Good morning, everyone. I'm Santiago Stel. I'm the head of Strategy and Investor Relations here at Inter. 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. We hope that you enjoy the materials that we have prepared for you today. Let me tell you how the day will go by. We have three modules that we'll be presenting today. Module number 1 is a strategic update, which will be presented by our CEO, João Vitor Menin. That will take approximately 40 minutes. We'll 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.
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 five-year business plan. We'll do a 2nd Q&A session, and we'll be wrapping up around 12:00 P.M., Brazil time. That's when we'll conclude the webcast, the live stream of the webcast. For the ones present here in Belo Horizonte, we will go for lunch and a site visit in our headquarters. Thank you very much for being here together, and I'll pass it to João Vitor for some opening remarks. Thank you.
Thank you. Hello. Hello. Thank you, Santiago. Good morning, everyone. Happy to be here in Belo with a very good attendance. We have close to 70 investors here and maybe around 400 on the webcast. I see some very common face, people supporting us for a long time. Just to share a little bit about the venue, the reason why we decided to start our Investor Day here is quite simple but important. You saw in the video our headquarter, where we're heading to later on. This building here, that's where everything started seven years ago. I think that some investors might have come here before to watch the checking accounts being opened. Here, seven 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 like to share. I'm engineer. I graduated as engineer so I do love to build things. At Inter, what I spent the past seven years is to build the only true super app on the Westworld. 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 are you heading to? What are your priorities?"
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, with 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 five years. We're going to present our five-year plan later on, which I believe you're gonna be very excited as we are. After that, we will go through some financial KPIs and Q&A session. Thank you very much. I hope you enjoyed the video, and I'll be back on the stage soon. Thank you very much. Today, I want to share with you how we are positioning Inter and where we're heading to.
I have decided to organize this discussion into five broad topics: Who are we? What is our strategy? Why do we win? What did we accomplish in 2022? Where we're going into the future. 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 worlds to create a better customer experience, and to gain scale, drive volumes, and generate profits more efficiently than the legacy bank models in Brazil. Let me share an example of what I mean by this. Do you know how our cost to serve compares to that of legacy banks? Our cost to serve is BRL 17 per month. 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 multi-product clients, as you can see here. Take a look.
Now, 66% of our active clients have three or more products at Inter. 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 comfortable. 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 your 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 one amazing experience, one account, one set of client credentials, one single login that can be used across any device or channel anywhere in the world. 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. I'm beginning to see the return of our investments, which we believe will grow for these next few years. Last quarter, we reported 47% annual growth in our loan portfolio. We also reached 50 BRL in average monthly revenue per active client or PAC.
We reported BRL 1.5 billion in gross revenue, which grew 85% year-over-year. I think these were strong results. We are still in the early stages of our evolution with market shares that are in the low single digits. 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. Let me walk you through our current plan. Our strategy is relatively simple. We are focused in three 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.
These help our clients use their money across a growing range of everyday activities. We use this suite to grow client engagement and increase our ability to monetize the relationship with them. 3, 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, to 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 ranks. Because we have all 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 Inter Shop, we can offer them more credit or personalized incentives. We also offer our clients a range of loan 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 RPAC, high volume to generate more engagements, and high variety to capture more client wallet share. As we develop all of our products, we want to monetize them across three phases that we call phase I, penetration, phase II, innovation, and phase III, 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 these 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.
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'll walk through our products in more detail, but I will tell you now how we put all these phases 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 spending 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 can see their income patterns based on deposits and payroll.
We can also see their spending trends across different products in our app, 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. 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 call 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 brands, highlighting our quality service versus other bank models, and also promoting how our app is extending into new areas. 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. 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, extending 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 Interc el. 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 Doutor 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 trend. We use this valuable 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 RPAC 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. 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 a right 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 clients 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. 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 one 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 a million Global Accounts in 2022 and are opening new ones at a rate of over 5,000 per working day.
When I look around, I can see that we are again ahead of the trend. We are pushing the frontier of combining 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 Pix transactions. Imagine if we can bring the rest of our business to match that market share gain. That's just in Brazil. The U.S. market will expand our opportunities even further, and there might be more markets to come. Now that I have walked you through a very high-level roadmap of our strategy, I would like to take a step back to explain the foundations of our business and the advantages we have created. The foundation of our success is based on four 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 one digital platform. Last, number four, our proprietary data and analytics advantage. These 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 licensed bank inside of Inter & Co, which provide us with differentiated benefits, including more stability, an attractive source of deposits, a lower cost of funding, more financial products, honest 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 fast. This has led us to a growing list of firsts. We were the first to create a 100% digital bank, a free bank account offering, a integrated banking and shopping solution, and many more.
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. 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 three 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 processes so we can serve our customers faster and with less friction. These 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 through product cross-sell. We are increasing our PAC over time as clients use more products and increase engagement. Lastly, our model provides us with lower CAC, cost of funding, cost of risk, and also cost to serve. Combined, these financial advantage help us benefit from greater diversification, higher defensibility, more powerful network effects that build and protect value for our shareholders. 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. 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, 6 times 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. In 2022, we hired Flávio Queijo, the Head of real estate business coming from Itaú, Danilo Coelho, Head of credit underwriting coming from Banco Votorantim, and Santiago Stel, Head of strategy and IR coming from Morgan Stanley.
Our strong brand and attractive culture are helping us to attract top-level talents, 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 number 1 Super App Brazil, the number 1 digital bank, and lastly, the number 1 digital broker. In 2022, we also launched several important products for our Super App. Doutor Inter, a telehealth solution connecting consumers with doctors through their app. Invest Now Pay Later, which enables Brazilian to invest more easily. 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. 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 UX. This can be seen in our NPS, where we achieved our highest score ever in 2022. Now that we have discussed 2022, I will finish with a look into the future. As I think about the future, I always keep three 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, these three ones are top priorities for me. 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. In operations, we expect to keep our headcount roughly flat for a second consecutive year, while maintaining a strong growth profile and without sacrificing innovation. We have several longer-term strategic initiatives for the future. For example, we have expanded into the healthcare 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. 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. 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 these concepts in more detail in the financial section. As I finish my overview, I want to leave you with a few final thoughts.
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 5, we have real revenue and cost advantage that improve as we scale. Finally, we are just getting started and have a very exciting outlook for the future, which I think make us an attractive fit for any long-term portfolio. 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. Then we'll deep dive into the business. First, we'll discuss our products. Then we will finish by digging into our numbers, our unit economics, and Inter outlook. Thank you. Hello, hello. I hope you enjoyed the video, the presentation. As I told you in the beginning, I'm very excited, energized for the five years to come. We took a lot of time during the past six months with the help of the team to elaborate this 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 five-year plan is ambitious, I would say that what we built on the past five 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. By implementing this five-year plan, the 60-30-30, having the 60 million clients, having the 30% efficiency ratio and ROE, we're gonna end up by having approximately BRL 100 billion credit portfolio, which we'll deep dive later on the financial metrics. Most important, talking about not only results, but also return to our shareholders, which it's 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 five years. With this important message about our plan, our portfolio, our profitability, I would like to end this session. 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 five minutes, we're going to show some more very nice things about Inter platform. Thank you very much.
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. Thank you.
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 RPAC, 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 two ecosystems delivered in one integrated super app: Inter Financial, where our products help clients manage their money, and Inter Commerce, where our products help clients use their money. With over 100 products and services to serve the daily needs of all clients across eight product categories. Let's start with day-to-day banking.
Hello, I'm Ray Chalub . 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. Good that we will fall in love and want to delete any other banking apps. With that said, let me jump into the products. From the moment you wake up and take an Uber to work, buy a coffee, shop online, pay your 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. How is this possible?
As Jo`ao mentioned earlier, we combine the strengths of a depository bank with the agility of a fintech to offer the most differentiated banking experience in the market. Our success can be seen in our impressive result. 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 in retail deposits. Our clients also have spent over BRL 500 billion in the last 12 months, or more than $100 billion. A pretty impressive number. 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 five 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. Now it's time to talk about our insurance vertical. Launching Inter Seguros to protect the most important assets of our clients' lives. We provide one of the broadest suites of insurance products available digitally in Brazil, delivered via an asset-light brokerage model with zero balance sheet risk. To help clients find the insurance policy that best fit their needs, working with the best known insurance carriers in the world. Our ability to grow our products suit quickly and efficiently is secon to none. In just three years, I have launched over 20 products. In 4Q 2022 alone, we launched three new products: Seguro PIX, Patch insurance, and Ascend insurance. Let me tell you our insurance platform's wins. We offer a best-in-class experience by making insurance simple, 100% digital with the broadest products offering.
Our superior growth capabilities enable us to launch new products efficiently and reduce time to market through our brokerage model. We can scale our business with our existing infrastructure with a minimal variable costs. We leverage our unique behavioral data by different segmentations to cross-sell clients with targeted insurance policies. For example, a customer who purchased a flight ticket via Inter Travel may also consider buy a travel insurance. We cross-sell our insurance products to protect the financial and commercial transactions. For example, a recurring user of Pix may consider purchase a Seguro PIX to protect her account balance. There are three key ways to monetize our business. Our upfront payments negotiated with the right partners, multi-year commissions earned on brokered policies, and performance fees linked to origination volume. We have been tremendously successful in growing our business, having reached more than 1,000,000 active contracts in just three years.
Inter Seguros is very profitable due to the multi-year recurring revenue streams. We grow as we accumulated and distribute 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 four 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 platform. We offer three 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 funds. 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 professional. For the beginners, we provide educational content along with robo-advisory tools, where a virtual investment assistant will ask a few questions, analyze the client's profile and goals, and propose selected 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 InvestShop. 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 unit, we have strong distribution capabilities for corporate issuers, which in turn attracts more investors looking for diverse investment opportunities. Our three competitive advantage 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 advisor model. 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 Intershop, and I'm gonna share a little bit of our products with you today. Intershop 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 cashback incentive that maximizes the purchasing power of our clients while feeding liquidity into Inter's ecosystem.
We partner 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've delivered five core value propositions to our customers that underpin our differentiations. 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 behavioral 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 secure. For those paying via Inter app or with an Inter credit card, there is an added level of comfort that they will be approved instantly for their 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 that take rate in the form of cashback rewards to our customers. Fifth, Super Limit. Not all customers want cashback.
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 Super Limit credit extension instead of cashback. Simply put, a Super Limit 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. 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. Why we do it, we provide these products to drive engagement with our super app, which fosters loyalty to the Inter brand and creates secure 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, Doutor Inter, our telehealth platform that helps our customers not only schedule appointments for in-person visits, but also enables online consultations via video, all within the app. We'll talk more about this offering on the following page. Intercel , our MVNO with Vivo, where customers can transfer their phone number to Interc el, benefit from the best mobile network in Brazil, and earn cashback on their account. Duo Gourmet is our subscription plan where customers can take advantage of unique discounts and promotions, such as two meals for the price of one 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 cashback.
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 Aloísio 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 Interglobal products into two categories: one for Brazilian residents and 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 three 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're 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 two quarters, we have grown the numbers of Global Account by 10 times to 500,000 account as of the 3rd quarter of 2022. Our customers are opening over 5,000 accounts every business days. 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, order 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. 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 thought leaders within 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 39 times and ROI by 23 times. 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 15 times 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 39 times increase in conversion and 23 times increase in asset allocation.
We shifted to an automated credit review process for our paycheck loan offering. This led to a 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 investment. 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 receive 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 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. 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 creditworthiness. 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's CTO. 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 microservices, core banking system, and all of it running 100% in the cloud, all of which make our operations more efficient, scalable, and secure. 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 a couple solution within the super app. This makes it easier to enhance functionalities, test, and deploy to production.
We prioritize a native mobile development on iOS and Android, making it one of the most fluid and fast-running app in the market. We have strong security and authentication protocols with active fraud detection. Now we're 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. We will add context to the app, including client behavior and location, to adjust the home page in real time to optimize the client experience. We will highlight the applications that are most likely to be used and adjust based on a client's context.
For example, if the client is driving their car, we may place the fuel payment solution and parking applications on their homepage. 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 a 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 hyper-personalized 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 microservices. 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. By using our Inter Gateway, we significantly reduce costs to serve compared to use a third-party solution.
We employ a modular microservice approach across all business application, 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 refined control and responsibility, help us operate with more agility to react to market changes by releasing updates more easily and frequently. With robust governance, we operate as a regulated bank with the agility of a disruptive startup. 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. In 2022, we achieved 5 nines 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 of behavioral and transactional data structured, so it's just one 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 InterLake. Speed. We have accelerated the time to generate insights by three times. We do in eight weeks what our competitors do in six 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. Of course, privacy. We ensure 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 InterMind, which provides meaningful insights, personalization, and client-focused prediction. To make InterMind more friendly to end users, we have created two applications, Insights Machine and 360 Vision.
We also use InterMind 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. 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 products categories are most relevant to our clients. It help us to identify new markets and which new retailers include on the 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 V ision, allows 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 have a customized homepage that highlights the tools and the icons that clients most care about. We also recommend specific products using client context to address their most pressing needs. Our Three Sixty view extremely useful to drive cross-selling and upselling. For example, we can identify look-alike 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 their 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 three-sixty profiles. Giving 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 tool 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 customers' complaints that are escalated to the Central Bank. As you can see, our proprietary data set 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 one app.
Excellent. Now we'll start the Q&A session. João Vitor, Alexandre, and Pri will join us here in the podium. Just to remind, we take questions from the webcast as well as questions from here in the audience. Maybe I'll shoot the first question to João that came from the webcast, is if you can comment, going back to module number one 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 three 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. This is very important. 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 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.
In order to do so, we need to keep innovating, raising the bar, having the best product, the best app, the best integrated solutions. I'm gonna lock in a client because he's in love with our Global Account, for example. Innovation is very important on that. The third one, it's about returns. As I also mentioned before, I'm a picture holder for Inter. I 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. 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 ourself, but also net income.
These are the 3 top priorities for myself. Of course, these are the 3 top-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, you know, as time goes. I remember this time last year there was also an Inter Day, 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. Okay. Now exploring a little bit the 27 vision. You know, the 60-30-30. That's a nice name. Okay. Roughly speaking, you know, Brazil is majority of the 60 million clients or does it already entail some of the U.S. ambitions? Last year you mentioned the number, I don't know if you have fine-tuned this as well.
Within the ROE, there's obviously a revenue component that will help you reduce costs and bring the efficiencies to 30%. Then 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. A few questions in one. Thank you.
Okay. If I forgot some, you help me too. Let's start from the last one. 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 capability and the fintech capability, the banking solutions and the commerce solutions. We really want, not today but years ago, to combine these two things in order to produce this good breakdown between NII and fee income. Important, I would like to say a healthy fee income. To charge R$10 for a Pix in a PJ, as many incumbent banks does, it's not a health, it's not a sustainable fee income. It's gonna go away. We're talking about a health income. Today we have about 40%.
This breakdown, this ratio tends to keep the same or even improve toward to fee income, which will help us to have a higher ROE comparing to incumbent banks. This is the first thing. Regarding U.S., when we do our assumptions and during 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 assumptions. We do already have the debit card. We're not talking about what we're going to build United States. Most likely we will have a tailwind from the U.S. business going forward. The second question was about?
Yeah. The client account, the distribution between Brazil, U.S. I think you alluded to the revenue coming mostly from Brazil. Whatever you add to the U.S. would add to this figure that you mentioned. If you can elaborate a bit on the 60 million client breakdown?
Okay. Yes.
-regionally.
Yeah. We believe that when you think about the 60 million client, again, as we're thinking business as usual, we're predicting that we have the roughly 7 million-8 million new clients addition per year going forward. Pretty much we're considering clients in Brazil, okay? This is pretty much what we have. We do believe that we're gonna have more clients coming, more U.S. residents coming to the platform on the years come.
Thank you. I'll go back in line for later.
Hi, João. Mario Pierry from Bank of America.
Okay.
On your five-year plan, can you discuss the growth coming from organic and inorganic opportunities? You know, we're seeing the sector in fintechs in Brazil starting to struggle, given that many of them don't have the access to funding as you have. If you could talk a little bit about how do you see consolidation happening and what kind of role do you plan on playing?
Mario, thank you. First of all, as I mentioned to Leduc, when we presented this five-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're today. This is what we have in place. I do believe we'll see consolidation on the market, mostly in Brazil, for obvious reasons. We see many companies without a good capital, without deposits, without a good range of products. They can no longer do a cash burn to attract and retain clients. The outcome of that, I believe that the M&A that I believe will take place at Inter is gonna be a hybrid organic and inorganic. Most of these clients, I believe you can M&A them through our platform down the road.
If you have a client that's was using a platform because they had 100% liquid in our balance on their account, and they no longer have that, they might turn to Inter. I don't think you need to buy a platform, buy a company, buy a fintech. I believe you can buy this business, these clients, I would say at cheap. I don't see ourselves doing a consolidation in Brazil to achieve this 5-year plan. Going forward, okay? Of course, we do have a 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. Just balancing questions from the audience, here and the webcast. The next questions, is regarding competitive landscape in Brazil. How do we see it? Alexandre, you wanna take this one?
Sure. I think the first point I'd like to touch on is that we're very confident to say that we're 1 of the winners in this market. 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. Also like to think about this, the competitive landscape in the context of the past. Back in 2018, we had, like, when we IPO'd 400,000 clients, and there were 2 big questions. 1 was, "Is Inter gonna be 1 of the top contenders 5 years from now?" The second was, "How big is this market gonna be?" The reality is that we had very good execution. Again, we're very well-positioned in 2023. Of course, we have to keep evolving.
The market is much larger than what we planned. 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. We're happy about that. 2023, we see that it's gonna be a better year to compete than the last five years, given everything that we're seeing also with the capital markets. Less capital abundance for people to spend on CAC, good prospects for 2023. Thank you.
Eduardo Rosman from BTG Pactual. João, Santiago, Alexandre, I know you're gonna discuss, you know, later today the five-year plan, but what about the next 6 months or 12-month plan, right? Clearly, say the stock has been under pressure, I think because of concerns about short-term profitability. You know, how you're gonna 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. If you can help us at least, you know, 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 like, 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. I'm going to hand over that to Santiago, our IR, to address this very important question for the next six or 12 months.
Thank you, João. Basically, the plan for 2023 is quite simple, which is the continuation of 2022. Simple as that. Basically, we're actively working on the repricing. We have repriced the majority of the short-term portfolio. We're working now on payroll and real estate. We're doing a very thorough rate with minimum ROE targets on every single origination that we have. We'll continue working on the fee side, and we'll continue allocating capital in a profitable way. Basically the plan is nothing new from what we have been doing, but in a more evolved manner. We wanna 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.
That allows us 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 a little deeper on that. I don't want to jump the financial section where we'll have a Q&A, but we'll dig deeper on several initiatives that we have in place.
Hi. H i, this is Flávio from Bank of America. Thank you for the presentation. I have a couple of questions here regarding your guidance. The first one is regarding your loan portfolio. I was wondering what should we expect regarding the loan portfolio breakdown regarding products and client segments for 2017. Also when we look at the ratio of loan portfolio per client, today you have roughly R$1,000 per client, correct me if I'm wrong. The guidance implies R$1,600 per client, right? What is the strategy here? Is it to deploy new products to change the loan portfolio mix? You know, what is the strategy here?
Also the guidance, also implies that, if we're gonna have a 30% ROE, with our BRL 5 billion, we're gonna have a shareholders, equity of roughly BRL 15 billion, right? It implies almost a BRL 10 billion increase from today or maybe a little bit less than that. Does it make sense, the math, here? Thanks.
I'm going to comment on the loan portfolio, then Santiago will cover about the profitability. As we explained earlier today, I mean, the glass is half empty, half full. I mean, we do have a small market share in very important and very good products that have a big market share, a big addressable market in Brazil, such as payroll loan, such as the mortgage products that you have been running and improving for 15 or 20 years or 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 a credit portfolio: funding, a very good funding capability. Also connecting to your question, we are gonna 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. 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 confident to have in a good way without hurting our NPLs, to the BRL 100 billion credit portfolio. Santi is gonna cover the profitability ratios.
Yes. We'll comment more on profitability in the financial section, but your math is accurate. I wanna make a clarification. This is not a guidance. This is our long-term target. 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 a 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 had a graph showing that. There's a question.
Mm-hmm
webcast regarding if you can elaborate that further.
Okay. Hi, everyone, thank you for the question. I like to talk about acquisition since 2016 because it's something that we did, I think, pretty well. We have a very low CAC, as you can see here. We were able actually to decrease this last year. 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, they are doing this just because we have like a very nice NPS. It's around 85 points right now, they are buying a lot of products, and they think that it's good for their family and friends to use our accounts.
This helps us to have a very low CAC and also helps us to do this organic way to be more profitable. 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 João Vitor or Alexandre wants to add something around this.
I think that as I mentioned to some of our shareholders in the past, I'd like to say that if you would do a 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. 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's not a good end story. As Priscila mentioned, with 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. Low churn or zero churn, it's mandatory for us to reach our five-year plan.
A follow-up question, for you, Pri, here from the audience is if you can comment on engagement and activation.
That's a great question and also a tricky one, because we have to be careful around that, I mean, for the analysis, 'cause we have to look in two point of view. For the first point, yes, it has slightly decreased in the last year. That happened mostly because we were more conservative on credit cards. We see this actually as a low-hanging fruits 'cause we can actually engage those clients right now. Looking to the other perspective, on the other hand, it is something is happening with engaged clients. Their activity is going up actually. They're buying more products. They're buying more than three products, as we have seen here. They are also using us as their primary bank. The last but not least, their ARPAC has grown up as well. Alex, do you wanna add something?
I think it's good. 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. Last year, we're able to almost double the approval rate, maintaining a low, controlled risk profile, let's say, in credit cards. We have more models to deploy moving forward during this year, which will enable us to bring these clients back. They're not engaged yet, but they will be engaged as we move forward.
Thank you. Another follow-up here from me. Exactly on this point on the credit cards, you mentioned to be launching overdraft this year. Indeed, your credit card business was a lot less impacted than we see in other players. Also, you did show that you either have better clients who are more engaged or risk models that are adequate. Then you move forward into overdraft. Why not go deeper, like, personal loans? You, you said you're gonna embed it there. Then I'm gonna 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 gonna get the overdraft option in their account, or only a few clients are gonna be offered the Buy Now, Pay Later, call it a personal loan?
I just wanna pick your brains a little bit 'cause you did show a strong capability in clean lines, why not accelerate it and how you're mixing that with a personalization?
As 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 limit real estate in our app. We cannot. You saw, we have over 100 products to offer, we need to get this data that Guilherme and Lucas shared with all of you, crunch that in a smart way. We cannot spend a lot of manpower to crunch this data. It need to be automated through AI, send it to Priscila teams to do a very good, a 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. We're improving, and improving.
The good news is, we have already 100 products. We have already clients. We have already tools. 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 thing. It's really something powerful that we're using it more and more. Again, we're not there yet. We still have to keep improving on that.
João, if I could just add a little bit on top of João's comment. We see really credit as a journey. If, 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. We've been learning a lot. We built a team. Danilo, João mentioned him in his presentation. He's been with us, with his team for over a year, improving models. 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.
Not a big bang, but a conservative approach, learning, testing, and increasing the product offering and who gets it.
Just permit to add something. Since we are 100% digital, it is easier for us to make, like, one app for every single client. Yes, we can do this, and that's where we want to be in, I don't know, maybe few months.
To get to these 30-ish ROE and efficiency levels, I'm assuming your portfolio mix needs to change a little bit. Today, 70% collateralized needs to probably be more like 50/50, I'm guessing. Does it make sense?
We'll comment that on the financial section, but it will not change too much. Yes, real estate loans will grow less than the average of the growth, the total portfolio. Overdraft, Buy Now, Pay Later, credit cards will grow above that average, but it will not be a very meaningful change overall.
Thank you.
We have time for one more question before we wrap up.
Guilherme Grespan from JP Morgan. Thank you, João, and team for organizing the event. My question is also regarding the plan, but the perspective of capital. It was a very aggressive plan. I think the implied lending book is something close to BRL 100 billion in 2027. This is something close to 60% CAGR, ballpark. The average ROE, if we consider a linear progression, is gonna be something close to 15% for this 5-year window. How do we reconcile capital for this growth with the earnings generation? If it's gonna be fully funded by the earnings generation itself, or if you're including new initiatives, eventual capital increases or new regulation changes, anything like that. Thank you.
It's a great question. Basically we plan to use retained earnings. In fact, in the latter two years of the model, we actually have some dividend payout, which is small, but we have some modeled in. We take the NPL, the CET1 ratio to the high teens in the later years. Basically we start at 25% CET1 today. There's a question of Rosman that we also had here about the mid-single digits, which we didn't answer, but basically to put that together with this one. The consensus of the analysts, which is mid-single digit, is in line with what we're thinking. We're not providing guidance, but we can confirm that the consensus is in line to what we've seen for 2023, and that number would expand year-over-year.
We have a lot of low-hanging fruits in terms of capital optimization and allocation from improving the credit card limits using better allocation of the loan portfolio, eventually loan portfolio sales. We can improve significantly that front, which in the past, working at CET1 levels of 40% wasn't the number one priority. Now it's a bit higher up in the list in order to work and self-fund our models going forward. Yes, it is fully funded. We actually have some excess capital in the later years when the ROE approaches to that high 20s, 30%, to even have some dividends on top of that. We can touch upon later. We have, in fact, a few pages on capital in the financial section.
We'll wrap up, module 2, do a quick break, and come back for the financial section later. Thank you.
Thank you.
Hello, I'm Helena Caldeira, CFO of Inter. I'm very happy to be here with you today. In this financial section, we will discuss the key trends affecting our business, our ongoing initiatives to drive efficiencies, our unit economics and financial performance, and our long-term outlook and path to profitability. I'll walk you through the key trends affecting our primary solutions. First, in banking, we have rapidly scaled retail deposits at a 72% CAGR, surpassing an impressive BRL 28 billion. This includes our zero cost demand deposits, which continue to grow despite a six times increase in the Selic rate over the last two years.
This attractive deposit base enables us to operate with a low cost of funding, which we have successfully reduced as a percentage of CDI from 63% in 3Q of 2021 to 58% in 3Q of 2022 when adjusting by the holding debt, which we repaid in October and no longer accrues interest. On card spending, we had stellar volume growth, more than doubling since the 1st quarter of 2021. As we've grown, the volume mix has shifted increasingly towards credit cards, a higher-yielding product. As a result, our blended interchange has increased to more than 100 basis points. Additionally, we have become a market leader in Pix. We have rapidly grown volumes by nearly 4 times in the last 2 years. In the 3rd quarter of 2022, we reached 8% of market share on Pix transactions.
We believe having this massive volume of flows running through our systems presents an attractive opportunity for three reasons. First, it increases client engagement. Second, it increases floating revenue. Third, it reduces operational costs. On credit, we have been executing a thorough repricing strategy. We've repriced 55% of our portfolio, including credit cards, agribusiness, SMEs, prepayment of receivables, and our new FGTS product. We are in the process of repricing the payroll and real estate portfolio, which take longer given their duration. I'll explain the repricing initiative in more detail in the next session. We can see the effects of the repricing in the two recent quarters as the growth of our yields on our interest earning assets has significantly outpaced the growth of our cost of funding. We present our NIM using two methodologies.
The first one is the NIM that we have historically reported, which includes our total portfolio of assets in the denominator, including credit card receivables that do not generate interest. The second is a new methodology, which is based on interest earning assets, specifically excluding card receivables without interest. We include this methodology because our credit card portfolio has grown to nearly a third of our loan book, and only 15% of those receivables actually accrue interest. In both cases, the NIM increases in the last two quarters, but the improvement is much greater with the new methodology, which we think is far more accurate. Despite the repricing of the portfolio, we have re-accelerated originations, growing significantly in the second half of 2022, surpassing the levels of 2021.
We have the flexibility to adjust the growth rate of our portfolio thanks to the completeness of the products we have created. Our loan portfolio growth is massively outpacing the market. It has increased by over 8 times in 5 years while the market has barely doubled. We have rapidly gained credit market share. However, I believe there is still tremendous upside to grow. Today, we have less than 1% market share in most credit products. We have achieved these market share gains while improving the quality of our loans. To recap, there were three main factors mentioned on our last earnings calls. One, we are increasingly using in our credit algorithms the data gathered from different interactions of our clients in our app. Two, we have strengthened our credit team. Three, we have significantly improved our collection processes.
Our investment business has performed very well despite the volatile capital markets. In the 3Q of 2022, we recorded BRL 3.8 billion in AUC inflows, by far the highest inflows ever. On insurance, we have redesigned the sales experience to be nearly 100% digital. In 3Q of 2022, we launched our in-app cross-sell functionality, which bundled insurance with the purchase of other Inter products, helping us to write a record number of insurance policies. Once insured, our client relationship becomes even stickier and less likely to churn. We are very proud of our progress in our marketplace, Inter Shop. Since launching in November 2019, we have significantly increased GMV, surpassing BRL 4 billion in annual volume, all while expanding take rate and delivering a strong value proposition to sellers in our platform.
In the last 12 months, we've increased net take rate by 460 basis points, reaching a more mature level of 5.1%. Finally, our innovative Global Account product has experienced rapid adoption. We are adding over 5,500 new accounts each business day and have increased the number of accounts by 10 times to reach over 500,000 in the third quarter of 2022. This provides us access to upper scale client profile, which we monetize through, 1, interchange on international transactions. 2, take rate on international gift card purchase. 3, fees on FX transactions. 4, interest on floating balance. Several of you have been asking about some of our key initiatives to improve operating efficiencies and improve profit generation. I'd like to walk you through some of these ongoing efforts to address these questions.
Let's start with the repricing of our portfolio that I touched on the prior section. We've been focusing on improving our pricing engine to increase the expected returns of our credit portfolio. By now, we have fully executed this strategy on the short duration portfolio, and we are advancing on the longer ones. On cards, we have raised the rate on revolving balance to nearly 15% and on installments to approximately 10%. On FGTS, which are loans backed by retirement funds, we are charging 2% a month with barely any NPLs. On payroll, our new originations are at rates above 1.5% per month. Finally, on real estate, new originations have rates that yield ROEs above 20%.
From an asset and liability management perspective, we have been growing the shorter duration portfolios more, which are faster to reprice, less capital intensive, and with a duration that better aligns with our funding base. To drive greater operating efficiencies, we have embarked on several cost reduction initiatives. First, as Gui told us, we are building our own core banking system in Gateway that will both reduce technology expenses and help us operate more efficiently. Second, we plan to keep our head count roughly flat for the next year, as we've done in 2022. We expect that this will lower our cost to serve as we realize more efficiencies from our recently hired staff. We will continue to maintain and strengthen our leading tier one capital ratio while also being more efficient with our capital.
For example, by reducing the unused limits of our credit cards and changing the mix of investments, we will improve our CET1 ratio by approximately 250 basis points. We believe we can achieve a similar improvement to our Tier 1 by fine-tuning operational risk scoring methodology and adopting new regulatory changes. As you are all aware, in June, we migrated from B3 to Nasdaq, becoming the first-ever Brazilian company to do this re-domiciliation under a Cayman holding company, Inter & Co. We believe that this is another example of our pursuit to innovate and stay away from our comfort zone. We are now evaluating a second reorganization, which would move certain subsidiaries that are now below Banco Inter. This would allow us to capitalize on operational, tax, and capital efficiencies. I will now pass along the presentation to my colleague, Santiago Stel.
Good morning, everyone. I'm Santiago Stel, Inter's Chief Strategy and Investor Relations Officer. Let me dig in directly into unit economics. We analyze the profitability potential of our clients through our value creation formula. Help us operate with cost efficiencies. As I'll mention later, low CAC, cost to serve, cost of funding, and cost of risk are a uniquely powerful combination at Inter, and this is possible thanks to our true banking platform that allows us to capture free demand deposits and perform high-quality credit underwriting. Third, given rapid growth and cost efficiencies, we expect to generate more profits that will self-fund our business plan and create strong shareholder value. Now I walk you through the different components of our revenue growth. It all starts with our fast-growing base of loyal clients.
In the last five years, we have grown our client base by 16 times to serve more than 24 million clients, making us one of the fastest-growing and largest digital banks in the world. We have accelerated our pace of winning new clients, driven by our effective marketing, word-of-mouth referrals, and strong branding recognition. We have just finished our second year of adding approximately eight million new clients and plan to continue at roughly the same pace into 2023. We tend to attract younger clients who are early adopters of technology. Today, roughly 70% of our clients are younger than 35 years old. We believe this provides us with a unique opportunity to grow wallet share with our clients as they accumulate wealth and progress through their financial lives. Our client base is significantly wealthier when compared to the Brazilian population average.
For reference, the percentage of clients that earn more than two minimum salaries at Inter is 54%, while in Brazil it is 39%. Regardless of the income levels of our clients, our low-cost structure based on state-of-the-art technology gives us the potential to serve clients of all income segments in a profitable manner. Our customers are spread out across the entire country, and on the contrary to what some think, we're not geographically overweight in the state where we're headquarters, Minas Gerais. We have, in fact, a stronger presence relative to the country's average population in states like Rio de Janeiro and São Paulo. Now moving to engagement. Our TPV per client across cohorts increases consistently. For credit and debit cards, it reaches 1,200 BRL per client per month as the cohorts mature, and it does so at an accelerated pace.
When we include Pix, another big driver of volumes and engagement, we see monthly TPV surpassing BRL 4,000 and improving meaningfully across cohorts. Given our origins in day-to-day banking, we have always been proud of the clients' deposit metrics. Clients have consistently increased their deposits across cohorts as they mature, demonstrating strong engagement with our platform. The more clients engage with Inter, the more likely they are to choose us as their primary bank. Today, roughly 60% of our active clients have their primary relationship with us at Inter. You can see in the chart, across cohorts, clients increasingly using Inter as their primary bank, and they are doing so at an accelerated pace on a cohort by cohort basis. This increasing engagement results in growing number of clients using multiple products.
We focus on clients with three or more products, which indicates very engaged and sticky client relationships. Today, two-thirds of our active clients use three or more products, an increase of 24 percentage points in just over three years. As we've just seen, as we launch more products, our multi-product client increases. Additionally, we have diversified our revenue and shifted the mix towards higher yielding and less capital-intensive products, which grew from 26% in 2018 to 82% in the third quarter of 2022. Our positive engagement and increasing product penetration have helped us to increase the average revenue per active client or ARPAC. In the third quarter of 2022, we reached an all-time high monthly ARPAC of 50 BRL.
When we look at the components of these BRL 50 ARPAC, fees account for BRL 16 or 32% through a combination of transactional banking, investment, insurance, and commerce fees. Second, we have the interest income that comes from the liquidity from our deposits, which account for BRL 13 or 26%. Lastly, the interest income of our loans account for the remaining BRL 21 or 42%. Again, I'd like to stress the quality of this ARPAC as it is highly diversified and resilient, thanks to having a universal banking platform as opposed of a mono or dual liner model. I am very proud of our cohort performance. The ARPAC of our clients increases across cohorts, and they do so at a faster rate. Our oldest cohorts with mature levels of BRL 80 of revenue per month.
We see similar trends in the ARPAC analysis net of interest expense, with more mature cohorts trending towards a net ARPAC of BRL 50. Putting all this together, when we combine more clients, more engagement, and more products, we get more ARPAC and rapid revenue growth at scale. We have grown revenue at an impressive CAGR since 2019. We believe that the quality of this growing revenue has increased significantly. In the first quarter of each cohort, we have seen an acceleration towards fee income. For example, the clients that started in 2019 had, during their first quarter as clients, only 11% of revenues coming from fees. This percentage has more than doubled in the latest cohorts, reaching 27%.
We have grown our fee-based income at an exponential pace, increasing by 9 times to reach BRL 1.6 billion for the third quarter of 2022 on an LTM basis. This revenue is both high margin and capital light. In fact, we believe our fee income ratio of 35% is one of the highest in the Brazilian industry. I'd like to walk you through our four low cost advantages, which generate significant operating efficiencies. Before jumping into the details, these are IFRS income statement for the first nine months of 2022. When we look at the expense lines, the largest one is SG&A, which represents 45% of the total cost base, and the ratios we use to evaluate it are cost to serve and CAC on a per client basis, as well as efficiency ratio on a consolidated basis.
The second-largest is cost of funding, which represents 35%. Here we measure it as percentage of CDI and is best in class, as we'll show in the next few minutes. Finally, cost of risk, which represents the remaining 20% and is measured by cost of risk or NPL ratios. First, we have a low cost to acquire new clients, measured by our CAC, which includes printing and shipping of cards, marketing expenses, and operational costs. During the last quarter, our CAC was BRL 28, which we believe is one of the lowest across consumer Fintechs globally. This low CAC is possible due to our organic acquisition of clients, which is driven by the word-of-mouth referrals and our increasingly strong brand, resulting in roughly 80% of clients being acquired organically.
Our clients continue to be our best marketing campaign, as reflected by our strong NPS mentioned by Brie earlier today, which measures how likely they are to recommend Inter to others. We operate with low cost to serve. This is largely due to our asset-light and technology-driven operating advantages. We believe we still are in the early stages of realizing the benefits of our operating leverage. Third, we have a very low cost to fund client loans due to a large and growing base of demand deposits. When measured as % of total funding, our demand deposits are multiple times greater than our peer group median. Our cost of funding, thanks to our unique strong funding base, is best in class.
In the third quarter, our funding cost was 58% of CDI, while large cap banks with massive balance sheets had to pay 80% on average for their funding base. The comparison is even stronger when compared to other fintechs that hover in the 90%-120% of CDI. Fourth, we operate with a low NPL supported by our structurally low risk portfolio, which is over 70% collateralized, backed by some of our clients' most valuable assets, like their homes and their salaries. Over time, we can see that our NPLs have consistently outperformed the peers, with the largest difference in the third quarter of 2022. Our low risk profile is even more visible when looking at the net charge-offs.
We're significantly better than our peer group and far greater advantage compared to the NPLs. This is largely due to our highly collateralized loan portfolio, which generates low LGDs. To recap, I have just described the four key drivers of our revenues and ARPAC, as well as the drivers of our unit level costs. When we bring these concepts together, we get a strong improvement in unit-level profitability. As you can see, we have a best in class payback period of 2-3 quarters, and while using conservative assumptions, we reach an LTV to CAC ratio of 25 times. Thank you. Now I'll pass it to Alexandre, who will speak about the five-year business plan.
Finally, I'll walk you through our path to powerful and sustainable profit generation. The foundation of the path to profitability is a strong balance sheet we have in place. If we look at it for a second, we have all the pillars we need to have a sustainable growth profile. On the asset side, we have one of the highest liquidity levels in the industry, and our loan book is healthy and highly collateralized. On the right-hand side, our funding structure is second to none, and we are strongly capitalized. Now moving to the drivers of profitability. During the past few years, we heavily invested in building our client base. With the size that we have today, the financial impact of growth will be proportionally lower as we move forward. For example, the 8 million clients added in 2021 represented a 92% growth.
In 2022, it went to less than 50%, despite the number of clients added being almost identical in both years. The second point is the client monetization or revenue growth. As we saw on the unit economic section, our ARPAC cohorts grew from a starting point of BRL 10 per month to an average of BRL 50 to a mature level of BRL 80, and with the potential to continue to grow significantly above that level. Even if we weren't adding a single new client, the inertia of the increasing monetization of our co-existing clients would drive strong revenue growth. Another way to see that is through the longevity ratio of our clients, which is the % of clients that have been with us for over a year.
This ratio increased from 52% a year ago to 61% today, is expected to continue doing so in the future. We covered this already, it's worth highlighting one more time. Our revenues are highly diversified across lines and with a very strong component of fee income, which makes the quality of our revenue very strong. In terms of revenue growth in relation to expenses, 2022 has been a year of strong improvement, as you can see in our efficiency ratio trend. That improved by more than 20 percentage points. Going forward, we think there is much improvement to make, particularly in the coming years, with expenses growing at a fraction of the revenue growth. For reference, the efficiency ratio we see in the large cap banks in Brazil is in the high 30s.
We think that with our branchless 100% cloud-based model, we should be able to over perform at such levels. An additional point regarding profitability measured by ROE is the capital structure. In the past, we have operated with significant levels of excess capital. Going forward, we expect to gradually converge to the average of the industry. That will make our ROE more comparable to that of our peers. Now, if we look at the third quarter of 2022, we delivered an ROE of 1.3% when adjusted by the deflation impact. Let me walk you through a few factors that help illustrate the profitability potential of Inter, all based on our third quarter financials. First, if in the third quarter we removed the expenses associated with growth, we would increase ROE by 8 percentage points.
These expenses include client acquisition costs, the expected credit loss associated with new loans and the normalization of personnel expenses to serve the current active clients. If we reflect the full impact of our long duration loan portfolio, we would increase ROE by 8 percentage points. Third, if we remove the excess capital to a capitalization level similar to that of our peers and suitable for steady-state growth, and also remove the interest income that this excess capital produced, then our ROE would increase by an additional 11 percentage points, resulting in a performer ROE of 28%. Finally, I'd like to present you our long-term financial goals. First, let me recap on what we've just discussed. One, we had strong performance across all of our businesses in 2022.
Two, we have several ongoing efficiency initiatives that will support our path to profitability and sustain strong future performance. Three, we have a powerful and advantaged unit economic formula that will strengthen and compound as we grow. Four, we have a clear plan to achieve growing profitability this year and in the years to come. Now, we're very excited to present to you our 60-30-30 plan, highlighting our goals for the next five years. We expect to achieve strong scale, which is represented by a 60 million client target. We expect to operate more efficiently than our peers, generating a target efficiency ratio of 30%. Finally, we expect to deliver high profitability, which is reflected in our 30% ROE target. These are the main targets of the 60-30-30, our five-year business plan which concludes in 2027.
60 million active clients, 30% cost to income ratio and 30% ROE. That is what we're aiming for. We believe that this combination of scale, efficiency and profitability will enable us to generate capital and maintain a strong balance sheet. This will also provide us with the strategic flexibility for sustainable growth, adding value to all stakeholders who are part of this journey. Thank you.
We'll open the Q&A session now. Rafael , you have a question? Yeah.
Hi, guys. Rafael Frade from Citigroup. I would like to hear a little more about the repricing your portfolio. As you show in the numbers, a large chunk of the increased profitability will come from the reprice of the mortgage and the payroll. As Helena mentioned, 1.5% interest rate for the payroll and the mortgage reaching 20% ROE is just hard to conciliate the how this help in the profitability. 1.5%, for example, in the payroll loan with 1.5% is well below the market, this rate, and still do you believe that it should be profitable? Just to understand what do you assume as interest costs on that, the cost related to the loan, this kind of stuff?
Yeah, I can start, and then you can complete, Helena. Frade, a lot of what Helena mentioned in the presentation is a path to what we consider optimal pricing. It's an ongoing exercise. We've started it. We are originating, like she said, the real estate above the 20% ROE levels. The goal is not necessary to stay there. Again, continuous exercise as we reprice the entire portfolio. The payroll above 1.5% is also an initial movement that we've been doing for at least the last six months, with the exception of a few repricing of the older portfolio, which we can talk about in a second moment. We're gonna be able to keep increasing the payroll loans.
Very important to mention that our origination strategy is within our own base, within our own channel. There isn't the credit broker's cost that allows us to operate at a lower level. Also, the low cost of funding allows us to be profitable even at rates that are lower than the market. These are, I think, important points that explains the 1.5 on payrolls.
Yeah. I think that on top of that, we exemplified only two portfolios across a very diversified loan book, right? As Santiago mentioned earlier, we expect in the five-year loan plan, in the five-year plan, we expect mortgages, for instance, to grow less than the other segments of the portfolios. The same with payroll loans. We have been accelerating more, for instance, the FGTS loans. This like the 1.5 was the bottom of the rate, but we continue to grow it with time as well.
Just a follow-up on that, Helena. You also mentioned some adjustments that you expect to do in the capital that could help the capital. Could you recap on that? 'Cause I missed the numbers.
Yes, of course. I'll start and I'll pass on to Garcez here, to complement as well. Just as a, with a broader perspective, with the excess of capital that we've had in the past years, the efficiency on capital hasn't been our priority, right? This is something that when we start building the plan, and we see profitability also generating more capital, it starts to become more relevant on our day-to-day. A few short-term possibilities are, for instance, the limits that we've given to our customers but they are not used, we can reduce that, and that can, we can improve our capital ratio by that.
We have also an optimization in terms of the risk, how we compound the RWA of our risk management in general, and we are doing several initiatives to increase that. Moreover, we have the total revenues coming, a lot of revenues coming from the fee business as well. When we think about the efficiency of this capital, like this is a much lighter organization for us to think about the long term as well. Do you want to complement?
Yes. Just to give you an example. For example, we are considering as methodology for operational risk, the Basel methodology. We are changing it in the next months, and we'll get some base points in our capital, for example. There are a lot of opportunities.
Hi, Mario Pierry from Bank of America. It wasn't clear to me during these presentations your appetite for lending into 2023, right? You talked about possibly reducing the unused credit card limits so it means you're probably gonna tighten your lending standards or you are gonna reduce the limits of your clients. Can you talk a little bit about how you're seeing asset quality evolving in 2023 and the potential for loan growth this year?
Okay, Mario. Actually, it's the opposite. We do have a credit appetite for 2023. The point on reducing the credit limits is on the unused credit limits. For instance, sometimes we have a credit limit of, for instance, I know 20,000, and the client normally uses for, I don't know, 12 months in a row, only, I don't know, half of it. You don't need to have this available balance for him to use. This is not going to reduce engagement, monetization, TPV, interchange on that. We're talking only about credit cards. On other products, for instance, as I think Santiago mentioned, by having a good funding, we do have appetite for grow the portfolio, short-term portfolio that matches with deposits, with demand deposits, in order to improve the share on our loan portfolio.
Overall, we do have an intention to keep growing our loan portfolio, I'd say pretty much on a 40%-50% annual rate in 2023 as well. Optimizing unused limits, optimizing the Tier 1 in order to maintain a good Tier 1.
Yeah. Complementing, I think like it's not a sign of reducing the limits of a customer. It's really the excess for us to do like to target capital optimization. If we see the pattern of the client increasing, like, we could reassess that limit. Also like with the launch of two new credit products, Buy Now, Pay Later and overdraft, I think that also composes new credit offering to our customers that we believe that will also help with increasing engagement.
Okay.
Sorry, Mario.
Yeah.
Sorry, Mario. A question, a comment from before on the CAGR of the loan implying the five-year plan, it's around 30%. We start obviously on a bit higher and then it goes down. The average of the five years, the CAGR of the five years is around 30%.
Okay. Just as a follow-up, if you can comment about the financial health of your clients, given all this uncertainty in Brazil, a higher Selic rate, high level of indebtedness, how are you seeing the ability of your clients to take on more loans? Thank you.
Mario, I think the first point is a very, it's a very broad client base, right? 25 million clients. We're gonna have everything. What we do is we constantly reassess the credit profile. We have behavior models that are ran every month, looking at the prior three months of behavior. The idea is that we can calibrate limits. We've done it especially for credit cards in the past. It's not something that we heavily do, reducing these limits, for instance. It's something that we calibrate to be able to control NPLs looking forward.
As we factor in everything and look at the growth prospects, we're comfortable that the plan is deliverable using or within the credit capabilities of the clients that we have and the clients that we are acquiring.
Alexandre, let me also complement here. It's important that not last year, not six months ago, we decided to have a collateralized credit portfolio. We decide not to be a monoliner. We decide to have a diversified credit portfolio, collateralized and diversified. Suppose that you are a credit card business, therefore, we wouldn't be able to grow because of the debt and of the population of the middle class or the lower class in Brazil. By establishing a diversified and collateralized portfolio with good deposits, you can avoid NPS, keep outpacing the growth for the loans in the industry, and have a very well-managed NPS. That's I would say, let's say, one of the best things of Inter together of the deposits. We have this diversified collateralized loan portfolio with potential to grow from 1% to whatever, 3%, 4%, 5%, 8%. This is very powerful.
Any other questions?
Thank you. Again, on the guidance outlook, it's just to fill in a couple pieces. Maybe it was on the small print that I couldn't see. Just to make sure the 30-ish ROE is counting on a capital, not reduction, because you're just gonna pay out more dividends. If you weren't to do it, just accumulate profits or have a small payout, it would be 17% ROE. Is that what I saw?
Yes. So basically, the way it works is at the beginning, we continue consuming capital, though at a lower rate than what we had before. Then we start accumulating capital as the ROE builds up. We end up in the mid to high teens by 2027.
You would cut it to, 15% Basel ratio.
Yes.
Equity or loan to funding equivalent to the sector. That's how you get to the 30.
Exactly. Where the capital in excess of at the German level, we pay it out. The ratio first, one correction, it is not a guidance. It's a North Star and a long-term outlook.
Yeah.
Return to that again. We're not walking through the model in detail. We're trying to give the place where we want to get to. We have the management incentives aligned. The board has approved this plan, this is what we're aiming for. As in terms of capital is that. I connect that to a question that we have here from the webcast which is, what will change, you know, to go from practically break-even to a 30% ROE? What will be the structural changes in terms of the final financial performance to get there? To answer that, I'll start first with the back stage. This is a plan that we have worked six months in producing. This was. Had the inputs of all of the senior directors at Inter. We had a lot of iterations. We did benchmarkings of everything you could benchmark.
We stressed the model to see where we are being too aggressive, where we weren't. We took it to the board. They gave comments. We came back to the board. It was approved. That's how we came to this plan that we're presenting now to you. As João said, we think it is aggressive, no? 30% ROE is it's a strong one, but we think that what we have achieved in the past five years from going from a small regional bank to one of the largest global bank, digital banks globally, is far more complex than what we have to do now. We have a not as a steeper curve as we had before, we humbly think.
The third one, to answer the question precisely is, 60-30-30, 60 million total clients, which is another question that we had. It's not actually 60 million total. We are modeling an activity ratio of roughly 60%, which we think has upside. We're being, we are to 60, which is around 35 million active clients by 2027, producing the ARPAC that we are seeing now with our mature clients. A point that we also mentioned is the longevity ratio which is the percentage of our clients that have been clients at Inter for over a year, has been increasing and will continue to increase as we add proportionally less clients versus the initial balance. That would take us to the revenue target.
We have the cost to serve, which is now in the mid-teens base per month. We model that pretty much flat going forward. We think we have upside for that number to decrease. For example, something we mentioned is we had 4,000 employees in December 2021. We have 4,000 employees today. We probably have 4,000 employees in the next Investor Day 1 year from now. We are keeping headcount flat. On the other expenses, we also have a lot of improvements to make in terms of making them more efficient. The combination of that ARPAC increase or that revenue increase and the cost to serve gets us to a cost-income ratio, which would continue the current trend. We mentioned 20 percentage points improvement in this year.
That will grow at a smaller pace but continue growing and trending towards the 30% ROE by the end of 2027. We also benchmarked that at every digital bank globally, we see certain cases of that already happening. We think we have all the elements to get there as well. A cost of risk, which we can low rate around 5% going forward. Together, that's where we get to have a 60-30-30 and BRL 5 billion net income. Of one, the repricing, and second, the change in the mix. We mentioned real estate decreasing the participation in the total loan mix and higher or richer products. Roughly 10% NIMs, 5% cost of risk, and then...
Sounds tight, but yeah. Okay. Thank you.
We operate at NIM of 10% in the past with a loan mix less rich than the one we have today.
The cost of risk was also a bit lower than 5, no?
Yes. That reflects the more th e unsecured part that didn't exist before.
That's grown. Thank you.
Also on tax rate, as Helena mentioned, we do have the seven-seven project, phase 2.0 going forward. We do believe we're gonna have a tax optimization. For instance, the marketplace doesn't need to be at Banco Inter S.A. Just to give a quick example. Anyway, instead of just getting a lot of take rates and just giving cash back, you can give a discount, so have less fiscal fees or have the optimization for, to improve tax rate as well.
Thank you.
Here. I have a few questions on the consignado product, the payroll-deductible loan. If you could comment about the challenges of growing in that product, you know, being fully digital. You know, you were the first ones. I understand you don't operate with the pastinhas, right, and because of that, you can probably charge less. As far as I understand it's not 100% digital all the time, you know. You have challenges. We do have a big potential competitor who's talking about entering the product, you know, soon, you know, and they think that they can be fully digital, you know. If you can help us understand about, you know, the risk of fraud, you know, what's manual and what's not, you know, what you've learned, you know, if it's harder or not, you know, than you thought, you know, that would be interesting.
Okay. Rosa, I think I mentioned that a couple of times. I joined Inter in 2004. In 2004, the payroll loan in Brazil was starting to grow. I watched the up and the down of the payroll loan industry. Everything you mentioned. Yeah, prepayment, portability, fraud, litigation, which is a problem in Brazil. Pastinhas, high take rates. Since the collapse of the industry, I would say in 2008 or so, we started to think about how to do that in different ways. We need to have good funding, so this is a must-check. We need to do that digital. We cannot afford to have the pastinhas owning the clients. Not only owning the clients, but trying to tell your clients to open a litigation against you.
When you look on our litigation ratio comparing to the size of our portfolio is by far the lowest in the industry. What we see, how far can you stretch your underwriting rates? It depends. If you have someone pitching your client to just sign a cost, you might go above, but you have the cost to do so. We watch the cash flow of the payroll loan due to the easy portability. It's very problematic. It's good for the consumer, but not good for the banks. If you have a high yield, the top of the industry, yields on the payroll loan, when the Selic rates, for instance, decrease, you're gonna have a very big churn on your portfolio.
It's not a good, I would say, not ALM, but the cashflow is not given. You're gonna lose your yield, but you have your liabilities, which might be the funding, which fixed, but also the expenses for you to do that underwriting. It's very tricky. I believe that we're very well positioned, and I don't totally agree that it's not digital. It's 100% digital. Of course, it doesn't mean that they are doing through the app, but they are finding our products on the platform, they are interacting, and therefore, so it's 100% digital, which means we don't need to pay a broker to do so. When you combine all of it, I would say, I think Leduc, I think Mario asked about, no, Fred asked about the ROE.
If you do a adjusted ROE, getting all of these components, that's not easy to assess today, but with time, with the duration of the portfolio, we have a very, we have a proper and good payroll product at Inter.
Hi, Philippe here from Corum. Thanks for the explanation. Just following up on that, on the cost of funds advantage that you have, how do you think that can change over the years as you get to a more normalized balance sheet and also aligning, duration of liabilities with the assets, given you have this collateralized portfolio? Do you think this should reduce or you can keep the same advantage that you have today relative to other banks?
Okay, that's a very good question. Remember, I told you that the 60-30-30, all these metrics are all connected. We do need to have 6 million clients. I remember, maybe Lavecchia will remember that, people in the past, they say, "Oh, but you have clients, but they are not getting a loan." Look, we don't need to offer a loan to 6 million clients but we do need to get deposits from 6 million clients. Even though growing the loan portfolio, if you do have a very good product, if you do have a lot of Brazilians using Inter as their primary checking accounts or primary wallet, we tend to keep having the advantage of the loan-to-deposit.
I believe that having the clients providing us free cash for the demand deposits, we tend to have the same level of cost of funding that we have today. It's feasible. Again, we need to have the best product, low churn. Also, one thing I forgot to mention, the way we're playing on the pejotas is very important to sustain this level of advantage in the cost of funding. The pejotas, the SME business, are very powerful in terms of bringing deposits. We do have the best product for the pejotinhas in Brazil today. It's growing very fast, so this is also very powerful to help the cost of funding going forward.
Excellent. We are actually out of time, and we have to head to the HQ for the lunch. Thank you everyone for participating. We hope you enjoy the materials, and we'll continue engage with you. Thank you very much.