Inter Mixed 2Q26 – NIM The Good, Asset Quality The Bad

Research evidence excerpt

J P M O R G A N

Latin America Equity Research

05 August 2026

Inter

Mixed 2Q26 – NIM The Good, Asset Quality The Bad

Overweight

INTR, INTR US

Price (05 Aug 26):$5.71

Latin American Financials

Inter just reported R$421mn in net income post-minorities (~16.3% ROE, up

80bps Q-o-Q), 2% above our estimates, and growing 34% Y-o-Y. ROE expansion

was marginally helped by shareholders’ equity growing below net income, as there

was ~R$100mn in OCI (not great, but somewhat expected given rate volatility).

We have a neutral take. On the positive side, we welcome the NIM 2.0 and riskadjusted margin recovery. We believe investors’ expectations were for riskadjusted NIM to move lower, but it expanded 30bps (helped by the market portion

of NII). That said, we missed NIM 1.0 disclosure, as we note the bank removed it

from its filings. We also welcome efficiency improving to 42%. On the negative

side, we have a mixed view on asset quality:

Yuri R Fernandes AC

(1-212) 622-3400

J.P. Morgan Securities LLC

Guilherme Grespan

(55-11) 4950-3058

Banco J.P. Morgan S.A.

Fernanda Sayao

(55-11) 4950-6588

Banco J.P. Morgan S.A.

Diego Marquez Antonio

1. The company changed its write-off policy. This is not a new topic in Brazil, as

we have seen many companies changing their policies - basically, Inter

changed its credit card policy, accelerating the period, which it said drove a

30bps tailwind to credit card NPL. We observed this reflected in card write-offs

to loans, moving to 14% annualized from previous 10–11% levels. As a result,

the 20bps NPL increase would likely have been closer to a 50bps deterioration,

also weighing on the coverage ratio. From a glass half full perspective, faster

write-offs in our view is positive as it accelerates provisions and it is a better

policy than delaying, in our view. Moreover, we also recall that private payroll

explain the majority of the NPL worsening (some 80% of reported ratio).

(52-55) 5339-94899

J.P. Morgan Casa de Bolsa, S.A. de C.V., J.P.

Morgan Grupo Financiero

2. 15–90 days NPL increased 20bps Q-o-Q to 4.8%, which is negative versus the

expected seasonal improvement.

3.…