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

Good morning, everyone. I'm Santiago Stel. I'm the Head of Strategy and Investor Relations here at Inter, and I'd like to welcome you all to our 2023 Investor Day. We're very excited to be presenting you today the perspectives of our business, and we hope that you enjoy the materials that we have prepared for you today. Let me tell you how the day will go by. So we have 3 modules that we'll be presenting today. Module number 1 is a strategic update, which will be presented by our CEO, Joao Vitor Menin, that will take approximately 40 minutes. We'll then do a quick break and come back to Module 2, which will be a deeper dive on each of the business verticals and support areas, which will be presented by our different business executives. We'll do a Q&A session there. Then we'll pause for another break and come back for the third and final module, which will be the financial section presented by Helena, our CFO; me covering Unit Economics and Alexandre covering the 5-year business plan. We'll do a second Q&A session, and we'll be wrapping up around noon Brazil time. That's when we will conclude the webcast, the live stream of the webcast. And for the ones present here in Belo Horizonte, we will go for a lunch and a site visit in our headquarters. Again, thank you very much for being here together. I'll pass it to Joao Vitor for some opening remarks. Thank you.

Thank you, Santiago. So good morning, everyone. Happy to be here in Belo with a very good attendance. We have close to 70 investors here and then maybe around 400 on the webcast. I see some very common face, people supporting us for a long time. And just to share a little bit about the venue, the reason why we decided to start our Investor Day here is it's quite simple but important. You saw in the video, our headquarter, where we're heading to later on. But this building here, that's where everything started 7 years ago. I think that some investors might have come here before to watch the global -- the checking accounts being open. Here, 7 years ago, we opened the first free full service and digital checking account in Brazil. For people that know my background for the ones that don't know, I'd like to share. I'm engineer. I graduated as an engineer. And so I do love to build things. But at Inter, what I spent the past 7 years is to build the only true super app on the West world. I did that with the support of 4,000 employees, which I really appreciate and also with the support of our shareholders. For the past, I would say, 12 months or so, many investors, sell-side analysts have been asking us, where we're heading to, what are your priorities? So we decided to put this Investor Day, which is the third, I think, if I'm not wrong, but for sure is the most important one, in order to share with you, with all of you, all the stakeholders, our priorities. What we have built so far at Inter, for you to know our foundation, where we're heading after for the next 5 years. So we're going to present our 5-year plan later on, which I believe you are going to be very excited as we are. And after that, we will go through some financial KPIs and Q&A session. Thank you very much. I hope you enjoy the video. And I'll be back on this stage soon. Thank you very much. Today, I want to share with you how we are positioned in Inter and where we're heading to. I have decided to organize this discussion into 5 broad topics. Who are we, what is our strategy, why do we win, what did we accomplish in 2022 and where we're going into the future. So let's begin with who are we. We have a very specific mission. We want to empower people to manage their finance and daily activities through a simple, fully integrated digital experience. In 2015, we became the first free full service and fully digital bank in Brazil. And we started a revolution. Let me elaborate a little more. We created a new way for people to think about banking. We made our basic account free, full service and digital, but with powerful capabilities. We made it easy for new customers to experience our service and then become their primary banking relationship over time. We view this as a long-term strategy and investment. We position Inter at the intersection of banking and technology, leveraging the best of both words to create a better customer experience and to gain scale, drive volumes and generate profits more efficiently than the largest bank modules in Brazil. Let me share an example of what I mean by this. Do you know how our cost serve compares to that of largest banks? Our cost to service is BRL 17 per month. And according to our estimates, that's approximately 70% lower the industry average. We have been quite successful in the early stages of our strategy with rapid client growth, increasing client longevity and more product adoption. We were able to increase 2,400 basis points in multiproduct clients, as you can see here. Take a look. Now 66% of our active clients have 3 or more products, I think. There are companies who have tried to copy our innovations, but we have been able to maintain our competitive advantage because we don't get comfort. We are always looking to push beyond the frontier. Today, Inter has become the leading Super App in Brazil and in the West world. We offer our clients complete power to manage all their financial needs at the tip of the fingers on any device and we enable them to use their money with more control and flexibility through a suite of commercial solutions that people can use every single day. You can buy your coffee in the morning, you can shop online, you can pay for a Uber or get food delivered. You can even find and speak to a doctor directly through the Inter app. We want to make everyday activities simple and easy for everyone. We do that through 1 amazing experience, 1 account, 1 set of client credentials, 1 single log in that can be used across any device or channel anywhere in the world. And so far, we are producing good results. I think we have shown that. We are winning in the market by growing our client base, our client deposits and our market share of payment activity. We are also improving our operations by driving down our marginal costs, improving our asset quality and becoming more efficient. And I'm beginning to see the return of our investments, which we believe will grow for this next few years. Last quarter, we reported 47% annual growth in our loan portfolio. We also reached BRL 50 in average monthly revenue per active client, or PAC. We report BRL 1.5 billion in gross revenue, which grew 85% year-over-year. I think these were strong results but we are still in the early stages of our evolution with market shares that are in the low single digits, but our addressable opportunity is massive and only getting bigger. I'm proud of what we have accomplished so far and even more excited because we are very well positioned for a much bigger future. So let me walk you through our current plan. Our strategy is relatively seen. We are focused in 3 areas: One, we want to offer a complete suite of banking solutions. We use this to build our client base and generate attractive low-cost funding that we can grow through credit loans and other financial services. Two, we complement our banking solutions with an integrated suite of commerce solutions. This helps our clients use their money across a growing range of everyday activities. We use this suite to grow client engagements and increase our ability to monetize the relationship with them. And three, we want to extend the capabilities we have developed into new markets. Let's begin with our complete banking solution. The center of our strategy is that we want to help our clients manage their money in a better way. We provide them with 1 digital account where we can deliver our solutions and manage the entire relationship with them. We help our clients to deposit money and link their payroll, save their money with many products and make payments with PIX, debit card or whatever digital wallet they would like to use, such as Apple Pay. We also help our clients access credit through many products. We offer credit cards for all types of customers for students and adults of all income ranges. Because we have our digital banking platform, we can monitor their income and spending in real time. We can offer our customers increased credit lines. And when our customers are shopping in the Inter Shop, we can offer them more credit or personalized incentives. We also offer our clients a range of long products to help them finance their lives more effectively. In Brazil, the banks are still pushing high-cost products, which are inefficient for the customers. At Inter, we help our clients borrow more efficiently and at lower cost by unlocking value in their most important assets, such as their salary, their homes or even their retirement funds. These products help our clients manage debt better than expensive unsecured personal loans, helping them lower their debt service and improve our relationship with them. Overall, this strategy results in a low risk and highly collateralized portfolio. Our product strategy is to create differentiated products that are high value that generates more ARPAC, high volume to generate more engagements and high variety to capture more client wallet share. So as we develop all of our products, we want to monetize them across 3 phases that we call phase 1, penetration; phase 2, innovation and phase 3, expansion. In our penetration phase, we create functionality and experience. These are our core solutions and the other service that we wrap around them. We use this to drive volumes on our platform. In our innovation phase, we make improvements. We watch, we learn and we adapt as we see how our clients behave using AI and data analytics we can improve our offerings and underwrite more efficient. And finally, in our expansion phase, we increase engagement and grow our base. We drive recurring usage and cross-sell new service. We make adjustments to grow our client base and portfolio with improving unit economics. Later today, we will walk through our products in more detail. But I will tell you now how we put out this phase to work. Our strategy to grow our banking solutions begins in the penetration phase. We want to grow our business by driving more client activity or adoption of more products, attracting more of their deposits, originating new credit or loan products and growing the TPV on our expanding products. We focus our marketing to promote our attractive combination of competitive pricing and differentiated features. In the innovation phase, we learn about our clients financial lives. We consider income patterns based on deposits and payroll. We can also see their spending trends across different products in a row, and we learn from their repayment behavior on credit cards and loans. We use this valuable data to improve our solutions and underwriting. And, therefore, have more engagement and growth. So our strategy in the innovation phase is to improve our existing solutions, to develop new solutions and to cross-sell through our app. To do this, we focus our messaging on great user experience and the excellent convenience of our integrated app, what we proudly called our Super App. To measure our success, one of the main metrics we look at is the percentage of active clients who use multiple products. As you can see, we have been very successful so far. In our expansion phase, we want to win new customers and deposits and grow our loan portfolio. Our strategy in the expansion phase is to win new clients, enter new sectors and expand into new markets. To achieve this, our marketing centers around building trust in Inter brand, highlighting our quality service versus other bank models and also promoting how our app is extended into new areas. And to track our progress, we measure total client growth, which has grown to over 24 million. Total deposit growth, which has 37% free demand deposits and the growth of our loan portfolio, which is now over BRL 22 billion. Now let's go to the second area of our strategy, which is integrated commerce. In addition to helping clients manage their money in a better way, we want to help them use their money in daily commerce more effectively. This not only diversifies our revenue base but also lowers our total risk and increase our returns. We have been developing and embedding new features in our app, extended into many areas of people's lives. Through our app, our customers can shop online for everything they need from Magalu and Amazon in Brazil, but also Best Buy, Macy's and Walmart in the U.S. They can buy a phone with services from Intercel. They can purchase a plane ticket or 20 different types of insurance. They can also invest their money and even consult a doctor right through the app with Dr. Inter. We also generate valuable insights from our clients' commercial activities. We can see our clients shopping behaviors. We can learn from their product selection patterns and payment preference and we can see how they repeat to create trends. We use this available information to improve our promotions and incentives, driving more engagement and growth. Although this part of our business is still emerging, we are compounding value quickly. In the third quarter of 2022, we generated BRL 175 million in revenue beyond banking and our monthly ARPAC increased to BRL 50. When we bring the financial and commercial parts of the business together, we provide better value to our customers and produce an information advantage for our business. We believe this translates into better funding, better underwriting, better growth and ultimately better long-term results for our shareholders. And finally, the third area of our strategy is our newest initiative. We are expanding the value we have created in banking and commerce across borders. We are using our playbook to enter new markets where we believe we can establish our rights to win. We're taking our local coding and development investments made in Brazil and finding new markets to monetize them. We have already expanded our Super App into the U.S. We began by offering our Brazilian client a global account, which they can use to spend abroad. This enables them to keep using their Super App and lowers their overall cost of shopping outside of Brazil. Then we target Brazilians who live in the U.S. by acquiring the leading Brazil to U.S. remittance service, USEND. We will offer them with the convenience of a full bank account where they can conduct all their financial activities in 1 app. With time, we will replicate what we did in Brazil, a suite of integrated commerce features. I think we can convert many of these clients, and the results so far have been very strong. We opened over half million global accounts in 2022 and are opening new ones at a rate of over 5,000 per working day. And when I look around, I can see that we are again ahead of the trend. We are pushing the frontier of combined digital banking and commerce. And we have a massive opportunity that is expanding every year. In Brazil, we have already captured 8% market share of fixed transactions. Imagine if we can bring the rest of our business to match that market share gain. And that's just in Brazil. The U.S. market will expand our opportunities even further, and there might be more markets to come. So now that I have walked you through a very high-level road map of our strategy, I would like to take a step back to explain the foundations of our business and the advantage we have created. The foundation of our success is based on 4 key pillars. These are: number one, our full bank depository capabilities. We have the privilege of having a bank license, which enables us to take free demand deposits and operate more efficiently. Second, our consistent culture of innovation. We have demonstrated that we can innovate over and over, not just once or twice. Three, our powerful technology platform, combining banking, commerce and global ecosystems into 1 digital platform. And last, number four, our proprietary data and analytics advantage. This enable us to learn more about our clients as we are digesting valuable information every second. Now let me walk you through each of these in a little more detail. First, our full bank depository capabilities. For those who are new to our story, let me highlight that we have a full license bank inside of Inter & Co, which provides us with differentiated benefits, including more stability, an attractive source of deposits, a lower cost of funding, more financial products, On-Us payment processing and higher transaction limits. Our second pillar is our consistent culture of innovation. This is a capability that we have cultivated across our organization and really make us unique. We hire creative people. We promote the passion in our Orange blood culture and we provide superpowers to our developers to automate tasks and launch new capabilities first. And this has led us to a growing list of first. We were the first to create a 100% digital bank, a free bank account offering, an integrated banking and shopping solution and minimal. You typically see others copying our innovations. But at Inter, we are always ahead. To maintain our innovative edge, we built a powerful cloud-based tech platform, which is our third pillar. The components of our platform enable us to launch new products faster, constantly enhance existing capabilities, operate more efficiently and scale at lower cost. All of this results in the most powerful Super App in the Western world. You will be amazed when Guilherme walks you through it on the tech segment of our Investor Day. And finally, our fourth pillar is data. We built powerful data analytics and AI tools that enable us to combine banking and commerce data to understand our customers better so we can underwrite more efficiently. We can offer more tailored solutions and personalized customer service and we can identify new opportunities to explore further. Most important, when we combine our pillars, they create 3 types of significant competitive advantage: market advantage to attract new clients, operating advantage to run our business and financial advantage to generate profits to our shareholders. Now let me elaborate on our market advantage. We have a very big suite of solutions, which offer our clients more choice than anyone else with a convenient, integrated experience that's very simple and easy to use. Our clients don't need to leave our app even when using partner solutions. This is very difficult for others to replicate, and we are already well ahead of the market. All this market advantage together enable us to attract and win clients more effectively. Second, we have strong operating advantage. We have an asset-light business without expensive banking brands and more importantly, without legacy systems. Our cloud model and digital platform enable us to scale quickly and automate process, so we can serve our customers faster and with less friction. This operating advantage enable us to run our business more efficiently. Our model also creates several financial advantage. Our banking solutions drive embedded growth in our commerce solutions and vice versa, true product cross-sell. We are increasing our PAC over time as clients use more products and increase engagement. And lastly, our model provides us with lower CAC, cost of funding, cost of risk and also cost to serve. Combined, this financial advantage help us bend it from greater diversification, higher defensibility, more powerful network effects that build and protect value for our shareholders. So now that I have walked you through how we win, I would like to discuss some of our accomplishments in 2022. First of all, I'm very proud of our tremendous growth. We have grown to levels that were unimaginable at the time of our IPO. For example, back in 2018, I told you that we would reach 4 million clients by 2022. It turned out, my forecast was a little light. Today, we have over 24 million clients, 6x larger than originally forecast. Our growth is only possible thanks to our strong team, which continues improving as we attract talent from top tier global institutions. For example, in 2022, we hired Flavio Queijo, the Head of Real Estate business coming from Itau; Danilo Coelho, Head of Credit Underwriting coming from Banco Votorantim; and Santiago Stel, Head of Strategy and IR coming from Morgan Stanley. Our strong brands and attractive culture are helping us to attract top-level talent and we will continue to strengthen our bench as we continue to grow. Our hard work is also being recognized. We received many awards last year, which make me very proud, including the #1 Super App Brazil, the #1 digital bank and lastly, the #1 digital broker. In 2022, we also launched several important products for our Super App. Dr. Inter, a telehealth solution connecting consumers with doctors through their app. Invest Now Pay Later, which enables Brazilians to invest more easily. And last but not least, our Global Account, which helps customers transact more efficiently across borders and provide us with a new solution for international expansion. Finally, in 2022, we demonstrated important operational achievements. First, we made significant updates to our tech platform by implementing our new Inter gateway and core banking system. Second, we launched our operations in the United States. And third, we became the first company ever to migrate from B3 to the Nasdaq. Executing on these ambitious initiatives has not distracted us from our relentless focus to serve clients with a world-class efforts. This can be seen in our NPS, where we achieved our highest score ever in 2022. So now that we have discussed in 2022, I will finish with a look into the future. As I think about the future, I always keep 3 priorities in my mind. We want to continue to drive growth. We are a growth company. We want to continue innovating. We are a very innovative company, and we want to increase profits. We have plenty of other goals and targets, but these 3 ones are top priorities for me. So with this in mind, I will share a few examples of our future plans. We have made several near-term tactical decisions. On marketing, we will focus on building further brand awareness. On product development, we will introduce Overdraft, a product that is strategically important to winning the primary banking relationship in Brazil. Another upcoming product will be Buy Now Pay Later available to our clients at Inter Shop. And in operations, we expect to keep our head count roughly flat for second consecutive year while maintaining a strong growth profile without sacrificing innovation. We have several longer-term strategic initiatives for the future. For example, we have expanded into the health care and are exploring other sectors to continue building a complete Super App. We are evaluating opportunities for international expansion where we believe to have a strategic advantage to win market share. And finally, let's discuss our long-term financial targets. We have spent the past 6 months or so developing a new plan, which we are very excited about. We call this the 60-30-30 plan. By the end of 2027, we are targeting 60 million clients, more than the double of clients we have today, a 30% efficiency ratio better than the largest incumbent banks in Brazil and resulting from this, a 30% ROE. I hope I was able to provide you with a good perspective on how we see the outlook over the next 5 years. We will discuss this concept in more detail in the financial section. As I finish my overview, I want to leave you with a few final parts. One, we are very well positioned with a unique strategy and opportunity for you to invest in. Two, we view our full banking and free deposit capabilities as a significant competitive advantage versus other digital players. Three, our Super App is a unique platform to engage and monetize clients more efficiently. Four, we have a clear and powerful strategy to generate growth and profits in multiple ways. Number five, we have real revenue and cost advantage that improve as we scale. And finally, we are just getting started and have a very exciting outlook for the future, which I think makes us an attractive fit for any long-term portfolio. So with that, I would like to thank you for walking through Inter's strategy with me. This is a very personal story, but I hope you can see why I'm so excited about the business. We're now going to take a short break, and then we will deep dive into the business. First, we will discuss our products and then we will finish by digging into our numbers, our unit economics and Inter outlook. Thank you. So I hope you enjoyed the video presentation. As I told you in the beginning, I'm very excited, energized for the 5 years to come. We took a lot of time during the past 6 months, with the help of the team to elaborate the 60-30-30 plan, which we know it's ambitious, but feasible. And also, we are very committed and engaged with that. This is very important. I would say that although this 5-year plan is ambitious, I would say that what we built on the past 5 years, as I explained it here, I would say that was even harder to obtain. I hope that you were able to really understand the capabilities, the business, everything we have, the good foundation that we built in order to make us committed and convinced that we can achieve this ambitious plan. Also, by returning -- by implementing this 5-year plan, the 60-30-30, having the 60 million clients, having the 30% efficiency ratio and ROE, we're going to end up by having approximately BRL 100 billion credit portfolio, which we will deep dive later on, on the financial metrics. But most important, talking about not only results but also return to our shareholders, which is a top priority for myself. Sometimes I need to remember that I am a very big shareholder for Inter. So I'm really focused on return. Having this BRL 100 billion credit portfolio with this efficiency ratio and being an asset-light company, we are planning to achieve a BRL 5 billion net income by the end of 2027, which we believe is going to be a very good value generation for our shareholders, that will be with us for the next 5 years. So with this important message about our plan, our portfolio, our profitability. I would like to end this session. So we're going to have a coffee break now for approximately 15 minutes. And then we will go into the financial metrics -- business with the business deep dive. And within 5 minutes, we're going to show some more very nice things about Inter platform. Thank you very much. [Break]

Proceed with module 2, which is the update of the business sections from the different executives, and we'll do a Q&A session right after it.

Hi, I'm Alexandre Riccio, Vice President of Technology, Operations and Finance at Inter. We developed a product strategy to deepen client relationships, improve unit economics and strengthen our market position. This strategy is focused on creating differentiated products that are high value to generate more ARPAC, high volume to generate more client engagement and high variety to capture more client wallet share. Our suite of best-in-class products spans across 2 ecosystems, delivered in 1 integrated Super App: Inter Financial, where our products help clients manage their money, and the Inter Commerce, where our products help clients use their money with over 100 products and services to serve the daily needs of our clients across 8 product categories. Let's start with day-to-day banking.

Hello, I'm [indiscernible] and I'm going to talk about day-to-day banking. Before going into details, I want to tell you what makes Inter so special. The secret sauce of day-to-day banking is our Super App, which is just beautiful. It is simple and clean. It works great, always on and has everything you need. We truly believe that measured on a global scale, it is best-in-class. So good that we will fall in love and want to delete any other banking apps. With that said, let me jump into the product. From the moment we wake up and take an Uber to work, buy a coffee, shop online, pay our bill and so much more, we have everything you need at Inter. How much? A lot more. There is nothing you would want that isn't covered by our day-to-day banking capabilities. So how is this possible? As Joao mentioned earlier, we combine the strengths of our depository bank with the agility of our fintech to offer the most differentiated banking experience in the market. Our success can be seen in our impressive results. We have more than 24 million clients, more than the population of Chile and Uruguay combined. Over 60% of our active clients chose Inter as their primary bank. And we have attracted over BRL 26 billion (sic) [ BRL 28 billion ] in retail deposits. Our clients also have spent over BRL 500 billion in the last 12 months or more than USD 100 billion. A very impressive number. And finally, we've reached 8% PIX market share.

When we look at traditional banking in Brazil, we see banks pushing high-cost products that are not in the best interest of consumers. We're changing that. Inter helps clients borrow more efficiently and at a lower cost by leveraging their most valuable assets, including their salary, real estate and retirement funds. This is a win-win situation as it enables us to have a highly collateralized portfolio. Our credit card product is designed to empower clients to transact in the digital world. It offers the flexibility of short-term financing although only 15% of credit card balances are interest-bearing. We believe this should not be a primary financing product, though having the flexibility is a strong advantage to our clients. Over the past years, we have significantly enhanced our credit portfolio, including the launch of our digital underwriting engine and our credit management capabilities. We'll talk more about credit underwriting offering later, but it's important to note that we have a highly sophisticated digital underwriting engine that leverages proprietary technology and a massive and growing data set, which we combine with machine learning and AI, giving us highly efficient loan generation capabilities. Our loan book is also inherently low risk given that 70% of the book is collateralized. Our loan book has evolved meaningfully over the past few years. We went from a regional bank offering only real estate and payroll loans to becoming a fully diversified lender with a broad suite of products. In doing so, we have grown our portfolio by an impressive 60% CAGR over the last 5 years. Finally, we have a huge opportunity to increase the credit penetration among our clients. The average balance at Inter stands at BRL 1,200, multiple times lower than that of the traditional banks.

Hi, everyone. I'm Paulo Padilha and now it's time to talk about our insurance vertical. Launched Inter Seguros to protect the most important assets of our clients' lives. We'll provide one of the broadest suites of insurance products [indiscernible] Brazil, delivered via an asset-light brokerage model with zero balance sheet risk, help clients find the insurance policy that best fit their needs, working with the best new insurance carriers in the world. Our ability to grow our product suite quickly and efficiently is second to none. In just 3 years, we have launched over 20 products. In 4Q '22 alone, we launched 3 new products: PIX insurance, pet insurance and SME insurance. Let me tell you why our insurance platform wins. We offer a best-in-class experience by making insurance simple, 100% digital with the broadest product offering. Our superior growth capabilities enable us to launch new products efficiently and reduce timing to market through our brokerage model. We can scale our business with our existing infrastructure with a minimum variable costs. We leverage our unique behavioral data by different segmentations to cross-sell clients with [ staggering ] insurance policies. For example, a customer who purchased a flight ticket via Inter Travel may also consider to buy travel insurance. We cross-sell our insurance products to protect the financial and commercial transactions. For example, a recurring user of PIX may [indiscernible] insurance to protect her account balance. There are tricky ways to monetize our business. Our upfront payments negotiated with our underwrite partners [indiscernible] commissions, earning brokerage policies and performance fees [indiscernible]. We have been tremendously successful in growing our business, having reached more than 1 million active contracts in just 3 years. Inter Seguros is very profitable due to the multiyear recurring revenue streams. We grow as we accumulated and distributing more and more policies. As you can see, we are optimistic of the consistent growth of our business and looking forward to deliver even more in the years to come.

Hi, my name is Felipe Bottino. I'm the CEO of Inter Invest. Let me tell you why Inter Invest is truly unique. We are the only direct-to-consumer investment platform created by a digital bank in Brazil. Our technology-enabled platform allow us to bypass the traditional intermediary channels and serve the entire spectrum of investment profile. We segment our customers into 4 categories based on their assets under custody. For the low AUC clients that prefer a self-service model, we offer a fully digital experience that we can service profitably given our low-cost tech-enabled platforms. We offer 3 types of personalized wealth advisory service: One, Black and Win. Regardless of the service level, our digital brokerage offering is completely democratized. We provide the same trading capabilities and products to everyone. In addition to offering a full range of products across all major classes, we provide a unique access to trade U.S. equities, not just Brazilian stocks. We also offer third-party investment funds and fixed income products as well as our in-house Inter Fund. We believe in the importance of empowering our clients with the resource to make the most informed investment decisions. We do so by providing them with educational content and tools created by Inter's financial professionals. For the beginners, we provide educational content along with robo-advisory tools where a virtual investment assistant will ask a few questions, analyze the clients' profile and goals and propose selector tailor-made investment options. For more experienced investors, we offer sell-side research reports produced by Inter Macro, fixed income and equities research team and advanced trading tools within Invest Shop. The success of our brokerage business has enabled us to continuously expand our offering. We have built a sizable asset management platform, Inter Asset, which provides in-house manufacturing mutual funds and customized solutions. We have also developed a robust capital markets platform for corporate clients, providing debt capital markets, trading and custody services. We have created a unique self-reinforcing ecosystem that provide us with strong competitive differentiation by combining our digital brokerage with our asset management and capital market solutions. Given the large investor base served by our brokerage and asset management units, we have strong distribution capabilities for corporate issuers, which in turn attracts more investors looking for diverse investment opportunities. Our 3 competitive advantages that are most worth highlighting are: we provide customers with attractive pricing by operating with a low-cost digital and direct-to-consumer model. Our customer-centric model puts the customer at the center of everything we do. It is simple, democratized and without conflict of interests that are inherent to the financial adviser model. Finally, we have a track record of creating innovative products for our clients such as Invest Now Pay Later and our investment communities. Our Inter Invest business has demonstrated impressive growth since its inception. We have grown our active client base to over 2.4 million clients. We have increased our share of wallet with more than 1 million clients having more than 1 investment product. As a result, our assets under custody increased to BRL 62 billion, making us one of the largest brokerage platforms in the country.

Hello, everyone. My name is Rodrigo Gouveia. I'm the CEO of Inter Shop, and I'm going to share a little bit of our products with you today. Inter Shop has been the most impactful product launch in our history. We've changed the way consumers conduct commerce online. We provide them with the most efficient, lowest cost and integrated shopping experience together with a powerful cash back incentive that maximizes the purchasing power of our clients, while feeding liquidity into interest ecosystem. We partnered with over 900 of the best brands and retailers in Brazil and around the world, who chose to work with us given our highly effective distribution channel and superior conversion rates, which help them drive more sales. As a result of our unique competitive advantages, we deliver 5 core value propositions to our customers that underpin our differentiation. Those include: first, a broad product suite. We provide one of the largest online marketplace in Brazil, approaching 1 million SKUs across over 900 merchants. We can do so as a result of our deepest relationship with our retailers as well as our integration technology, which enables us to quickly onboard new retailers and reduce our time to market. Second, superior personalization. As a result of our unique ability to capture customer behavior data across Inter's platforms, we provide highly personalized special offers to our clients. Third, safety and reliability. Our customers feel safe transacting on Inter Shop, knowing that their personal and financial information will be kept secured. For those paying via Inter app or Inter credit card, there is an added level of comfort that they will be approved instantly for the purchase. Fourth, attractive incentives. In exchange for providing our merchant partners with an effective distribution channel, we charge attractive take rates. Further, we pass along a portion of the take rate in the form of cash back rewards to our customers. Fifth, SuperLimit. Not all customers want cash back. For those consumers who prefer to increase their spend power on Inter Shop and/or build their credit profile faster, we provide them with the option to receive a SuperLimit credit extension instead of cash back. Simply put, a SuperLimit credit allows clients to access greater credit limit to complete a purchase. As a result of the key differentiation points that we just mentioned and the unique value proposition that they provide to our clients, we have grown beyond our own expectations. We've reached an impressive BRL 4.1 billion in GMV over the past 12 months. We've increased our take rates steadily over time and drove volume for our retail partners. Today, our average gross take rate is almost 11%. And our net take rate surpassed 5%. Commerce Plus. So what is it that we are trying to achieve by offering all of these e-commerce products in addition to our Inter Shop marketplace? Our strategy is to help customers manage all their spending activity, from the most typical day-to-day transaction like ordering food or paying electric bills to the most important pursuits such as caring for your health. Inter will help you achieve it. And why we do it? We provide these products to drive engagement with our Super App, which fosters loyalty to the Inter brand and creates stickier customers, who will then adopt more products within the ecosystem, which feeds our data engine and enables us to better serve the customer. On this slide, we've laid out a few examples of our key Commerce Plus offerings that will help consumers with their spending needs. To highlight just a few, Dr. Inter, our telehealth platform, that helps our customers not only schedule appointments for in-personal visits, but also enables online consultations via video, all within the app. We'll talk more about this offering on the following page. Inter Cel, our MVNO with Vivo, where customers can transfer their phone number to Inter Cel, benefit from the vast mobile network in Brazil and earn cash back on their account. Duo Gourmet is our subscription plan where customers can take advantage of unique discounts and promotions, such as 2 meals for the price of 1, across tens of thousands of restaurants in Brazil. Inter Travel provides you with the ability to book airline tickets, hotels, car rentals and much more and all while earning cash back. Have you ever imagined a regulated bank offering telehealth? Well, we do it here at Inter. We provide the convenience of being able to schedule an appointment in just 1 click, and most importantly, experience an online medical consultation via video. All from the comfort of your own home. We offer a broad range of medical professionals from general practitioners and specialist doctors as well as psychologists, nutritionists, and more.

Hi. I'm Aloisio Matos, Executive Director at Inter and responsible for global and cross-border initiatives. We have taken the very best of our Inter Financial and Inter Commerce Solutions and deployed them globally. We segment our Inter Global product into 2 categories: 1 for Brazilian residents and 1 for U.S. residents. For Brazilian residents, this includes investing, FX, e-commerce and digital account for those that are either traveling or working abroad. For U.S. residents, this includes our digital account, remittance and shopping products that are initially targeted at the Brazilian diaspora that lives in the United States. For Brazilians, we offer 3 core products. Our global account is a U.S.-based account and a debit card for Brazilians to transact globally. This product is extremely simple to use, requiring just a quick swipe within the app to move money from your Brazilian account to your global account. The core value proposition is to help Brazilians save money while traveling as it enables them to minimize taxes and expensive FX conversion fees. We're also making it easy to access the U.S. financial system as Brazilians traveling in the U.S. may not be able to open a local account for global investing. This provides Brazilians with the ability to invest in U.S. equities to diversify their portfolios. Lastly, our FX product allows Brazilian to receive international payments with low fees. For example, a Brazilian living in Rio can sell her products on Amazon or eBay and receive the payments locally in the United States. For U.S. residents, we provide Inter Financial products such as day-to-day account services and the ability to send remittances abroad, mainly to Brazil nowadays. We also provide Inter Commerce products such as to purchase a wide variety of e-commerce gift cards on our platforms. We believe that we are positioned to succeed in providing financial and commerce products to the Brazilian community in the United States, given our ability to target this demographic group effectively. We understand them culturally, and we can overcome the language barrier for those who do not speak English well. We are highly experienced in the market, having recently acquired USEND, a leading remittance business that has over 16 years in the U.S. market. We have a local team across the major cities where Brazilian immigrants concentrate and we are licensed to provide financial services in more than 40 U.S. states. While we remain at the beginning of our journey of expanding globally, we're excited about the progress we have made so far. In just 2 quarters, we have grown the numbers of global account by 10x to 500,000 accounts as of the third quarter of 2022. Our customers are opening over 5,000 accounts every business days and we expect this to continue going forward.

Hello. I'm Priscila Salles, Chief Marketing Officer at Inter. Let's talk about our marketing and distribution. Inter has had a key role in the banking revolution in Brazil. Now we are focused on delivering the most disruptive solution to enhance every moment of our customers' lives. How? By launching Brazil's first digital account; being the first bank to offer a complete marketplace and the first one to launch a Super App. When we say Super App, what we mean is we can simplify day-to-day banking transactions: shopping, booking the next family vacation, insurance or their food delivery, investing for the future. Whatever our customers desire, we deliver and more. The result? We have millions of customers passionate about Inter. They know we have a complete solution, outstanding customer service and an incredible app, resulting in a love that knows no bounds. Inter's business and growth is driven by our self-fulfilling flywheel. Our brand is powered with awareness and referrals. This results in an amazing performance in organic and paid client acquisition. With the customers we add, we leverage our insight and data to enhance activation, upsell and inform clients about our entire product landscape, which results in more engagement. New and old customers fall in love with our experience, the exceptional app and the simplicity we provide resulting in top of market app ratings and NPS score, which drives awareness and referrals. Now I'll walk you through how we build our powerful brand. Our brand strategy is driven through high impact and consistent communications across all channels. We have seen hundreds of millions of views in our latest awareness campaigns, over 36 million searches for Inter on Google, over BRL 1.3 billion in organic advertising value were created by significant Brazilian press interested in Inter. In all, social channel engagement is up more than 80% over last year. As our brand awareness and power has grown, we have seen rapid growth in our client base. Our organic acquisition capabilities are impressive. Its growth is even faster than client growth and reached more than 3/4 of all installs. This helps us to realize a 6% decrease in client acquisition costs year-over-year. We engage with our clients throughout their journey with Inter. Our social media channels have over 10 million followers and have seen significant growth in engagement with Inter over the last year. Content leadership is our key driver. We drive awareness across product offerings and promote top leaders with the invest economics and commerce. Our engagement with clients will continue to grow with the launch of our communities. A new channel to support the education of our growing clients. As highlighted within the data and technology deep dive, our data insights are best-in-class. Through our analytics and AI, we have realized growth in engagement of more than 600 basis points and promotional conversion by 39x end ROI by 23x. Let me give you a couple of examples. Shifting from manual targeting to algorithmic automation has yield significant ROI. In the case of Inter Shop, we offered a promotion to 90% fewer clients than the manual offering. However, we experienced a 15x increase in conversion and 35% greater GMV than the less efficient manual offering. Another good example worth mentioning is that we implemented an automated recommendation in engine for Brazilian treasury bonds. This promotion led to a 39x increase in conversion and 23x increase in asset allocation. Lastly, we shifted to an automated credit review process for our paycheck loan offering. This led to an 800% increase in lead generation and 700% in credit origination. We're still in the early stages of realizing the benefits of our data and automation potential, and we expect to continue generating significant returns on our investments. Now let's talk about experience. Greater engagement by our customers and high quality of our services drives better overall experience. This can be seen in the high scores and awards that we received from our customers. We value our customers at the highest levels, and we are very fortunate to have them value us as well. As you can see, we have proven track records of success. Our powerful brand supports our rapid customer acquisition. The engagement with our customers helps them through their journey and drives greater product usage. As we become more rooted in our customers' lives, they become more connected and happier with Inter. This moves us further to keep our flywheel turning and connecting amazing products to amazing customers.

Hello, everyone. Thanks for watching. My name is Thiago de Lima. I'm the Chief Risk Officer at Inter, in charge of all risk matters. We have strengthened and enhanced our credit process from front to back. Specifically, we strengthened the underwriting and credit team, adding bandwidth and expertise. We are using more sophisticated strategies and tools, leveraging proprietary cloud-based technologies and assets to make more data-driven decisions. And finally, we are constantly looking for ways to improve what we do and the data and tools we use. These refined tools and strategies, including our deep customer insights and broad proprietary data have allowed us to maintain high approval rates while improving the credit quality of our portfolio. The deep insights we are able to derive from our customer data, combined with our increasingly sophisticated risk algorithms and models, allows us to target more creditworthy customers and lower our default rates. For example, harnessing our customer data and using it as a key driver in our credit decisioning process has allowed us to target better customers for our credit card product and dramatically reduce our first payment default experience. As can be seen from the chart, our credit profile is also benefiting from our ability to build deeper relationships with our clients. Our experience shows that the number of products a customer procures from us is highly correlated to their credit worthiness. This allows us to target highly valuable customers and extend more credit to them. Our improved strategies and process are producing valuable benefits for us, including smarter credit decisions, a more resilient loan portfolio characterized by lower first payment defaults, better NPL measures, improved recoveries, lower charge-offs and improved financial performance.

Hi. I'm Guilherme Ximenes, Inter CTO, and I'm here today to tell a little bit of our technology. We created a modern technology platform that empowers our entire organization. This platform includes our mobile app, API gateways, hundreds of micro services, core banking system and all of it running 100% in the cloud, all of which make our operations more efficient, scalable and secure. And now I'll walk you through each of our platform components. We created the first Super App for the Americas with powerful attributes and advantages. Our single application written in a unified code base provides clients and businesses with a centralized and integrated experience. We run on a modern mobile architecture with shared software components and decoupled solution within the Super App. This makes it easier to enhance functionalities, test and deploy it to production. We prioritize native mobile development on iOS and Android, make it one of the most fluid and fast-running app in the market. And we have strong security and authentication protocols with active fraud detection. And now we are building a new version of our Super App with an innovative experience for our clients. First, we have added a banner with personalized client offers based on the client's behavior. For example, if we see that a client has just transacted at a pet store, we will offer pet food, pet insurance and products they could purchase for their pet on the home screen banner. Then we will add context to that, including client behavior and location to adjust the homepage in real time to optimize the client experience. We will highlight the applications that are most likely to be used and adjust based on the client's context. For example, if the client is driving their car, then we may place the fuel payment solution and parking applications on their home page. In terms of execution, we are very close to rolling out this new version of our Super App, which we plan to deploy in phases throughout this year. Our integrated data lake is ready. We have deployed customized offers via homepage banners, which we will continue to enhance throughout the year. We are developing many client personas and our recommendation engine to power the initial rollout of personalized experiences. We plan to deploy the first version of contextualized experiences, providing clients with smart recommendations and access to products that fit their lives. For the final stage, we will launch hyperpersonalized experiences where each client has a tailored app look and feel with AI to assist in managing their financial lives and daily activities. We are very excited about what we're building and look forward to providing more updates later this year. To power our apps, we launched the Inter API Gateway in 2021, a proprietary technology that manages and allows all communications across more than 2,500 micro services. This cloud-native architecture handles enormous throughput capacity, effectively harnessing the cloud computing power to better serve our customer request volumes with speed and stability. The Inter Gateway helps product developers to focus on building business application and engineers to focus on managing and enhancing our infrastructure, which inspires more creativity by allowing developers to focus on their business application, improves developer productivity and enables us to deploy new products faster. And by using our Inter Gateway, we significantly reduce cost to serve compared to user certified solution. We employ a modular micro service approach across all business applications, which is coded in the most popular programming language, giving us access to a larger pool of high-quality engineers. We have a faster learning curve. This enable us to provide developers with greater autonomy with refinery control and responsibility, help us operate with more agility to react to market changes by releasing updates more easily and frequently. And with robust governance, we operate as a regulator bank with the agility of a disruptive start-up. Given our global scale and increasing complexity of our operations, we decided to develop a next-generation core banking system. This system will enable us to automate more banking processes, have more data integrity as we exponentially grow our transaction and ledger, operate with faster processing speeds and integrate and operate our banking capabilities in new countries, including the U.S. We operate with all systems in the cloud, and we're the first bank in Latin America to do so. Our infrastructure as code empowers our developers to create its own development environments with control and autonomy. We've automated the process to launch more environments, making it faster and easier to scale. To complement, we have full observability of our tech stack to ensure clients have the best digital experience. We have redundant data architecture and have segregated some service environments, making our technology more reliable and resilient. And in 2022, we achieved 99,999 of uptime which was best in class. Finally, our cloud host empowers our big data lake, one of our most valuable assets.

Hi, everyone. My name is Lucas Bernardes, and I'm the CDO at Inter. Data is core to everything we do at Inter. By bringing together financial and commerce ecosystems, we have unique and powerful advantages that enable us to generate more behavioral data across each client interaction and develop better information and insights and of course, improve the client experience. To date, we have gathered over 1 petabyte (sic) [ 7 petabytes ] of behavioral and transactional data, structured so it's just 1 click away from being used by anyone allowed at Inter. We have a simple strategy: create trustworthy and accurate data that can be quickly and easily leveraged across the entire organization with the highest standards of data privacy and protection. We believe the power of data is only as good as the ability to use it. So we must guarantee the analytic data have accuracy. We have developed a robust and reliable single source of truth, our Inter Lake. Speed, we have accelerated the time to generate insights by 3x. We do in 8 weeks what our competitors do in 6 months. Usability, we have built thousands of dashboards used by 1,500 employees. Through our center of excellence, we have fostered a data culture to teach and empower employees with our data to improve business outcomes. And of course, privacy. We assure the data privacy of every single client. Our data protocols have been designed according to international data protection standards, including Europe and U.S. rules. We created a powerful intelligence and analytics engine called Inter Mind, which provides meaningful insights, personalization and client-focused prediction. To make Inter Mind more friendly to end users, we have created 2 applications: Insights Machine and 360 Vision. We also use Inter Mind to explore new technologies and techniques for AI. For example, we recently won an award for application of AI in the context of anti-money laundering. Now I explain the business application in more detail. Launched in 2021, our Insights Machine tracks spending behavior and enable business users to analyze the consolidated data to drive business decisions. For example, Insights Machine can determine which sellers or product categories are most relevant to our clients. It helps us to identify new markets and which new retailer is included on Inter Shop. We can also use this client preference data to negotiate better take rates with retailers. In fact, our forecasts are so good that we have demonstrated a 95% correlation to actual financial results published by public retailers. Our second application, 360 Vision, allows the Inter teams to have a complete client transactional and behavioral profile. With this powerful information, we can create magical journeys and better serve our clients. For example, we can provide with high personalized experiences, and we can recommend and cross-sell products that best fit their needs. We also can underwrite credit more efficiently and provide customized pricing. And we can prioritize the most critical service requests to maximize customer satisfaction and retention. Now I'll walk through a few study cases on how we use data. We can personalize the entire client experience from beginning to end. Soon, we'll have a customized homepage that highlights the tools and the icons that clients most care about. We also recommend specific products using client contacts to address their most pressing needs. Our 360 view is extremely useful to drive cross-selling and upselling. For example, we can identify lookalike customers' profiles and offer similar products that were purchased by others. More importantly, our customers' spending patterns tell us a lot about what's happening in their lives so we can predict upcoming needs. For example, by identifying someone growing spend on rent, we can infer that there is a higher likelihood that they may need a mortgage in the near future. We have also become very adept at upselling clients based on their 360 profiles. Given our deep insights into each customer's historical earnings and spending, we can estimate how much AUC they can bring into our ecosystem, creating upsell opportunities for Inter Invest. Our 360 Vision do enable us to prioritize service levels to customers with a higher lifetime values, but also with a higher propensity to churn. We have also improved retention by matching our customer service people to clients with similar profiles such as living in the same region or speaking with the same accent. The results have been impressive. We have improved our NPS score from 81 to 84 and have reduced the number of customer complaints that are escalated to the central bank. As you can see, our proprietary data sets and our ability to extract unique insights from them are extremely valuable. We continue to capitalize on these strengths to benefit our customers, providing them with the service they need, with the personalized experience, all in 1 app.

Excellent. So now we will start the Q&A session. Joao Vitor, Alexandre and Pri will join us here in the podium. And just to remind, we take questions from the webcast as well as questions from the -- from here in the audience. And maybe I'll shoot the first question to Joao that came from the webcast. If you can comment, going back to module #1, on the priorities that you have for Inter in light of the strategic update that you provided?

Okay. Thank you for the question. I think as I have shown in the presentation, it's quite simple. The 3 top priorities, not only for 2023, Santiago, but also for the next years to come are growth. We're a growth company. We need to have growth. Growth will help us diluting the costs and improving our revenue. So this is very important. And not only growing the clients, but also the revenues, the cross-sell and the activity in our app. The second, innovation. I think that I have shared before with many of our investors and the sell-side analysts that more important than getting the clients and serving them well is to protect our clients. We cannot avoid to have churn. And in order to do so, we need to keep innovating, raising the bar, having the best product, the best app and the best integrated solutions. So I'm going to lock in a client because he's in love with our global account, for example. So innovation is very important on that. And the third one is about returns. As I also mentioned before, I'm a big shareholder for Inter. And we believe that everything we're doing, we're building, compounding. By the end of the day, we want to make sure that we can have the best return possible for the risk we are willing to take. So improving the risk reward with a decent level of risk, we're focused on having a very good return, which I mentioned earlier about the ROE, which is a very important KPI for ourselves, but also net income. So these are the 3 top priorities for myself. And of course, these are the 3 top priorities that we share with our Board of Directors and with all the management, the [ 30 ] managing directors that we have at Inter.

Thank you. I think the first question from the audience that I see is Leduc in the front row.

Okay. Thank you, guys, so much for hosting the event and the presentation. It's very evident that you guys are maturing as time goes. I remember this time last year, there was also an Inter Day but today with a lot more data and a lot more science. And I think a longer-term vision that you guys are portraying, that's useful for everybody. And now exploring a little bit '27 vision, the [ 60 30 30 ], that's a nice name. Roughly speaking, Brazil is majority of the 60 million clients or does it already entail some of the U.S. [ ambitions ]. Last year, you mentioned a number, I don't know if you had fine-tuned this as well. And within the ROE, there's obviously a revenue component that will help you reduce costs and bring the efficiencies to 30%. And roughly speaking, on this revenue, how do you imagine it composed between credit products, service products? Just for us to start coloring in the picture here, but a few questions in one.

Okay. If I forgot some, you help me too. But let's start from the last one. So about the breakdown between NII and fee income, this is very important for us, Leduc. We have highlighted that for the past quarters or so. We have built, as we see on that picture about the banking capabilities and the fintech capabilities, the banking solutions and the commerce solutions. We really wanted, not today but years ago, to combine these 2 things in order to produce this good breakdown between NII and fee income. And important, I'd like to say, a healthy fee income, to charge BRL 10 for a PIX [indiscernible] it's not a healthy -- it's not a sustainable fee income. It's going to go away. So we're talking about a healthy fee income. So today, we have about 40% of this. This breakdown, this ratio tends to keep the same or even improve our fee income, which will help us to have a higher ROE comparing to [ e-commerce ] bank. So that's the first thing. Regarding the U.S., when -- do our assumptions and doing our modeling for the 2027 plan, we're just talking about our core business, core products that we have as of today. Of course, we already have the remittance business, which is in our assumption. We do already have the debit card. We're not talking about what we're going to build in the United States. So most likely, we will have a tailwind from the U.S. business going forward. And the second question was about?

The client count, the distribution between Brazil and U.S., but you already -- I think you've alluded to the revenue coming mostly from Brazil, whatever you add to the U.S. would add to this figure that you mentioned. But if you can elaborate a bit on the 60 million client breakdown regionally?

So we believe that when you think about the 60 million client, again, as we're thinking business as usual. So we're predicting that we have the roughly 7 million to 8 million new clients additional per year going forward. And pretty much we're considering clients in Brazil, okay? So this is pretty much what we have. We do believe that we're going to have more clients coming -- more U.S. residents coming to the platform on the years to come.

Mario Pierry from Bank of America. On your 5-year plan, can you discuss the growth coming from organic and inorganic opportunities? We're seeing the sector and fintechs in Brazil starting to struggle given that many of them don't have the access to funding as you have. So if you could talk a little bit about how do you see consolidation happening? And what kind of role do you plan on playing?

Okay, Mario, thank you. So first of all, as I mentioned to Leduc, when we presented this 5-year plan to the Board, to the employees and everyone, we're talking about organic growth, about the products that we have today in the markets that we are today. So this is what we have in place. I do believe we will see consolidation in the market, mostly in Brazil, for obvious reasons [indiscernible] without good capital, without deposits, without a good range of products. And they can no longer do a cash burn to attract and retain clients. So the outcome of that, I believe that -- the M&A that I believe will take place at Inter is going to be a hybrid, organic and inorganic, because most of these clients, I believe you can emanate them through our platform down the road. So if you have a client that was using our platform because they had 100% [indiscernible] balance on their account, and they no longer have that, they might turn to Intern. So I don't think you need to buy a platform, buy a company, buy a fintech. But I believe you can buy this business, these clients, I would say, at chips. So I don't see ourselves doing a consolidation in Brazil to achieve this 5-year plan going forward, okay? Of course, we do have capital, we do have funding and everything. If there is something that is interesting, of course, we are always looking and assessing, but that's not what we have in our modeling.

Thank you, Mario. [indiscernible] questions from the audience here on the webcast. The next question is regarding competitive landscape. In Brazil, how do we see it? [indiscernible], do you want to take this one?

Sure. So I think the first point I'd like to touch on is that we're very confident to say that we're one of the winners in this market. So digital banking became a market in the last, say, 5 years. We grew very well positioned, confident with our position and our capacity to keep competing as we move forward. And I also like to think about this -- the competitive landscape in the context of the past. So back in 2018, we have like -- when we IPO'ed 400,000 clients and there were 2 big questions. One was, is Inter going to be one of the top contenders 5 years from now? The second was, how big is this market going to be? And the reality is that we had very good execution. So again, we're very well positioned in 2023. Of course, we have to keep evolving. And the market is much larger than what we planned. So our business plan talked about 4 million clients by 2022. We are at about 25 million clients today, which means it's a much bigger opportunity for us as we move forward, and we're ready to compete. So we're happy about that. 2023, we see that it's going to be a better year to compete than the last 5 years, given everything that we're seeing, also with the capital markets, less capital abundance for people to spend on CAC. So good prospects for 2023.

Eduardo Rosman from BTG Pactual. Joao, Santiago, [indiscernible] I know you're going to discuss later today the 5-year plan. But what about the next 6 months or 12-month plan, right? Clearly -- see, the stock has been under pressure, I think, because of concerns about short-term profitability. How we're going to get there? I know that you have a lot of capital, but your capital has been going down quarter after quarter. I know you can probably use your capital better. So if you can help us at least to have a view on the next, let's say, 6 to 12 months, if you can get to at least a mid-single-digit ROE, if that's possible, which I think it is, but it would be great to hear from you.

Okay. Rosman, thank you for the question. We have been receiving these type of questions for a while, and I'm going to hand over that to Santiago, our IR, to address this very important question for the next 6 or 12 months.

Thank you, Joao. So basically, the plan for 2023 is quite simple, which is the continuation of 2022, simple as that. So basically, we're actively working on the re-pricing. We have re-priced the majority of the short-term portfolio. We're working now on payroll and real estate, working on a very thorough rate with minimum ROE targets on every single origination that we have. We will continue working on the fee side. We will continue allocating capital in a profitable way. So basically, the plan is nothing new from what we have been doing, but in a more evolved manner. Protect our fee income ratio, which as we showed in the presentation, we'll talk about that later. It's the highest among Brazilian banks or one of the highest among Brazilian banks, as such, to consume less capital. We have a lot of low-hanging fruits in terms of capital allocation, which we're actively working on. And we'll dig -- [indiscernible] on that. I don't want to jump the financial section where we'll have the Q&A, but we'll dig deeper on several initiatives that we have in place.

This is Flavio from Bank of America. So I have a couple of questions here regarding your guidance. So the first one is regarding your loan portfolio. So I was wondering what should we expect regarding the loan portfolio breakdown, regarding products and client segments for 2017 (sic) [ 2027 ]? And also, when we look at the ratio of loan portfolio per client, today, you have roughly BRL 1,000 per client, correct me if I'm wrong. And the guidance implies about BRL 1,600 per client, right? So what is the strategy here? Is it to deploy new products to change the loan portfolio mix or what is the strategy here? And also the guidance also implies that if we're going to have 30% ROE with BRL 5 billion, we're going to have a shareholders' equity of roughly BRL 15 billion, right? So it implies almost a BRL 10 billion increase from today or maybe a little bit less than that. Is this -- does it make sense, the math here?

I'm going to comment on the loan portfolio and then Santiago will cover about the profitability. So on the loan portfolio, as we explained earlier today, we do have -- I would say, the glass is half empty, half full. I mean we do have a small market share in very important and very good products that are -- have a big market share, big addressable market in Brazil, such as payroll loan, such as the mortgage products that we have been running and improving for 15 or 20 years or so. So that's things that we know how to do. Second, I mean to achieve BRL 100 billion of credit portfolio, we have the most important thing for a decent risk/reward on the credit portfolio. Funding, a very good funding capability. And now also connecting to your question, we are going to launch new products. We're not going to launch 5, 10 new products, but we have, as I mentioned, the overdraft, we have the personal loans inside Inter Shop, which we believe is sustainable, not outside Inter Shop. So the combination of improving the market share on big addressable markets such as payroll, mortgage, new products and also catch up on the market share will lead us to the -- we're comfortable having in a good way without hurting our NPLs, to the BRL 100 billion credit portfolio. And Santiago is going to cover the profitability ratios.

Yes. So we'll comment more on profitability in the financial section, but your math is accurate. And I want to make a clarification. This is not a guidance. This is our long-term target. Now this is our North Star, where we want to go. We don't give guidance for the record. This is our ambition. The incentives are aligned in this way. The Board has approved it, but it's not our guidance. This is our goal. I'll take a question from the audience here for Pri. Pri, if you can comment on the evolution of organic clients, you have a graph showing that, there's a question from the webcast regarding -- if you can elaborate that further.

Okay. Hi, everyone, and thank you for the question. I'd like to talk about acquisition since 2016 because it's something that we did, I think, pretty well. So we have a very low CAC, as you can see here. We were able actually to decrease this last year. And how we did this? The main point that we did this is because our clients are very engaged with our platform. They are referring our accounts to their family and friends. And they are doing this just because they -- we have like a very nice NPS. It's around 85 points right now, and they are buying a lot of products. And they think that it's good for their family and friends to use our accounts. So this helps us to have a very low CAC and also helps us to do this organic way to be more profitable. So as you can see, we were able to reach 80% of organic in this perspective. So this is very good for us as well. If Joao Vitor or Alexandre wants to add something around this?

All right. I think that as I mentioned to some of our shareholders in the past, I'd like to say that if you would do an adjusted NPS, it will be higher than 85%. When you get the detractors on our NPS, roughly half of them are complaining about credit card limits. And we know that by giving a lot of credit card limit might be good for gaining clients and retain, but it might hurt you down the road and you know how it -- it's not a good end story. So as Priscila mentioned, with a good product and with the market getting some of these incentives, we saw some players in Brazil reducing dramatically credit card limits, we tend to have more organic -- more than we had before, which was great -- more organic client adoption and also client retention. So low churn or 0 churn, it's mandatory for us to reach our 5-year plan.

A follow-up question for you Pri here from the audience is, if you can comment on engagement and activation.

Okay. That's a great question and also a tricky one because we have to be careful around that. I mean for the analysis because we have to look in 2.0 view. For the first point, yes, it has slightly decreased in the past -- in the last year, and that happened mostly because we were more conservative on credit cards. And we see this actually as a low-hanging fruit because we can actually engage those clients right now. But looking to the other perspective, on the other hand, it is -- something is happening with engaged clients. Their activity is going up actually. They are buying more products. They're buying more than 3 products as we have seen here. And they are also using us as their primary bank. And the last but not least, their ARPAC is going up as well. Alex, do you want to add something?

I think it's good. So your explanation is good enough. The credit card thing on approval rates is an opportunity for us moving forward in 2023. We've been evolving a lot. So last year, we're able to almost double the approval rate, maintaining a low-risk profile of -- controlled risk profile, let's say, in credit cards. And we have more models to deploy moving forward during this year, which will enable us to bring these clients back. So they're not engaged yet, but they will be engaged as we move forward.

Another follow-up here for me. Exactly on this point on the credit cards, you mentioned to be launching overdraft this year. And indeed, your credit card business was a lot less impacted than we see in other players. So you did show that you either have better clients or more engaged or risk models that are adequate and then you move forward into overdraft. Why not go deeper, like personal loans? You said you're going to embed it there. And then I'm going to mix it a little bit, with Guilherme Ximenes here, on the customization of the product. Is it going to as deep as only a few clients are going to get the overdraft option in their account or only a few clients are going to be offered that buy now pay later, call it a personal loan? So I just want to pick your brains a little bit because you did show a strong capability in clean lines. Why not accelerate it and how you're mixing that with personalization?

Leduc, I would say that we really need to gather all the data that we have, usage data, transactional data in order to try to be effective. We need to think that we have a limited real estate in our app. So we cannot -- and you saw we have over 100 products to offer. So we need to get this data that Guilherme and Lucas shared with all of you. Crunch that in a smart way. Cannot spend a lot of manpower to crunch this data. It needs to be automated through AI. Send it to Priscila teams to do a very good -- very efficient CRM and to display that in the best and the cheapest way possible in the right real estate in the right -- are we there yet? No, but we're improving, improving and improving. But the good news is we have already 100 products, we have already clients, we have already tools. So fine-tuning that, we can really try to offer -- because it will help us on the monetization but also to protect our business; delinquency, frauds and this type of things. So it's really something powerful that we're using it more and more. But again, we're not there yet. We still have to keep improving on that.

Joao -- if I could just add a little bit on top of Joao's comment. We see really credit as a journey. So again, if we go back to 2018, most people that followed up on our business know that we were very conservative on credit cards. In fact, our objective was not to have a credit card portfolio, but we offered it because we knew it was important for engagement. And we've been learning, learning a lot. We've built a team, Danilo. Joao mentioned him in his presentation. He's been with us with his team for over a year, improving models and the addition of these products for the -- say, from maybe the top of the pyramid and down to the base is a matter of time, learning and taking the conservative approach that we like taking on credit. So not a big bang, but a conservative approach, learning, testing and increasing the product offering and who gets it.