Hi, everyone. I'm Rafa Vitória, IR Officer at Inter, and I would like to welcome all to Inter & Co's first quarter 2026 earnings conference call. First of all, some instructions. This call is also available in Portuguese. To access it, press the globe icon on the lower right side of your Zoom screen, then select the Portuguese room. Please be advised that all participants will be in listen-only mode and that the conference is being recorded. You may submit online questions at any time today using the Q&A box on the webcast. A replay will be available at the company's IR website. With me today are João Vitor Menin, our Global CEO, Alexandre Riccio, our Brazil CEO, and Santiago Stel, our CFO. To start with the CEO overview, I would like to invite João. João, please go ahead.
Thank you, Rafa, and thank you for joining us today to discuss our first quarter results for 2026. As you can see, we had a strong start of the year, and our first Q results reaffirm our path to sustainable and profitable growth. We have a strong momentum across several metrics. Some examples are our gross loan portfolio scaled to more than BRL 50 billion. Our structural profitability is taking shape. Our net income reached almost BRL 400 million on first Q and on a run rate of BRL 1.6 billion on a year basis. More than BRL 1.7 trillion in run rate for the TPV on this first quarter. Xande and Santi will join me later on to elaborate more on that.
I want to highlight that these results were at the same time executed with discipline and they connect to our vision for the future. During earnings call, I usually speak about the strategic view of Inter, our vision. However, next Monday, we're hosting our Owner's Day, and I will save the big picture for that event, which I'm personally very excited about. We will showcase our ambition to lead through innovation and deliver growth and profitability together, creating a sustainable business model for our owners. I really encourage you to join us next Monday at Nasdaq. For the first time, we will have our senior leadership sharing the perspectives on topics such as clients principality, credit penetration, monetization through upsell and cross-sell, and of course, our latest tech evolutions, how we are unlocking the AI opportunities at Inter.
We will discuss our vision, our financial strategy, our execution plan, and the core enablers behind all of it. As you are already familiar, in every earnings day, I like to present not only the financial KPIs, but also new products and solutions that we deliver to our clients. This quarter, I want to highlight the announcement we just made two days ago. For those who haven't seen it, we just launched Seven, our new multi-agent AI tool. It has massive potential because it is not just a user interface, it is a powerful agentic platform built from the ground up. It connects the full power of our data infrastructure to deliver the absolute best client experience. Since 2025, our AI evolved from simply answering questions to actually getting things done. It's now a fully transactional AI tool.
Clients can ask for investment advice, make Pix transfers through texts, and also buy gift cards. They can also manage credit card installments and much more. Seven makes even the most complex products incredibly simple to understand and use. You'll see the full picture of it during our Owner's Day, where we will present how Seven plays a crucial role in our business model going forward. Now, I want to invite our Brazil CEO, Xande, to present the business update for the first Q of 2026. Xande, please go on.
Thank you, João. We're excited to share our long-term plans with all of you at the Owners' Day on May 11th. First, let us dive into our first quarter results. Let me start with our client base. Our total number of clients keeps growing and our base is stronger than ever. We reached 44 million total clients. We just achieved our highest quarterly jump in activation rate since 2024, reaching almost 60%. People are not just opening accounts, they're actively using them. We're achieving this high engagement while maintaining a deliberately disciplined low customer acquisition cost. Our absolute focus remains on increasing principality and becoming the primary bank for every single user. This means increasing cross-sell and driving much higher monetization levels. That's another topic we will explore during our upcoming Owners' Day. These high activation levels translates directly into massive payment volumes.
As you can see in the cohort chart on the right side of the slide, our clients are transacting more than ever before. In the first quarter, our combined cards and Pix volume reached BRL 1.7 trillion run rate, with a 25% growth year-over-year. We're the solution people use for their daily needs. Because of this daily engagement, 8.5% of the Pix transactions made in Brazil flow through Inter. Moving to the credit side, we continue to see healthy and balanced growth across our entire credit portfolio. We're growing fast at more than 30% year-over-year, but we're doing it in a diversified way. Nearly 70% our portfolio is secured with some type of collateral. We do this by balancing our growth across products like mortgages, payroll loans, and credit cards.
This strategic mix ensures steady returns are protecting our asset quality. Private payroll has been our main highlight over the past year. We maintain a positive view on this product. We reached BRL 2.5 billion portfolio and 600,000 active clients. This shows the true strength of our digital distribution and our ability to scale a new product quickly. On credit cards, we are making progress in increasing the volume of the installments and the overall interest-ea rning volume. We call this process reshaping. These interest-ea rning portfolios now represent over 25% of our credit card portfolio, up from 21% last year. Revolving grew as clients are no longer mandatorily moved to installments. Santi will provide more details on our strong loan book performance later. I'll finish with a view on our market shares.
Business keeps increasing materiality, consolidating our position as a high volume, high engagement platform for dozens of millions of people. Because of our complete ecosystem, we're gaining market share across every key product. Whether you look at Pix, credit cards, mortgages, or investments, our numbers are climbing steadily. Our foundation is solid, and we're ready to build another solid year and an even more remarkable future. Now, I'll pass the word to Santiago, who will detail our financial performance.
Thank you, Xande. Hello, everyone. Let's jump into financial performance. As Xande mentioned, our loan portfolio is growing at a strong pace. We nearly reached BRL 50 billion, which is a 33% growth in the last 12 months or 3% relative to last quarter. If we exclude the SME portfolio, which has short duration and usually decreases during the first quarter, our growth is even stronger at 37% year-over-year and 5% versus last quarter. In terms of loan balance per active client, a very important KPI that drives ARPA growth, we remained at BRL 1,930, following a very strong growth in the prior quarter. Now, let me break down this growth by each of the products, starting with the bottom of the page.
On the real estate side, mortgages grew 42% year-on-year, while home equity grew an impressive 43%. On the payroll and personal loans portfolio, which includes both public and private payroll, we grew 38% year-on-year. The highlight in this group was private payroll. We've reached BRL 2.5 billion portfolio, just as Xande highlighted before. Finally, credit cards grew 27% year-on-year, supported by solid risk management and continued progress from our reshaping strategy, driving improved monetization and profitability in the product. To close this slide, it's worth highlighting that we have three products growing at nearly 40%. At the same time, credit cards are growing at around 30% year-on-year. This enables us to continue building a powerful balance sheet, driving NIM and ARPA expansion while maintaining strict control risk management.
This fast loan growth we just covered came together with sound asset quality metrics. We have three factors playing out in this quarter. On the macro side, as you all know, delinquency in the system is increasing. On seasonality, first quarters tend to have a bit more pressure in these metrics. Third, on growth strategy, we are growing private payroll, plus working on cards reshaping, which pay off in NII side, but do pressure on the asset quality metrics. All these factors put together, we have increase in NPLs from 4.7% to 5.1%. In terms of NPL and stage III formation, we had a stable quarter, having almost the same metrics as we had in the prior quarter.
In terms of cost of risk, it did increase as a consequence of private payroll being in our books for several quarters. You can see that excluding it remained fairly flat during the past three quarters. Lastly, on credit cards, our cohorts continued to perform well, significantly better than two to three years ago, and now with much greater monetization. Moving to the funding side, our total funding reached BRL 74 billion, which is a 25% annual growth. Another great number to highlight is the loans to deposit ratio. It increased 4 percentage points in one year as our loan growth is expanding faster than our deposit base. Our deposits per active client remains strong, sitting above BRL 2,000 per active client. The slight decrease in the first quarter is seasonal.
This happens when compared to the fourth quarter when people receive their 13th salary and year-end bonuses. Our annual growth was driven primarily by time deposits due to the high level of the Selic rate and the ongoing success of My Piggy Bank product that now has over 5 million clients. As we said many times in prior calls, our strong funding franchise remains being one of our key competitive advantages, given that our cost of funding remains one of the lowest and most stables in the industry. While market rates fluctuate very strongly, we are able to keep our funding costs very stable. This quarter, our cost of funding stood at 64% of CDI, an improvement from the 66% of the prior quarter and almost identical to the level we had one year ago.
On the revenue front, both our net interest income and our fee income continued growing at a strong pace. Our total gross revenues surpassed BRL 4.3 billion. This marks an impressive 37% year-over-year growth. This magnitude clearly highlights the scale and momentum of our business as we continue to expand. Total net revenue also delivered significant results, growing 33% year-on-year to BRL 2.4 billion. The standout driver behind this growth was our credit portfolio. Our NIM increased by 38% year-on-year. This acceleration was heavily driven by strong performance in payroll loans, credit card, mortgages, and home equity loans. These are key segments where we have built significant scale and efficiency. On the fee side, net fee revenue grew 18% year-on-year. This reinforces the importance of our complete ecosystem.
Having seven verticals and 180 products allows us to easily cross-sell and increase our fee composition. The completeness of our platform enables cross-selling and further monetization. Because of this, most cohorts are monetizing better quarter after quarter. This increases our ARPAC, while our cost to serve remains flat. This dynamic is a key driver of our structural profitability. As a result, our net ARPAC reached BRL 34. This is a solid 9% growth year-on-year despite strong active client growth. Furthermore, our margin per active client stands at BRL 21, marking a 15% improvement on an annual basis and recording the second-best quarter ever. Our mature clients demonstrate even greater potential. They are already generating over BRL 130 in gross ARPAC, further underscoring the attractive opportunity ahead once clients mature in our base.
This performance is a true testament to the strength of our ecosystem. We will dive on this much deeper in our unit economics and principality efforts during our Owner's Day on May 11th. Now I go through the NIM page. The first comment I'll make is that this year we will be using the NIM 2.0 as our primary NIM. This NIM has the interest- earnings portfolio in the denominator and is in line with what we see in the industry, both on incumbents and disruptors' disclosure. Now jumping to the metric itself, our NIM of 9.54% was the second best on record, only 3 basis points lower than in fourth quarter 2025, which had a very strong performance.
On a 12-month comparison, it is an increase of 70 basis points or 15 basis points per quarter on average, exactly in the middle of the 10 basis points-20 basis points per quarter that we have signaled to the market. On a risk-adjusted basis, we are seeing the impact of the upfront provisioning of private payroll loans as those expenses come in before the interest of the product through the natural J curve. Overall, the results that we see in this page makes us very proud as it is the consequence of disciplined and consistent capital allocation. We're delivering growing and stable margins despite volatility in macro variables and a more levered balance sheet as we continue to grow and scale. While revenue grew 33% in the last 12 months, our cost control approach allowed us to grow expenses by 20%, a delta of 13 percentage points.
There are a few factors that I would like to explain on this page. First, on personal loans, our headcount remains stable at approximately 4,000 employees over the last 12 months, where we continue to seniorize multiple teams. Second, our administrative expenses rose 17% year-over-year at almost half the top line growth level, despite the much higher transaction volumes in our super app as it continues to scale. Third, a topic that touches both personnel and administrative, we're seizing AI opportunities across the company. By now, it's much more than just fraud, customer service, and credit underwriting. As it has scaled across all divisions and became part of our day-to-day. We will deep dive on this in the Owner's Day of May 11th.
Putting both revenue and expenses in the same page, here we can see the essence of our digital banking model, which is high operating leverage potential. On the left side, we can see it indexed since beginning of 2023. On the right-hand side, the efficiency ratio shows that we had a very strong quarter, reaching a record low of 43.8%, meaning 170 basis points improvement versus the prior quarter. Thus starting the year with a very strong momentum on this metric. Operating leverage is in full action and is driving incredible results straight to our bottom line. All of this strong execution combined is reflected on this profitability page, which makes us again very proud. We reached a net income of BRL 395 million this quarter, meaning a run rate of almost BRL 1.6 billion.
We delivered 15.5% ROE and 1.59% ROA, both record numbers. A new metric that we added this quarter, which we think is interesting to follow, is our return on tangible equity, which reached 19.5%, a very impressive level in our view. To close on my end, I would like to highlight that these results speak to the discipline in capital allocation, risk management, and cost control, all with an ambitious growth mindset. Now João Vitor will take the stage for his closing remarks. Thank you.
Thank you, Santiago. On top of the great results the team just presented, I want to add one final thought. 10 years ago, we completely transformed our business. We decided to go mobile-only, not just mobile first. We launched the first digital bank in Brazil, placing a strategic bet on the banking revolution concept. Today, 10 years later, we are experiencing a true deja vu moment. We are entering a new trend that is as big as the banking revolution back then. We call it the banking AI revolution. It is a massive new technological wave, and at Inter, we are seizing it. Our first quarter results prove we have the perfect combination of growth and profitability. On top of this strong momentum, we can aspire to transform the retail banking market again, exactly as we did in 2016. There is much more to come. Stay tuned.
Thank you very much for joining us today. Rafa, now let's open for the Q&A session.
Thank you, João. We are very proud of this quarter, but we are even more excited about the future. Before we open for Q&A, I would like to invite all of you to join us on May 11th for our Owner's Day. It will be an exciting opportunity to reflect on our incredible journey and share insights into the future we are building together. We will be live at the Nasdaq MarketSite in New York City, starting at 9:00 A.M. next Monday. For those who can't attend in person, the event will be broadcast live. You can use the QR code on the screen to register for the live broadcast. Hope to see you all there. Now let's start the Q&A session. Our first question comes from Gustavo Schroden. Gustavo, your mic is open. Please go ahead.
Hello, can you hear me?
Yes, please go ahead.
Okay, thank you. Well, good afternoon, João, Santi, Rafa, Xande . Thanks for the call. I would like to explore the asset quality trends because we have been seeing recurring deterioration in these indicators over the last few quarters. As a consequence, it has impacted the cost of risk as well. You mentioned that it is related to this acceleration in private payroll loans as it requires upfront provisions. But I'd like, maybe you could explain us the dynamics of this private payroll loan. I mean, what is the level of expected credit loss you have to build in the beginning? What is the expectations regarding breakeven point?
I think that would be great because we have received a lot of questions from investors about this, let's say, increase in NPLs and NPL formation and increase in cost of risk. What is the level of a cost of risk we should expect during the year? Thank you.
Gustavo, João Vitor speaking. Thank you for your question. I'm gonna cover first the answer from a strategic point of view. How we see that the Selic is going forward and how it can impact our growth. Then Santi will cover more on the cost of risk and NPLs going forward. Important to mention that it might look contradictory, but I do see opportunity for Inter at this moment. We know that's a hot topic today, most in Brazil, that there is a big pressure on cost of risk. The macro scenario is not good. Why do I see that as an opportunity? Let me just try to be clear about that.
As you might know, the ones that have been following Inter for a while, we have been working hard for the past 10 years since we launched the first digital bank in Brazil to build a very strong funding franchise. We have the best funding to keep underwriting well. Also, due to the digital model, digital distribution model, we can distribute loans and serve loans cheaper than our competitors. That said, we see that the last credit cycle was positive, now we see some deterioration on the credit cycle in Brazil. We see that Inter is well-positioned to be ahead of the competition, therefore keep growing at the 30% each level that we have been growing for the past years or so. We do see that our transactional part of the business, the TPV, the Pix volume, are working really well.
It will help us to keep bringing the best cost of funding, the best distribution channel, and the best way to serve. With all that in place, we're excited for keep producing more loans, mostly on the secured portfolio. Important to highlight, as of today, roughly 70% of our portfolio is collateralized and also keep growing on the unsecured part of it through credit cards that Xande has already explained on his remarks. With all that said, I'm gonna hand over to Santi to cover about the delinquents and the NPLs going forward.
Hi, Gustavo . Santi here. Thank you for your question. On private payroll and its delinquency, this product continues to show the expected behavior that an early stage group has, and its performance remains within our assumptions. This quarter, we had record volume of originations as we started to also sell it through WhatsApp in addition to the app and the portal. This channel is driving more conversion of clients. We're pleased with the dynamic that it's taking from a commercial point of view. Xande can comment on this later at greater depth. Private payroll did drive NPL in 90 days up, mainly because it came from around zero last year, and its share of the provisions on delinquency mix keeps growing within the portfolio.
This quarter, we saw operation improvements such as, one, the possibility of moving contracts from one company to another when clients switches jobs, as well as, two, a smoother process of collecting payments from employers. We still see many other operational improvements coming, such as, for example, the possibility to use the severance funds as a collateral when the employees are terminated, and the automatic re-inclusion across employers, and lastly, the use of FGTS as collateral. These are improvements that we think that eventually will come and will also impact positively delinquency. It's also important, Gustavo, to know that the current pricing of this product already implies a rather rigid delinquency. With these current levels of delinquency, the ROE of the product at the rates at which we are originating are around 30%.
As we have also mentioned in prior calls, the product has its natural J-curve, where first we have to provision upfront, and then as the interest income comes through the P&L, we see the positiveness of the results. We passed the break-even point a quarter ago, as the portfolio starts growing, stock or the portfolio starts growing more than the new originations, that NPL should continue moving forward. In all, we are happy with it. This is an investment for the future. It fits very well in the Inter by design formula. The people that get these loans are benefiting from this versus more expensive alternatives. As we can continue to categorize this opportunity, we will do so. Thank you.
Right. Thank you. Santi, just a follow-up here. What is the period on average to reach a break-even point, right? I imagine that is, as you mentioned, it's a J-curve. You originate in the beginning of the contract, you have this higher cost of risk, and then you reach the break even. What is the average period to reach a breakeven point in this?
Vintages of private payroll at the rates that we're originating and with the delinquency that we're seeing reach break even in around two quarters or six months, Gustavo. We did accelerate originations in the last quarter through WhatsApp, so we had a steepness on the volumes coming in. A typical cohort breaks even in six months.
Okay, cool. Just a final one. The expected cost of risk for the year is still 5%-5.5%, or it has changed?
The current scenario we're seeing, we are expecting something closer to 6%. Again, as we have mentioned many times, we're in the business of maximizing or solving for risk-adjusted NIM, and the cost of risk in this particular year with the scenarios that we're seeing and taking more marginal exposure to private payroll and within cards also with the reshaping, we see closer to 6% for the remaining of the year.
Cool. Thank you.
Ricardo Buchpiguel. Ricardo, your mic is open. Please go ahead.
Hi, everyone, and thank you for the opportunity of making questions. We saw that NIM was roughly stable in this quarter despite changes in the portfolio mix, as you mentioned, the private payroll loan that has higher yields. That also kind of drove higher cost of risk. It would be helpful if you could help us understand what makes sense to expect for NIM in the coming quarters, and what drove this effect in Q1. Like, perhaps it's something to do with seasonality and also the J-curve that you mentioned, but just wanted to hear your thoughts on that. Thank you.
Thank you, Ricardo. This is Santiago again. On NIM, First, let me give a longer-term answer. We've been saying that the NIM should grow 10 basis points- 20 basis points per quarter on average. If we look at the growth in the metric for the past 12 months, it grew 70 basis points, so 15 basis points on average, which makes us very pleased that we see that improvement continuously happening. In the fourth quarter, we have a greater increase from 9.28% - 9.57%. Everything plays favorably for the NIM in the fourth quarter. A bit of the opposite happens in the first quarter, particularly with deposit balance on the cheapest type of deposits being lower in this quarter, and that generates that opposing view, you know.
It's relative to last quarter, we're at 3 basis points difference, you know, 957 versus 954. We call it roughly flat. But we are continuing to see more NIM expansion. We see it closer to around 10 basis points on average for this quarter, the NIM expansion, as a consequence of a lot of the lower-hanging fruits in terms of repricing of all the portfolio and putting the liquidity to work at higher yields. We still have a lot to be done. We're having many initiatives on the treasury front as well. Again, this first quarter is more the stableness. It has more to do with seasonality in the funding side for the first quarter, which had the opposite effect in the fourth quarter, and therefore we were roughly flat versus fourth quarter 2025.
That's clear. On another topic, I wanted to ask if you could comment a little bit on the impact from the changes in payroll loan rules that we saw this week, either in the short term, medium term. Not sure if that would be relevant for you guys.
This is Alexandre speaking, Ricardo. Thank you for the question. First, on the private payroll, we're very constructive with the product. Important to say this. The changes in the caps do not change materially our underwriting. If we look back since the beginning, that would be less than 5% of the total underwriting. What's happening with our underwriting dynamics is that we're evolving the distribution channels and our own distribution channels, which we're confident that's gonna offset the impacts of this 5% that we may that we might see as potential reduction. To give you a few numbers, we reached the BRL 2.5 billion portfolio. The average rate is at 3.7%, which is considerably lower than what we see in the caps.
Talking about a few dynamics on the private payroll loans and how good it is for Inter. The cross-selling is at about twice the average cross-selling of the product. The ARPAC is about four times the average ARPAC of the clients. That's very good. Last quarter, we talked about WhatsApp origination, that we would start it during the first quarter of this year. We started, and in these early days, it's still early days, we're already seeing about 30% of our origination coming from the WhatsApp channel. That's really good. I would like to finish talking a little bit about the public payroll. We also saw rules changing a little bit. The most, the biggest impact comes on the public payroll cards, which we don't operate.
Also the benefit cards, which we also don't operate. We shouldn't see any impact on business. We see the changes as positive for the population, positive for our clients. Anything that's positive for our clients will be positive for Inter in the long term. Thank you, Ricardo.
Thank you. Just a quick follow-up on that. The reduction in payroll margins for public employees to reaching eventually 30% wouldn't have a negative impact on you guys? Perhaps they're not that relevant. If you could also elaborate on this part.
Yeah. From an underwriting volume perspective, as we look at the penetration of this product in the, in our overall portfolio, it's not significant. We believe as we're still growing the portfolio, we shouldn't see any material changes as we look for the future of the products.
Perfect. Thank you.
Our next question comes from Tito Labarta. Tito, please go ahead.
Hey, Rafa. Hi, Santi, Alexandre, and João Vitor. Thanks for taking my question. Follow-up, I guess, on asset quality. Are you able to quantify, I guess, how much of the pickup in NPLs was one related to the private payroll and to seasonality? Just trying to understand a little bit how much is, like, underlying deterioration versus some of the other mix and seasonality. Also, I guess, as the private payroll sort of stabilizes and the collateral and all the systems are working, where do you think the write-offs or NPLs for private payroll will eventually end up? My second question. Santi, you mentioned, right, cost of risk will probably be closer to 6% this year. I think you're keeping the NIM expansion guidance.
I guess, how are you thinking, I don't know, from a risk-adjusted NIM perspective, given that cost of risk is probably gonna be a little bit higher. Do you think you'd be able to compensate for that with better NIM, or is the risk from asset quality a little bit greater than the NIM expansion that you expect? Thank you.
Tito, thank you for the question. On the first one to quantify seasonality versus the internal dynamics in the portfolio, it's roughly half and half. No? The display of both. We see if you look at the last year, our NPLs grew around 30 basis points. We see a similar amount of delinquency increase this quarter as a consequence of seasonality. The remaining is two factors: private payroll growing the portfolio and also the additional delinquency from credit cards. That is obviously paying off very nicely on the credit card portfolio on P&L. It's partially seasonality and partly internal. Within internal, both private payroll and credit cards being the two main factors.
On the ultimate delinquency level of private payroll, it will depend, as I mentioned, with the all of the factors that are still to be seen on the collateral and the severance and so on. We think that it would make sense for this product to have a delinquency level in the high single digit, potentially even mid-single digit, depending on how well those things play out. It's still above 10%, but it should converge, we think, to something around those levels once the continuous improvements continue to happen. On risk-adjusted NIM, well, first, decomposing on NIM, we expect the continuous improvement closer to 10 basis points on average in the quarter.
With risk-adjusted, with cost of risk growing, we think that the risk-adjusted NIM will be a bit more stable this year, throughout the year, than what it was before. It would continue resume the upward trend going forward. It will ultimately depend on the loan mix that we operate with. No? What we're seeing with the current loan mix, we see it more stable throughout the year, meaning end of 2026, a similar level to 2025, with NIM expansion and cost of risk both growing marginally.
Okay. That's helpful. And I guess just one follow-up on the private payroll. As the delinquencies will come down, would you expect the NIM to come down as well? Maybe risk-adjusted NIM stay the same or would those dynamics change at all?
Hi, Tito. This is Xande speaking. It's gonna depend a lot on the competitive dynamics. Short term, we don't expect to see the average rates coming down as the market's still adapting, the market's still learning and trying to reach these long-term NPL levels and these long-term cost of risk levels. We believe for now, we should see stability. Longer term, as everything is in place, because Santi talked about the high single digit NPLs. When will that happen? It's uncertain. Could be in the end of this year, could be mid-next year. It heavily depends on the implementation of all the improvements that Dataprev is working on. As this, we see these NPLs in these high single digits.
Longer term, we may see a compression in NIMs, but João will fill in also with a few more info.
Tito, just to connect with my first comment on how we see the business, the long growth portfolio moving forward. Interesting to see that these first two questions connected to delinquency and some changes on the regulatory part of private payroll loan, public payroll loan. It's important to see that. As I told, it has been preparing it ourselves to be well-positioned to seize the opportunity. Just to recap, by having the best cost of funding, we can, for instance, be more competitive when we see a cap on the interest rates for private payroll and for public payroll loan. When you see, for instance, that we can distribute most of our private payroll loan through our own app and not on the open market, therefore, we can be more competitive when, for instance, we have a cap on rate.
When we combine delinquents picking up on the industry, some regulatory change, we see Inter more positioned than before to keep growing on the portfolios that we want to evolve, such as the private payroll loan, public payroll loan, mortgage, home equity, and also even on credit card. On credit card, by instance, although we see the most of it as our unsecured credit portfolio, we're now shifting our underwriting to older clients, to clients that have been with us for a while and avoiding the new underwriting. This combination leads us to be confident that the pace of growth that we have been experienced so far, it's solid, it's good, and we keep believing in that trend. This is very important to mention.
Again, it might look contradictory, but the overall macro deterioration in terms of delinquents and all this change that we see on private payroll loan and public payroll loan creates opportunities for Inter to keep growing and to keep penetrating and keep gaining market share. This is a very important measure that I like to highlight here.
Okay. Thanks for that, João . Yeah, it makes sense. I mean, I think the Fintechs should be in a good position to potentially take advantage. Good luck. Thank you.
Our next question comes from Mario Pierry. Mario, please go ahead.
Hey, guys. Good afternoon. Thanks for taking my question. Let me ask two questions. Still on the asset quality, if you can comment a little bit about this new debt renegotiation program in Brazil, how do you think that's gonna impact your business? You know, if you think that many of your clients could be participating in this program. Then a second question, completely unrelated, João, I keep focusing on this, is on operating expenses, right? You showed a significant improvement in the efficiency ratio this quarter. However, right, your efficiency ratio is still at 44%. Everyone else is running in the 20% level, your target was 30%. You know, I feel like it's always personnel expenses growing 20% that concerns me the most.
You showed that, your number of employees stays stable at 4,000 and still expenses up 20%. You talk about having a more senior management team, but I want to understand exactly what that means. Because, yes, expenses are growing less than revenues, but it's growing like five times inflation. If you think, you know, and not maybe you're gonna touch on this on Monday, but there's gotta be a point where your expense growth starts to normalize. If you think that we still are like two years away from that happening or one year away, especially, right, as you talked a lot in your remarks about AI and the benefits of the AI banking.
Just help us first understand why it's okay to grow personnel expenses 20%, and when do you think that this growth rate should start to normalize? Thank you.
Thank you, Mario. This is Xande speaking. I'll take the first part on Desenrola and the renegotiations, and then I'll pass the mic to João. On Desenrola, the first answer is that it's a positive program. We participated in the discussions as the program was developed and believe that it's gonna be better than the first one. The reality is it's not gonna materially change the business. It's gonna help for sure, but it's not gonna materially change the dynamics, the overall macro conditions that we see. Having said that, what percentage of our portfolio or of our delinquent base can participate? The answer is more than half. We have the volume between 90 days and 720 days delinquent today that we have that's addressable is higher than 50%.
We have a lot of room to renegotiate with clients, and we see that as positive. It should bring positive results short-term. Long-term, we still believe there is a lot of structural issues in the country to resolve. Our mission here is try to help as many clients as possible. If we can do this, it's gonna positively impact the results bottom line and cost of risk. Thank you. I'll pass the mic to João.
Mario, João Vitor here. Thanks for your question. It's actually a very interesting question because let's just try to put that on the perspective. When we see about the number of employees that you just mentioned, 2. 5 years ago, we had the same number of employees, roughly at 4,000 employees at Inter. Back then, we had half of the revenue that we're producing today. This is mostly because we have been optimizing how much revenue we're producing per employee. Just to remind, Inter is still a growth story, we're not solving for only the expense on a nominal base. As you just mentioned, we are solving for-
A lower growth on expense compared to the growth on our revenue side. This is exactly what we have been treating for the, let's say, maybe four or six quarters already. Just to connect to your question, we do have spending more on our senior management. We believe that this is very important for us to keep improving our credit underwriting collections, how we keep innovating, how we keep pushing the bar, how we can keep growing our business on a sustainable way with the right risk management approach. Yeah, so we are bringing more senior management. It's not an expensive investment, and we're proud of that. We're gonna share a lot about that on our Owner's Day next Monday. I think you're gonna be pleased with what you're going to see there.
Also to remember, we doubled our revenues with the same number of employees, and this equals to efficiency ratio. Of course, could you be having a better efficiency ratio as of today if we're not growing fast, not innovate, not putting new products? Probably, yes. Again, at the end of the day, we believe that we want to produce more value, more momentum to our shareholders, and we believe the right thing to do now is to keep growing, to keep innovating, to keep pushing the bar in terms of new clients, more clients, more engagement, more monetization, more revenues, more products, and so on. That's the arbitrage that we're doing here. Maybe postponing a little bit how good you can get into efficiency ratio in order to build and to produce a better platform for our owners.
That's the view behind it. Thank you very much.
Very clear. Thank you.
Our next question comes from Pedro Leduc. Leduc, please go ahead.
Thank you very much for taking the question. First one, on the interest income from personal loans, I think, like, the way you disclose it, now it's few quarters now that the applied yield declines, which is not too intuitive given that F GTS has been losing share there and private payroll gaining, which has a much higher rate than that applies. If you can help us understand that implied yield drop there in personal loans. That will be the first. Then second, just a general view on your SME initiatives, where do you stand? I mean, it's been a while since you acquired Granito. We haven't heard much since then. Just a general overview on SMEs and what we can expect here for this year.
Leduc, Santi here. Thank you for the question. The implied yield as some more general then touch on specifically on your point of personal loans. The implied yield on our interest earning assets increased from 18.4 to 21.7 comparing from the same period of last year. This is 3 percentage points improvement. On personal loans and credit cards, there's some mixed or crossed effects. Now, with the reshaping strategy that Santi has alluded to, part of those interests are remaining in the product of credit cards when before they were transferred to the personal loan portfolio. That additional interest or interest rate increase that was outside of credit cards, but belong to credit cards, is now staying within it. That's why that curve is increasing more.
On the personal loans, the positive angle is that private payroll is pushing that product rates up, while you have the offsetting one of cards remaining within the card product. A good way to see it in summary is when you see both of them together and they're going up, you know, very nicely on a quarter-by-quarter and even more on a year-by-year basis. That's the way we think about it. They have some cross effects between the two products that makes the joint view more accurate.
Thank you, Santi.
Hi, Leduc. This is Xande. I'll talk about the SME business. We're very, I'm a big enthusiastic of this business at Inter. We've been doing it for a few years now. What's the dynamics that we see today? First, in terms of client acquisition, very positive. We're in our best year ever in terms of client acquisition, both for SMEs and base, in the ballpark of close to 100,000 accounts a month. Very positive acquisition dynamics. The transactional business is strong, and it ends up bringing the majority of the profitability that we see in this segment at Inter. Today, within our overall deposit base, about 40% is coming from the SMEs, which also reflects a little bit the power that we have in this business.
Reality is that SMEs are still an enormous opportunity for future prospects for Inter. Why is this? Cross-selling is still to be done when we think about credit. The transactional business is very intense. The cross-selling of credit is still on the early days, and that's why I said that I'm so enthusiastic about it because we have a lot of touch points with this client. We have an activation rate of about 80% with this public, which is much higher than the activation rate of the individual accounts. Meaning that as we evolve the solutions and the credit solutions, we will see this penetration of credit products that to date are about 3%, only 3% growth.
It's easy to see three to six, six to 10, and to see something closer to what we see in the individuals. We're above 30% credit penetration today. To finish on, you talked about the Granito acquisition, so it's Inter Pag. On Inter Pag, we are on a modernization agenda to make sure we can serve their clients. We should still see a few quarters until we resume growth there. Thank you, Leduc.
Thank you, Xande.
Our next question comes from Yuri Fernandes. Yuri, please go ahead.
Thank you. Thank you, Rafa. Hi, Xande. Hi, Santi. Hi, João. Thank you. I have a similar question to Leduc, but for real estate, the yield also moved down. Not sure if this is inflation that sometimes is lower, but when we do interest income for real estate lending, it was also a little bit down. Just checking on the Inter Card because I get that the private payroll is polluting the asset quality metrics. When we go for Inter Cards and we check the stage two, stage three, there was increase in the product. You did provision for most of this formation.
Just checking Santi's answer that if this is related also for you migrating some of the personal loans towards credit card, like I guess the refinanced loans that were cards now migrating from personal to loans, to credit cards, I think this may explain. Then I have a second question regarding fees. If you can comment a little bit why fees have been a little bit more like lackluster. You're growing clients, you're growing loans, we don't see, you know, fees picking up. Thank you.
Yuri, I'll take the first two on rates and cards delinquency, and I'll pass it to Xande for fees. On interest rates, there is a delay between the increase in inflation and the rate that the mortgage, particular mortgage and also the MTD of many mortgage products reflect. We will see that improvement that happened in the metric in the first quarter reflected in our financials in the second quarter. There's a bit of a delay factor there that we're seeing already playing, in April and more to come in May. On the credit cards, with the reshaping, what we see is that the length at which certain clients stage in stage two is longer, right? Relative to what we had a year or more longer ago.
It's a continuation of the life of the client in stage two for longer, and that's what led to the increase on the cards front. I'll pass it to Xande on the last one.
Hi, Yuri. Thank you for the question. We did see this pressure on fees, especially when we look at the overall picture, right? The net revenues grew at 33%, 18% on fee, 38% on NII. Looking at the 18% year-on-year, still a positive growth. We did have some positive highlights there, for example, Intershop growing at 30% despite the pressures that we see in the segment. We do have several plans in the different verticals to resume growth and try to bring it to the pace above 30%. We have a lot of product launches coming, for example, in insurance so that we can pick up a little bit more growth there.
Despite the delinquency, we're very constructive on growing credit cards. We should keep seeing interchange revenues growing more than what we saw in the last 12 months. In the last 12 months, we saw 16% growth on interchange. We expect to see it getting closer to 20 %, +20%. We're constructive. We have very good plans. We also truly believe that with all the Seven efforts, when we think about the conversational sales, it's going to bring us an opportunity to engage more with the clients and sell more in products that bring fee income. Thanks, Yuri.
No, thank you. Thanks, Xande. The point about fees is there was some help on cashback moving lower and other income being higher. If you normalize for that, I guess some of the fees like the interchange, for instance, that is a highly transactional fee line. It's growing like 11. That is less. This is why I ask. But perhaps more important, a broad question for you, for Santi, for João. The stock is down 12% today, right? You are very positive on the speech. I think asset quality has a seasonality. You just mentioned, Santi just mentioned that he's looking for better trends ahead on already on the second quarter. What do you think we are missing here? Like, what am I missing on these results?
Yuri, here João Vitor speaking. Actually, you made a very good question. It's very hard to understand market reaction. At the end of the day, we are still here working hard. We're confident with the outcome for the business, not only on the short term, but also on the long term. As I mentioned on my opening remarks, we are confident that Inter has been, for many years, building our banking franchise. Let's just recap. We have the best momentum on our deposit franchise. We have a very good momentum on our transactional platform. The volume of Pix above 90% of the market. All that put in context, we're really happy with the earnings. We're really happy with the momentum of the company.
Also, we're really happy with what we're going to show on our Owner's Day next Monday on Nasdaq. Anyways, I mean, we need to keep doing what we have been doing the best. Always focus, always diligence, and not working only harder, but also smarter. We're confident that we will be able to show very good results, not only for the rest of the year, but also for the years to come.
No. Thank you, João.
That's how we take this market reaction. I mean, it helps us to just keep focused and keep delivering strong momentum for the business.
No, thank you, João, and good luck on Monday. Thank you.
Thanks, everyone. With that, this ends the first quarter results conference call. We hope to see you all on Monday, 11th, at Nasdaq in New York. Thank you very much.