Good morning, and thank you for standing by. Welcome to Inter & Co 3Q 2022 earnings conference call. Today's speakers are João Vitor Menin, CEO, Alexandre Riccio, VP of Finance, Helena Caldeira, CFO, and Santiago Stel, Strategy and IR Officer. Please be advised that today's conference is being recorded, and a replay will be available at the company's IR website.
At this time, all participants are in listen-only mode. After the prepared remarks, there will be a question and answer session. For the Q&A session, we ask you to write down your question via the Q&A icon at the bottom of your screen. Your name will then be announced, and you will be able to ask your question live. At this point, a request to activate your microphone will appear on your screen.
If you do not want to open your microphone live, please write down "no microphone" at the end of your question. In this case, our operator will read your question aloud. All questions will be answered in the language we receive them. Please note that there is a translation button on the right side of your screen, where you can choose the language you want to hear. Now I would like to welcome one of your speakers for today, Mr. João Vitor Menin, CEO. Sir, the floor is yours.
Hello. Good morning, everyone. Thank you for joining our 1/3 1/4 earnings call. First, I will do a quick introduction, and then I'll pass it to the team who will provide an update on the business and on our financial performance. We completed what I think was an excellent 1/4. The numbers that we present today reflect our consistency and dedication, but more importantly, the passion that we have towards our mission.
Jumping to the page number 2, I would like to share with you the highlights of this 1/4. From a client perspective, we added 2.1 million net new clients, reaching almost 23 million clients so far. This put us ahead of our goal of ending 2022 with 24 million total clients. We were able to decrease our CAC to BRL 28, the lowest level in over one year.
We believe that the combination of lower CAC and also acceleration in new clients is only made possible given the growing strength of our brand. In terms of volumes, which is a reflection of engagement, we reached a record BRL 155 billion in TPV. This consolidated TPV plus Pix grew an impressive 69% Year-Over-Year.
On the loan side, we grew 47% Year-Over-Year, and we are on track to deliver 50% growth on the calendar year. We call these growth levels disruptive. It allows us to keep gaining significant market share across products and dilutes our cost base. A point which makes me particularly pleased is that our NPL ratio was flat for the 1/4.
This is a result of a strong effort and dedication to master the combination of high growth and good quality underwriting and also good collection process. Going now to funding, growth was also remarkable, reaching 41% Year-Over-Year. We reached BRL 28.4 billion at the end of the 1/4, and another BRL 5 billion in 1/3-Party fixed income distribution.
On monetization, we can see that our gross revenue surpassed BRL 1.5 billion mark for the 1/4, which will take us above BRL 6 billion in the year, twice the level we had on 2021. One important highlight is our marketplace, which we call Inter shop, which reported a record net take rate of 5.1% in the 1/4. Having covered the operational and the financial highlights, I would like to share my top priorities for 2022 and beyond. First thing, growth.
We are a growth company. We need to keep growing, both in clients and loans/deposits. We consider ourselves a disruptor and have big aspirations where we want to get to. Second thing is about engagement. With volumes which continues to grow significantly with market shares that are becoming truly meaningful.
Third thing, innovation. We are a very innovative company. To name a few very interesting examples of the years, we have the Global Account, the first of its kind, the Inter Shop on the web version, and first ever Invest Now, Pay Later product on our investment platform. Finally, fourth topic, calibrating the right risk reward for our credit business. We are working on repricing, as we will comment later. We're highly focused on having strong asset quality.
Now, I'd like to comment that I'm pleased that we just received the excellent news that iBest recognized Inter with 3 awards. Last, 2 days ago, which are the best digital broker of Brazil, the best Super App, and last, the best digital bank. We take this recognition with humility, but it does make us proud and give us energy to work hard every day to fulfill our mission to simplify people lives through our Super App. Now I'll hand over to Alexandre that will provide some update on the business verticals.
Thank you, João, and good morning, everyone. I'll go through some highlights of our six business verticals, all of which had an exciting 1/4. Starting on page 5, I'll talk about Day-To-Day banking. We reached an impressive BRL 155 billion TPV, as mentioned by João. This 1/4, we started disclosing TPV, including Pix, as we believe it better explains client engagement and the activity of Day-To-Day banking that's happening at Inter&Co.
On the debit and credit card front, TPV reached BRL 17.2 billion, with the mix trending towards credit, which now accounts for 46% of the mix. The evolution of this TPV towards credit cards brings an increase in blended interchange fee. On Pix, we saw another 1/4 of strong growth with Inter&Co finishing with a market share of 8% of the transactions in Brazil.
Finally, our overall TPV grew by 16%, significantly outpacing the growth in the number of clients, an important factor to understand client engagement with the platform. Moving to page 6. On the credit front, our gross loan portfolio surpassed BRL 22 billion, delivering 47% Year-Over-Year growth. The focus on loans has been to balance growth and profitability.
With respect to profitability, we have been consistently repricing our portfolio as a result of the new rate environment and spread expansion strategy. For reference, our underwritten volume in the 1/4 reached BRL 6.5 billion, which is all at the prevailing rate environment. In terms of growth, we're on track to deliver 50% Year-Over-Year, aligned with our market share and cost dilution objectives. We'll bring more color on this point in the financial section. Going to page 7, we highlight our insurance and protection distribution business.
We continue to improve our product offering, sustaining our position as the leading digital insurance distribution platform in Brazil, with more than 20 products sold through the app. Our net revenues reached BRL 31 million, driven by very strong digital sales. We currently have more than 1.1 million active insurance policies at Inter&Co, and we continue to actively work to further penetrate Inter&Co's client base.
Going to page 8, a brief update on Inter Invest. As a reminder, this is our direct to consumer business with BRL 62 billion in AUM. This 1/4, we have record net inflows of BRL 3.8 billion, accelerated by the high interest rate environment, attracting fixed income investments. We reached BRL 40 million in revenues, also a record for us. Recently, we launched the first ever Invest Now, Pay Later product.
This is just another example of bringing innovation to our clients with the goal of simplifying their lives through our Super App. Going to page nine, I'll talk about Inter Shop, which is our E-Commerce platform.
We delivered a record BRL 48 million in net revenues, driven by an impressive net take rate that reached 5.1% in the 1/4. I'd like to highlight that 75% of the sales in the 1/4 came from recurring customers, and we're still able to attract 565,000 new customers to Inter Shop. Three final highlights are that, one, we surpassed the 900 seller mark. Two, we surpassed 800,000 SKUs offered.
Third, for some the most exciting, we launched our End-To-End E-Commerce offering through the web, where clients can do their product selection online and get a QR code to wrap up the transaction through the app. Visit intershop.bancointer.com.br to test it. Finally, on page 10, I'd like to spend a moment on our cross-border services unit.
We continue to grow our global accounts, having added 360,000 accounts in the 1/4 to reach a total of over 500,000 global accounts. The level of engagement in this product is inspiring and motivates us to keep evolving the offering. We think the monetization potential here is very big through a combination of FX, interchange, float, and take rates. Now, Helena and Santiago will provide an update on our financial performance. Thank you.
Thank you, Alex, and good morning, everyone. I'll move straight into page 12. I would like to highlight one of our main achievements in the 1/4, the growth and the repricing of our loan portfolio. As you can see, our gross loans reached BRL 22 billion in the 1/4. This is an 11% increase 1/4-over-quarter or 47% growth Year-Over-Year.
Growth was driven by multiple products with payroll, FGTS, and anticipation of credit card receivables as the most notable ones. As Alexandre mentioned, we have been highly focused on balancing growth and portfolio profitability of our loan book. We have now fully repriced 5 out of our 7 major loan portfolios. As you can see in the chart, anticipation of credit card receivables, credit card, agribusiness, SMB loans, and FGTS fully repriced. The 2 that are still ongoing are payroll and real estate.
These portfolio have a long duration, so repricing process take longers. I would like to emphasize that we are actively in the process of doing so. Moving to page 13, I will comment on asset quality. As João mentioned at the beginning, our 90-Day NPL remained flat this 1/4 at 3.8%.
This marks what I believe is an inflection point and is a result of an active risk management approach, which included improving our risk management processes, our credit, our algorithms, and our collection processes. In addition, an additionally strong point to highlight is that we have increased our coverage ratio from 129% to 141%.
Going to page 14, we reached BRL 28.4 billion in total funding, an increase of 10% 1/4-over-quarter or 41% Year-Over-Year, which is a strong growth that make us very proud. In terms of mix, even though we see an increasing demand of our customers on higher yielding savings products, such as time and savings deposits, we have also grown the free demand deposits base this 1/4 by 6%, despite the very high level of interest rates prevailing in Brazil.
In addition to the on-balance sheet funding, we also have BRL 5.2 billion in 1/3-party distribution of fixed income products, which grew 18% or BRL 780 million in the 1/4.
What we see is that we continue growing the share of wallet of our customers and that we benefit from earning a fee on these 1/3 party distribution products when we have Over-Funding. We could drive this flow to our balance sheet if needed. The direct to consumer investment platform is a key strategy to sustain this possibility.
Moving now to page 15. This is another positive highlight for the 1/4, our cost of funding. As you can see on the page, our cost of funding was 63.5% of Selic in the 1/4, in line with the prior 1/4s. With funding expenses included with BRL 52 million included in these funding expenses, that relates to a debt in our holding company, which was canceled in October. Therefore, it will not repeat itself, lowering cost of funding going forward.
As seen on this page and on the prior one, our funding structure and cost remain as a competitive advantage for Inter, particularly in today's world with very high interest rates. Moving to page 16, on revenues, we surpassed BRL 1.5 billion in gross revenues during the 1/4, I'm sorry, which positions us to surpass BRL 6 billion mark in the calendar year.
It is worth noting that during the 1/4 we had a non-recurring deflation. For reference, we estimated that, if we had a normalized inflation, our revenues would have been BRL 1.68 billion, which would have implied a 12% and a 10% growth in gross and net revenues respectively. Santiago will walk you through the detailed calculation on page 18. Before that, I just wanted to highlight the breakdown of our fee revenues on page 17.
You can see that we continue having highly diversified revenues on both fee income and on the interest side. We are convinced that having this diversification of revenue streams strengthens our financial profile by making us more resilient and less dependent on any given product, as opposed to what happens to a mono or a dual-line player. I'll pass it on to you, Santiago.
Thank you, Helena. Good morning, everyone. Moving to page 18. For easiness of understanding, we included in the presentation a detailed table that has the walkthrough of our deflation adjustments. We made these adjustments because for the first time in several decades, Brazil experienced 3 consecutive months of deflation totaling 1.32%.
We believe this is an extraordinary event as Brazil structurally has positive inflation. Going into the table on the page, you can see 3 exposures. Two are on the asset side and one on the liability side, which gives us a net long exposure of BRL 4 billion. With an inflation rate of 1.32%, the revenue of this net loan exposure was -BRL 53 million in the 1/4.
Assuming a 1/4ly inflation of 1.24%, which is the one disclosed by the Central Bank of Brazil in its Focus Report for 2023, the revenue of this net loan exposure would have been BRL 50 million. This gives us a net difference in revenues of BRL 103 million. In terms of net income, when we adjust by taxes, the positive impact of the bottom line would have been BRL 53 million.
Now moving on page 19, we show the remarkable evolution of our client base. You can see how clients keep choosing Inter&Co at an accelerated pace. On average, we added 2.2 million net new clients each 1/4 this year, which is 10% more than the average of last year, when we added an average of 2.0 million clients each 1/4.
You can see that 61% of our 22.8 million clients have been clients at Inter&Co for more than a year. This allows us to show increasing monetization as our client base matures. Moving to page 20, we present here our monthly revenue per active client, or also known as RPAC.
This 1/4, we reported a monthly RPAC of BRL 46 or 29 net of funding costs. Based on our estimates described on page 18, in the absence of inflation, our RPAC would have been a record of BRL 50 per active client or 33 net of cost of funding. Jumping onto page 21, we present here our progress on the expenses front. On a per client basis, our monthly cost to serve was BRL 17, which was flat 1/4 over 1/4.
When we look at the cost to income ratio on a reported basis, it reached 78%, though when we adjust for the inflation impact mentioned earlier, we see a continuation of the improvement trend by 2 additional full percentage points, which would imply a 70% cost to income ratio. Note that both cost to serve and cost to income ratios are 2 critical variables that we track closely to assess our performance through time.
Jumping into page 22, we describe here the evolution of our NIM. You can see that we reported 6.3% in the 1/4. Again, adjusted by the estimated inflation impact, the NIM was 7.5%, which represents a significant improvement relative to the prior 1/4s and a reflection of the thorough repricing we're doing across portfolios.
Another way to see this repricing is through the yield on the average earning assets, which is the black line on top of the page, which grew an impressive 140 basis points on an adjusted basis. Finally, on page 23, net income on the 1/4 was -BRL 30 million.
Adjusted by deflation, we had the best 1/4 in the year with a net positive of BRL 23 million. Before passing it to João for some final remarks, I would like to remind the audience that we will have our Investor Day on January eighteenth in Belo Horizonte with hybrid format, with live stream, globally. Back to you, João.
Okay, Santiago Stel. Thank you. Final remarks on page 24. As I mentioned initially, I'm truly happy with the performance of this 1/3 1/4. We have Inter functioning at its best, with all cylinders pushing with strength in a coordinated manner. Clients continue to choose us because we have the best and most complete Super App in the market, not only because of our fair pricing offer. We innovate day in, day out, trying to simplify the lives of our clients.
Particularly, the Global Account, I think, is the number one innovation of the year, equivalent to the E-Commerce platform back in 2019, Inter Shop, which end up being a big success as of today. Our financial performance is proving strong. As you saw, we improved meaningfully on the asset quality front, as I anticipated last 1/4 when I said that the worst was behind us.
I'm fully committed to reprice our loan portfolio and deliver proper NIM expansion. This is now a top priority from a financial perspective. Finally, we continue growing our balance sheet at a strong pace, gaining significant market share, which will help us achieve operational leverage and organic capital creation. With that said, operator, please, we can now open for the questions of the audience.
We will now begin the question and answer session. Once again, for the Q&A session, we ask you to write down your question via the Q&A icon at the bottom of your screen. Your name will then be announced, and you will be able to ask your question live. At this point, a request to activate your microphone will appear on your screen.
If you prefer not to open your microphone live, please write down "no microphone" at the end of your question, and our operator will read your question aloud. Our first question comes from Olavo Artuso, Sell-Side analyst at UBS. Hi, everybody. Good morning, and thank you for taking my question. I have one related to the GMV of the marketplace. The volumes reported a drop of 1% Y-O-Y and 5% Q-O-Q after strong growth rates in the previous 1/4s.
Could briefly explain this dynamic and what should we expect for the upcoming 1/4s? No, sir, you're now opening the audio so you can ask your question live. Please go ahead.
Oh, sorry for this. Good morning, everybody. Thank you for the opportunity. It's basically this. I wanted to jump in with my question on the marketplace of the bank, and I just wanted to understand a little bit more what happened in this dynamic to show this slowdown Year-On-Year in comparison to the last year. I basically just wanted to understand briefly what could explain this slowdown when compared to the 1/3 1/4 of the last year and also related to the last 1/4, the second Q.
Okay. Olavo. João Vitor speaking. Thank you for your question. Given the macro this year, the consumer confidence, the consumer purchasing power in Brazil was very affected, and this reflect in commerce levels. This is one thing.
The second thing is about balance. We also wanted to improve our margins, which is the net take rates, in order to just focus on growth. Going forward, we expect this balance evolution between take rates and volumes going forward. This is pretty much the 2 reasons for the trend on the GMV volume per Q comparing to Q2Q.
Okay. Thank you very much, Victor. And if I may, I just wanted to jump to another topic, which is very, very quick, related to the asset quality of the bank, because we welcome the management of the cost of risk this 1/4, and also the effect on the reserves that they reached a very safe level of more than 140%.
My focus here continues on the NPL ratio because it increased 10 basis points 1/4-over-quarter, but stage 3 loans increased almost 1 percentage point in the 1/4, with this increase basically stemming from the credit card. Victor, I just wanted to understand what are the intentions of the bank regarding this trend going forward?
Okay, Olavo, thank you for the question. I'll forward to Helena, which will cover that.
Hi, Olavo. Regarding asset quality, as we mentioned, we are very happy with our performance. We believe that over the last months, we have really focused in increasing and improving our risk management collection and our processes in general for us to see that trend, so that NPL is going down.
What we see is that our NPL levels stayed flat. I think, like when we see this, 3.9%-4%, is we are not taking into consideration the loan book. That is an actual loan book of credit card receivables that is not in the same line in the balance sheet because the counterparty are financial institutions, but they are actually part of the loan book. As it becomes more relevant, it's important to look at that number, so 3.8% compared to 3.8%.
When we look at the stages, as you mentioned, specifically the evolution of stage 3, what we see there is that they are not a direct reflection of the NPL formation. What we see is that conservatively, we also consider as a stage 3 other type of loans, such as the ones that we have some type of renegotiation that we can classify as stage 3 as well, but not the same reflection that we have on NPLs. They can be a good proxy, but not necessarily the same number to be looked at.
Okay. When we see trends, the trend is for us to continue seeing an evolution on NPL ratio. We are confident that we have improved, as I mentioned, our credit risk assessment, the processes, the new underwriting, and it's
The trend is really for us to see an improvement in an NPL going forward, in all the different loan books.
Okay. Much appreciated. Thank you, Victor. Thank you, Helena.
The next question comes from Flavio Yoshida, Sell-Side analyst with Bank of America. Please, Flavio, we're now opening the audio so you can ask your question live. Go ahead, sir.
Hi, guys. Thanks for the opportunity. I was wondering, given that you mentioned that NPL probably reached its peak, what should be the speed that we can expect, NPL improvement going forward? How this could impact also the loan growth acceleration, given the better asset quality trends? I have a follow-up question on this.
Thank you. Santiago here taking that question. In terms of NPL going forward, we expect it to remain roughly stable on the level that we had. The increase that we had in the past few 1/4s had to do with the deterioration in the market.
Also with the fact that we're increasing the share of credit cards as percentage of the total portfolio. Going forward, we expect that credit cards will grow in line with total portfolio, so we will have little change in terms of mix. Therefore, All-In, factoring in, we expect a stable NPL trend for the coming 1/4s.
The next question comes from Mario Pierry, Sell-Side analyst with Bank of America. Mario, we're now opening the audio for you to ask your question live. Please go ahead.
Hi, guys. Can you hear me?
Yes.
Okay, perfect. Congratulations on the results. Thanks for taking my question. I have 2 questions. The first one is, you showed, right, the longevity of your clients has been increasing. Like 61% of your clients now have been with Inter & Co for more than one year, and this was 48% one year ago. This is a clear positive. However, when we look at your net ARPA, it has not changed.
This, for us, seems counterintuitive because we thought, right, the longer clients are, the more products you're able to sell. I was just wondering, how do you see this disconnect between clients using the platform, but you're not being able to monetize on them? My second question is related to all the repricing of your loan portfolio that Helena talked about.
When should we expect to see the full benefits of this repricing? I would imagine some of this took place late in the 1/4. When should we see the full benefit of the repricing? Thank you.
Thanks, Mario. I'll take the first part on ARPA. The way we look at it, in this 1/4 is on an adjusted basis by deflation. At the end of this, we consider it to be a one-off factor. When we do adjust it, we see that the ARPA before deducting interest expense did a record high of BRL 50 per month per active client. That is, having added a significant number of clients in the 1/4 still. The deflation impact changes the number when you look at it on an unadjusted basis. That's the reason why we brought this adjustment to mind.
If you look at it on a net of cost of funding basis, the number was 33 KIs, which is a positive trend, considering the number of clients that we brought in the base. We will do a very deep dive on unit economics in the Investor Day, where we will break down the ARPA to the cohorts and what we have inside the cohort, how that changes across cohorts to provide more color on how that has been evolving through time.
Following up into the repricing question. As we mentioned, we have been repricing the loan portfolio. Having already repriced SMEs, cards, prepayment of cards, and Agribusiness. But those loans they represent over 50% of the total credit exposure, right? On payroll, we are increasing origination rates to new loans to above 1.5%.
We are also in the process of refinancing older loans that were underwritten at lower rates now with higher rates. With these 2 effects combined, we expect the most of the portfolio to be repriced by the second 1/2 of 2023. Now on Real Estate, we are in the process also of repricing it, but given the nature of these loans, it will take longer.
What we think will likely happen is that Selic will eventually go down, so we will see this trend of increasing NIMs and this loan book be fully repriced, as the macro scenario evolves as well. That's basically what we believe in terms of repricing and how fast we will see it.
Thank you.
Our next question comes from Rafael Fraga, Sell-Side Analyst with Citi. Rafael, we're now opening the audio for you to ask your question live. Please go ahead.
Hi, guys. Good morning. I have 2 questions here. One is going back to the stage 3 loans. Helena explained that it's not necessarily NPL, but it could be related to renegotiation. I would like just to understand if in this 1/4 there were a more intense process of renegotiation or anything that you can share about it.
A second question would be related to. I saw that there were some fees related to some performance fees related to Mastercard, B3, Livelo that had some reduction in the 1/4. Just to understand here where this reduction comes from and what we can expect going forward. Thank you.
Fragi, this is Alex. I'll take this question. The first point on the stage 3, the point is that sometimes you may have a mismatch between the days that the loan is delinquent and the stage where it is, meaning that you may have loans that are on time but are on stage 3. This is the mismatch that Elena was explaining.
Moving to your second question on the performance fee. Performance fees are something that we work on to negotiate constantly. Sometimes they depend on partners' programs that incentivize certain behaviors from us with our base. B3 does that all the time, for instance. Others have contracts that are more consistent, such as Mastercard.
Our objective is to keep optimizing the revenue that we get from those performance fees, but fluctuations are likely to happen as the programs comes and goes. Thank you.
We now have a question from Pedro Leduc, sell side analyst with Itaú BBA. Pedro, we're now opening the audio so you can ask your question live. Go ahead, Pedro. Thank you.
Thank you, guys. Two questions, please. First, on the operating costs, this 1/4 still rising a little bit, how you guys are thinking about, you know, maximizing the efforts as we look into 2023? How should we think about this line? Then on the second, more broader thought, you know, also as we look into the year ahead, what the key priority are in terms of the main lines, how should we think about book, revenues, and costs? That's just broader thinking. Thank you.
Thanks, Leduc. I'll answer the first one. On expenses. We are really committed to maintaining our total expenses under control. When we look at the evolution of our personnel expenses, it grew 2% 1/4-on-quarter, and the other expenses grew close to 8% in the 1/4.
Our commitment is really to grow it less than growth in total revenues, which would have had with the adjusted revenues, decreasing Cost-To-Income ratio. That's the trend. Of course, the evolution of our expenses, there are many levers for us to pull, but there is also the growth of some of these expenses with the growth of the engagement of our customers, with the evolution of our business, and that they are very correlated.
The key goal here is for us to sustainably maintain this decrease in cost-to-income ratio, and this is what we are working on.
Thank you.
I'll take the second part on interest income, so that's the combination of rates and volumes. I'll separate it in 2 pieces. On the rates front, I think Elena touched on the repricing front, but basically I'd like to highlight that this is the first full 1/4 where we have credit cards operating at the repriced level.
That's the difference versus the prior 2 quarters. SMEs and anticipation of receivables have also been repricing as the months went evolving through the year. On the volume side, we did have more growth on payroll and anticipation of receivables lately, with SMEs and real estate growing a bit below the average, but still at good levels.
We are balancing, as Alexandre was mentioning on his remarks, both rates and volumes to keep a balanced mix. We think that as we continue doing that, we'll start showing a NIM trending towards a level that we're more comfortable with, which is in the high single digits.
Thank you, Santiago and Helena.
Again, if you have a question, please use the Q&A icon at the bottom of your screen to write it down, and we will open your microphone. Any other questions? We have a question from Tito Labarta, Sell-Side analyst with Goldman Sachs. Tito, we're now opening the audio for you to ask your question live. Go ahead, sir.
Hi. Good morning, everyone. Thank you for the call and taking my question. Just to follow up, in terms of asset quality, you know, we saw, you know, your NPL only got 10 basis points, overall, seeing some of the incumbent banks have much more deterioration. In some of the comments we've heard there, it's, you know, more lower income clients, digital clients that seem to be suffering more.
I think relatively, you know, looks like much better results on your end. Just wanted to try to understand that. You know, are you seeing a similar thing either by income segment, where lower income clients are performing worse? You know, why do you think your NPLs seem to be holding up?
Also, you know, your provisions relatively steady, you know, and some of the comments you made that, you know, things can improve, you know, sooner rather than later. Just kinda curious why you think we're seeing this kind of difference, where some of the incumbent banks are suffering, a bit more than expected and, you know, you've had some deterioration, but it looks like maybe the worst could be behind you. Just to try to get some context there. Thank you.
Thank you, Tito. Three points on your question. First, the way we see it, NPLs remain flat 'cause the 3.8 ratio that we added here includes anticipation of receivables. This is financing with credit risk and interest rate risk. For us, this is a loan. And that this versus the prior 1/4, it was flat, so 0% deterioration.
This goes to the point of João in last 1/4, the worst is behind us, meaning no longer deterioration. Second, this happened by the fact that we have a lower beta portfolio or a highly collateralized portfolio by design. This is the nature of Inter to be resilient in times of increasing interest rates, and this is precisely where we can, when we can show this improvement.
Third, we have been working very actively on the risk management and collection processes. We gathered a lot of data from our clients that interact in the different parts of our platform that have been increasingly more incorporated on our credit underwriting models. All those efforts together have resulted on an early reaction that allowed us to print a flat NPL.
Great. Thanks, Santiago. That's helpful. Maybe just one follow-up then. You know, does that give you confidence, you know, to increase loan growth from here? Can you get more aggressive, you know, particularly in unsecured lines?
We see loan growth next year higher than this year. We don't see it going back to a 3-digit % levels, 'cause our size has become increasingly more material. We do see an acceleration of loan growth in a more balanced manner across products, more into 2023.
Great. Thank you.
We now have a question from Geoffrey Elliott, Autonomous Research Sell-Side analyst. He's asking, he would like to ask about divergence from stage 3 loans and N-NPLs.
Hello. I think 2 people have already asked about divergence in stage 3 loans and NPLs, so maybe I could ask a different one instead, please. Just in terms of the net interest margin progression from here, so I think you're at 7.5% on an adjusted basis in 3Q, once we take out the CPI impact. How should we think about the main drivers of the NIM going forward? You know, thinking about mix, repricing, and then sensitivity to interest rates and potentially interest rate cuts at some point over the next year. Thank you.
Thanks, Geoffrey. Santiago here. We are now at the point of more pressure on the NIM. As we commented on the repricing remarks, we have close to 50% of it repriced by now. We're working very actively on the payroll and the real estate to bring it to a market level.
We think as we increase 1/4 by 1/4, the replenishment of new loans, and we get the repayments of the older loans, that expansion of NIM will continue playing out. We see a material improvement, or we expect a material improvement going forward in the next year as that repricing approaches 100% of the loan portfolio.
Okay. Well, I guess this concludes our Q&A session. I would like to turn the conference back over to Mr. João Vitor Menin for his closing remarks. Please, Mr. Menin, you have the floor. Thank you.
Okay. Thank you everyone for joining us for this earnings call. My final remark, I would like to share with our shareholders, with our employees, that we're here for the long term. We are running a marathon, not a sprint. Sometimes we want everything to be in place on the next part. That's not what's going to happen.
Be sure that we're working hard, doing our best. It's a big group, talented group of 4,000 employees working together to improve quarter -over-quarter. Again, quarter-over-quarter improvement as we see from Q2 to Q3, and as we see from 2021 to 2022. Again, improving and improving. It's about commitment, it's about resilience, and that's the spirit that we have here at Inter&Co. Very excited with the coming years for Inter&Co in Brazil, all over the world.
Thank you everyone for supporting us so far. Thank you very much. See you soon.
The conference has now been concluded. Inter IR area is at your disposal to answer any additional questions that you might have. Thank you so much for attending today's presentation. Have a nice day, everyone. Thank you.