Inter, the first digital bank founded in Brazil, has grown about 30% a year since its listing and trades at roughly eight times current earnings. On 2028 analyst estimates, Ian Bezek said, that is about five times.
The usual explanation is that Brazil is dangerous. His is narrower: with the central bank's overnight rate at 14%, a Brazilian saver can earn about 12% in the bank's own app with no risk at all.
"So why are you going to put money in the stock market in Brazil when interest rates are so high?"
Bezek has written Ian's Insider Corner every Sunday for ten years, lives in Colombia, has lived in Mexico, and owns three Mexican airport operators among his largest positions.
The full episode is covered here so you can skip it. 54 minutes of audio, 20 minutes of reading.
Here are the 14 insights that matter.
👤 Guest: Ian Bezek, who writes Ian's Insider Corner on Substack and is in his tenth year covering Latin American equities from Colombia, a recurring guest the show calls its Latin American correspondent
🎙️ Hosts: Ryan Henderson and Brett Schafer, General Partners and Portfolio Managers at Arch Capital, who run Chit Chat Stocks
📰 Published: 16 September 2026 on YouTube and the show's own feed
🔴 YouTube | 🟣 Apple Podcasts | ⏱️ 54 min | ✅ Time saved: 34 min
Key Takeaways
Inter grows about 30% a year, earns a 16% return on equity and trades at about eight times earnings
On 2028 estimates that is roughly five times, and the company has no buyback
The competition for Brazilian equities is a 12% deposit rate inside the bank's own app
Only 7% of Brazilian households have a mortgage, which is why consumer loans absorb so much income
About 40% of young Brazilians still live with their parents, and car ownership is low
More than half of Inter's loan book is secured, which is the opposite of most Brazilian fintechs
Stone's non-performing loans rose about 400 basis points in a year
He expects Lula to win reelection by two or three points and Brazilian stocks to fall 5% to 10% on it
Inter is under 1% of the Brazil ETF, so the index trade barely touches it
The case against owning Brazilian banks into the election ignores who was president while they compounded
He is short the JETS airline ETF and long airports, and the airports have fallen further this year
Spirit's shutdown alone cut traffic at Cancun by about 5%
He prefers Mexican peso bonds to Brazilian ones despite Brazil's higher yield
Argentina is not in any emerging or frontier index, because capital controls still block money in and out
1. What Inter Actually Is
The hosts opened by asking what Inter does and how an emerging-market bank differs from what an American or European listener is used to.
Inter was the first digital bank founded in Brazil and predates Nubank. Where Nubank started with credit and debit cards, Inter started as a full-service bank — deposits and the whole banking relationship — and built a large deposit base over more than a decade.
The customer is deliberately wealthier. The assumption was that these people already had an account at one of the big traditional Brazilian banks but did not want to walk into a branch, so Inter took the part of the relationship that could be done on a phone.
That funding base is the structural advantage. The bank is internally self-funded with what Bezek called a very low-cost structure to operate, and the wealthier customer produces higher revenue per user per month.
The business is built on seven pillars. Banking is one; the others include a loyalty program, an e-commerce platform and foreign exchange for Brazilians who spend time in the United States and need to move between reais and dollars without friction.
2. Why Margins Are So Wide
One host put the contrast in numbers: MercadoLibre reports a net interest margin after losses north of 20%, while Ally, the closest American equivalent he follows, runs 3% to 4%.
The first cause is the policy rate. Brazil's overnight rate is 14%, and deposit costs follow it. As Bezek put it: "If the banks are having to pay 12% on deposits, let's call it, then naturally you're going to start lending it, I don't know, 18 or 20% even for a mortgage."
The second is that credit has historically been hard to get. The big incumbent banks did not want to lend to customers without very stable employment, such as government workers, which left a clientele unserved.
The third is the absence of the rate caps that get debated in the United States. He put Nubank's average credit card rate at around 60%, while saying he did not have the figure in front of him.
The comparison that makes 60% look cheap is the informal market. In Colombia the daily lenders "will beat you up if you don't pay them," and he said of that alternative: "That was the only access people had to credit prior."
High rates and high losses are the same business model, not a contradiction. Inter's non-performing loans are 6% against a net interest margin of about 15%, which he treats as a cost of doing business rather than a warning.
3. Inter Next to Nubank
Asked why Nubank gets the American attention, Bezek said the answer is mostly size.
Nubank's market capitalization is about 20 times Inter's. Nubank is already the second-largest digital bank in Mexico, growing fast in Colombia and launching in the United States this year, and it recruited senior American executives to run the international expansion. He owns the stock himself.
Inter is a $3 billion company, and one host put the market value at $2.4 billion. "Yeah, for context for listeners, this is definitely not JPMorgan," he told the audience.
Inter's own US launch is in Florida, and it is targeted rather than general. The pitch is to the large Portuguese-speaking population there: one card that works in both countries, money moving back and forth without fees, and a product that lets a Brazilian credit history be used to buy a house in the United States.
He called the portability of credit a genuinely interesting feature and not a mass-market one. It means nothing to an American; it means a great deal to a Brazilian American, which is the customer Inter's upper-income brand positioning is already built for.
Inter has grown around 30% a year since the IPO, and he thinks it can hold that for at least a few more years, because it is still competing against the traditional banks rather than running directly into Nubank or MercadoLibre, which target the mass market.
4. Is the Credit Boom Real?
A listener question did the work of a bear case: if Inter, Nubank, MercadoLibre and Sea Limited are all growing credit at 30%, either the incumbents are losing share very fast or the credit market itself is expanding at a rate that cannot last.
His answer to the first half is that the incumbents are not really growing at all. Brazilian inflation has run between 6% and 10% in recent years, so an incumbent growing 10% is running in place.
He does see maturity appearing in one place. Nubank's products are showing signs of it in Brazil, which he reads as the reason for the aggressive push into Colombia and Mexico.
The businesses are not interchangeable. MercadoLibre's Brazilian growth is mostly financing purchases on its own e-commerce platform, which he distinguished from Inter's personal and paycheck-backed lending: someone buying a guitar in installments is not the same customer as someone borrowing against future wages.
5. Where 45% of Income Goes
The second half of the listener's question was the statistic that 30% of Brazilian salary already goes to interest payments. Bezek said he had checked it because it sounded impossible, and the central bank data confirms it.
The explanation is what Brazilians are not paying for. Only 7% of Brazilian households have a mortgage, and close to 40% of young Brazilians still live with their parents, so income that would be rent or a mortgage payment elsewhere goes to consumer loans instead.
Car ownership is the other missing line item. "The rate of car ownership in Brazil is also very low compared to the US." His contrast: "And so people like in the US you see people with a $5,000 a month income spending $1,000 a month on their truck which is just not a thing in Brazil to anywhere near the same extent."
He sees the same pattern in Colombia and Argentina, where spending tilts to discretionary items rather than housing and vehicles.
The total is the number that makes the comparison fair. He put estimated total Brazilian debt service, including mortgages, vehicles and medical debt, at about 45% of income — and said a lot of American households would reach 45% too once their mortgage and cars are counted.
6. The October Election
Brazil's first round is in October. Asked whether the result changes Inter's plan, Bezek separated the company from the stock.
The business strategy does not change whoever wins. The two assumed candidates are Lula, the socialist incumbent, and Flávio Bolsonaro, the son of the former president, and he expects Inter to run the same plan under either.
The market reaction is a different question. He expects Brazilian stocks to fall if Lula is reelected and to rally if Bolsonaro wins.
Inter is largely outside that trade. "It's barely in the Brazil ETF." Its weight is under 1%, against about 8% for Nubank, so when investors in New York and London hit the buy or sell button on Brazil, Nubank moves roughly 10% the day after the election and Inter does whatever it does.
The betting market was 55% Lula to 45% Bolsonaro at the time of recording, and his own read is more bearish than that. He expects Lula to win by two or three points, which he thinks would produce a 5% to 10% selloff in Brazilian stocks.
His evidence is Colombia's result two months earlier. "The rightwing candidate only won by one point." Colombia had no incumbent running; Lula does, and Brazil has a larger share of the population on state pensions and the social safety net, with a retirement age that was 55. If the regional swing to the right only managed one point in Colombia, he does not expect it to unseat an incumbent in Brazil.
7. Half the Book Is Secured
Asked what Inter actually lends against, Bezek gave the answer he thinks separates it from every other Brazilian fintech.
More than half the loan book is directly secured. "So secured against people's paychecks or against other assets personal property vehicles whatnot." The credit card business is growing, but it is not the core.
The trade-off is explicit: secured lending earns a significantly lower net interest margin. He treats that as the price of knowing what the book is worth.
The contrast is with the unsecured lenders. Nubank's loan book is overwhelmingly unsecured, which leaves the lender dependent on whether the consumer chooses to pay.
His example of unsecured growth going wrong is Stone. "Like Stones, NPLs have gone up like 400 basis points over the past year." Other Brazilian fintechs have grown loan books fast in unsecured products, and he said it does not look as though they know what they are doing.
The investment point is that the market refuses to distinguish between them. Inter, Stone and PagSeguro all sit in the same bucket labeled too hard — rates too high, consumers too indebted — while Inter's and Nubank's non-performing loans are stable and Stone's are not. Investors, he said, should give more credit to the banks performing well in the harder macroeconomic environment.
8. Why It's Cheap at 8x
The hosts put the valuation on the table: about eight times earnings against roughly 30% earnings-per-share growth over five years.
Bezek treats the question as the right one to ask. "So it's like yeah, why is this business growing at 30% a year and trading at this price?" On 2028 analyst estimates the same price is about five times earnings.
The first answer is the risk-free alternative. With the policy rate at 14%, a Brazilian can open the Nubank or Inter app and lock in about 12% with no risk: "So why are you going to put money in the stock market in Brazil when interest rates are so high?"
The second is the credit cycle. Non-performing loans have been ticking up across the system, including at the incumbents, and exploding at some of the smaller firms, so investors are asking how the Brazilian consumer holds up if Lula is reelected and the economy turns down again.
The third is how shareholders get paid. Inter has no buyback and pays about 25% of annual profits as a dividend — which compounds into a meaningful stream if profits keep rising 30% a year, but American investors would rather see repurchases. He called that a cultural difference: Latin American investors like dividends and do not much like buybacks.
The catalyst he names is management simply hitting its numbers. Return on equity is 16% now against 1% three years ago, and management has guided to 30%.
His valuation rule of thumb for banks is return on equity divided by ten. "That gives you a good multiple for what your price to book value should be." On that arithmetic Inter is worth about 1.6 times book now and three times over time, against a stock trading at a discount to the lower figure — while Nubank already trades at about five times book, which is the measure of the upside if Inter delivers.
9. What Could Go Wrong
Asked where Inter loses as an investment beyond the obvious Brazilian recession case, he pointed at the seven pillars he had opened with.
The risk is focus. Asset management, insurance, e-commerce rewards and the rest help lock customers in, but he can see a case where management is doing too many things at once and the brand stops meaning anything.
The precedent he reaches for is American. "Obviously, you can do it well, but you can also have like a Wells Fargo scenario where you try trying to sell too many products and get into scandals."
One pillar is already going backwards: he said the e-commerce platform has been shrinking a little. The core bank is doing well, and the decision he wants to see management make is whether the weaker pillars are still worth the time and resources.
The US expansion is his high-risk, high-reward item. Florida is a different market with interest rates Brazilians would not recognize, and building a loan book at American yields could pull down overall profitability.
The last risk is the guidance itself. "So yeah, management has set a high bar for themselves." They have promised 30% return on equity and 30% growth, they have hit their targets so far, and the stock has not rewarded them for it — which sets up disappointment if they ever miss. One host's version was blunter: "Why are you promising us the moon" at eight times earnings.
10. Mexican Bonds Over Brazil
A listener asked about local-currency government bonds in Brazil and Mexico. Bezek said he has a stronger view on Mexico.
"I'm bullish on Mexican fixed income." The overnight rate is around 10% against inflation near 5%, which is a 5% real yield, and he called that very attractive against what else is on offer in the world.
The reasons are institutional. The central bank is fully independent, and President Sheinbaum has been austere on spending — a liberal, he said, whom people assumed the worst of, who has been responsible.
Mexico also has the dollars. Exports to the United States plus the investment boom from companies relocating out of China mean there is no obvious route to a liquidity squeeze.
He has held the trade personally. When he lived in Mexico his wife held certificates of deposit in pesos, because the yields beat anything in the United States and the peso was stable against the dollar.
Brazil pays more and he wants less of it. The yield is about 14% against inflation of six or seven, which is a large real yield, but he would be cautious at least until the election. He was careful to separate that from ideology — he admires Sheinbaum, and rates Lula well above Colombia's Petro — but said: "I don't think Brazil really has a long-term coherent economic vision."
His structural objection is fiscal. "And so the states like Brazil and Argentina that try to spend as if they were in Scandinavia, it just doesn't work out for them." More welfare, more pensions and more obligations sit on a tax base that cannot carry them.
11. Airports Over Airlines
The hosts asked about a pair trade he had written up: short airlines, long airports.
He owns the airports already. Three Mexican airport operators are among his largest positions, with one in Argentina, and he has held them through COVID and everything since. One of the Mexican operators has just bought a group of Brazilian airports, which he noted creates a listed way to own Brazilian airport traffic.
The threat to that traffic is jet fuel. "Spirit shut down earlier this year, which caused like a 5% traffic drop at Cancun, for example, which is not ideal." He said JetBlue could go under in the next six months if oil does not come down, and that local carriers fail routinely in Latin America anyway.
So he shorted the sector rather than a name. The position is in JETS, the ETF of North American airlines, so he is not picking a winner or a loser — the view is that industry profitability falls hard if jet fuel stays where it is.
He does not think fares can absorb it. After years of revenge travel, with gasoline around $4 and heading toward $5, he thinks discretionary purchasing power is tapped out: "And yeah, in the US we've now seen according to the TSA data like check-ins in the US are down 5% year-over-year now." He called that the biggest sustained drop since COVID outside government shutdowns.
The asymmetry is in the cost structure. Airlines carry union labor and aircraft leases: "The plane leases, you can't get out of those." Airports cut operating costs to almost nothing during the pandemic and waited, while the airlines needed a bailout — and in a scenario where oil sits at $150 he thinks the airlines need another one.
The mispricing is that the market has it backwards. "And interestingly, the airports are down more this year than the airlines, which makes no sense because the airlines have so much more economic sensitivity to oil prices than airports." If there is a ceasefire tomorrow he covers the short and his airports rise 30%, which is why he is comfortable either way.
12. MercadoLibre's 4 Months
Asked how MercadoLibre fits the Latin American lending picture, Bezek disclosed that he had been on the sidelines for years on valuation and bought during a recent dip.
The bear case is old and not unreasonable. The argument is that management is buying its revenue growth streak with lending — he believes it is the longest run of 30% revenue-growth quarters of any listed company — and that the growth is empty calories.
He thought there was something to that in 2021 and 2022, and thinks five years of evidence has since answered it. Bad loans did tick up, first in Argentina through the 2024 downturn and now in Brazil.
What the bears miss is duration. "I believe it's four months on average." A four-month book can be shut off: limits come down, risky accounts close. "It's very easy to cut off that lending relationship very quickly."
That is the difference from 2008, which is the comparison he says people keep reaching for. "Those banks made these stinker 30-year whole mortgages that were at bad interest rates that didn't cover the risk correctly." You cannot get out of a 30-year loan; you can get out of a four-month one.
He also credits local experience. Executives across the region have lived through devaluations and confiscations, so the risk everyone warns them about is one they grew up with: "It's a real risk but I think it's totally blown out of proportion."
One host's supporting example was Argentina, where he believed MercadoLibre stayed contribution-margin profitable through hyperinflation and the policy chaos that preceded the free-market reforms.
Bezek then circled back with the point he wished he had made about Inter. "It's like, okay, so who's been president for the last four years when they were going EPS at 40% a year?" The answer is Lula — so the risk being used to argue the stock is unownable is the reelection of the president it prospered under.
13. Argentina Isn't Frontier
Argentina votes next year, and the host said he had tempered his own expectations on slower-than-promised progress and the polling.
Bezek thinks the market is complacent. Betting markets have run around 60/40 on Milei being reelected, and he has built a short position at about 35% — roughly two-to-one odds, paying about $3 for every dollar if Milei loses. "I think it should be closer to pure 50/50."
His split is geographic. "I think the reforms have worked very well out in the countryside like the mining sector it's booming." Agriculture has been reactivated too.
The problem is where the votes are. Buenos Aires holds the largest voting block and the economy there is not working: the largest shutdowns of hotels, restaurants and consumer businesses in twenty years, high prices and not enough money circulating. Cutting the state apparatus removed the state-run university and hospital jobs that much of the capital lived on, and those people are unemployed and angry.
He has tempered expectations without selling. He still owns the Argentine airport operator, but is significantly more cautious than he was twelve months ago, and sees significant downside if the socialists return.
The structural point is about market access. "Argentina is not even frontier because there's still too many capital controls for money to freely get into or out of the Argentine equity index." It sits in a standalone tier, ineligible for the emerging market ETFs: "Like they're not even like on the same level as like a Kazakhstan, which is a frontier market." One host, who has visited, described arriving with an investor's eye and finding a 30% surcharge on an international airline ticket.
14. Colombia Goes Hard Right
Colombia elected a conservative president, the peso and the stock market have rallied, and Bezek lives there.
He has been bullish for several years and is still fully invested. "I think our ETFs up like 150% now over the past couple years." The bear case had been Colombia turning into Venezuela; he did not believe it, held through the painful years, and has not taken money off the table.
Oil is the swing factor he will not forecast. "I have no idea where oil prices will go but oil is half our exports."
The new information was not the result but the character of the government. A conservative win was expected; what was unknown was whether it would be a centrist administration or an aggressive one. It is aggressive — campaigned on Bukele-style law and order, with daily raids, deportations and drug seizures on television.
He thinks the market has not priced what full El Salvador-style or Milei-style reform would mean, and said he has some concerns about how it goes as well as the upside.
The diplomatic change is already worth money. The new president is an American citizen who lived in the United States for ten years and is close to Marco Rubio, who visited Colombia that week, announced a large earthquake aid package and lifted the tariffs imposed under the previous government.
His favorite way to own that is Tecnoglass, a US-listed Colombian manufacturer of windows and solar panels that produces in Colombia and sells into the United States. Margins had been squeezed by a soft American housing market and the tariffs; with the tariffs gone, half the problem is solved, and the stock is still far below where it traded two years ago while the rest of Colombia has gone straight up.
He also likes the Colombian banks and notes Nubank has a large digital banking operation there. He expects a building boom — nobody committed money to apartments and condominiums under the last government — and says this is the first year of positive net migration into the country in some time, with Colombians moving home from Spain and Florida.
Bonus Insights
The show's framing of the whole Brazilian complex is that it has to re-prove itself every quarter, with the numbers arriving good and the next question always being what happens when the economy turns.
Bezek's own preference for Latin American ownership of local businesses shows in what he holds: airports, banks and a manufacturer, rather than commodity exposure.
Ian's Insider Corner is in its tenth year and publishes almost every Sunday, covering the Latin American names alongside his best ideas in the United States and other international markets — recently including software and alcohol stocks, as one host noted.
Bezek's bottom line is that Latin American financials are priced as one undifferentiated risk when the differences between them are visible in the disclosure: a secured loan book against an unsecured one, a four-month duration against a thirty-year one, and a 30% grower at eight times earnings sitting in the same bucket as a lender whose bad loans are rising.
Products, Companies & Tools Mentioned
Inter (The first digital bank founded in Brazil, growing about 30% a year at roughly eight times earnings, with more than half its loan book secured)
Nubank (About 20 times Inter's market value, 8% of the Brazil ETF, and an almost entirely unsecured loan book)
MercadoLibre (He bought the dip; the four-month average duration of its lending is what he says the bears miss)
Stone and PagSeguro (The cheap Brazilian fintechs he says are wrongly bucketed with Inter — Stone's bad loans rose about 400 basis points in a year)
Ally (The American digital bank the hosts used as the margin comparison, at 3% to 4% against north of 20% in Brazil)
Itaú (The incumbent type of Brazilian bank that historically lent only to customers with very stable employment)
JETS (The North American airline ETF he is short, rather than picking an individual airline)
JetBlue and Spirit Airlines (Spirit's shutdown cut Cancun traffic about 5%; he thinks JetBlue is at risk within six months if oil stays high)
Tecnoglass (Colombian maker of windows and solar panels selling into the US, whose margins improve now that the tariffs are lifted)
Sea Limited (Named in the listener question as another entrant growing credit fast in Brazil)
Wells Fargo (His cautionary example of a bank selling too many products into a scandal)
Books & Resources Mentioned
Ian's Insider Corner – Ian Bezek (His Substack, in its tenth year, publishing almost every Sunday on Latin American and international equities)
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