] mentioned about PIX in the presentation. I believe that PIX really changed the dynamics for Brazilian payment scheme. It's getting more accessible. It's 24/7. It's less expensive. So it's a huge benefit for the society in Brazil. I would say that the open banking is going to be the same. I mean, we're still -- I would say a couple of years until we have that fully implemented. I don't think it's going to be something fast. I would say that's more complicated to fully implement open bank than to do with PIX than with what we did with PIX. But the outcome for open bank is good mostly for a player like Inter, because when we're discussing about the credit card business a couple of hours ago, we were talking about our idea of getting clients, to watch for the clients, how they behave and later on to underwrite the credit limit for them. We believe that with the open bank, we will be able to reduce this -- the time for that. And therefore, the monetization for the client is going to get first -- will come first. So I'd say that this is one of the benefits. But also, we see that many players in Brazil for the past 5, 10 years, we had to acquire many payments capabilities from big companies or governments or states in Brazil to have the ability to access the payroll for that individuals. And with the open banking and the payment initiation, we believe that these funds will be available for them to flow to Inter in a more convenient and in a very inexpensive way. So I'm very excited with that. Again, I believe it's going to take a while. It's not going to be as fast as PIX, but I believe that the outcome for the market is great, for the clients would be great, but mostly for Inter it's going to be very important.

And maybe the last one, just that we -- that arrived here, maybe to [indiscernible]. Someone asking, is the universal checkout going to be only for Inter Shop and when it's going to be launched?

Oh, that's nice, Helena. Thank you so much. The Inter Universal Checkout will be available to every single client joining in our Super App. So if the client wants to buy insurance, to buy something from Inter Shop, or even wants to make an investment from money from other banks, he's going to connect itself with the Inter Universal Checkout. So this is something that we are really proud, and we really think that's going to be a game changer in our clients' user experience using our app because, as Joao said, everything became a financial transaction by the end of the day.

And when is it going to be launched?

It's already launched by the -- first version, and we are going to keep improving it by the 2022.

Okay. Well, thank you. Maybe we invite Joao to say maybe some final remarks. And thank you, everyone, to be here with us today.

Okay. So thank you, everyone, for the audience. I would say that on the last few hours, we're able to deep dive on our 5 verticals. I'd like to say that is very important for us. We're very proud of having this balanced business, this balanced component because of these 5 verticals. I'd like to say that we have been able to accomplish that for the past 5 years-or-so in a short period of time, actually. And I would say that for 2022 [ and had ] our shareholders, our clients, you can be sure that we're going to be committed to some key points. So first, we're going to keep innovating. It's in our DNA. We like to innovate. We know how to innovate, we have the workforce here to innovate, so 1,000-plus [ devs ]. So be sure that it is always going to be ahead of the trend. So this is one thing that we're very committed to. Also we're going to keep growing. We know that at some point, we will need to reduce the pace of growth, not only for credit underwriting, but for maybe new client additions, but we're still in the growth mode. So we will keep doing our best to bring more clients to make sure that more clients in Brazil and abroad, they get to know the benefits of being a Inter client. So growth is something that is very important for our conference. So we're going to be engaged on this. So we're going to keep growing. Also very important. We are a disruptive company, but we are very conservative on the balance sheet. We're going to keep doing that with a sound balance sheet. At the end of the day, besides of being a Super App. We do have a bank license in Brazil. We are a bank, so we need to have a sound balance sheet. We always had that with our follow-on with our IPO, sorry. So another follow-on, the second, the third. So this is something that's very important for us, for our Board of Directors. So we're going to keep doing that in a very sustainable way in spite of the growth. And last, I would say that we see some headwinds on 2022 for Brazil, I would say, we have the presidential actions. We also see the interest rates in Brazil and abroad going up, which might put some pressure on many digital companies and so on. But we see that as we see our business our company. We see that as a marathon or as a sprint. So I mean, we did a lot in the past 5 years, but we think that we still have 5, 10, 15, 20 years more to come. So we're not concerned about these headwinds for 2022. We're going to be here for the long term doing things on the right way. So I'm sure that the future for our business is amazing. And the best and the less, we have a very good team, very talented people to support us on this journey. So I'm very excited with 2022. I hope to see you soon on our next Inter' Investor Day by -- within 11 to 12 months. And -- that's it. Thank you, Helena, for your help for support. Thank you, [indiscernible]. Thank all the team that is helping us with this broadcast. So thank you for the audience. And that's it.