consolidated financial with ifrs on december 31,

Consolidated Financial Statements in accordance with IFRS on December 31, 2020

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Contents Management report 3

Independent auditors' report on the consolidated financial statements 7

Consolidated balance sheet 11

Consolidated income statement 12

Consolidated statement of comprehensive income 13

Consolidated statement of changes in equity 14

Consolidated statement of cash flow - indirect method 15

Notes to the consolidated financial statements 16

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Management report The Administration of Banco Inter S.A., a private multiple bank specialized in credit and digital services, in compliance with legal and statutory provisions, presents to its shareholders the Consolidated Financial Statements for the period ended on December 31, 2020. The information, unless indicated otherwise, is expressed in Brazilian currency (in thousands of Brazilian Reais) and was prepared according to the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).

Banco Inter S.A. We are a digital platform with the purpose to make our client´s life simpler. We started our journey already as one of the main agents of modernization of the Brazilian bank industry, and that we offer a disruptive value proposal with a new bank concept. We offer an extensive portfolio of financial and non-financial services and products, without charging bank fees, for all types of clients, regardless of age, economic or social condition.

The products that comprise Inter´s ecosystem today communicate and are totally interconnected, offering options, such as checking account, financing, consortium, currency exchange, insurance, credit, in addition to the possibility to buy products from the main retail stores in the country through our Inter Shop, in our digital shopping, everything in a single app, simply and quickly.

The more than 26 years of experience in the Brazilian banking industry provide credibility to render quality services and products we deem of quality in a strongly regulated market. In parallel, in our opinion, the fintech essence has provided Inter with a modern, agile, scalable and digital business model, best serving the demands of customers and growth strategies.

Our digital platform has evolved and transformed into an ecosystem of products and services beyond out bank origin. Nowadays, we see ourselves as an innovation platform, which intends to make clients’ lives easier: we understand that our processes involve just the necessary, in order to avoid the bureaucracy of the traditional bank industry for us to deliver what we believe our clients need in a practical, adaptable and intuitive way.

The digital platform enables accelerated growth in the base of digital account holders, increasing from 4.1 million account holders on December 31, 2019 , to 8.5 million on December 31, 2020, equivalent to 108% growth in the period.

Since the digitalization in our business model in 2015, we have increased the diversification of our revenues, expanding the relevance of the service revenues. Furthermore, the structure of a digital retail bank contributes to a low-cost funding composition, more resilient and pulverized among our account holders.

Operational Highlights

Digital Account As of December 31, 2020, we reached 8.5 million digital account holders. The number of accounts opened per business day exceeded 25 thousand in December 2020. In the year ended December 31, 2020, we reached 4.9 million active customers, an increase of 113% over the same period last year, and we added more than 165 million logins to the Inter app over the year.

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Loans and advances to customers and financial institutions As of December 31, 2020, the balance of loans and advances to customers and financial institutions amounted to R $ 11 billion, a positive variation of 102.8% in relation to December 31, 2019. The loan portfolio with real estate guarantee totaled R $ 3 , 5 billion, growth of 37.8% compared to December 31, 2019, when it totaled R $ 2.5 billion. The Individual Credit portfolio, in the amount of R $ 1.5 billion, showed a growth of 68.3% in comparison with the same period in 2019. The Corporate Credit portfolio presented a growth of 235.1% in relation to the same period of 2019, totaling R $ 1.6 billion. In the same period, the Multiple Card portfolio grew 143.1%, totaling R $ 1.9 billion, and the Payroll Card portfolio decreased by 15.8%, totaling R $ 67.7 million.

Liabilities with financial institutions, customers and securities issued Total Liabilities to Financial Institutions, customers and securities issued ended 2020 at R $ 15,919.2 million, an increase of 109.8% over the R $ 7,586.5 million recorded at the end of 2019. The increase is mainly due to the growth of (i) the balance of demand deposits, which ended the year with an amount of R $ 6,713.3 million, showing an increase of 220.6% compared to the fiscal year 2019, whose balance was R $ 2,094 million ; and (ii) time deposits, which closed the year 2020 with a balance of R $ 4,771.2 million, showing an increase of 84.1% compared to 2019 when it totaled R $ 2,591.0 million (iii) the balance of Issued Securities, which totaled R $ 1,832.3 million in 2020, decreased 3.5% in relation to the amount of R $ 1,898.1 million in 2019.

Economic-Financial Highlights

Net profit As of December 31, 2020, Net Income was R $ 30.7 million, representing an annual reduction of 47.2%.

The decrease in Net Income is the result of the negative increase in derivative financial instruments for fair value hedging. In addition, there was an increase in personnel expenses, administrative expenses and depreciation and amortization expenses, presenting an increase of 62.7%.

Social-environmental responsibility Inter has a Socio-Environmental Responsibility Policy with well-defined guidelines, which formalizes its commitment to responsible performance aimed at the development of society and the preservation of the environment. Among the initiatives practiced by Inter are sponsorships with their own resources or through tax incentive mechanisms, projects and programs owned or carried out in partnership with other institutions of a social, educational and / or environmental nature.

Further information about the programs, projects and actions in the area of social and environmental responsibility can be obtained on the website ri.bancointer.com.br.

Capital management and operating limits According to the regulatory standards of the Central Bank of Brazil, banks must maintain a

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minimum percentage of 8.625% of the assets weighted by the risk that affect their operations, in order to preserve the solvency and stability of the financial system in relation to fluctuations and adversities economic.

Inter ended 2020 with a Basel Ratio of approximately 31.83%, maintaining a strong capital structure to maintain the institution's growth rates. Further details in Explanatory Note No. 8.

Credit, operational, liquidity, market Risk management At Inter, the management of Credit, Liquidity, Market and Operational Risks is carried out continuously and autonomously, based on structured policies and strategies and on an appropriately trained technical team. More detailed information can be found in Explanatory Note 7.

Preventing and combating money laundering Inter has policies, procedures, internal controls and continuous monitoring, aimed at preventing and combating such illicit acts, in accordance with BACEN Circular No. 3,461 / 2009 and cooperates with the regulatory bodies for the prevention and combating the laundering or concealment of assets, rights and values, as well as to prevent the use of the financial system for illegal acts provided for in Law No. 9,613 / 1998.

Executive office statement The Bank's Board of Directors declares that it discussed, reviewed and agrees with the opinions expressed in the independent auditors' report, as well as reviewed, discussed and agrees with the financial information related to the year ended December 31, 2020.

Ratings The Investment Grade rating given by the specialized agencies Fitch Ratings and Standard & Poor's, with long-term national scale scores of “A- (bra)” and “brAA-”, respectively, proves the adequate liquidity position and the comfortable level of capitalization of Inter. The agencies highlight the improvement in credit quality, the mitigation of mismatch risks and the important advances in cross-selling of products and in the autonomy of fundraising, reflecting the benefits of the exponential growth of the customer base in recent months.

Relation with Independent Auditors In compliance with CVM Instruction No. 381, the Bank and its subsidiaries contracted services provided by KPMG Auditores Independentes other than external audit services for the year ended December 31, 2020, as follows:

The additional services provided by our independent auditors represent approximately 8% of the total audit fees.

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The adopted policy complies with the principles that preserve the auditor's independence, according to the internationally accepted criteria, that is, the auditor must not audit his own work or perform managerial functions in his client or promote his interests.

Acknowledgments We thank our shareholders, clients and partners for their trust, and each of our collaborators, who build our history day after day.

Belo Horizonte, March 31, 2021.

The Administration

KPMG Auditores Independentes, uma sociedade simples brasileira e firma-membro da rede KPMG de firmas-membro independentes e afiliadas à KPMG International Cooperative (“KPMG International”), uma entidade suíça.

KPMG Auditores Independentes, a Brazilian entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

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KPMG Auditores Independentes Rua Paraíba, 550 - 12º andar - Bairro Funcionários 30130-141 - Belo Horizonte/MG - Brazil P.O. Box 3310 - Zip Code 30130-970 - Belo Horizonte/MG - Brazil Telephone +55 (31) 2128-5700 kpmg.com.br

Independent auditors´ report on the consolidated financial

statements

Shareholders and the Board of Directors ofInter S.A. Belo Horizonte – MG

Opinion

We have audited the consolidated financial statements of Inter S.A. ("Bank") and its subsidiaries, which comprise the consolidated balance sheet on December 31, 2019 and related consolidated income statement, statement of other comprehensive income, statement of changes in shareholders’ equity and cash flow statement for the year ended, and notes, including significant accounting policies and other clarifying information..

In our opinion, the consolidated financial statements referred to above adequately present the consolidated financial and equity position of Inter S.A. and its subsidiaries on December 31, 2019, the consolidated performance of its operations and its consolidated cash flows for the year ended on such date in all relevant aspects, in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).

Base for opinion

We conducted our audit in accordance with Brazilian and International Standards on Auditing.. Our responsibilities, pursuant to such standards, are described in the following section entitled "Auditors' Responsibilities for auditing the consolidated financial statements.” We are independent in relation to Inter and its subsidiaries, in compliance with the relevant ethical principles set forth in the Professional Accountant Code of Ethics and the professional standards issued by the Federal Accounting Council, and we comply with the other ethical responsibilities in accordance with these standards. We believe that the audit evidence we have obtained is sufficient and appropriate to substantiate our opinion.

Key Audit Matters

Key audit matters arethose, which, in our professional opinion, were the most significant in our audit of the current period. These matters were addressed in the context of our audit of the consolidated financial



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statements as a whole and in the formation of our opinion on such consolidated financial statements and, therefore, we do not express a separate opinion on these matters.

IFRS 9 – Financial Instruments (Loss on impairment of loans and advances to customers)

See Notes 4.d and 11 of the consolidated financial statements

Key Audit Matters How our audit approached this matter

In each reporting period, the Bank assesses the credit risk of loans and advances to customers by means of qualitative, quantitative and prospective information. Forward-looking information is based on macroeconomic scenarios that are reassessed annually.

To assess whether there have been changes in credit risk, the bank analyzes whether the risk increased significantly individually or collectively. For collective valuation purposes, financial assets are grouped based on shared credit risk characteristics, taking into account the type of instrument, credit risk classifications, the date of initial recognition, the remaining term, branch, geographical location of the counterparty and other relevant factors.

Due to the relevance of the balances of loans and advances to customers, the degree of judgment and uncertainty underlying the determination of the estimated impairment loss and the impact that any change in the assumptions used in determining the loss could generate at the amounts recorded consolidated financial statements, we consider this issue as the main audit subject.

We evaluated the design of internal controls related to the risk level approval processes ("ratings") of credit and leasing and governance operations on the internal models used in the calculation of expected losses.

With the assistance of our credit risk modeling specialists: (i) evaluation of the reasonableness of the models for measuring expected losses on loans and advances to customers, including the criteria used for the classification of credit and leasing operations in stages provided for in IFRS 9; (ii) evaluation of the stages in the development of models of probability of loss of the loan portfolio and advances to customers; (iii) evaluation of the methods used to calculate the expected credit loss; (iv) we carried out procedures to verify adherence on the amount recorded by Management as a provision for reduction to recoverable value of the portfolio of loans and advances to customers versus the amount incurred (back test); (v) mathematical recalculation of the expected loss on loans and advances to customers;

We assessed by means of a sample basis, whether the loan and advance portfolio of clients meet the principal and interest (“SPPI”) criteria;

We evaluated the classification of the category of assets in the loan portfolio and advances to customers;

Evaluation of the disclosures made by management, regarding the criteria and values of expected credit losses, in the consolidated financial statements

Based on the evidence obtained through the procedures listed, we consider the balance of provisioning for the expected loss on loans and advances to customers to be acceptable, in the context of the consolidated financial statements, as well as the respective disclosures, for the year ended December 31, 2020.



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Other information accompanying the individual and consolidated financial statements and the auditor's report

The Bank's management is responsible for this other information that comprises the Management Report. Our opinion on the individual and consolidated financial statements does not cover the Management Report and we do not express any form of audit conclusion on this report. In connection with the audit of the individual and consolidated financial statements, our responsibility is to read the Management Report and, in doing so, consider whether that report is, in a relevant manner, consistent with the financial statements or with our knowledge obtained in or otherwise appears to be materially distorted. If, based on the work performed, we conclude that there is a material misstatement in the Management Report, we are required to report this fact. We have nothing to report in this regard.

Management and governance responsibilities for individual and consolidated financial statements

The management of Inter and its subsidiaries is responsible for the preparation and adequate presentation of the consolidated financial statements in accordance with international financial reporting standards (IFRS), issued by the International Accounting Standards Board (IASB), and for the internal controls that it determined as necessary to allow the preparation of consolidated financial statements free of material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Bank's ability to continue operating, disclosing, when applicable, matters related to its operational continuity and the use of this accounting basis in the preparation of the consolidated financial statements, unless that management intends to liquidate Inter and its subsidiaries or cease operations, or has no realistic alternative to avoid closing operations.

Those responsible for the governance of Inter and its subsidiaries are those responsible for supervising the process of preparing the financial statements.

Auditors' responsibilities for auditing the individual and consolidated financial statements

Our objectives are to obtain reasonable assurance that the individual and consolidated financial statements, taken as a whole, are free from material misstatement, whether due to fraud or error, and to issue an audit report containing our opinion. Reasonable security is a high level of security, but not a guarantee that the audit carried out in accordance with Brazilian and international auditing standards always detects any relevant existing distortions. Misstatements can be due to fraud or error and are considered relevant when, individually or jointly, they can influence, within a reasonable perspective, the economic decisions of users made based on these financial statements.

As part of the audit carried out in accordance with Brazilian and international auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. Furthermore:

- We identify and assess the risks of material misstatement in the individual and consolidated financial statements, whether due to fraud or error, plan and perform audit procedures in response to such risks, and obtain sufficient and appropriate audit evidence to support our opinion. The risk of not detecting material misstatement resulting from fraud is greater than that arising from error, since fraud can involve the act of circumventing internal controls, collusion, forgery, omission or intentional misrepresentation. We obtain an understanding of the internal controls relevant to the audit in order to plan audit procedures that are appropriate to the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls of the Bank and its subsidiaries.

- We assessed the adequacy of the accounting policies used and the reasonableness of the accounting estimates and respective disclosures made by management.

- We concluded about the adequacy of the use, by management, of the accounting basis for operational continuity and, based on the audit evidence obtained, whether there is significant uncertainty in relation to



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events or conditions that may raise significant doubts regarding the operational continuity capacity Bank and its subsidiaries. If we conclude that there is material uncertainty, we must draw attention in our audit report to the respective disclosures in the individual and consolidated financial statements or include changes in our opinion, if the disclosures are inappropriate. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Bank and its subsidiaries to no longer remain in business continuity.

- We evaluate the general presentation, structure and content of the financial statements, including the disclosures and whether the individual and consolidated financial statements represent the corresponding transactions and events in a manner consistent with the purpose of proper presentation.

- We obtain appropriate and sufficient audit evidence regarding the financial information of the entities or business activities of the Bank and its subsidiaries to express an opinion on the individual and consolidated financial statements. We are responsible for the direction, supervision and performance of the Bank and its subsidiaries' audit and, consequently, for the audit opinion. We communicate with those charged with governance regarding, among other things, the planned scope, timing of the audit and significant audit findings, including any significant deficiencies in internal controls that we identified during our work.

We also provide those charged with governance with a statement that we have complied with the relevant ethical requirements, including the applicable independence requirements, and communicate any possible relationships or matters that could significantly affect our independence, including, where applicable, the respective safeguards.

Of the matters that were the subject of communication with those charged with governance, we determined those that were considered to be the most significant in the audit of the current financial statements of the year and, therefore, constitute the main audit matters. We describe these matters in our audit report, unless the law or regulation has prohibited public disclosure of the matter, or when, in extremely rare circumstances, we determine that the matter should not be reported in our report because the adverse consequences of such communication may, within a reasonable perspective, overcome the benefits of communication to the public interest. Belo Horizonte, March 31, 2021

KPMG Auditores Independentes

CRC SP-014428/O-6 F-MG

Original report in Portuguese signed by

João Paulo Dal Poz Alouche

Accountant CRC 1SP245785/O-2

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Consolidated balance sheet on December 31, 2020 and 2019(Amounts in thousands of Brazilian reais)

Note 12/31/2020 12/31/2019Assets Cash and cash equivalents 8 2,154,687 3,114,789 Loans and advances to financial institutions 10 2,212,098 648,377 Loans and advances to customers 12 8,790,057 4,777,387 (-) Provision for expected loss (282,355) (215,563)Securities, net provision 12 5,812,622 1,155,094 Derivative financial instruments 9 27,513 - Non-current assets held-for-sale 15 119,929 121,632 Property and equipment 13 137,846 91,851 Intangible assets 14 224,516 79,248 Deferred tax assets 32 168,815 88,385 Other assets 16 518,681 192,054 Total assets 19,884,410 10,053,254

Liabilities Liabilities with financial institutions 17 1,654,039 974,001 Liabilities with customers 18 12,436,632 4,714,439 Securities issued 19 1,832,310 1,898,071 Derivative financial instruments liabilities 9 56,758 20,941 Loans and onlending 20 27,405 29,800 Current tax liabilities 21 30,271 18,202 Provisions 22 23,637 22,055 Other liabilities 23 475,420 216,115 Total Liabilities 16,536,472 7,893,624 Equity Capital stock 24a 3,216,455 2,068,305 Capital reserve 83,714 1,119 Profit reserves 24b 67,772 89,809 (-) Other comprehensive income 24c 48,937 (3,780)(-) Treasury shares 24f (117,521) - Total equity, excluding non-controlling interest 24 3,299,357 2,155,453 Non-controlling interests 48,581 4,177 Total equity 3,347,938 2,159,630

Total liabilities and equity 19,884,410 10,053,254

The notes are an integral part of these consolidated financial statements.

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Consolidated income statementYears ended on December 31, 2020 and 2019(Amounts in thousands of Brazilian reais)

Note 12/31/2020 12/31/2019 Interest income calculated using the effective interest method 942,808 775,516 Interest expenses (218,161) (264,833)Net interest income 25 724,647 510,683

Revenues from services and commissions 257,145 130,457 Expenses from services and commissions (6,147) (27,526)Net result from services and commissions 26 250,998 102,931

Revenues from securities 12 45,886 70,634 Gains / (losses) from derivatives 9 (54,418) 4,235 Other revenues 27 219,098 97,843 Revenues 1,186,211 786,326

Impairment losses on financial instruments 28 (213,688) (137,371)Personnel expenses 28 (229,096) (169,198)Depreciation and amortization (43,659) (17,460)Other expenses 30 (706,791) (415,413)Income before taxes (7,023) 46,884

Current income tax and social contribution 31 (13,166) (5,859)Deferred income tax and social contribution 31 50,875 17,065 Net profit from the Period 30,686 58,090

Profit attributable to: Controlling shareholders 17,911 55,403 Non-controlling shareholders 12,775 2,687

Earnings per share (in Brazilian Reais - BRL) Basic earnings per share 24 0.02422 0.07493 Diluted earnings per share 24 0.02418 0.07479


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Consolidated statement of other comprehensive incomeYears ended on December 31, 2020, 2019(Amounts in thousands of Brazilian reais)

12/31/2020 12/31/2019

Net result of the year 30,686 58,090 Other comprehensive income of the year Items that can be subsequently reclassified to the resultEvaluation result at fair value of financial assets, net of taxes 40,017 (5,236)

Items that cannot be reclassified to the Income StatementExpected loss for financial assets classified as fair value through other comprehensive income - FVOCI 12,700 -

Other comprehensive income of the year, net of income tax and social contribution 52,717 (5,236)

Total comprehensive income for the period 83,403 52,854 Allocation of comprehensive income Part of comprehensive income of controlling shareholders 70,628 50,167 Part of comprehensive income of non-controlling shareholders 12,775 2,687 Total comprehensive result from the period 83,403 52,854


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Consolidated statement of changes in equityYears ended on December 31, 2020, 2019(Amounts in thousands of Brazilian reais)

Profit reserve

Capital stockCapital reserve

Legal reserve

Statutory Reserve

Other comprehensive

incomeAccrued

Profit Treasury shares

Shareholders’ equity of

Controlling shareholders

Non-Controlling Shareholders´

Share Total Net Equity Balances on January 1, 2019 848,760 1,290 13,262 72,396 (3,340) - (432) 931,936 252 932,188 Capital increase 1,250,266 (299) - - - - - 1,249,967 268 1,250,235 Share issuance cost (30,721) 192 - - - - - (30,529) - (30,529)Share-based payment - 102 - - - - - 102 - 102 Comprehensive income of the year - - -

Net profit from the Period - - - - - 55,403 - 55,403 2,687 58,090 Proposed destinations: - - -

Constitution of legal reserve - - 3,944 - - (3,944) - - - - Profit reserve constitution - - - 207 - (207) - - - - Dividends and interest on equity - - - - - (51,252) - (51,252) 970 (50,282)Repurchase (Cancellation) of treasury shares - (166) - - - - 432 266 - 266 Valuation adjustment reserve - - - - - - - - - -

Evaluation result at fair value of financial assets, net of taxes

- - - - (5,129) - - (5,129) - (5,129)

Capital transactions - - - - 4,689 - - 4,689 - 4,689 Balances on December 31, 2019 2,068,305 1,119 17,206 72,603 (3,780) - - 2,155,453 4,177 2,159,630

Balances on January 1, 2020 2,068,305 1,119 17,206 72,603 (3,780) - - 2,155,453 4,177 2,159,630 Capital increase 1,181,351 - - - - - - 1,181,351 - 1,181,351 Share issuance cost (33,335) 820 - - - - - (32,515) - (32,515)Share-based payment 134 (134) - - - - - - - - Net profit from the Period - - - - - 17,911 - 17,911 12,775 30,686 Proposed destinations:

Profit reserve reversal - - - (20,038) - 22,038 - - - - Interest on Equity (39,949) (39,949) - (39,949)

Repurchase of shares on the market - - - - - - (153,109) (153,109) - (153,109)Sale of treasury shares - - - - - 35,588 35,588 - 35,588 Profit in sale of treasury shares - 81,909 - - - - - 81,909 - 81,909 Acquisition of funds with share in non-controlling companies - - - - - - - 31,629 31,629

Evaluation result at fair value of financial assets, net of taxes

- - - - - - - - - -

Adjustment to market value - - - - 40,017 - - 40,017 - 40,017

Expected loss for financial assets classified as fair value through other comprehensive income - FVOCI

- - - - 12,700 - - 12,700 - 12,700

Balances on December 31, 2020 3,216,455 83,714 17,206 50,565 48,937 - (117,521) 3,299,356 48,581 3,347,937


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Consolidated statement of cash flowsYears ended on December 31, 2020, 2019(Amounts in thousands of Brazilian reais)

Cash flow statement - indirect method 12/31/2020 12/31/2019Operational activities Net profit from the Period 30,686 58,090 Adjustment of net profit

- Depreciation and amortization 43,659 17,460 - Loss for impairment of financial assets 213,688 137,371 - Expenses for provisions and contingent liabilities 15,280 8,413 - Deferred income tax and social contribution (50,875) (17,065) - Current income tax and social contribution 13,166 5,859 - Provisions for loss of assets (4,401) 4,295 - Result of foreign exchange variation (1,006) (397) - Recognized grant options and share-based payment - 103

(Increase)/ reduction of the operational assets:Loans and advances to financial institutions (1,563,721) (406,706) Loans and advances to customers, net expected loss (4,146,866) (1,540,879) Securities (161,869) - Derivative financial instruments (27,513) 19,945 Non-current assets held-for-sale 6,104 (57,258) Fiscal assets (29,555) - Other assets (326,627) (56,434) Increase/ (reduction) of the operational liabilities:Liabilities with financial institutions 680,038 267,280 Liabilities with customers 7,722,193 2,704,501 Securities issued (65,761) 103,431 Derivative financial instruments liabilities 35,817 - Loans and onlending (2,395) (2,188) Current taxes 13,090 7,664 Provisions (13,698) (9,335) Other liabilities 192,852 64,238 Profit tax paid (14,187) (5,634)

Net cash generated by the operational activities 2,558,100 1,302,754 Cash flow from the investment activities

Acquisition of property and equipment (17,655) (11,391) Alienation of property and equipment 7,223 - Acquisition of intangible assets (160,119) (62,043) Acquisition of Financial Assets at Fair Value through Profit or Loss (255,104) (1,871,033) Transfer of of Financial Assets at Fair Value through Profit or Loss - 1,231,867 Acquisition of Financial assets at Fair Value through Other Comprehensive Income (4,699,630) (587,518) Transfer of of Financial Assets at Fair Value through Other Comprehensive Income 499,092 388,430

Cash flow (used in the) coming from the investment activities (4,626,193) (911,688) Cash flow from the financing activities

Capital increase 1,148,836 1,220,101 Option purchase - share-based payments - 299 Sale (Repurchase) of treasury shares - 432 Repurchase of treasury shares (153,109) - Funds coming from sale of treasury shares 117,497 - Paid dividends and interest on equity (37,868) (43,571) Acquisition of funds with share in non-controlling companies 31,629 -

Net cash (used in the) coming from the financing activities 1,106,985 1,177,261

Net increase in cash and cash equivalents (961,108) 1,568,327 Cash and Cash Equivalents at the beginning of the period 3,114,789 1,546,065 Effect of the exchange rate variation on cash and cash equivalents (1,006) (397) Cash and cash equivalents at the end of the year 2,154,687 3,114,789

Net increase in cash and cash equivalents (961,108) 1,568,327 Transactions that do not affect cash

Dividends and interest on equity stated and not paid 39,950 12,813 Dividends and interest on equity converted into capital increase - - Variation of financial assets at fair value through other comprehensive income 40,017 107 Capital increase by means of share-based payments - 299 Effects initial adoption of IFRS 16 39,871 69,387 Non-paid goodwill and custumer portfolio 24,500 -



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Notes to the consolidation financial statements

(Amounts in thousands of Brazilian reals)

1 Activity and structure of Inter and its subsidiaries Inter S.A. (Inter) is a private traded company, which works as multiple bank based on a digital platform, as allowed by the Central Bank of Brazil and in the terms of the applicable legislation. Inter´s objective is operation as a digital multi-service bank for individuals and legal entities, and among its main activities, there are real estate credit, payroll credit, credit for companies, rural credit and credit card operations, and checking account, investments, insurance services, as well as a marketplace of non-financial services provided by means of its subsidiaries. The operations are conducted within the context of the set of companies from Inter and its subsidiaries, working on the market in an integrated way.

2 Basis for Preparation

a. Compliance statement The consolidated financial statements of Inter and its subsidiaries were prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Board (IASB). Publication of the consolidated financial statements was approved by the of Executive Board in the minutes of the Executive Board Meeting held on March 31, 2021.

b. Functional and presentation currency These consolidated financial statements are presented in Brazilian Reais (BRL), which is the functional currency of Inter and its subsidiaries. All balances were rounded to the nearest thousand, unless otherwise noted.

c. Use of estimates and judgments In preparing these consolidated financial statements, management has made judgment, estimates and assumptions that affect the application of the accounting policies of Inter and its subsidiaries and the reported amounts of assets, liabilities, revenues and expenses. Actual results may differ from such estimates. Estimates and assumptions are reviewed on an ongoing basis. Reviews to the estimates are recognized prospectively.


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, (i) Judgments

The information on judgments made in the application of the accounting policies that have significant effects on the amounts recognized in the financial statements are included in the following notes:

• Classification of financial assets (see notes 3 and 7) - evaluation of the business

model in which the assets are held and evaluation if the contractual terms of the financial asset refer only to payments of principal and interest (SPPI test).

• Consolidation (see note 3): determining whether the Inter and its subsidiaries has

real control over an investee. • The measurement of the provision for expected losses on credits for financial

assets measured at amortized cost and Fair value through other comprehensive

income (FVOCI) requires the use of complex quantitative models and assumptions about future economic conditions and credit behavior. Several

significant judgments are also needed to apply the accounting requirements for measuring expected credit loss, such as: Determine criteria to determine the

significant increase in credit risk, select quantitative models and appropriate

assumptions for measuring expected credit loss, establish different prospective scenarios and their weighting, among others.

(ii) Uncertainties about assumptions and estimates Information on the uncertainties related to assumptions and estimates with a significant risk of resulting in a material adjustment in accounting balances of assets and liabilities involving judgments are included in the following notes:

• Provisions for judicial demands (see notes 3 and 23) - Key assumptions on the

likelihood and magnitude of outflow of funds;

• Non-current assets held for sale (see notes 3 and 23) - determination of fair value

less selling costs, of non-current assets held for sale based on significant non-observable data;

• Deferred tax assets (see notes 3 and 31) - availability of future taxable income;

and

• Fair value of financial instruments, including derivative financial instruments (see

notes 3, 6 and 7) - Determination of the fair value of financial instruments with

significant non-observable inputs.


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• Expected loss (see notes no. 3 and 11b) - set the criteria for determining whether

credit risk on financial assets has increased significantly since the initial recognition, determining the methodology to incorporate prospective information

in the measurement of expected loss, as well as selection and approval of models

used to measure the expected loss.

d. Basis for measurement

The consolidated financial statements were prepared considering the historical cost, except for the following material items recognized in the balance sheets: - derivative financial instruments are measured at fair value; - non-derivative financial instruments designated at fair value through profit or loss are measured at fair value; - equity securities designated at fair value through profit or loss are measured at fair value; and - Fair value through other comprehensive income (FVOCI) debt securities are measured at fair value.

3 Main accounting policies The accounting policies described below were applied in all periods presented in the consolidated financial statements by Inter and its subsidiaries.

a. Basis for consolidation The following table shows the subsidiaries included in the consolidated financial statements:

(i) Subsidiaries Companies the Bank has control on are classified as subsidiaries. The Bank controls an entity when it is exposed to, or has rights on, variable returns arising from its involvement with the entity and has the ability to use its power over such entity to affect the amount of their returns. The subsidiaries are consolidated in full as from the date the Bank gains control on their activities until the date on which the control ceases to exist.

(ii) Non-controlling interest Inter and its subsidiaries book the portion related to non-controlling interests in shareholders’ equity in the consolidated balance sheet. In transactions involving purchase of interests with non-controlling shareholders, the difference between the amount paid

Entity Branch of activity 12/31/2020 12/31/2019BMA Inter Fundo De Investimento Em Direitos Creditórios Multissetorial Investment Fund 81.2% 0.00%Inter Digital Corretora e Consultoria de Seguros Ltda. Insurance broker 60.0% 60.0%Matriz Participações Ltda. Asset management 70.0% 0.00%Inter Titulos Fundo de Investimento Investment Fund 96.5% 98.1%Inter Distribuidora de Títulos e Valores Mobiliários Ltda. TVM Distributor 98.3% 98.3%Inter Marketplace Ltda. Marketplace 99.9% 99.9%TBI Fundo De Investimento Renda Fixa Credito Privado Investment Fund 100.0% 0.0%

Share in the capital (%)


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and the interest acquired is recorded in shareholders’ equity. Gains or losses on sales to non-controlling shareholders are also recorded in shareholders’ equity. Profits or losses attributed to non-controlling interest are presented in the consolidated income statements as profits or losses attributable to non-controlling interest.

(iii) Balances and transactions eliminated on consolidation Intra-group balances and transactions, including any unrealized gains or losses arising from intra-group transactions, are eliminated in the consolidation process. Unrealized losses are removed as unrealized gains, but only to the extent that there is no evidence of impairment.

b. Transactions in foreign currency Transactions in foreign currency are translated into the respective functional currencies of Inter´s entities by the spot exchange rates at the dates of the transactions. Monetary assets and liabilities denominated and determined in foreign currency on the date of the balance sheet are re-convertible into the functional currency at the exchange rate on that date. Monetary assets and liabilities denominated in foreign currencies at reporting dates are translated into the functional currency at the spot exchange rate at that date. Non-monetary assets and liabilities measured at fair value in foreign currency are translated into the functional currency at the spot exchange rate at the date on which the fair value is determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated using the spot exchange rate at the date of the transaction. Foreign currency differences arising on translation are generally recognized in profit or loss.

c. Cash and cash equivalents The balance of cash and cash equivalents consists of cash held and bank deposits on demand (in Brazil and abroad) and other short-term highly liquid investments with original maturity dates not exceeding three (3) months that are subject to insignificant risk of changes in their fair value. These instruments are used by Inter and its subsidiaries to manage their short-term commitments.

d. Financial assets and liabilities Financial assets and liabilities are initially booked at fair value, and subsequently, measured at amortized cost or fair value.

(i) Classification and Measurement of Financial Assets Financial Instruments are classified in the financial assets into the following measurement categories:

- Amortized cost;

- Fair value through other comprehensive income (FVOCI);


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- Fair value through profit or loss (FVTPL). The classification and subsequent measurement of financial assets depend on:

- The business model in which they are managed;

- The characteristics of their cash flows (Solely Payment of Principal and Interest Test - SPPI Test).

Business model: represents the way in which the financial assets are managed to generate cash flows and does not depend on the Management intentions regarding an individual instrument. Financial assets may be managed for the purpose of: i) obtaining contractual cash flows; ii) obtaining contractual cash flows and sale; or iii) others. To evaluate business models, Inter considers the risks affecting the performance of the business model; and how the performance of the business model is assessed and reported to Administration. If cash flows are performed differently from Inter's expectations, the classification of the remaining financial assets held in this business model is not changed. When the financial asset is held in the business models “i” and “ii” SPPI Test needs to be applied. SPPI Test: assessment of cash flows generated by the financial instrument in order to verify whether they refer only to payments of principal and interest. To meet this concept, cash flows shall include only consideration for the time value of money and credit risk. If the contractual terms introduce exposure to risks or volatility in cash flows, such as exposure to changes in the prices of equity instruments, the financial asset is classified as at fair value through profit or loss. Hybrid contracts shall be assessed as a whole, including all built-in features. The accounting for a hybrid contract containing an embedded derivative is carried out jointly, that is, the entire instrument is measured at fair value through profit or loss. Effective Interest Rate The effective interest rate is the rate that discounts future receipts or payments estimated over the expected life of the financial asset or liability. For the calculation of the effective interest rate, Inter estimates the cash flows considering


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all the contractual terms of the financial instrument, but does not consider future credit loss. The calculation includes all commissions paid or received between the parties of the agreement, transaction costs and all other premiums or discounts. Interest income is calculated by applying the effective interest rate to the gross carrying amount of the financial asset. Fair value Fair value is the price that would be received for the sale of an asset or that would be paid by the transfer of a liability in an orderly transaction between market participants at the measurement date. Details on the fair value of financial instruments, including Derivatives, as well as on the fair value hierarchy are detailed in Note 8. Classification Based on these factors, Inter applies the following criteria for each classification category: - Amortized cost - Assets managed to obtain cash flows consisting only of payments of principal and interest (SPPI Test);

- Initially recognized at fair value plus transaction costs;

- Subsequently measured at amortized cost, using the effective interest rate;

- Interest, including the amortization of premiums and discounts, is recognized in the Income Statement under Interest Income.

- Financial assets at Fair Value through Other Comprehensive Income - Assets managed both to obtain cash flows consisting only of payments of principal and interest (SPPI Test) and for sale;

- Initially and subsequently recognized at fair value plus transaction costs;

- Unrealized gains and losses (except expected credit losses, currency rate differences, dividends and interest income) are recognized, net of applicable taxes, under item Other Comprehensive Results in shareholders' equity.

- Financial Assets at Fair value through profit or loss and Financial Assets Designated at Fair Value


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- Assets that do not meet the classification criteria of the previous categories; or assets designated at initial recognition as at fair value through profit or loss to reduce "accounting mismatches";

- Initially and subsequently recognized at fair value;

- Transaction costs are recorded directly in the Income Statement;

- Gains and losses arising from changes in fair value are recognized in item Income from derivative financial instruments.

Regular purchases and sales of financial assets are recognized and written-off, respectively, on the trading date.

Financial assets are written-off when the rights to receive cash flows expire or when Inter transfers substantially all property risks and benefits and such transfer qualifies for write-off in compliance with IFRS 9 requirements.

Otherwise, the control shall be evaluated to determine if the continuous involvement related to any retained control does not prevent the write-off.

Financial assets and liabilities are offset and the net amount is reported in the Statement of financial position only when there is a legal right to offset the amounts recognized and there is the intention to settle them on a net basis or to realize the asset and settle the liability simultaneously. Equity Instruments An equity instrument is any contract proving a residual interest in the assets of an entity, after deducting all its liabilities, such as Shares and Quotas. Inter measures subsequently all its equity instruments at fair value through profit or loss. Gains and losses on equity instruments measured at fair value through profit or loss are recorded in the Income Statement. Expected Credit Loss Inter assesses, on a prospective basis, the expected credit loss associated with financial assets measured at amortized cost or at fair value through other comprehensive income. The recognition of the provision for expected credit loss is made on every date of issue of the financial statements against the income statement. In the case of financial assets measured at fair value through other comprehensive income, Inter recognizes the provision for losses in the income statement against the net shareholders’ equity in other comprehensive income. Measurement of Expected Credit Loss


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Financial assets: the loss is measured at the present value of the difference between the contractual cash flows and the cash flows that Inter expects to receive discounted at the effective rate charged; Loan commitments: the loss is measured at the present value of the difference between the contractual cash flows that would be payable if the commitment was contracted and the cash flows that Inter expects to receive; Financial guarantees: the loss is measured by the difference between the expected payments to repay the counterparty and the amounts that Inter expects to recover. At every reported period, Inter evaluates the expected loss of its active credit portfolio. The expected loss is calculated using the following terms: the probability of default (PD), the loss given the default (LGD) and the exposure at default (EAD). For the formulation of the terms of the expected loss, the credit portfolio is divided into products with similar characteristics, for example, transactions with real estate guarantee form a group for the purposes of statistical modeling. Other product divisions are, for example: credit cards; payroll loans; business credits, etc. The period used for the calculation of PD was defined up to 24 months. This period was determined for being sufficient for the construction of statistically significant models, still remaining close to the most recent scenario. For the estimation of LGD, a workout period - asset recovery - of up to 60 months is considered, given the nature of the operations, such as, for example, real estate credit, in which the consolidation and the sale of an asset can extend over longer period. However, the recovered amount is considered from the deduction of its value over time, aiming to weigh the economic loss for the period. Given the estimation of the expected loss terms, each contract is classified in three risk stages. The first includes operations with the lowest credit risk, with the expected loss calculated over the following twelve months. The second group includes contracts with significant credit risk, namely, contracts overdue for more than 30 days, renegotiation, agreement or which are in quarantine. For this group, the expected loss is calculated for the remainder of the contract term. The third and final stage contemplates contracts that are more than 90 days overdue and / or evidence increases credit risk, credit deterioration - that is, in default. Finally, in order to incorporate the macroeconomic perspectives that might affect the financial health of the portfolio, a correction factor based on a macroeconomic model is used; it considers the main market indicators: CDI, IPCA, PIB and minimum wage. The probability of default of each product group is calibrated using a multiplier, which contemplates the forecasts for the variables mentioned above in the following twelve months, with variations that represent a base scenario and a market stress scenario. The


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forecasts of the macroeconomic variables used are obtained by means of a study by the Research area of Inter, in addition to the evaluation of external forecasts. Finally, PD calibrated by the macroeconomic model is multiplied by LGD and EAD of each operation, which results in the expected final loss of Inter's loan portfolio. Modification in Contractual Cash Flows When the contractual cash flows of a financial asset are renegotiated or otherwise modified and this does not substantially change its terms and conditions, Inter does not write off the asset. However, the gross booking value of this financial asset is recalculated as the present value of the renegotiated or modified contractual cash flows discounted at the original effective interest rate. Any costs or fees incurred adjust the modified carrying amount and are amortized over the remaining term of the financial asset. If, on the other hand, the renegotiation or modification substantially changes the terms and conditions of the financial asset, Inter writes off the original asset and recognizes a new one. Accordingly, the renegotiation date is considered to be the date of initial recognition of the new asset for purposes of calculating expected credit loss, including to determine significant increases in credit risk. In any case, Inter also assesses whether the new financial asset may be considered as originated or purchased with credit recovery problems, particularly when the renegotiation was caused by financial difficulties of the debtor. Differences between the carrying amount of the original asset and the fair value of the new asset are recognized immediately in the Income Statement. Write-off of Financial Assets When there is no reasonable expectation of a financial asset recovery, considering historical curves, its total or partial write-off is made simultaneously with the reversal of the related provision for expected credit loss, with no effects in Inter's Statement of profit or loss. Subsequent recoveries of amounts previously written-off are recorded as revenues in the Statement of profit or loss.

(ii) Classification and Measurement of Financial Liabilities Financial liabilities are initially recognized at fair value and subsequently measured at amortized cost, except by: Financial Liabilities at Fair Value through Profit or Loss: classification applied to derivatives and other financial liabilities designated at fair value through profit or loss to reduce "accounting mismatches". Inter designates financial liabilities, irrevocably, at fair value through profit or loss on initial recognition (fair value option), when the option reduces or significantly eliminates measurement or recognition inconsistencies. Write-off and Modification of Financial Liabilities


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Inter removes a financial liability from the Statement of financial position when it is extinct, i.e., when the obligation specified in the agreement is discharged, canceled or expired. An exchange of debt instrument or substantial modification of the terms of a financial liability is booked as extinction of the original financial liability and a new one is recognized.

(iii) Derivatives All derivatives are recorded as financial assets when the fair value is positive, and as financial liabilities when the fair value is negative. Inter will continue to apply the accounting hedge requirements set forth in IAS 39, however, it may adopt the IFRS 9 requirements as per Administration's decision. Pursuant to this rule, derivatives may be designated and qualified as hedge instruments for accounting purposes and, depending on the nature of the hedged item, the method for recognizing fair value gains or losses will be different. All the following conditions shall be met to qualify as an accounting hedge: At the beginning of hedge, there is a formal designation and documentation of the hedge relation and the objective and strategy of the entity's risk management; It is expected that hedge is highly effective in achieving offsetting changes in the fair value or in the cash flows attributable to the hedged risk, consistent with the risk management strategy originally documented for this hedge relation in particular; Regarding cash flow hedge, an expected transaction that is subject to hedge shall be highly likely and shall be exposed to changes in cash flows that could ultimately affect the result; The hedge effectiveness can be reliably measured, i.e., the fair value or the cash flows of the hedged item attributable to the hedged risk and the fair value of the hedging instrument can be reliably measured; and Hedge is measured on an ongoing basis and effectively determined as been highly effective during all periods of the Financial Statements for which it was designated. IAS 39 presents three hedging strategies: fair value hedge, cash flow hedge and hedge of net investment in a transaction abroad. Inter uses only derivatives as instrument of fair value hedge. For derivatives designated and qualified as fair value hedge, the following practices are applied: a) The gain or loss resulting from the re-measurement of the hedge at fair value shall be recognized in profit or loss; and


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b) The gain or loss resulting from the hedged item attributable to the effective portion of the designated risk shall adjust the carrying amount of the hedged item to be recognized in the profit or loss. When the derivative expires or has been sold and the hedge or the accounting hedge criteria cease to be met, or the entity revoke the designation, the entity shall discontinue prospectively the accounting hedge. In addition, any adjustment to the carrying amount of the hedged item shall be amortized in the profit or loss.

In compliance with its risk management policies, as described in note 7,Inter and its subsidiaries, use derivative financial instruments, mainly swap registered in B3 (Brazil, Bolsa, Balcão), classified as market risk Hedge, related to loans and advances to customers classified as "loans and receivables". For the calculation of the fair value of financial instruments, the average reference rates used for operations with a similar term at the date of the balance sheet, disclosed by B3, are used. The effectiveness of protection (hedge) is measured as from the beginning and over the term of the operations. The composition of amounts recorded in derivative financial instruments, both in equity accounts and in offsetting accounts, is presented in note 10.

(iv) Loans and advances to customers Inter classifies a credit operation as not performing if the payment of principal or interest is is arrears for 60 days or more. The areas of credit risk and data intelligence are responsible for defining the methodologies and modeling used to measure the expected loss in credit operations and to assess the evolution of the provision amounts, in a recurrent basis. Such areas monitor the trends noticed in the provision for expected credit loss by segment, in addition to establishing an initial understanding of the variables that may trigger changes in provision, PD (probability of default) or LGD (loss given default).

(v) Loan Commitments and Financial Guarantees Following the issuance, based on the best estimate, if Inter concludes that the expected credit loss in respect of the guarantee issued is higher than the initial fair value less accumulated amortization, this amount is replaced by a provision for loss.

e. Non-current assets held-for-sale Non-current assets held for sale include properties repossessed in debt. These are classified as intended for sale if their book value is recovered mainly through sale instead of continuous use. This condition is met only when the sale is highly probable and the non-


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current asset is available for immediate sale in its current condition. Management must be committed to the sale, which, on recognition, is expected to be considered completed within one year of the classification date. The reclassification of assets for this balance sheet, when this condition is met, is carried out at the lower of its carrying amount and the fair value of the assets. The fair value of the properties is recorded according to the sales history of the previous year's stock, together with the assessment of the occupation status (occupied or unoccupied) of the property. Management works with segregation into occupied and unoccupied properties. For vacant properties, it is hoped to recover most of the asset's market value, while in relation to occupied properties, a smaller portion of this value is recovered. Based on the sales history and the occupancy situation of the property, the recoverability percentages are defined for the constitution of the provision for devaluation in the current year.

f. Property and equipment

(i) Recognition and measurement Items of Property, plant and equipment are measured at historical cost, excluding maintenance expenses, less accumulated depreciation and, if necessary, adjusted to their recoverable value. The cost includes expenses directly attributable to the acquisition of the asset. The cost of assets generated internally includes the cost of materials and direct labor as well as any other directly attributable costs required to its functionality. Purchased software that is integral to the functionality of the related equipment is recorded as part of that equipment. If parts of an item have different useful lives, and its control may be carried out on a standalone basis, then they are accounted for as separate items (major components) of tangible assets. The useful lives and residual values of the assets are revalued and adjusted, if necessary, on each balance sheet date or when applicable. Gains and losses on the sale of property, plant and equipment are recorded (by the difference between the proceeds from the sale and the carrying value of property, plant and equipment) in the Statement of profit or loss under "Other operating revenues (expenses)".

(ii) Subsequent costs The cost of repairing or maintaining an item of property, plant and equipment is recognized in the value of the asset, when it is likely that the future economic benefits incorporated into the asset will flow to Inter and its subsidiaries for more than one year and its cost can be measured reliably. The carrying amount of the replaced items is not recognized. Other costs of repairs and maintenance of tangible assets are recognized in the profit or loss as they are incurred.


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(iii) Depreciation

Depreciation is calculated to write off the cost of items of property, plant and equipment, net of their estimated residual values, where applicable, using the straight-line method to write-off the cost of Property, plant and equipment to their residual values over their estimated useful lives. Land is not depreciated. The estimated useful lives of property, plant and equipment items are as follows: Description Estimated service life Property and Equipment 10 years Data Processing system 5 years The depreciation methods, the service lives and the residual values are reviewed on every balance sheet date and adjusted if appropriate.

g. Intangible assets

(i) Goodwill The premium results from the acquisition of subsidiaries and represents the excess of (i) transferred compensation; (ii) the value of the non-controlling share in the acquired company; and (iii) the fair value on the date of the acquisition of any previous equity interest in the acquired in relation to the fair value of the identifiable net assets acquired in accordance with the applicable rules, this goodwill is not amortized. If the total transferred compensation, the interest non-controlling recognized and the previously held share measured at fair value is lower than the fair value of the net assets of the acquired subsidiary, in case of a favorable purchase, the difference is recognized directly in the income statement.

(ii) Customer portfolio Contract relations with clients are recognized at fair value on the acquisition date. The service life of contract relations with clients is finite and they entered at cost minus the accrued amortization. The amortization is calculated using the linear method over the expected life of the relationship with the client.

(iii) Software and licenses The software licenses are capitalized based on the costs incurred to acquire the software and make them ready for use. These costs are amortized during the estimated service life of the software. The costs associated to the software maintenance are recognized as expenses, as incurred. The development costs, which are directly attributable to the project and the tests of identifiable and exclusive software products controlled by the Group, are recognized as intangible assets.


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The directly attributable costs, which are capitalized as a part of the software product, include the cost for employees allocated in the software development and an adequate part of the applicable indirect expenses. The costs also include the financing costs incurred during the period of development of the software. The software development costs recognized as assets are amortized during their estimated service life.

(iv) Development cost The cost of intangible assets generated internally includes all directly attributable expenses, necessary for creation, production and preparation of the asset to be able to work as intended by the administration. Other development expenses, which do not meet these capitalization criteria, are recognized as expenses as incurred. The development costs prior recognized as expenses are not recognized as assets in a subsequent period.

(v) Amortization The estimated service lives of intangible asset items are as follows: Description: Estimated service life: Customer portfolio 5 years Development cost 3 to 5 years The depreciation methods, the service lives and the residual values are reviewed on every balance sheet date and adjusted if appropriate.

h. Impairment of non-financial assets On each date of the financial statements, Inter and its subsidiaries review the carrying amounts of their non-financial assets (other than investment property and deferred tax assets) to determine if there is any indication of impairment. In case there is such indication, then the recoverable value of the asset is estimated. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows (i.e., cash-generating units - CGUs). The recoverable amount of an asset or cash generating unit is the higher of its value in use and its fair value less selling cost. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses recognized in prior periods are assessed at each Statement of financial position date to detect indications that the loss has decreased or no longer exists. An impairment loss is reversed if there is a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the carrying amount of the asset does not exceed the carrying amount that would have


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been determined, net of depreciation and amortization, if no impairment had been recognized.

i. Provisions A provision is recognized if, as a result of a past event, Inter and its subsidiaries have a present, legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by expected future cash flows discounted at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. In setting up provisions, Management considers the opinion of the legal advisors, the nature of the lawsuits, the similarity with previous proceedings, the complexity and the position of the courts, whenever the loss is assessed as likely. Contingent liabilities are: a possible obligation arising from past events and whose existence may only be confirmed by the occurrence of one or more uncertain future events not fully within the entity’s control; or a present obligation stemming from past events that is not recognized because: it is not probable that an outflow of resources encompassing economic benefits shall be required in order to settle the obligation; or the amount of the obligation cannot be measured with sufficient certainty. As regards the basis for the measurement of provisions, the entity shall seek, , a best estimate of the disbursement required to settle the present obligation at the statement of financial position date, considering

• The risks and uncertainties involved;

• Where relevant, the financial effect produced by the discounted present value of

future cash flows required to settle the obligation;

• Future events that may change the amount required to settle the obligation. Contingent assets are recognized only when there is a secured guarantee or unappealable favorable court rulings, over which there are no more appeals, characterizing the gain as practically certain. Contingent assets, whose expectation of success is probable, are only disclosed in the financial statements, when relevant.


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j. Employee Benefits

(i) Short-term employee benefits Short-term employee benefit obligations are recognized as personnel expenses to the extent the corresponding service is provided. The liability is recognized for the amount expected to be paid if Inter and its subsidiaries has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation may be estimated reliably.

(ii) Share-based compensation agreements The fair value at the granting date of share-based compensation agreements granted to employees is recognized as expenses, with a corresponding increase in shareholders’ equity, during the period in which employees unconditionally acquire the right to the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which there is an expectation that service and performance conditions will be met, in such a way that the final value recognized as an expense is based on the number of awards actually meeting the conditions of service and performance on the vesting date.

k. Income tax and social contribution Provisions are calculated by considering the relevant legislation for each charge for the effect of the calculation bases and their respective rates: income tax (15% plus 10%), social contribution (15% until August 2015 and 20% for the period from September 2015 to December 2018, pursuant to Law n° 13.169/15, returning to the rate of 15% as from January 2019). Constitutional Amendment No. 103 dated 2019, in force as of March 01, 2020, increased the rate of Social Contribution on Net Profit (CSLL) for banks by 5% (five percent). Such increase leaded to adjustment of the balance of deferred CSLL assets and liabilities to be used under the new rules. Inter and its subsidiaries also comply with the accounting practice of setting up, as applicable, diferred tax assets related to income tax and social contribution on temporary differences and tax losses. Such diferred tax assets are recognized for accounting purposes based on expectations for realization, considering the technical studies and analyzes made by management. As of January 2019, application of IFRIC 23 for determination of the current and the deferred income tax became obligatory. Inter carries a study out regarding the effects produced by the referred standard, which takes into consideration the impact of uncertainties related to the taken tax positions and whether any additional income tax payment has to be made, and it believes that the provision for income tax in the liability is adequate in relation to all open fiscal periods based on its evaluation of different factors, including interpretation of the fiscal laws and past experience. Such evaluation is grounded on estimates and assumptions, which may involve judgments of future events. New information can be made available, which would lead the Group to change its judgment


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regarding the suitability of the existing provision. Such changes will impact the income tax expenses in the year they are made.

(i) Current taxes Current tax comprises the expected tax payable or receivable on the taxable profit or loss for the year and any adjustment to tax payable in respect of previous years. It is measured based on tax rates enacted or substantively enacted on the date of the balance sheet. Current tax also includes any tax payable arising from dividends.

(ii) Deferred taxes Deferred tax stems from differences between the carrying amounts of assets and liabilities for accounting purposes and the amounts used for taxation purposes. The tax benefit of tax loss carryforwards is recognized only when it is identified that future taxable profits shall be generated in sufficient amounts to be compensated. Income tax and social contribution expenses are recognized in the statement of profit or loss, unless related to the valuation of financial instruments available-for-sale at fair value when these are recognized directly in the shareholders’ equity.

l. Interest Interest income and expenses are presented in accounting entries of interest income and interest expenses, in net interest income, for all financial instruments using the effective interest rate method. The effective interest rate is the rate that discounts future payments and receipts estimated throughout the expected life of the financial instrument based on the contracts, to the present current amount of the financial asset or liability in the balance sheet. The effective interest rate is established on initial recognition of financial assets and liabilities and is subsequently reviewed in the event of the renegotiation of loans and advances that result in changes in its estimated flow of payments. To calculate the effective interest rate, future cash flows are estimated considering all contractual terms of financial instruments; however, future credit losses are not considered. The calculation of the effective interest rate includes all incremental charges directly attributable to loans, which include equalization rates, premiums and discounts and transaction costs that may be directly attributed thereto. The adjustment resulting from any change in fair value of derivative financial instruments held for risk management purposes and qualified for fair value accounting hedge are recorded as interest income or expenses, in net interest income, under the same account where the variation adjustments in the fair value of risk exposures of hedged interest rates are recorded.


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m. Net result from services and commissions

Inter and its subsidiaries use IFRS 15, "Revenue from contracts with customers". This standard applies the five-step model for the recognition of revenue from commissions and services, with the following steps: • Step 1 - Identify the contract (s) with the customer • Step 2 - Identify performance obligations • Step 3 - Determine the transaction price, due to performance obligation • Step 4 - Allocate the transaction price to the performance obligations in the contract • Step 5 - Recognize revenue when (or as) the entity meets a performance obligation After the contract identification process as well as the determination of the transaction price and the identification of the performance obligations, the revenues are recognized when the services are effectively rendered, that is, when the contractual performance obligations to the client are satisfied. The amount of revenue is measured based on the transaction price contractually described for each performance obligation. If a contract includes variable consideration, the amount of the consideration that you will be entitled to in exchange for transferring the promised goods or services to the customer is estimated. Revenue is also recognized in income for the period when the identified performance obligation is satisfied. Inter and its subsidiaries determine the price of the transaction in accordance with the contracts, where performance obligations are assessed in the contractual terms and each transaction price is allocated proportionally to each service. The individual selling price of the service is the price at which Inter and its subsidiaries would sell a service separately to a customer on a segregated basis. The best evidence of an individual selling price is the observable price of a service when Inter and its subsidiaries sell that service separately under similar circumstances and to similar customers. If the service is not sold to a customer separately, the individual price is estimated using an appropriate method, for example, in similar transactions, the requirements for recognition of profit on the day of trading are applied and considers the price at which other participants in the transaction market provide the same service individually. Therefore, when estimating an individual selling price, all information (including market conditions) that is available is considered. In doing so, the use of observable data is maximized and estimation methods are consistently applied in similar circumstances.

• Interchange fees are commission income from card transactions carried out by Inter clients and its subsidiaries. The performance obligation is satisfied when the transaction is made. The transaction price is agreed according to the contractual terms. • Asset management that give rise to asset management fees and the contracts entered into are a single performance obligation. Asset management and performance fee components are variable considerations, and each end of period is estimated the amount


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of the fee that you will be entitled to in exchange for the transfer of the promised services to the client, generating revenue from the management of third party resources

• Income from bank fees is the result of registration services necessary to carry out loans and advances to customers, and is recognized as the services are provided, where the performance obligation is satisfied. The transaction price is agreed according to the contractual terms.

• Commission and intermediation revenues refer to the intermediation of products and services businesses. Revenues are recognized when the product or service is intermediated, where the performance obligation is satisfied. The transaction price is agreed according to the contractual terms.

• Other fee income, which includes commissions, investment fund management fees and others, is recognized as the related services are provided. Expenses that are directly related and are incremental to the generation of commissions and fee income are presented net in the income from services and commissions in the consolidated result. This includes income and associated expenses, where Inter and its subsidiaries contractually have the performance obligation (that is, as the principal) in relation to the service that gives rise to the associated income and expenses. In contrast, they do not include situations in which there is no contractual performance obligation.

n. Net Equity

(i) Capital Stock The common and preferred shares are classified in shareholders' equity. Additional costs directly attributable to the issuance of new shares or options are included in shareholders' equity as a deduction of the amount raised, net of taxes.

(ii) Earnings per share Inter and its subsidiaries present basic earnings per share data. Basic earnings per share is calculated by dividing the net earnings attributable to shareholders of Inter and its subsidiaries by the weighted average number of shares outstanding during the year, excluding the average number of shares acquired by Inter and its subsidiaries and held in treasury. Diluted earnings per share differs from basic earnings per share as there are potential dilutive instruments as described in note 24.

(iii) Repurchase and remission of shares (treasury shares) When shares recognized as shareholders’ equity are repurchased, the amount of the consideration paid, which includes any directly attributable costs is recognized as a reduction to shareholders’ equity. Repurchased shares are classified as treasury shares and are presented as a deduction to shareholders' equity. When treasury shares are subsequently sold or reissued, the amount received is recognized as an increase in shareholders' equity, and the gain or loss resulting from the transaction is presented as a capital reserve.


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(iv) Payable Dividends

The minimum mandatory dividend payment is made at percentages that may be uniform or variable in each quarter, but that shall make up at least 25% (twenty five percent) of net income for each fiscal year. Interest on equity is embedded into minimum dividends. For financial statement presentation purposes, interest on equity paid or payable is eliminated from interest expenses and stated as a reduction to shareholders’ equity, on distribution of dividends.

o. Lease At the beginning of a contract, the Group evaluates whether a contract is or contains lease. A contract is or contains lease, if the contract transfers the right to control the use of an identified asset for given period of time against compensation. To evaluate whether a contract transfers the right to control the use of an identified asset, the Group uses the definition of lease in IFRS 16. This policy is applied to the contracts signed as of January 1, 2019.

(i) As lessee At the beginning or upon amendment of a contract containing a lease component, the Group allocates the compensation in the contract to each lease component based on its individual price. However, for property 0lease, the Group decided not to separate the non-lease components and book the lease and non-lease components as a single lease component. The Group recognizes a use right asset and lease liability on the lease start date. The use right asset is measured initially at cost, which comprehends the value of the initial measurement of the lease liability, adjusted by any lease payments made by the start date, plus any initial direct costs incurred by the lessee and estimate of costs to be incurred by the lessee upon disassembly and removal of the subjacent asset, recovering the place, where it is located, or recovering the subjacent asset to the condition required in the lease terms and conditions, minus any lease incentives received. The use right asset is subsequently depreciated by the linear method from the start date to the end date of the lease term, unless the lease transfers the ownership of the subjacent asset to the lessee at the end of the lease term, or if the cost of the use right asset includes purchase options for the lessee. In this case, the use right asset will be depreciated during the subjacent asset service life, which is determined on the same base as that of the Property, plant and equipment. Furthermore, the use right asset is periodically reduced by loss on impairment, if any, and adjusted to given re-measurement of the lease liability. The lease liability is initially measured at present value of the lease payments not made on the start date, deducted by the implicit interest rate of the lease, or if this rate cannot be determined immediately, by the additional loan rate of the Group. Generally, the Group uses its additional rate on loans as deduction rate. The Group determines its additional rate on loans by obtaining interest rates from different


36 36

external funding sources and making some adjustments to reflect the contract terms and the type of asset leased. The lease payments included in the lease liability measurement comprise the following: - fixed payments, including essential fixed payments; - variable lease payments, which depend on the index or the rate, initially measured using the index or the rate on the start date; - amounts expected to be paid by the lessee, according to the residual value guarantees; and - the price to exercise the purchase option, if the lessee is reasonably sure to exercise such option, and payments of fines for lease termination, if the lease term reflects the exercise of the option of the lessee to terminate the lease. The lease liability is measured by the amortized cost, using the effective interest method. It is re-measured when there is a change in the future lease payments pursuant to a change in the index or the rate, if there is a change in the amounts expected to be paid according to the residual value guarantees, if the Group changes its evaluation to exercise a purchase, extension or termination option, or if there is an essential fixed lease payment reviewed. When the lease liability is thus re-measured, adjustment is made, corresponding to the accounting value of the use right asset or it is entered in the income if the accounting value of the use right asset has been reduced to zero. The Group presents use right assets, which did not meet the definition of property for investment in a ‘Property, plant and equipment” and lease liabilities in “loans and financing” in the balance sheet.

(ii) Lease of low-value assets The Group opted not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. The Group recognizes lease payments associated with these leases as an expense on a straight-line basis over the lease term.

p. Operating segments The IFRS 8 requires the disclosure of financial information on the entity's operating segments based on the internal disclosures that are used by the main operating decision maker to allocate resources and to assess its performance. The main operating decision maker, responsible for allocating resources, evaluating the performance of the operating segments and responsible for making strategic decisions for the Consolidated, is the Management of Inter and its subsidiaries, which is composed of the Board of Directors and the Executive Board . A detailed disclosure of results by segment is presented in note 5.


37 37

4 Standards issued but not yet effective

Series of new rules will be made effective after January 1, 2021. Inter and its subsidiaries has not adopted these standards in the preparation of these financial statements.

a. Onerous Contracts - costs to perform a contract (changes in IAS 37) The changes specify the costs an entity includes upon determination of the contract performance cost in order to evaluate whether the contract is onerous. The changes apply to annual periods beginning on or after January 1, 2022 for contracts existing on the date the changes are applied for the first time. On the initial application date, the cumulative effect of the change application is recognized as adjustment to the opening balance in accrued profit or other components of the shareholders´ equity, as appropriate. The comparisons are not presented again. The Group has determined that all contracts existing on December 31, 2020 will be completed before the changes enter into force.

b. Interest Rate Benchmark Reform - Phase 2 (changes to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) The changes deal with issues that might affect the financial statements as a result from the interest rate benchmark reform, including the effects of changes in the contract cash flows or hedge relations pursuant to the replacement of the interest rate benchmark with alternative rate benchmark. The changes provide practicality for certain requirements ofIFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 related to:

- changes in the base for determination of the contract cash flows of financial assets, financial liabilities and lease liabilities; and

- hedge accounting.

(i) Change in the base for determination of cash flows The changes will require an entity to account for the change in the base for determination of the contract cash flows of a financial asset or financial liability, which is required by the interest rate benchmark reform upon update of the effective interest rate of the financial asset or financial liability.

(ii) Hedge accounting The amendments provide exceptions to the hedge accounting requirements in the following areas: - Allow change in the designation of a hedge relationship to reflect the changes required by the reform. - When an item object of hedge in a cash flow hedge is changed to reflect the changes required by the reform, the amount accrued in the cash flow hedge reserve will be considered based on the alternative reference rate at which the hedged future cash flows are determined.


38 38

- When a group of items is designated as a hedged item and an item from the group is changed to reflect the changes required by the reform, the hedged items are allocated to subgroups based on the rate benchmarks subject to hedge. - If an entity reasonably expects that an alternative rate benchmark will be separately identifiable within a period of 24 months, it is not forbidden to designate the rate as a non-contractually specified risk component if it is not separately identifiable on the date of designation.

(iii) Disclosure The changes will require the Group to disclose additional information on the entity's exposure to risks pursuant to the interest rate benchmark reform and related risk management activities.

(iv) Transition The Inter and its subsidiaries plans to apply the changes as of 1 January 2021. The application will not impact the amounts reported for 2020 or previous years.

a. Other Standards It is not expected the following new and changed standards to impact the Group's consolidated financial statements significantly: - Rental concessions related to COVID-19 (change to IFRS 16) 60 - Property and equipment: Revenues before the intended use (changes to IAS 16). - Reference to the Conceptual Framework (Changes to IFRS 3). - Classification of the Liabilities into Current or Non-Current (Changes toIAS 1). - IFRS 17 Insurance Agreements

5 Operating segments The information by segment was prepared based on the criteria used by the chief operating decision-maker to evaluate performance, in making decisions regarding the allocation of funds for investment and other purposes, considering the regulatory environment and the similarities between products and services. The operations of Inter and its subsidiaries are basically divided in six segments: bank, distribution of securities, and insurance brokerage, marketplace, asset management and other segments. The accounting policies of reportable operating segments differ from those described in the summary of the main accounting policies in IFRS mainly due to:

a. Impairment losses on loans and advances to customers Based on the accounting practices adopted in Brazil, applicable to financial institutions authorized to operate by Banco Central do Brasil, impairment losses on loans and advances to customers are obtained following the criteria for classification of loans and advances to customers, as set forth in CMN Resolution No. 2.682/99.


39 39

IFRS accounting practices consider a provision in accordance with IFRS 9, therefore, Inter and its subsidiaries have developed a policy that includes the credit risk provisioning model based on expected losses, in order to provide more transparently evidence of losses on its loans and advances to customers. The referred model performs the estimation by nature of loans and advances, segregated as follows: a) personal credit and credit cards; b) real estate credit and c) other operations with legal entities, this model being considered by management to be appropriate to the profile of the loan portfolio of Inter and its subsidiaries. This model makes the estimate in accordance with the nature of loans and advances, as follows: (a) personal credit and credit cards; (b) real estate credit; and (c) other operations with legal entities, this model being understood by administration as appropriate for the profile of the credit portfolio of Inter and its subsidiaries. Based on the parameters applied to analyze the objective evidence of loss, new calculations were made for loans and advances to customers of Inter and its subsidiaries, and new impairment loss amounts were calculated, as set forth in the policy presented in note 3.

b. Non-current assets available-for-sale Based on the accounting practices adopted in Brazil, applicable to financial institutions authorized to operate by the Central Bank of Brazil, the assets not in use are mainly the assets received by Inter and its subsidiaries in the settlement of loans and advances to customers. Non-use assets are recorded in other assets at the time the guarantee is actually enforced or when physical possession is obtained, regardless of an enforcement process. Non-use assets are initially recorded at the lower of (i) the fair value. of the asset, less the estimated costs for its sale; or (ii) the book value of the loan granted subject to recovery. IFRS 5 requires the measurement of the estimated fair value as a non-recurring measurement, as it only occurs when the fair value of a non-current asset available for sale, less costs to sell it, is less than its net book value. Using these accounting practices, Inter and its subsidiaries calculate the recoverable value of these assets.

c. Deferral of financial charges Based on the accounting practices adopted in Brazil, applicable to financial institutions authorized to operate by Banco Central do Brasil, the corporate accounting standards applied to financial institutions authorized to operate by the Central Bank of Brazil provide that certain charges related to certain financial assets are recognized in the statement of profit or loss at the time of origination of the transaction, other charges such as commissions paid to correspondents are recorded under “other assets - prepaid expenses” and recognized in the statement of profit or loss on a straight-line basis over the term of the respective operations under “expenses from services and commissions" a part is recognized in the act of the operation in the result and remainder and deferral for a period determined in the current legislation.


40 40

IFRS recognize revenues in accordance with the effective rate method, therefore, recognition is carried out on a straight-line basis according to the term of the respective operations under the heading "service and commission expenses". Management income by segment The measurement of management income by segment takes into account all revenues and expenses calculated by the companies that make up each segment, pursuant to the distribution stated below. There are no common revenues or expenses allocated between the segments for any distribution criteria. Inter-segment transactions are carried out under terms and rates compatible with those practiced with third parties, where applicable. Such transactions do not involve abnormal collection risks. Inter and its subsidiaries do not have customers accounting for more than 10% of their total net revenue.

a. Banking segment The banking segment is responsible for the substantive portion of the income of Inter and its subsidiaries, and comprises a wide range of products and services, such as check account and cards, deposits, loans and advances to customers and service provision, which are available to the clients mainly by means of Inter´s application.

b. Security distribution segment This segment is essentially responsible for operations inherent to acquisition, sale and custody of securities, structuring and distribution of securities in the capital market and administration of investment funds (institution, organization, custody). Revenues are derived primarily from management commissions and fees charged to investors for the rendering of such services.

c. Insurance brokerage segment This segment offers products and services (sale of products and services by partner insurance companies), related to warranties, life, property and automobile insurance, consortium, social security, among others. The income from insurance brokerage commissions are recognized when the performance obligation is fulfilled. Revenues include considerations received or receivable for the provision of services.

d. Marketplace segment In this segment, provision of services for sale of goods and/or services by means of a digital platform is offered to the partner companies. Revenues from the segment substantially comprehends the commissions received for sales and/or provision of these services.


41 41

e. Assets management segment

Essentially composed of the operations inherent to the management of fund portfolios and other assets (purchase, sale, risk management). Revenues are derived primarily from management commissions and fees charged to investors for the rendering of these services.

f. Other segments It comprises the investment fund and other segments, which have been aggregated for not being individually representative.


42

42

Management income statement by segment

Banking Securities Insurance Brokerage Marketplace Asset

managementOther

segments CombinedAdjustment

and eliminations

Adjustment and

eliminationsConsolidated

Revenues from interest 912,455 1 546 - - 31,506 944,508 (1,700) - 942,808 Interest expenses (187,914) - - - (53) (28,949) (216,916) 819 (2,064) (218,161)

Net interest income 724,541 1 546 - (53) 2,557 727,592 (881) (2,064) 724,647

Revenues from services and commissions 154,985 21,894 34,072 33,574 12,972 (352) 257,145 - - 257,145 Expenses from services and commissions (6,147) - - - - - (6,147) - - (6,147) Net result from services and commissions 148,838 21,894 34,072 33,574 12,972 (352) 250,998 - - 250,998

Income from securities 43,585 1,044 - 82 94 1,080 45,885 - - 45,885 Income from derivative financial instruments (54,418) - - - - - (54,418) - - (54,418) Other revenues 174,117 - - - - - 174,117 (35,202) 80,182 219,098

Revenues 1,036,663 22,939 34,618 33,656 13,013 3,285 1,144,174 (36,083) 78,118 1,186,210

Result from impairment losses on financial assets (174,551) - - - - - (174,551) - (39,137) (213,688) Personnel expenses (213,633) (3,727) (5,517) (4,168) (2,051) - (229,096) - - (229,096) Depreciation and amortization (41,860) (257) (131) - (93) - (42,341) - (1,318) (43,659) Other expenses (680,149) (22,712) 5,072 (5,975) (5,703) (1,724) (711,191) - 4,401 (706,790)

Income before taxes (73,530) (3,757) 34,042 23,513 5,166 1,561 (13,005) (36,083) 42,064 (7,023)

Current income tax and social contribution - - (4,808) (6,958) (1,400) - (13,166) - - (13,166) Deferred income tax and social contribution 66,329 1,503 - - - - 67,832 - (16,957) 50,875 Net profit from the Period (7,201) (2,254) 29,234 16,555 3,766 1,561 41,661 (36,083) 25,107 30,686

Total assets 19,743,678 75,899 81,289 69,382 9,982 425,359 20,405,589 (632,978) 111,799 19,884,410Total liabilities 16,440,990 46,596 45,771 47,957 2,419 4,565 16,588,298 (166,178) 114,352 16,536,472Total shareholders´ equity 3,302,688 29,303 35,517 21,426 7,563 420,794 3,817,291 (466,800) (2,553) 3,347,938

12/31/2020


43

43

Banking Securities Insurance Brokerage Marketplace Asset

managementOther

segments CombinedAdjustment

and eliminations

Consolidated

Revenues from interest 775,501 2 205 15 278 171 776,172 (656) 775,516 Interest expenses (256,475) - - - - (4,889) (261,364) (3,469) (264,833) Net interest income 519,026 2 205 15 278 (4,718) 514,808 (4,125) 510,683

Revenues from services and commissions 94,116 17,471 18,870 - - - 130,457 - 130,457 Expenses from services and commissions (30,266) - - - - - (30,266) 2,740 (27,526) Net result from services and commissions 63,850 17,471 18,870 - - - 100,191 2,740 102,931

Revenues from securities 59,972 2,039 - - - 10,690 72,701 (2,067) 70,634 Income from derivative financial instruments 4,235 - - - - - 4,235 - 4,235 Other revenues 113,317 - - - - 389 113,706 (15,863) 97,843

Revenues 760,400 19,512 19,075 15 278 6,361 805,641 (19,315) 786,326

Result from impairment losses on financial assets (107,065) - - - - - (107,065) (30,306) (137,371) Personnel expenses (162,192) (2,153) (4,441) - (412) - (169,198) - (169,198) Depreciation and amortization (13,838) (144) (67) - (1) - (14,050) (3,410) (17,460) Other expenses (402,950) (6,126) (733) (211) (75) (956) (411,051) (4,362) (415,413) Income before taxes 74,355 11,089 13,834 (196) (210) 5,405 104,277 (57,393) 46,884

- (3,552) (2,307) - - - (5,859) - (5,859) Current income tax and social contribution 4,525 (341) - 66 71 - 4,321 12,744 17,065 Deferred income tax and social contribution 78,880 7,196 11,527 (130) (139) 5,405 102,739 (44,649) 58,090 Net profit from the PeriodTotal Assets 10062373 43317 11094 4884 4980 56198 10182846 -129592 10053254Total Liabilities 7,861,356 11,725 4,813 14 118 792 7,878,818 14,806 7,893,624 Total shareholders’ equity 2,201,017 31,592 6,281 4,870 4,862 55,406 2,304,028 (144,398) 2,159,630

12/31/2019


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Conciliation of the management income by segment with the consolidated results according to IFRS

6 Financial risk management Inter’ risk management addresses the credit, market, liquidity and operational risks. The management activities are carried out by specific and specialized structures, according to policies, strategies and processes described in each of these risks. This management structure enables identifying and measuring possible impacts and solutions to assure the continuity and the quality of Inter and its subsidiaries' business. In order to assure anticipation of any changes caused by market scenarios and/or situations that might result in the realization of the identified risks, Inter and its subsidiaries adopt proactive and conservative attitude in risk management, considering mainly the strategic goals of Inter and its subsidiaries, anticipating possible changes, in addition to mitigating actions focused on their exposure, mapping their deficiencies by means of a process survey, respecting the limits set in their policies and in the relevant legislation. The model adopted by Inter involves a structure of areas and committees assuring:

• Segregation of function;

• Specific structure for risk management;

Income for the period 12/31/2020 12/31/2019Total management profit reported by segment 41,661 102,739 Elimination of inter-segment profit (36,083) (21,172) Reconciliation for IFRS 25,108 (23,477) Total consolidated income 30,686 58,090

AssetsTotal assets reported by segment 20,405,589 10,182,846 Elimination of inter-segment assets (632,978) (163,270) Reconciliation for IFRS 111,799 33,678 Total consolidated assets 19,884,410 10,053,254

LiabilitiesTotal liabilities reported by segment 16,588,298 7,878,818 Elimination of inter-segment liabilities (166,178) (59,193) Reconciliation for IFRS 114,352 73,999 Total consolidated liabilities 16,536,472 7,893,624

Shareholders’ equityTotal shareholders’ equity reported by segment 3,817,291 2,304,028 Elimination of inter-segment shareholders´ equity (466,800) (104,077) Reconciliation for IFRS (2,553) (40,321) Total consolidated shareholders´ equity 3,347,938 2,159,630


45 45

• Defined management process;

• Decisions at various hierarchical levels;

• Clear norms and competence structure; and

• Reference to best management practices.

Risk management practices adopted by Inter and its subsidiaries are in line with the recommendations of Pillar III of the Basel Committee for both qualitative and quantitative aspects. Governance and hierarchical structures, monitoring processes and other aspects of management support in optimizing resources and selecting the best business opportunities to maximize shareholder value, based on a methodology compatible with its size, offering support to measure, align, coordinate and conclude on the effectiveness of its management. Inter and its subsidiaries also believe that the risk management of its operations and activities is paramount to business success, providing company appreciation and ensuring best results for own and third-party funds. Therefore, the institutional guideline is that risks shall be managed so that they fall within the limits and margins set by the Administration.

a. Credit risk The definition of credit risk includes, among others:

• Counterparty risk: possibility of a failure, by a given counterparty, to honor obligations regarding the settlement of transactions involving the trading of financial assets, including those related to the settlement of derivative financial instruments.

• Principal risk: possibility of disbursements to honor sureties, guarantees, co-

obligations, credit commitments, or other such operations of a similar nature.

• Risk of intermediary: possibility of losses associated with a failure to comply with agreed financial obligations by an intermediary or a party to a covenant for loans and advances to customers.

• Concentration risk: possibility of credit losses arising from significant exposure

to a borrower or counterparty, a risk factor, a group of borrowers or counterparties related through common characteristics.

Credit risk management risk is performed based on best market practices and complies

with the banking oversight and regulatory rules. It intends to identify, evaluate, control,


46 46

mitigate and monitor risk exposure, to contribute to safeguarding Inter and its subsidiaries’

solidity and solvency and ensure compliance with shareholders´ interests.

In order to ensure that the loan process is aligned with the strategic objectives, Inter and

its subsidiaries establish in their Credit Risk Policy:

• The evaluation of the ability to pay and likelihood of loss for each customer;

• The establishment of limits for transactions with individuals and legal entities;

• The definition of how credit shall be released to the customer; and

• The monitoring and tracking of portfolios subject to credit risk.

Inter and its subsidiaries have a structured process in order to maintain the diversification

of its portfolio regarding the concentration of the largest debtors per geographical region,

segment and sector of activity.

Mitigation of Exposure In order to maintain exposure within the risk levels established by senior management, Inter

seeks to add credit risk mitigating instruments. Accordingly, the following activities are

adopted:

• Exposure to credit risk is mitigated by structuring guarantees, adjusting the risk level to be incurred to the borrower’s characteristics and operation at the time loans are granted and derivative transactions intended for hedging purposes;

• In addition, the monitoring of indicators is directly linked to the proposed

mitigation alternatives whenever exposure to the behavior of the credit risk for a given unit, region, product or segment so requires;

• The implementation of credit risk mitigation measures occurs by means of the

repositioning of products, involving guarantees, operational process or operation approval levels;

In addition to the activities described above, to pledge in guarantee, goods are subject to

technical assessment or valuation, the validity of which is up to twelve months. In case of

personal guarantee, an analysis of the financial and economic circumstances of the

guarantor or warrantor is made, in addition to their direct or indirect responsibility,

considering debt with third parties, particularly tax, social security and labor debt.

Credit standards guide operational units in a clear and comprehensive manner covering,

among other aspects, the classification, requirement, choice, assessment, formalization,

control and reinforcement of guarantees, ensuring the adequacy and sufficiency of

mitigating instruments throughout the cycle of the operation.


47 47

There were no changes in the risk exposures which Inter and its subsidiaries are subject

to, compared to the previous years. Additionally, Inter and its subsidiaries have been

improving internal risk management and mitigation aspects.

Measurement The measurement of credit risk at Inter is carried out considering the following aspects:

• At the time that credit is granted, an assessment of a customer´s financial standing is undertaken through the application of qualitative and quantitative methods, ensuring the continuous collection of information including those in the market that support the adequacy of the risk level during the course of the operation;

• The assessment is carried out from a counterparty´s perspective, considering

information on guarantors where applicable. The exposure to the credit risk is also measured in extreme scenarios, using stress techniques and scenario analysis. The models applied for distribution of rating to the clients and the operations are reviewed periodically in order to assure the adherence to the macroeconomic scenario and the recognized losses;

• The distribution of portfolios classified according to late payment is monitored in

order to identify trends or changes in behavior of non-performing loans in the portfolio before losses are recorded, allowing the adoption of timely management measures when required;

• The loss realized reflects the risk level of loans and advances to customers

operations in stock and allows monitoring and control of the portfolio’s exposure level under the classification, supporting the adoption of risk mitigation measures;

• The expected loss consists in forecast of the risk levels of the credit portfolio. Its

calculation is based on the historical behavior of late payment and the distribution of the portfolio by product and risk level. This is a key input to the process of pricing loans and advances to customers;

• In addition to the monitoring and measurement of indicators under normal conditions, simulations of changes in business environment and economic scenario are also undertaken in order to predict the impact of such changes in levels of exposure to risks, provisions and balance of such portfolios, in addition to support in the process of reviewing the exposure limits and the credit risk policy;


48 48

(i) Maximum exposure to credit risk:

12/31/2020Low Risk High Risk Total

Loans and advances to customersPayroll Card 64,570 3,162 67,732 Multiple Card 1,793,872 110,770 1,904,642 Overdraft protection agreement 20,193 - 20,193 Check Account 10,660 3,572 14,232 Payroll loan 1,510,962 40,437 1,551,399 Business Credit 1,580,682 2,186 1,582,868 Real Estate Credit 3,372,023 99,331 3,471,354 Rural Credit 177,637 - 177,637 8,530,599 259,458 8,790,057Loans and advances to financial institutions Interbank deposit investment 2,212,098 - 2,212,098

2,212,098 - 2,212,098 Derivative financial instruments Swap (56,757) - (56,757) (56,757) - (56,757)

12/31/2019Low Risk High Risk Total

Loans and advances to customersPayroll Card 77,910 2,499 80,409 Multiple Card 710,443 73,101 783,544 Business Credit 459,808 12,496 472,304 Real Estate Credit 2,415,917 103,236 2,519,153 Personal Credit 893,279 28,698 921,977

4,557,357 220,030 4,777,387Loans and advances to financial institutions Interbank deposit investment 648,377 - 648,377

648,377 - 648,377 Derivative financial instruments Swap (20,941) - (20,941) (20,941) - (20,941)

31/12/20 31/12/19Exposure to credit risk Balances of "Cash and cash equivalents" 2,154,687 3,114,789 Derivative financial instruments 27,513 - Loans and advances to financial institutions 2,212,098 648,377 Loans and advances to customers, net of provision for loss 8,790,057 4,777,387

Other financial assets 5,812,622 1,155,094 Sub-total 18,996,977 9,695,647

Provided guarantees and bonds 127 5,318 Total exposure to credit risk 18,997,104 9,700,965


49 49

Transactions are limited to the amount of BRL 15 million for legal entities and 1% of the

Regulatory capital for individuals. Loans and advances to customers exceeding such

amounts must be approved by the Board of Directors. LTV is assessed for products with

real estate guarantee, and, overall, the amount financed is lower than the amount of the

good received as collateral. Other products are directly linked to the payroll discount.

(ii) Description of guarantees The financial instruments subject to credit risk are subject to careful assessment of credit

prior to being contracted and disbursement and is ongoing throughout the term of

operations. Credit analyses are based on an understanding of customer operational

characteristics, their borrowing capacity, considering cash flow, payment history,

creditworthiness and consider alternatively, the guarantees that may support such

operations.

Loans and advances to customers, as shown in Note 12, are mainly represented by the

following operations:

• Working capital operations, personal loans and credit card are guaranteed by receivables, promissory notes, sureties provided by their owners and occasionally by collateral;

• Real estate financing is backed by collateral;

The portfolio of financial assets available-for-sale consists mostly of federal government

bonds, defined as minimal risk and shares in investment funds, generally guaranteed by

promissory notes and sureties.

Assets received as collateral for loans and advances to customers, when repossessed,

are sold at public auctions, free of any charges or encumbrances, with disclosure in major

newspapers, thus attracting the largest number of interested parties for purchase, in order

to achieve highest possible sales price, considering the conservation status of the asset

and market conditions. An asset is sold without mechanical or operational guarantee.

Guarantees on real estate loans and financing

The tables below structure the credit exposure of real estate loans and advances to retail

customers by loan-to-value (LTV) classification. LTV is calculated as the proportion of the

gross value of the loan or the value of loans committed to the value of collateral. The gross

amounts exclude any provision for impairment. The assessment for guarantee of real estate

loans is based on the adjusted value of collateral, based on changes in real estate price

indexes:


50 50

Percentage of coverage for assets received as collateral Assets % coverage Loans and advances to customers Business Credit 100% Loans and advances to financial institutions Interbank onlendings 100% Derivative financial instruments Swap 100%

(i) Concentration of the portfolio of loans and advances to customers:

Analysis of the breakdown of loans and advances to customers by product:

The concentration of the portfolio of loans and advances to customers of Inter and its

subsidiaries is as follows:

The breakdown of loans and advances to customers by maturity is as follows:

12/31/2020 12/31/2019

Lower than 30% 467,960 337,786 31 - 50% 1,291,130 1,048,916 51 - 70% 1,314,740 828,618 71 - 90 % 370,358 296,870 Higher than 90% 27,168 6,963

3,471,356 2,519,153

Balance % Balance %

Private Sector Payroll Card 67,732 0.77% 80,409 1.68%Multiple Card 1,904,642 21.67% 783,544 16.40%Overdraft Protection Agreement 20,193 0.23% - 0.00%Check Account 14,232 0.16% - 0.00%Personal Credit 1,551,399 17.65% 921,977 19.30%Business Credit 1,582,868 18.01% 472,304 9.89%Real Estate Credit 3,471,354 39.49% 2,519,153 52.73%Rural Credit 177,637 2.02% - 0.00%Total Portfolio 8,790,057 100% 4,777,387 100%

12/31/201912/31/2020

Balance% on Loans and

advances to customers

Balance% on Loans and

advances to customers

Biggest debtor 144,821 1.65% 58,565 1.23%Total of the 20 biggest debtors 2,145,985 24.41% 333,592 6.98%Total of the 50 biggest debtors 1,695,446 19.29% 174,709 3.66%Total of the 100 biggest debtors 2,157,462 24.54% 193,215 4.04%Other debtors 2,646,343 30.11% 4,017,306 84.09%Total Portfolio 8,790,057 100% 4,777,387 100%

12/31/201912/31/2020


51 51

b. Liquidity risk Liquidity risk is the possibility that Inter and its subsidiaries are not able to efficiently meet

their expected or unexpected obligations, current and future, including those resulting from

binding guarantees, without affecting its daily operations and without incurring significant

losses and the possibility of Inter and its subsidiaries may not be able to negotiate a

position at market price due to their high size in relation to the volume normally transacted

or due to any discontinuity in the market.

The liquidity risk management structure is segregated and runs proactively to prevent any

situations to which Inter and its subsidiaries may be submitted in relation to their liquidity.

The process of monitoring liquidity risk encompasses the entire flow of receipts and

payments for Inter and its subsidiaries so that risk mitigating actions may be implemented.

This monitoring is carried out mainly by the Assets and Liabilities Committee and the Risk

and Capital Management Committee. Liquidity risk information available at the following

systems is discussed in such committees:

• Top 10 investors;

• Mismatch between assets and liabilities;

• Net Funding;

To become due Overdue: Total

Installments to become due To become due within 90 days 2,593,572 - 2,593,572 To become due between 91 and 360 days 1,357,068 - 1,357,068 To become due in more than 360 days 4,637,604 - 4,637,604 Total to become due 8,588,244 - 8,588,244 Overdue installments - overdue as of 15 days - 201,813 201,813 Total overdue - 201,813 201,813 Total Portfolio 8,588,244 201,813 8,790,057

12/31/2020

To become due Overdue: Total

Installments to become due To become due within 90 days 1,109,647 - 1,109,647 To become due between 91 and 360 days 561,054 - 561,054 To become due in more than 360 days 2,895,765 - 2,895,765 Total to become due 4,566,466 - 4,566,466 Overdue installments - overdue as of 15 days - 210,921 210,921 Total overdue - 210,921 210,921 Total Portfolio 4,566,466 210,921 4,777,387

12/31/2019


52 52

• Liquidity limits;

• Maturity forecast;

• Stress tests based on internally defined scenarios;

• Liquidity contingency plans;

• Monitoring of asset and liability concentrations;

• Monitoring of Liquidity Ratio and funding renewal rates;

• Reports with information on positions held by Inter and its subsidiaries; and Such information consolidates data and seeks to adjust requirements of Inter and its

subsidiaries regarding the effective management of liquidity risk exposure.




(i) Contingency plan Inter and its subsidiaries have a contingency plan for liquidity risk, structured for various

scenarios and evolving on a recurrent basis. Such plan includes, among other measures,

the monitoring and continuous assessment of cash flows and liquidity of assets and

analysis of stress scenarios as well as the definition of the minimum levels of liquidity for

these scenarios.

Liquidity risk management is a key activity for Inter and its subsidiaries, due to their role in

the financial and capital markets, and the established Liquidity Contingency Plan includes

the responsibilities and procedures to deal with the following extreme situations:

• Possibility that Inter and its subsidiaries are not able to effectively honor their expected and unexpected obligations, current and future, including those stemming from binding guarantees;

• Possibility that Inter and its subsidiaries are unable to negotiate a position at

market prices for, due to the volume transacted or due to any discontinuity in the market.

The responsibilities of the Liquidity Risk Management Framework are distributed between

different committees and hierarchical levels: Board of Directors, Asset and Liability

Committee (ALC), Officer in charge of Risk Management, Superintendent of Compliance,

Risk Management and Internal Controls and Risk Coordination. These consider the internal

and external factors affecting the liquidity of Inter and its subsidiaries, and a detailed daily


53 53

monitoring of incoming and outgoing movements of loans and advances to customers, time

deposits, LCA, LCI, LIG and demand deposits is carried out. Time deposits are analyzed

according to the concentration, maturities, renewals, repurchases and new funding.

The liquidity risk database comprises Assets, Liabilities, Securities and Derivatives

products of Inter and its subsidiaries, which are generated from the source systems for

each product. The liquidity coverage ratio (LCR) generates Short-, Medium- and Long-term

liquidity ratio analysis, particularly highlighting funds according to their liquidity to

withstand sharp financial stress scenarios, calculated based on the ratio between liquid

assets and net outflows during each period. The Liquidity Ratio (LCR) is prepared based on

information that shall lead to calculation of amounts on the condition of cash flows in

relation to a standardized stress scenario for a period of 30 days, and the findings are

interpreted as follows:

Interpretation of LCR with regard to minimum Situation

LCR below 3.00 times

Critical

LCR above 2.99 and below 5.00 times Satisfactory

LCR above 4.99 and below 8.00 times Comfortable

LCR above 7.99 Excess liquidity

(ii) Analysis of financial instruments by remaining contractual term

The table below illustrates in a management and consolidated format the financial data of

all the legal entities that comprise Inter at the projected future realizable value related to

financial assets and liabilities, as used by the Administration.

Explanatory note Up to 3 months 3 months to 1 year Above 1 year Total

Financial assets Cash and cash equivalents 8 2,154,687 - - 2,154,687 Loans and advances to financial institutions 10 1,709,752 502,346 - 2,212,098 Securities 12 196,927 161,356 5,455,098 5,813,381 Derivative Financial Instruments 9 6,510 21,003 - 27,513 Loans and advances to customers 11 2,795,385 1,357,068 4,637,604 8,790,057 Other assets 16 409,465 27,373 81,844 518,681 Total financial assets 7,272,726 2,069,146 10,174,546 19,516,418 Financial liabilities Liabilities with financial institutions 17 1,603,807 50,232 - 1,654,039 Liabilities with customers 18 7,550,562 607,077 4,278,993 12,436,632 Securities issued 19 183,798 505,572 1,142,940 1,832,310 Derivative financial instruments liabilities 9 - 20,767 35,990 56,757 Borrowing and onlending 20 104 1,145 26,156 27,405 Other liabilities 23 475,420 - - 475,420 Total financial liabilities 9,813,691 1,184,793 5,484,079 16,482,563

12/31/2020


54 54

The information stated above evidences the ability of Inter and its subsidiaries to settle

their short-, medium- and long-term liabilities, given the higher amounts of financial assets.

The Administration monitors liabilities based on their history, and it is not expected that

such liabilities may be subject to substantial early maturity.

c. Market risk

Market risk is the possibility of losses resulting from fluctuations in market value positions

held by Inter and its subsidiaries, including the risks posed by transactions subject to

foreign exchange, interest rates, stock prices and the price of commodities.

The Market Risk Policy is analyzed and monitored by the Asset and Liability Committee and

the Risk and Capital Management Committee. These committees analyze the reports on

Market Risk available in the system. These are: Namely:

• VaR;

• VaR by risk factor;

• Stress Test; and

• Backtest. These reports allow the analytical assessment of the information, and are constantly

improving, seeking to provide an overview that is more consistent with the current needs

of Inter and its subsidiaries and that adds to Market Risk decision and stances. Such reports

are also evaluated and monitored by the Compliance, Risk Management and Internal

Controls Departments.




Explanatory note Up to 3 months 3 months to 1 year Above 1 year Total

Financial assets Cash and cash equivalents 8 3,114,789 - - 3,114,789 Compulsory deposits at Banco Central do Brasil 392,280 - - 392,280 Securities 12 450,705 64,144 640,245 1,155,094 Loans and advances to financial institutions 10 483,728 161,485 3,164 648,377 Loans and advances to customers 11 1,320,568 561,054 2,895,765 4,777,387 Other assets 16 190,950 - 1,104 192,054 Total financial assets 5,953,020 786,683 3,540,278 10,279,981 Financial liabilities Liabilities with financial institutions and clients 17 e 18 (3,104,012) (314,239) (2,270,189) (5,688,440) Securities issued 19 (576,393) (655,467) (666,211) (1,898,071) Derivative financial instruments 9 (20,941) - - (20,941) Borrowing and onlending 20 (109) (1,198) (28,493) (29,800) Other liabilities 23 (216,115) - - (216,115) Total financial liabilities (3,917,570) (970,904) (2,964,893) (7,853,367)

12/31/2019


55 55

Measurement The methodology used to calculate VaR is the parametric model with 99% confidence level

(CL) and time horizon (TH) of 01 (one) day scaled to 21 days. This VaR is calculated using

the Basel & Market system, from the supplier Élin Duxus.

(ii) VaR of the portfolios of Inter and its subsidiaries: The supervision and monitoring of limits are undertaken based on the evaluation results for

the amounts subject to market risks, with the application of the Value at Risk (VaR)

methodology which is determined by the Compliance, Risk Management and Internal

Controls Department as well as monitored and analyzed by the Risk and Capital

Management Committee.

Hedge operations of Inter and its subsidiaries are segregated by risk factors identified after

the implementation of the Value at Risk methodology. In addition, other metrics are used

to define the need to hedge the portfolios. These are:

• GAP analysis (mismatch between assets and liabilities of the expected cash flow);

• Stress Scenarios; and

• Sensitivity measures (PV01).

(iii) Sensitivity analysis of interest rate risk

Inter and its subsidiaries adopt the methodology of monitoring the risk of its portfolio,

through interest rate indexes rather than of using the portfolio-type methodology, using

interest rate shock that may impact the consolidated portfolio of Inter and its subsidiaries.

This procedure enables making inferences about the risk of the positions when compared

to the current levels of market prices and their historical behavior.

In order to estimate the effect of variations of a given risk factor on regulatory capital (RC),

Inter and its subsidiaries run sensitivity tests to assess the number of base-points (BPS)

required to trigger a 5, 10% and 20% decrease in Regulatory Capital. From the sensitivity

test result, they estimate the impact of increasing or decreasing in the magnitude of 1, 25

or 50 basis- points in the risk factors in which it is sensitive (yield curve and IGP-M and

IPCA coupon).


56 56

(*) The amounts shown in the table above refer to the RC of Inter and its subsidiaries affected by the proposed shocks. These shocks affect the MtM (Mark-to-Market) of the positions of assets and liabilities of Inter and its subsidiaries, while MtM variations affect RC. The shocks are defined by the regulatory authority and the Senior Management of Inter and its subsidiaries. The table below includes the sensitivity analysis of the assets classified in the portfolios

indexed to the highest exposure rates of Inter and its subsidiaries, namely IGP-M, IPCA and

PRE-rate.

The maximum expected gains and losses at the 1st and 99th percentile, calculated from a

series of 252 returns, calculated from the VaR calculation of the portfolio, using a

parametric methodology with 99% confidence level and a one-day time horizon scaled to

twenty-one days.

Stress Test on 12/31/2020

IGP-M IPCAPREBRL

thousand

TR BRL

thousand

Other Factors Total portfolio

Risk Factor

PR with normal MtM (*) 3,077,952 - Shocks by base points-50 bps Scenario 3-25 bps Scenario 2 6,404,782 6,464,699 6,408,979 6,402,323 6,400,550 6,479,133 -1 bps Scenario 1 6,402,647 6,432,142 6,404,720 6,401,422 6,400,550 6,439,281 +1 bps Scenario 1 6,400,633 6,401,796 6,400,715 6,400,584 6,400,550 6,402,078 +25 bps Scenario 2 6,400,467 6,399,306 6,400,385 6,400,516 6,400,550 6,399,023 +50 bps Scenario 3 6,398,490 6,369,885 6,396,468 6,399,705 6,400,550 6,362,898 Amounts in thousands of Brazilian reais 6,396,466 6,340,112 6,392,472 6,398,885 6,400,550 6,326,286

Stress Test on 12/31/2019

IGP-M IPCAPREBRL

thousand

TR BRL

thousand

Other Factors Total portfolio

Risk Factor

PR with normal MtM (*) 2,123,127Shocks by base points-50 bps Scenario 3 3,205,702 3,235,145 3,212,587 - - 3,260,643 -25 bps Scenario 2 3,201,001 3,215,525 3,204,434 - - 3,228,170 -1 bps Scenario 1 3,196,578 3,197,151 3,196,714 - - 3,197,653 +1 bps Scenario 1 3,196,212 3,195,640 3,196,076 - - 3,195,138 +25 bps Scenario 2 3,191,866 3,177,740 3,188,468 - - 3,165,283 +50 bps Scenario 3 3,187,409 3,159,544 3,180,650 - - 3,134,813 Amounts in thousands of Brazilian reais


57 57

The tables below show the value of exposures in question considering Inter and its

subsidiaries, described in Note 1, and sensitivity tests for three possible stress scenarios:

Number of basis-points required to reduce Regulatory Capital by 5%, 10% and 20%.

d. Operational risk

Risk Factor 1 - 1 year 99 - 1 year 1 - 5 years 99 - 5 years IGP-M index number (33,128) - (59,717) (676) IGP-M Coupon 21,944 7,347 18,667 (22,085) IPCA index number (66,953) (1,876) (303,365) (10,745) IPCA Coupon 31,238 (71,095) 13,990 (446,219) PRE 9,821 (3,232) 5,560 (96,520) Stocks (Ibovespa) 9,333 (19) 14,320 217 TR Coupon 2,186 994 1,777 (14,229) USD (4,218) 2,308 (7,746) 1,830

Risk Factor 1 - 1 year 99 - 1 year 1 - 5 years 99 - 5 yearsEuro (701) 300 (3,049) 587 IGP-M index number (19,140) (683) (75,527) (4,476) IGP-M Coupon 9,088 (14,730) 7,126 (48,766) IPCA index number (34,510) (1,010) (223,303) (5,267) IPCA Coupon 24,634 (106,380) 11,724 (261,092) PRE 14,015 (64,698) 10,495 (244,156) Stocks (Ibovespa) (759) 0 (2,211) (155) TR Coupon (12,646) 31,886 (9,128) 92,153 USD (1,061) 581 (4,112) 468 Australian Dollar (4,234) (3,435) (5,632) (3,103) Canadian Dollar (460) 135 (1,334) 113

Percentile 12/31/2019

Percentile 12/31/2020

Variation % of the Reference Equity - 2020Risk Factor -1.0% -2.5% 5% -10% -20% IGP-M Coupon 4.3% 14.3% - - - IPCA Coupon 0.3% 1.9% 1.3% 3.0% 7.4% PRE 2.0% 6.0% - - - TR Coupon 31.3% - - - -

Variation % of the Reference Equity - 2019Risk Factor -1.0% -2.5% 5% 10% 20% IGP-M Coupon 0.00% 0.00% 12.58% 56.60% 0.00% IPCA Coupon 0.00% 0.00% 1.59% 3.39% 8.47% PRE 0.00% 0.00% 3.65% 8.22% 21.58% TR Coupon 0.00% 0.00% -2.47% -3.93% -5.65%


58 58

Operational Risk Management aims to identify, assess and monitor risks.

Policy

Operational risk is defined as the possibility of losses resulting from failure, deficiency or

inadequacy of internal processes, people and systems, or from external events.

Inter and its subsidiaries are aligned with the definitions established by CMN Resolution

4.557/2017, and operate proactively in the identification and mitigation of operational risks

involved in its activities.

We believe that the adoption of best practices in operational risk management, does not

represent a differential, but a key and essential condition for the sustainability of growth

for any business, especially those operating in the financial market.

Accordingly, Inter and its subsidiaries remain committed to the formalization of processes,

definition of strategies and risk management policies in order to ensure the sound financial

health of customers and maintain its solidity.

Among the operational risk events, there are:

• Internal frauds;

• External frauds;

• Labor demands and deficient safety at the working place;

• Inadequate practices related to clients, products and services;

• Damages to physical assets owned or used by Inter and its subsidiaries;

• Interruption of the activities;

• Failures in information technology systems; and

• Failures in execution, fulfillment of deadlines and management of the activities. Inter and its subsidiaries address the management of its risks based on a methodology

consistent with its size, which provides support to measure, align, coordinate and conclude

on the effectiveness of internal controls and risk management.

Operational risk management ensures compliance with established standards, and is seen

as an opportunity to improve the quality of processes and controls.

Additionally, it aims to minimize the operational risks that are fundamental to its nature,

complexity of products, services, activities, processes and systems.


59 59

For the purposes of Operational Risk minimum capital allocation (RWAopad portion), Inter

and its subsidiaries adopted the Basic Indicator (BIA) methodology for its management.

Phases of the Management Process Qualitative Evaluation The qualitative assessment uses scales containing measures for probability and impact,

taking into account the vulnerabilities and threats that, combined, determine the level of

risk exposure to each event over the assets and funds of Inter and its subsidiaries.

Verification is performed by face-to-face monitoring, interviews and workshops with the

managers and employees from all operational areas, business partners and business units.

The identified risks are duly categorized as provided in Resolution 4,557/2017 of the

National Monetary Council and organized by risk factors.

Quantitative Evaluation In the quantitative assessment of operational risk, we view as key the establishment of an

internal base with various sources of information.

It is important to attribute a description and details to the operational loss levels, in order

to keep the database consistent and useful from the management point of view.

We also emphasize that, in the quantitative assessment, information from external sources

deemed reliable and relevant to the businesses of Inter and its subsidiaries may also be

used.

Monitoring An effective risk management process requires a communication and review structure that

assures the correct, effective and timely identification and assessment of the risks. In

addition, it also seeks to assure that controls and responses to these risks are

implemented.

At Inter and its subsidiaries, control tests and regular audits intended to verify compliance

with applicable policies and standards are performed.

The monitoring and review process tries to verify whether:

• The adopted measures have achieved the intended results;

• The procedures adopted and the information gathered to perform the assessment were appropriate;

• Higher levels of knowledge may have contributed to make better decisions; and

• There is an effective possibility of obtaining information for future assessments.


60 60

7 Capital management and solvency indexes This note presents information regarding the exposure to financial risks of Inter and its

subsidiaries and capital management.

For additional information on the risk management structure of Inter and its subsidiaries,

please see note 6.

Inter and its subsidiaries have a Capital Management Structure in place comprising a

continuous monitoring and control of capital process maintained by Inter, an assessment

of the need for capital to cover the risks to which it is subject and planning of goals and

capital requirements, considering the strategic objectives.

The Capital Management Structure covers Inter Distribuidora de Títulos e Valores

Mobiliários, also considering the possible impacts arising from the risks associated with

other members of the consolidated companies. This structure is consistent with the

nature of its operations, the complexity of products and services offered, and the extent

of its exposure to risk.

In order to ensure the effectiveness of Capital Management, the structural organization

also includes a shared performance of responsibilities and controls, in which all concerned

shall monitor compliance with processes, establishing and practicing internal controls and

action plans to minimize risks and remedy weaknesses.

In compliance with the Institutional Capital Management Policy, Capital comprises an

indispensable component for business decision-making, and its management represents

a competitive differentiation factor and for the assessment of risk-return relationship,

where, with the new requirements resulting from Basel III recommendations, the efficient

use of capital becomes the focus of management in an environment where the most

important factor is the ability of Inter and its subsidiaries to profit from it.

As main objectives of Capital Management, Inter and its subsidiaries aim to:

• Efficient use of Capital through the business allocation considering the binomial risk versus return.

• Optimization of Capital allocated to business segments and more profitable

products.

• Capital target forecasts to achieve the strategic objectives defined in the Strategic and Marketing Planning.

• Integrated risk management.


61 61

• Ensure its liquidity in the financial market, by adopting the best management practices and mitigation of risks, in compliance with Basel III requirements.

The Institutional Policy for Capital Management also presents the mechanisms and

procedures that comprise the Capital management, keeping the Capital compatible with

the risks incurred by Inter and its subsidiaries. It is integrated with the strategies and the

business of each Institution from the Group, in order to align all existing processes

practiced with the current policies

Capital management enables Inter and its subsidiaries to carry out a consistent

assessment of the Capital required to support projected growth, and to adopt a

prospective approach, anticipating the need for Capital arising from potential changes in

market conditions.

In this context, Inter and its subsidiaries manage the capital structure also aiming to meet

the minimum regulatory capital requirements. At the regulatory level, it is important to

highlight that the Basel Accord has an international mandatory parameter for financial

institutions for the ratio of regulatory capital, known in Brazil as “Patrimônio de Referência”

under applicable law.

Inter and its subsidiaries use mechanisms that enable identification and assessment of

significant risks incurred, including those not covered in the Minimum Required Regulatory

Capital (MRRC) related to Pillar I risks. The policies and strategies, as well as the capital

plan, enable maintenance of capital within levels compatible with the risks incurred by

Inter and its subsidiaries. Stress tests are performed periodically and their impacts are

assessed from the capital point of view. Stress tests are performed periodically and their

impacts are assessed from the capital point of view. The Management’s capital adequacy

reports are informed to intervening and strategic areas and committees, subsidizing the

decision-making process of the Senior Management.

The Basel Index was calculated in accordance with the criteria established in CMN

Resolutions 4.192/2013 and 4.193/2013, which provide for calculation of the Regulatory

Capital (RC) and the Minimum Required Regulatory Capital (MRRC) against Risk-Weighted

Assets (RWA).

It should be noted that as from October 1, 2013, a set of rulings regarding implementation

of the recommendations of the Basel Committee on Banking Supervision relating to the

capital structure of financial institutions, known as “Basel III”, became effective in Brazil.

The new standards adopted address the following matters:

(i) New method for calculating regulatory capital, which will continue to be divided in Tiers I

and II. Tier I includes the Core Capital (less Prudential Adjustments) and Supplementary

Capital.


62 62

(ii) New method for calculating capital maintenance requirement, which includes minimum RC,

Tier I and Core Capital requirements, and introduction of Capital Buffer (Additional Core

Capital).

The consolidation scope used as the base for checking operational limits was also

changed to consider only Inter and its subsidiaries, from October 1, 2013 to December 31,

2014, and the Prudential, as defined in CMN Resolution 4.280/2013, as from January 1,

2015.

All references to RC and the Required Regulatory Capital (RRC) or MRRC from dates prior

to October 1, 2013, refer to the Basel II method, and they were calculated based on the

criteria established in CMN Resolutions 3.444/2007 and 3.490/2007 respectively.

a. Accounting classification and fair values The balances of financial assets and liabilities are classified based on the categories

defined in note 3.d.

The following table sets forth the breakdown of financial assets and liabilities according to

the technique used for its measurement, as defined in IAS39 and IFRS 9 and described on

item 3.d of the financial statements. It also shows the book values and fair values of

financial assets and liabilities, including their levels in the fair value hierarchy. It does not

include information on the fair value of financial assets and liabilities not measured at fair

value, if the book value is a reasonable proxy of the fair value.

12/31/2020 12/31/2019Reference Equity (RE) 3,077,952 2,123,127Reference Equity Level I 3,077,952 2,123,127Main Capital (CP) 3,077,952 2,123,127Risk-Weighed Assets - RWA 9,643,109 5,388,262

RWA for Credit Risk by Standardized Approach - RWACPAD 8,064,303 4,102,332RWA for Market Risk - RWAMPAD 476,759 565,751RWA for Operational Risk by Standardized Approach - RWAOPAD1,102,047 720,179

Capital RequirementMinimum Main Capital Required for RWA 433,940 242,472Minimum Required Reference Equity Level I for RWA 578,587 323,296Minimum Required Reference Equity for RWA 771,449 431,061

Margin on Capital RequirementsMargin on Required Main Capital 2,644,013 1,880,655Margin on Required Reference Equity Level I 2,499,366 1,799,831

Main Capital Index (MCI/ RWA) 31.9% 39.4%Capital Index Level I (Level I / RWA) 31.9% 39.4%Basel Index (BI/RWA) 31.9% 39.4%


63

63

Fair value

through profit or loss

Fair value other comprehensiv

e incomeAmortized cost

Financial liabilities at

amortized cost

Total Level 1 Level 2 Level 3 Total

On December 31, 2020; Financial assets Cash and cash equivalents - - 2,154,687 - 2,154,687 - - - - Loans and advances to financial institutions - - 2,212,098 - 2,212,098 - - - - Loans and advances to customers, net of provision for loss - - 8,790,057 - 8,790,057 - - - - Securities 205,239 5,291,914 316,229 - 5,813,382 - 5,497,153 - 5,497,153 Derivative financial instruments 27,513 - - - 27,513 - 27,513 Other assets - - 518,681 - 518,681 - - 109,216 109,216 Total financial assets 232,752 5,291,914 13,991,753 - 19,516,419 - 5,524,666 109,216 5,606,369

Financial liabilities Liabilities with financial institutions - - - 1,654,039 1,654,039 - - - - Liabilities with customers - - - 12,436,632 12,436,632 - - - - Securities issued - - - 1,832,310 1,832,310 - - - - Derivative financial instruments 56,758 - - - 56,758 - 56,758 - 56,758 Borrowing and onlending - - - 27,405 27,405 - - - - Other liabilities - - - 475,420 475,420 - - - - Total financial liabilities 56,758 - - 16,425,806 16,482,564 - 56,758 - 56,758

Accounting value Fair value

Fair value by

means of income

Fair value other comprehensiv

e incomeAmortized cost

Financial liabilities at

amortized cost

Total Level 1 Level 2 Level 3 Total

On December 31, 2019; Financial assets Cash and cash equivalents - - 3,114,789 - 3,114,789 - - - - Loans and advances to financial institutions - - 648,377 - 648,377 - - - - Loans and advances to customers, net of provision for loss - - 4,777,387 - 4,777,387 - - - - Securities 705,007 450,087 - - 1,155,094 1,155,094 - - 1,155,094 Other assets - - 192,054 - 192,054 - - - - Total financial assets 705,007 450,087 8,732,607 - 9,887,701 1,155,094 - - 1,155,094

Financial liabilities Liabilities with financial institutions - - - 974,001 974,001 - - - - Liabilities with customers - - - 4,714,439 4,714,439 - - - - Securities issued - - - 1,898,071 1,898,071 - - - - Derivative financial instruments 20,941 - - - 20,941 - 20,941 - 20,941 Borrowing and onlending - - - 29,800 29,800 - - - - Other liabilities - - - 216,115 216,115 - - - - Total financial liabilities 20,941 - - 7,832,426 7,853,367 - 20,941 - 20,941

Accounting value Fair value


64

The determination of the fair value calculation for a financial asset or liability may provide

for the use of three approaches regarding the type of information used for assessment,

which are known as fair value hierarchy levels, namely:

• Level I - prices negotiated in active markets for identical assets or liabilities;

• Level II - data other than those quoted on the market (level I) that are able to price rights and obligations, directly or indirectly, for example, valuation-derived techniques using observable market data; and

• Level III - pricing data is obtained using valuation techniques that include

variables for the asset or liability, but, largely, are not based on observable market data.

The methodology used for the measurement of financial assets and liabilities classified as

“Level II” (derivative financial instruments and hedged credit operations) is the discount

to present value of future cash flows of such operations, using the usual market rates

disclosed by B3 for similar assets.

During the 2020 and 2019, there were no changes in the measurement method of financial

assets and liabilities that entailed reclassification of financial assets and liabilities among

the different levels of the fair value hierarchy.

The following table sets forth the breakdown of financial assets and liabilities by category

and by class of operation that corresponds to accounting headings in the statement of

financial position. Criterion for valuation of financial instruments:

Analysis of loans and advances to customers by type and maturity

Working capital 22,335 224,090 298,767 779,497 1,324,689 Payroll loan 156,974 192,060 295,445 1,207,638 1,852,117 Real estate loan 8,626 21,574 51,983 538,507 620,690 Real estate funding 11,290 55,727 135,169 2,042,232 2,244,418 Rural funding - - 146,518 31,122 177,640 Card - 1,267,623 410,263 452 1,678,338 Other credits with credit granting characteristics 2,588 832,498 18,923 38,156 892,165

Total 201,813 2,593,572 1,357,068 4,637,604 8,790,057

TotalOverdue:

12/31/2020To become due

Up to 3 months 3 months to 1 year Above 1 year


65

Breakdown of the accounting balance of securities by maturity range

Working capital 11,672 101,637 178,963 516,696 808,968 Payroll loan 160,185 172,395 198,807 657,820 1,189,207 Real estate loan 9,026 21,044 50,585 525,283 605,938 Real estate funding 29,762 41,521 116,183 1,182,121 1,369,587 Rural funding - 1,500 - - 1,500 Card - 620,309 13,769 3 634,081 Other credits with credit granting characteristics 276 151,241 2,747 13,842 168,106

Total 210,921 1,109,647 561,054 2,895,765 4,777,387

3 months to 1 year Above 1 yearOverdue: Total

12/31/2019To become due

Up to 3 months

From 3 to 12 1 year to From 3 to 5 Above 5

months 3 years years yearsSecurities - VJORA Public debt bonds Financial Treasury Letters (LFT) - 36,186 1,277,359 145,314 1,216,391 2,675,250 Debentures - 5 6,365 61,162 30,771 98,303 Certificates of real estate receivables - 38,893 3,721 132,333 22,756 197,703 Real Estate Credit Letters (LCI) 2,646 382 628 - - 3,656 Agribusiness Credit Letters (LCA) 1 14 893 387 278 1,573 Investment Fund Quotas 10,615 42,114 21,502 - 193,824 268,055 Financial Letters - - - 16,937 92,236 109,173 Bank Deposits Certificates 1,456 1,585 3,550 577 3,441 10,609 Certificate of Agribusiness Receivables - 3,273 3,143 1,319 554 8,289 National Treasury Bonds (NTN) - - - 474 1,918,829 1,919,303

Securities - Amortized costDebentures - 30,458 193,533 73,890 - 297,881 Financial Letters - 7,207 11,141 - - 18,348

Securities - VJRInvestment fund quotas 182,209 - - - - 182,209 Financial Bills - Not related - - - - - - Certificates of real estate receivables - 983 778 1,300 - 3,061 Certificate of agribusiness receivables - - 83 - 182 265 Debentures - 256 1,306 2,963 15,178 19,703 Total securities 196,927 161,356 1,524,002 436,656 3,494,440 5,813,381

Accounting balance

Up to 3 months

12/31/2020

From 3 to 12 1 year to From 3 to 5 Above 5

months 3 years years yearsSecurities - VJORA Public debt bonds Financial Treasury Letters (LFT) - 52,140 189,957 70,191 - 312,288 Certificates of real estate receivables - 264 - 98,716 17,119 116,099

Securities - Amortized costDebentures - 11,740 88,195 160,409 - 260,344

Securities - VJRInvestment fund quotas 433,980 - 15,658 - - 449,638 Financial Treasury Letters (LFT) 629 - - - - 629 Real Estate Credit Letters (LCI) 140 - - - - 140 Certificates of real estate receivables 3,839 - - - - 3,839 Certificate of agribusiness receivables 781 - - - - 781 Bank Deposits Certificates 5,076 - - - - 5,076 Debentures 5,667 - - - - 5,667 Agribusiness Credit Letters (LCA) 593 - - - - 593 Total securities 450,705 64,144 293,810 329,316 17,119 1,155,094

12/31/2019Up to 3 months

Accounting balance


66

8 Cash and cash equivalents

* Refers to operations whose maturity, on the effective investment date, was equal to or less than 90 days and presents an insignificant risk of change.

a. Inter-financial liquidity applications

9 Derivative financial instruments Inter participates in transactions involving derivative financial instruments, recorded in

balance sheet and compensation accounts destined to meet its own needs to manage its

risk exposure, and to meet its clients' requests to manage their exposures. These

transactions involve swaps, index and forward derivatives. Inter's risk management policy

is based on the use of derivative financial instruments with the predominant purpose to

mitigate the risks pursuant to the transactions made.

a. Value of the composition of the derivative financial instruments (assets and

liabilities) demonstrated by their updated cost value, market and terms

12/31/2020 12/31/2019Cash and cash equivalents in national currency 474,395 83,391Cash and cash equivalents in foreign currency 27,595 10,721Interbank liquidity investments * (90 days) 1,652,697 3,020,677Total of cash and cash equivalents 2,154,687 3,114,789

12/31/2020 12/31/2019Bench Position

- Financial Treasury Letters (LFT) 412,492 499,996 - National Treasury Letters (LTN) 1,240,205 2,420,682 - National Treasury Bond (NTN) - 99,999

Total interbank liquidity investments 1,652,697 3,020,677

Parent Company and Consolidated12/31/2020 12/31/2019

Updated cost

Adjustment to

market value

Market value Up to 3

monthsFrom 3 to 12

monthsFrom 1 to 3

yearsFrom 3 to

5 yearsTotal Total

Assets (A)Receivable forward purchase 27,768 (255) 27,513 6,510 21,003 - - 27,513 -

Liabilities (B) (i)Payable adjustment - swap (56,757) - (56,757) - (20,767) (25,392) (10,598) (56,757) (20,941)

Net effect (A-B) (28,989) (255) (29,244) 6,510 236 (25,392) (10,598) (29,244) (20,941)


67

b. Forward and swap contracts - (Reference value)

c. Index swap contracts

Inter has a part of its real estate credit portfolio indexed to the General Price Index (IGP-M)

of Getúlio Vargas Foundation, part indexed to the National Broad Consumer Price Index

(IPCA), and the majority of its LCI funding is indexed to the Interbank Deposit (DI) rate.

Aiming at safeguarding Banco Inter and its subsidiaries’ revenues from fluctuations in IGP-

M, management has opted to carry out swap transactions with inverted legs for its asset

and liability portfolios. Transactions with derivatives were agreed upon, Inter and its

subsidiaries pays the variation of IGP-M plus coupon, IPCA plus coupon and receives a certain percentage of the DI variation on given date.

The operations were carried out via B3 and feature guarantee margin and control by this

exchange. On December 31, 2020, Inter and its subsidiaries had 10 active swap contracts

CDI x IGP-M, with total Notional of BRL 178,592 (2019: BRL 216,989) (2019: BRL 50,000),

and 3 active swap contracts CDI x IPCA, with total Notional of BRL 110,000 (2019: BRL

310,000) (2018: BRL 0), registered at B3 with guarantee margin deposit, whose value can

be adjusted at any time. The swap transaction is the exchange of risks between two

parties, consisting of an agreement for two parties to exchange the risk of an active

(creditor) or passive (debtor) position, at a specified date, under previously established

conditions.

Inter and its subsidiaries’s swap operations are classified as Hedge Accounting (“Fair Value

Hedge”), as a safeguard for the exposure to changes in the fair value of a recognized asset,

or of an identified portion of such asset attributable to a particular risk that might affect the

result.

The hedge instrument (swap) was used for the purpose of protecting risks related to the

mismatch of indexes between the asset and liability portfolios, specifically between

interest rate and variations of price index, and was recognized at fair value in the result for

the period. The fair value is the value to be received, according to market conditions, by

the assets and paid in the settlement of the liabilities, calculated based on the rates

practiced in the Exchange markets.

Agreements of the real estate portfolio are hedged by the instruments detailed above, from

which the spread is discounted, the hedge being solely performed for the specific risk of

the portfolio.

Up to 3 months

From 3 to 12 months

From 1 to 3 years

From 3 to 5 years

Total 12/31/2020

Total 12/31/2019

Forward contracts - assets 6,510 21,003 - - 27,513 - Swap contracts - liabilities (c) - 115,736 132,356 40,500 288,592 526,989 Total 6,510 136,739 132,356 40,500 316,105 526,989


68

d. Derivative financial instruments

Negotiation

Assets Liabilities Assets Liabilities

Derivative Financial Instruments for hedge at fair value

27,513 56,763 - 20,941

Total 27,513 56,763 - 20,941

12/31/2020 12/31/2019

12/31/2020 Parent Company and ConsolidatedCost Value Market Value

Bank Counterpart Bank Counterpart

CDI x IGPM 906722276 35,842 38,015 48,365 38,015 47,959 (9,944) CDI x IGPM 906722594 29,894 31,706 40,400 31,706 39,464 (7,758) CDI x IGPM 906722608 17,550 18,614 23,790 18,614 23,293 (4,679) CDI x IGPM 906723043 17,306 18,356 23,484 18,356 23,140 (4,784) CDI x IGPM 906723159 12,000 12,637 15,832 12,637 15,509 (2,872) CDI x IGPM 906723160 14,000 14,743 18,540 14,743 18,195 (3,452) CDI x IGPM 906723161 11,500 12,095 15,199 12,095 14,878 (2,783) CDI x IGPM 906723162 16,000 16,828 21,199 16,828 20,901 (4,073) CDI x IGPM 906723163 11,000 11,570 14,589 11,570 14,460 (2,890) CDI x IGPM 906723164 13,500 14,199 17,934 14,199 17,834 (3,635)

Total CDI x IGPM 178,592 188,763 239,332 188,763 235,633 (46,870)

12/31/2020Cost Value Market Value


CDI x IPCA 905638590 50,000 53,293 55,651 53,293 56,358 (3,065) CDI x IPCA 905638603 10,000 10,659 11,203 10,659 11,698 (1,039) CDI x IPCA 905638611 50,000 53,293 56,133 53,293 59,076 (5,783) Total CDI x IPCA 110,000 117,245 122,987 117,245 127,132 (9,887)

Grand total 288,592 306,008 362,319 306,008 362,765 (56,757)

Indexes Contracts Reference Value

Indexes Contracts Reference Value

Earnings (loss) hedge

operation

Earnings (loss) hedge

operation


69

In the year ended on December 31, 2020, the result from the operations with derivative financial instruments was BRL (54,419) (2019: BRL 4,235).

e. Hedge accounting

Inter and its subsidiaries carry out fair value hedge operations regarding exposure to fixed interest rate represented by installments of loans and advances to customers, made in compliance with IAS 39 - Financial Instruments: recognition and measurement.

i. Fair value hedge for exposure to fixed interest rate represented by installments of loans and advances to customers

With regard to the risk of fixed interest rate represented by credit installments and

exchange variation represented by foreign currency loan, Inter and its subsidiaries have

adopted the practice to protect themselves, in line with their risk management policies,

taking into account the prevailing funding rates. The hedging strategy adopted aims to

hedge the spread of its loans and advances to customers and funding. These hedge

operations are performed in compliance with IAS 39 - Financial Instruments: recognition

and measurement, which requires regular assessment of hedge effectiveness and

recording at fair value of both the derivative financial instrument and the hedged item,

considering this is a market-risk hedge operation.

ii. Associated Risks:

The main risk factors of the derivatives of Inter and its subsidiaries are related to foreign

exchange fluctuations and the results obtained are adequate for asset protection

purposes.

Risk management is controlled and supervised independently from departments

Parent company and Consolidated12/31/2019

Cost Value Market Value


CDI x IGPM 906722276 38,397 39,631 40,589 39,631 41,931 (2,300) CDI x IGPM 906722594 35,842 36,994 37,900 36,994 38,900 (1,906) CDI x IGPM 906722608 29,894 30,855 31,628 30,855 33,003 (2,148) CDI x IGPM 906723043 17,550 18,114 18,589 18,114 19,571 (1,457) CDI x IGPM 906723159 17,306 17,863 18,338 17,863 19,396 (1,533) CDI x IGPM 906723160 12,000 12,297 12,389 12,297 12,906 (609) CDI x IGPM 906723161 14,000 14,347 14,455 14,347 15,083 (736) CDI x IGPM 906723162 11,500 11,771 11,866 11,771 12,327 (556) CDI x IGPM 906723163 16,000 16,376 16,522 16,376 17,294 (918) CDI x IGPM 906723164 11,000 11,259 11,360 11,259 11,951 (692) CDI x IGPM 906723165 13,500 13,818 13,952 13,818 14,718 (898) Total CDI x IGPM 216,989 223,323 227,588 223,323 237,080 (13,755)

Parent Company and Consolidated12/31/2019

Cost Value Market Value


CDI x IPCA 905638565 80,000 82,978 83,008 82,978 83,004 (26) CDI x IPCA 905638573 60,000 62,233 61,893 62,233 62,523 (290) CDI x IPCA 905638581 60,000 62,233 62,044 62,233 63,609 (1,376) CDI x IPCA 905638590 50,000 51,861 51,776 51,861 53,715 (1,854) CDI x IPCA 905638603 10,000 10,372 10,382 10,372 10,914 (542) CDI x IPCA 905638611 50,000 51,861 51,955 51,861 54,959 (3,100) Total CDI x IPCA 310,000 321,540 321,058 321,540 328,724 (7,186)

Grand total 526,989 544,863 548,646 544,863 565,804 (20,941)

Indexes Contracts Reference ValueEarnings

(loss) hedge operation

Indexes Contracts Reference ValueEarnings

(loss) hedge operation


70

generating risk exposure. Its evaluation and measurement are carried out on a daily basis,

based on statistical data and indexes, using tools such as nonparametric V@R and

sensitivity analysis to stress scenarios.

10 Loans and advances to financial institutions

a. Breakdown of loans and advances to financial institutions:

b. Analysis of changes in impairment losses In a continuous process of credit analysis for the portfolio of Loans and advances to

financial institutions, neither Inter nor its subsidiaries detected the need for a provision

for impairment losses for such assets.

11 Loans and advances to customers

a. Breakdown of balance of loans and advances to customers

12/31/2020 12/31/2019Receivable commissions and bonus - 2,980 Compulsory deposits Banco Central do Brasil 1,704,460 392,280 Interbank deposit investment 507,616 229,088 Interbank onlendings 22 24,029 Total 2,212,098 648,377

12/31/2020 12/31/2019

Payroll Card 67,732 80,409Multiple Card 1,904,642 783,544Overdraft Protection Agreement 20,193 - Check Account 14,231 - Personal Credit 1,551,399 921,977Business Credit 1,582,869 472,304Real Estate Credit 3,471,356 2,519,153Rural Credit 177,637 - Total loans and advances to customers 8,790,059 4,777,387

(-) Payroll Card (5,890) (2,385) (-) Multiple Card (163,993) (120,808) (-) Overdraft Protection Agreement (645) - (-) Check Account (455) - (-) Personal Credit (38,900) (30,469) (-) Business Credit (5,803) (10,133) (-) Real Estate Credit (60,994) (51,768) (-) Rural Credit (5,675) - Total provision for loss by impairment adjustment (282,355) (215,563)

Loans and advances to customers, net of provision for loss 8,507,704 4,561,824


71

Gross

balanceLoss on

impairmentAccounting

balance

Payroll Card 67,732 (5,890) 61,842Multiple Card 1,904,642 (163,993) 1,740,649Overdraft Protection Agreement 20,193 (645) 19,548Check Account 14,231 (455) 13,776Personal Credit 1,551,399 (38,900) 1,512,499Business Credit 1,582,869 (5,803) 1,577,066Real Estate Credit 3,471,356 (60,994) 3,410,362Rural Credit 177,637 (5,675) 171,962Total 8,790,059 (282,355) 8,507,704

Gross balance

Loss on impairment

Accounting balance

Payroll Card 80,409 (2,385) 78,024 Multiple Card 783,544 (120,808) 662,736 Overdraft Protection Agreement - - - Check Account - - - Personal Credit 921,977 (30,469) 891,508 Business Credit 472,304 (10,133) 462,171 Real Estate Credit 2,519,153 (51,768) 2,467,385 Rural Credit - - - Total 4,777,387 (215,563) 4,561,824

12/31/2019

12/31/2020


72

b. Analysis of changes in expected losses by stage

Changes in expected losses are presented as follows:

Stage 1 Start balance on 01/01/2020

Transfer to Stage 2

Transfer to Stage 3

Transfer from Stage 2


Completed contracts

Write-off for loss

Constitution / (Reversal)

End balance on 12/31/2020

Payroll Card 448 (2) (16) - 5 (34) (2) 2,513 2,911 Multiple Card 57,462 (566) (6,284) 2,195 6,174 (8,929) (2,797) 56,439 103,694 Overdraft protection agreement 9 - - 46 85 - - 505 645 Check Account 47 - (12) 10 159 - (33) 164 334 Personal Credit 9,654 (192) (341) 41 166 (4,616) (66) 11,659 16,306 Business credit 2,450 (1) (7) - - (1,875) (43) 5,154 5,679 Real estate credit 14,735 (1,786) (513) 8,258 2,810 (3,201) (33) 14,628 34,897 Rural Credit - - - - - - - 5,675 5,675

84,805 (2,546) (7,174) 10,550 9,399 (18,655) (2,973) 96,736 170,141


Transfer to Stage 1

Transfer to Stage 3



Completed contracts

Write-off for loss



Payroll Card 26 - - 2 - (4) (21) 34 36 Multiple Card 10,297 (2,195) (283) 566 - (2,229) (5,578) 4,331 4,909 Overdraft protection agreement 46 (46) - - - - - - - Check Account 296 (10) (30) - 20 - (254) (15) 6 Personal Credit 1,169 (41) (195) 192 62 (353) (377) 3,933 4,390 Business credit 191 - (0) 1 - (111) (50) (27) 4 Real estate credit 20,417 (8,258) (1,774) 1,786 1,163 (4,611) (439) 2,564 10,848 Rural Credit - - - - - - - - -

32,443 (10,550) (2,283) 2,546 1,245 (7,308) (6,718) 10,820 20,195


Transfer to Stage 1

Transfer to Stage 2



Completed contracts

Write-off for loss



Payroll Card 1,911 (5) - 16 - (218) (1,683) 2,922 2,943 Multiple Card 53,050 (6,174) - 6,284 283 (9,950) (36,921) 48,816 55,389 Overdraft protection agreement 85 (85) - - - - - - - Check Account 3,712 (159) (20) 12 30 - (3,049) (413) 114 Personal Credit 19,591 (166) (62) 341 195 (2,431) (14,944) 15,680 18,205 Business credit 3,316 - - 7 - (820) (2,493) 231 241 Real estate credit 16,651 (2,810) (1,163) 513 1,774 (7,307) (3,642) 11,112 15,127 Rural Credit - - - - - - - - -

98,316 (9,399) (1,245) 7,174 2,283 (20,726) (62,732) 78,348 92,018

Consolidated Balance on 12/31/2019

Completed contracts

Write-off for loss



Payroll Card 2,385 (256) (1,707) 5,468 5,890 Multiple Card 120,808 (21,107) (45,295) 109,587 163,993 Overdraft protection agreement 140 - - 505 645 Check Account 4,055 - (3,336) (264) 455 Personal Credit 30,415 (7,401) (15,386) 31,273 38,900 Business credit 5,957 (2,806) (2,586) 5,358 5,924 Real estate credit 51,803 (15,119) (4,114) 28,303 60,872 Rural Credit - - - 5,675 5,675

215,563 (46,689) (72,423) 185,904 282,355


73


Transfer to Stage 2

Transfer to Stage 3



Completed contracts

Write-off for loss



Payroll Card 1,425 - - - - (1,425) - 448 448 Multiple Card 19,863 (568) (3,335) 864 - (1,856) (37) 42,531 57,462 Business credit 938 - (8) 27 - (504) - 2,042 2,495 Real estate credit 13,140 (1,622) (478) 5,389 1,071 (1,892) - (907) 14,700 Personal Credit 9,199 (120) (266) 515 101 (3,656) (162) 4,091 9,700

44,564 (2,310) (4,088) 6,795 1,172 (9,333) (199) 48,204 84,805


Transfer to Stage 1

Transfer to Stage 3



Completed contracts

Write-off for loss



Payroll Card 1,259 - - - - (1,259) - 26 26 Multiple Card 5,286 (864) (889) 568 - (439) (2,995) 9,629 10,297 Business credit 33 (27) - - - (4) (2) 533 533 Real estate credit 17,246 (5,389) (2,860) 1,622 1,395 (3,692) - 12,095 20,417 Personal Credit 4,617 (515) (615) 120 111 (942) (1,205) (400) 1,172

28,441 (6,795) (4,364) 2,310 1,506 (6,335) (4,201) 21,883 32,446


Transfer to Stage 1

Transfer to Stage 2



Completed contracts

Write-off for loss



Payroll Card 3,015 - - - - (3,015) - 1,911 1,911 Multiple Card 18,961 - - 3,335 889 (1,703) (17,256) 48,823 53,050 Business credit 200 - - 8 - (110) (93) 7,099 7,105 Real estate credit 11,866 (1,071) (1,395) 478 2,860 (6,450) (1,264) 11,626 16,651 Personal Credit 12,365 (101) (111) 266 615 (1,618) (7,943) 16,126 19,599

46,407 (1,172) (1,506) 4,088 4,364 (12,895) (26,555) 85,585 98,315


Completed contracts

Write-off for loss



Payroll Card 5702 (5,698) - 2,385 2,389 Multiple Card 44,111 (3,998) (20,287) 100,982 120,809 Business credit 1,169 (618) (94) 9,674 10,131 Real estate credit 42,250 (12,034) (1,264) 22,814 51,767 Personal Credit 26,177 (6,216) (9,310) 19,817 30,468

119,409 (28,563) (30,956) 155,673 215,563


74

c. Analysis of the change of loans and advances to customers by stage


Transfer to Stage 2

Transfer to Stage 3



Completed contracts

Write-off for loss



Payroll Card 77,089 (444) (2,433) 40 10 (6,590) (212) (3,347) 64,113 Multiple Card 683,629 (4,201) (42,212) 5,113 8,508 (162,026) (9,234) 1,294,294 1,773,870 Overdraft protection agreement 1,434 - - 816 200 - - 17,742 20,193 Check Account 6,566 - (1,536) 324 452 - (4,892) 9,543 10,457 Personal Credit 875,451 (14,721) (19,221) 913 263 (540,865) (2,450) 1,179,535 1,478,905 Business credit 435,982 (109) (1,637) - - (349,762) (735) 1,495,645 1,579,384 Real estate credit 2,146,634 (89,342) (47,101) 114,130 20,051 (441,402) (1,951) 1,485,924 3,186,942 Rural Credit - - - - - - - 177,637 177,637

4,226,785 (108,816) (114,141) 121,336 29,484 (1,500,646) (19,475) 5,656,973 8,291,501


Transfer to Stage 1

Transfer to Stage 3



Completed contracts

Write-off for loss



Payroll Card 821 (40) (5) 444 1 (96) (680) 13 457 Multiple Card 26,814 (5,113) (623) 4,201 - (5,949) (15,108) 15,781 20,002 Overdraft protection agreement 816 (816) - - - - - - - Check Account 5,147 (324) (784) - 39 - (4,008) 132 203 Personal Credit 17,739 (913) (2,468) 14,721 93 (6,808) (4,159) 13,851 32,058 Business credit 3,026 - (1) 109 - (2,219) (499) 882 1,298 Real estate credit 276,208 (114,130) (26,501) 89,342 7,740 (63,011) (5,901) 21,334 185,080 Rural Credit - - - - - - - - -

330,572 (121,336) (30,382) 108,816 7,873 (78,083) (30,354) 51,992 239,098


Transfer to Stage 1

Transfer to Stage 2



Completed contracts

Write-off for loss



Payroll Card 2,499 (10) (1) 2,433 5 (271) (2,211) 717 3,162 Multiple Card 73,101 (8,508) - 42,212 623 (13,709) (50,878) 67,927 110,770 Overdraft protection agreement 200 (200) - - - - - - - Check Account 7,892 (452) (39) 1,536 784 - (6,283) 135 3,572 Personal Credit 28,685 (263) (93) 19,221 2,468 (3,950) (21,357) 15,725 40,437 Business credit 4,417 - - 1,637 1 (1,750) (2,660) 542 2,187 Real estate credit 103,236 (20,051) (7,740) 47,101 26,501 (43,440) (19,979) 13,704 99,333 Rural Credit - - - - - - - - -

220,030 (29,484) (7,873) 114,141 30,382 (63,120) (103,366) 98,750 259,461


Completed contracts

Write-off for loss



Payroll Card 80,409 (6,957) (3,103) (2,616) 67,732 Multiple Card 783,544 (181,685) (75,218) 1,378,001 1,904,642 Overdraft protection agreement 2,451 - - 17,742 20,193 Check Account 19,605 - (15,183) 9,810 14,231 Personal Credit 921,875 (551,622) (27,966) 1,209,111 1,551,399 Business credit 443,425 (353,731) (3,894) 1,497,069 1,582,869 Real estate credit 2,526,078 (547,854) (27,833) 1,520,962 3,471,354 Rural Credit - - - 177,637 177,637

4,777,387 (1,641,849) (153,197) 5,807,715 8,790,057


75


Transfer to Stage 2

Transfer to Stage 3



Completed contracts

Write-off for loss



Payroll Card 87,912 - - - - (87,912) - 77,089 77,089 Multiple Card 278,310 (6,746) (35,704) 3,402 - (17,859) (165) 462,392 683,630 Business credit 250,256 - (2,941) 3,486 - (179,407) (42) 379,468 450,820 Real estate credit 1,626,968 (157,455) (47,551) 63,635 8,352 (234,857) - 880,616 2,139,708 Personal Credit 679,894 (8,690) (15,985) 2,068 184 (293,075) (1,260) 512,402 875,538

2,923,340 (172,891) (102,181) 72,591 8,536 (813,110) (1,467) 2,311,967 4,226,785


Transfer to Stage 1

Transfer to Stage 3



Completed contracts

Write-off for loss



Payroll Card 1,665 - - - - (1,665) - 821 821 Multiple Card 20,028 (3,402) (3,710) 6,746 - (1,783) (10,740) 19,675 26,814 Business credit 4,694 (3,486) - - - (965) (243) 8,988 8,988 Real estate credit 228,490 (63,635) (35,095) 157,455 10,883 (51,418) - 29,527 276,207 Personal Credit 15,534 (2,068) (2,033) 8,690 201 (3,606) (3,117) 4,141 17,742

270,411 (72,591) (40,838) 172,891 11,084 (59,437) (14,100) 63,152 330,572


Transfer to Stage 1

Transfer to Stage 2



Completed contracts

Write-off for loss



Payroll Card 4,356 - - - - (4,355) - 2,498 2,499 Multiple Card 27,179 - - 35,704 3,710 (2,441) (24,733) 33,681 73,100 Business credit 724 - - 2,941 - (400) (326) 9,557 12,496 Real estate credit 92,560 (8,352) (10,883) 47,551 35,095 (50,311) (9,861) 7,439 103,238 Personal Credit 22,477 (184) (201) 15,985 2,033 (2,939) (14,441) 5,967 28,697

147,296 (8,536) (11,084) 102,181 40,838 (60,446) (49,361) 59,142 220,030


Completed contracts

Write-off for loss



Payroll Card 93,933 (93,932) - 80,408 80,409 Multiple Card 325,517 (22,083) (35,638) 515,748 783,544 Business credit 255,674 (180,772) (611) 398,013 472,304 Real estate credit 1,948,018 (336,586) (9,861) 917,582 2,519,153 Personal Credit 717,905 (299,620) (18,818) 522,510 921,977

3,341,047 (932,993) (64,928) 2,434,261 4,777,387


76

12 Securities

a. Breakdown of securities:

b. Revenues from securities

12/31/2020 12/31/2019Fair value through other comprehensive income

Financial Treasury Letters (LFT) 2,675,250 312,288 Debentures 98,303 - Certificates of real estate receivables 197,703 116,099 Real Estate Credit Letters (LCI) 3,656 - Agribusiness Credit Letters (LCA) 1,573 - Investment fund quotas 268,055 - Financial Letters 109,173 - Bank Deposits Certificates 10,609 - Certificate of Agribusiness Receivables 8,289 - National Treasury Bonds (NTN) 1,919,303 - Subtotal 5,291,914 428,387

Amortized cost Debentures 297,881 260,344 Financial Letters 18,348 - Expected Loss (759) -

Subtotal 315,470 260,344 Agribusiness Credit Letters (LCA) - Income

Fair value through profit or lossInvestment fund quotas 182,209 449,638 Certificates of real estate receivables 3,061 3,839 Certificate of Agribusiness Receivables 265 781 Debentures 19,703 5,667 Financial Treasury Letters (LFT) - 629 Certificados de Depósitos bancários - 5,076 Agribusiness Credit Letters (LCA) - 593 Real Estate Credit Letters (LCI) - 140

Subtotal 205,238 466,363

Total 5,812,622 1,155,094

12/31/2020 12/31/2019Income from secuties - Fair value throught other comprehensive income

26,717 57,346

Income from secuties - Amortizes cost 17,149 2,886 Income from securities - Fair value throught profit or loss 2,021 10,422 Total 45,886 70,634


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13 Property and equipment

a. Breakdown of Property and equipment:

b. Changes in Property and equipment:

Annual depreciation rate

Historical Cost Accrued Depreciation

Residual value

Historical Cost

Accrued Depreciation

Residual value

Buildings 4% 21,969 (14,502) 7,467 5,464 (112) 5,352 Furniture and Equipment 10% 10,219 (74) 10,145 18,958 (4,447) 14,511 Data processing systems 20% 12,348 (60) 12,288 9,598 (6,997) 2,601 Building financial lease 38% 109,264 (1,318) 107,946 69,393 (1,510) 67,883 Equipment financial lease 38% - - - 3,404 (1,900) 1,504 Total 153,800 (15,954) 137,846 106,817 (14,966) 91,851

12/31/201912/31/2020

Balance on 12/31/2019 Addition Transfer Write-offs Balance on

12/31/2020

Buildings 5,464 6,273 11,106 (874) 21,969 Furniture and Equipment 18,958 5,103 (11,106) (2,736) 10,219 Data processing systems 9,598 5,051 - (2,301) 12,348 Building financial lease 69,393 39,871 - - 109,264 Equipment financial lease 3,404 - - (3,404) - Total - historical cost 106,817 56,298 - (9,315) 153,800

Fixed Assets - accrued depreciationBuildings (112) (2,805) (11,585) - (14,502) Furniture and Equipment (4,447) (162) 4,535 - (74) Data processing systems (6,997) (113) 7,050 - (60) Building financial lease (1,510) - - 192 (1,318) Equipment financial lease (1,900) - - 1,900 - Total - accrued depreciation (14,966) (3,080) - 2,092 (15,954)

- Total - residual value 91,851 53,218 - (7,223) 137,846


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Inter and its subsidiaries do not have any assets pledged as collateral.

Balance on 12/31/2018

Initial adoption of IFRS 16

Adjusted balance on

1/1/2019Addition Write-offs Balance on

12/31/2019

Buildings - - - 5,464 - 5,464 Furniture and Equipment 13,486 - - 5,472 - 18,958 Data processing systems 9,031 - - 567 - 9,598 Building financial lease - 69,393 69,393 - - 69,393 Equipment financial lease - 3,404 - - - 3,404 Total - historical cost 22,517 72,797 72,797 11,503 - 106,817

Fixed - accrued depreciationBuildings - - - (112) - (112) Furniture and Equipment (2,698) - - (1,749) - (4,447) Data processing systems (5,989) - - (1,008) - (6,997) Building financial lease - (1,510) (1,510) - - (1,510) Equipment financial lease - (1,900) (1,900) - - (1,900) Total - accrued depreciation (8,687) (3,410) (3,410) (2,869) - (14,966)

Total - residual value 13,830 69,387 69,387 8,634 - 91,851


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14 Intangible assets

a. Breakdown of intangible assets

b. Changes of intangible assets

12/31/2020 12/31/2019 12/31/2018Annual

amortization Historical

CostAccrued

Amortization Net value Historical Cost

Accrued Amortization Net value

Right of Use (a) 20% 73,379 (43,890) 29,489 15,503 (11,338) 4,165 Software 20% - - - 4,235 (242) 3,993 Development costs (b) 10% 74,407 (5,263) 69,144 - - - Customer portfolio 20% 9,341 (1,630) 7,711 - - - Premium for expectation of future profitability 8% 38,963 - 38,963 - - - Intangible in progress 79,208 - 79,208 71,090 - 71,090 Total Intangible 275,298 (50,783) 224,515 90,828 (11,580) 79,248

12/31/2019 Addition Write-offs Transfer Amortization 12/31/2020

Right of use 8,159 55,201 (1,561) - (32,313) 29,486 Development costs - - - 74,408 (5,263) 69,145 Customer portfolio - 9,341 - - (1,631) 7,710 Premium for expectation of future profitability - 38,963 - - - 38,963 Intangible in progress 71,089 94,428 (11,898) (74,408) - 79,211 Total intangible 79,248 197,933 (13,459) - (39,207) 224,515

12/31/2018 Addition Write-offs Transfer Amortization 12/31/2019Total intangible 26,419 63,043 - - (10,214) 79,248


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15 Non-current assets held-for-sale

The balance of non-current assets held-for-sale, received in lieu for credit recovery, comprises assets originally received as collateral for loans and advances to customers, which were repossessed. Non-current assets held-for-sale are considered to be those for sale at auctions, which usually occur within one year. Therefore, non-current assets held-for-sale include the carrying amount of these items intended for sale, whose sale in its present condition is highly probable and expected within one year. The increase in the balance of Non-current assets held for sale resulted from successful procedures to repossess properties upon settlement of loans and advances to customers carried out by Inter and its subsidiaries. This is also explained by the increase in the balance of real estate loans and the economic crisis in Brazil in the past three years.

16 Other assets

(a) Amounts receivable from the sale of investments: consists substantially of amounts relating to the variable portion of the sale of 40% of the subsidiary Inter Digital Corretora e Consultoria de Seguros Ltda. (“Inter Seguros”), for Wiz Soluções e Corretagem de Seguros S.A. (“Wiz”), which is recognized in accordance with Interseguros' EBITDA.

(b) Commissions and bonuses receivable: refer, substantially, to the bonus receivable from the partnership signed with Mastercard due to the use of the flag by Banco Inter's client.

(c) Pending settlements: Refer to the negotiation of securities intermediation in the amount of R $ 15,696 (2019: R $ 4,427), other amounts R $ 2,832 (2019: R $ 1,246)), amounts to process cards in the amount of R $ 49,399 (2019 : R $ 1,395).

(d) Prepaid expenses: the balance of other prepaid expenses includes the recording of payments for card expenses that involve the generation of economic benefits for Inter, in subsequent periods.

(e) Sundry debtors: Refers to agreements in the amount of R $ 9,091 (2019: 3,557), debtors for guarantee deposits in the amount of R $ 2,852 (2019: 2,130), chargeback with card banner 11,286 (2019: 40) and other amounts R $ 1,351 (2019: 3,267)

12/31/2020 12/31/2019

Real Estate 129,668 135,772 Impairment (9,739) (14,140) Total 119,929 121,632

12/31/2020 12/31/2019Amount receivable from the sale of investments (a) 109,216 - Receivable commissions and bonus (b) 100,509 20,654 Anticipated expenses (d) 74,140 47,130 Pending settlements (c) 67,926 7,806 Other Amounts 45,714 17,662 Early settlement of credit operations 39,723 52,395 Sundry debtors(e) 24,580 9,655 Agreements on sales of properties receivable 24,542 33,988 Taxes and Contributions to compensate 21,960 1,472 Advanced Payment to Third Parties 10,370 1,258 Exchange Portfolio - 33 Total 518,681 192,054


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17 Liabilities with financial institutions The financial liabilities under “Funds from financial institutions” are initially measured at fair value and subsequently at amortized cost, using the effective interest rate method.

a. Breakdown of liabilities with financial institutions

18 Liabilities with customers The financial liabilities under “Funds from customers” are initially measured at fair value and subsequently at amortized cost, using the effective interest rate method.

a. Breakdown of liabilities with customers

19 Securities issued

a. Breakdown of securities issued

12/31/2020 12/31/2019

Time deposits - 332,242 Interbank deposits 1,654,039 640,610 Interdependent relations - 1,149 Total liabilities with financial institutions 1,654,039 974,001

12/31/2020 12/31/2019Demand deposits 6,713,351 2,094,127 Time deposits 4,771,204 2,259,047 Savings deposits 887,666 307,098 Creditors by funds to release 64,410 54,167 Total liabilities with customers 12,436,632 4,714,439

12/31/2020 12/31/2019Agribusiness Credit Bills - - Financial Letters 102,874 189,677 Real estate credit letters 1,729,436 1,695,690 Guaranteed Real Estate Letters - 12,704 Total securities issued 1,832,310 1,898,071


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20 Loans and onlending

They refer to real estate loan financing onlending operations with Caixa Econômica Federal, with rates ranging from 4.5% to 6% p.a.

21 Current taxes

12/31/2020 12/31/2019

Onlending obligations - CEF

Total borrowing and onlending 27,405 29,800

27,405 29,800

1 to 30 days 31 to 180 days 181 to 360

days Above 360 days Total

Borrowing and onlending 104 520 625 26,156 27,405 Grand total 104 520 625 26,156 27,405

12/31/2020

1 to 30 days 31 to 180 days 181 to 360

days Above 360 days Total

Borrowing and onlending 109 545 653 28,493 29,800 Grand total 109 545 653 28,493 29,800

12/31/2019

12/31/2020 12/31/2019Income tax and social contribution 9,947 4,725Tax on financial transactions 1,427 3,630PIS/COFINS 7,505 4,058INSS/FGTS 7,229 4,455Other taxes 4,163 1,334Total current taxes 30,271 18,202


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22 Provisions for legal and administrative proceedings

Provisions for loan commitments Inter and its subsidiaries have expected losses for financial assets that include both a collected component and a loan commitment component not yet used. To the extent that the combined value of expected credit losses exceeds the gross carrying amount of the financial asset, the remaining balance is shown as a provision. Provisions for legal and administrative proceedingsProvision

a. Contingent assets Inter and its subsidiaries figure as plaintiffs in judicial proceedings seeking to recover non-performing customers loans. They mostly involve executions of judicial and extrajudicial instrument (Bank Credit Notes) issued in working capital and factoring transactions. Yet, in cases where there is a request for judicial recovery or bankruptcy of debtors, Inter and its subsidiaries include their credit in such proceedings and keeps the execution against guarantors. Finally, in operations where there are property liens, Inter and its subsidiaries take the ownership of such property if there is customer default (extrajudicial procedure pursuant to Law No. 9.514/97).

b. Contingent liabilities and legal obligations Inter and its subsidiaries, in the normal course of their activities, are parties to tax, social security, labor and civil lawsuits. The respective provisions were made taking into account the laws in force, the opinion of legal advisors, the nature and complexity of the cases, case law, past loss experience and other criteria that allow the most adequate estimate possible. The management of Inter and its subsidiaries, pursuant to IAS37 and as described in Note 3 “k”, sets up provisions to cover the outflow of funds estimated for settlement of cases and legal obligations, when it is assessed that it is probable that financial funds shall be required to settle the obligations and that those amounts can be estimated with sufficient certainty.

(i) Labor proceedings These are proceedings filed by employees and former employees, seeking to obtain indemnities of a labor nature. Contingencies are related to processes in which alleged labor rights are discussed, such as overtime and salary equalization.

12/31/2020 12/31/2019Provision for contingencies 20,613 18,516 Provisions for loan commitments 3,024 3,539

23,637 22,055


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(ii) Civil proceedings

The majority of claims refer to indemnities for material and moral damages related to Inter's and its subsidiaries' products, such as payroll deductible loans, in addition to declaratory and remedial actions, compliance with the limit of 30% discount on borrower's paychecks, presentation of documents and adjustment actions.

c. Change in provisions

d. Contingent liabilities with possible losses

(i) Tax contingent liabilities classified as possible losses

i) Income tax and social contribution It comprises the provisioning of the effects of the legal challenge of the extinction of the inflation indexation of the balance sheet, in accordance with Law 9,249/95, resulting from the full use (deduction) of the debt balance of the inflation indexation in 1996 in the calculation of IRPJ and CSLL, at the amount of BRL 972, which judicial deposit in the same amount is recorded in long-term receivables.

On August 30, 2013, a tax assessment notice was drawn up demanding constitution of diferred tax assets for IRPJ and CSLL related to the calendar years from 2008 to 2009, increase by ex-officio fine (qualified) of 150% and interest on arrears, as well as imposing an isolated fine of 50% on IRPJ and CSLL estimates. Here are the values updated on December 31, 2020:

The tax assessment notices are intended to cover expenses incurred in the provision of services. In view of the factual situation under discussion and Inter’s defense arguments, we evaluated the expectation of outcome as possible, but with a lower likelihood of loss.

Tax Labor Civil TotalStart balance on 01/01/2020 957 3,678 13,881 18,516 (+) Complemented/updated provision 59 1,492 13,729 15,280 (-) Reversal / Write-off due to payment - (1,997) (11,186) (13,183) End balance on 12/31/2020 1,016 3,173 16,424 20,613

Tax Labor Civil Total

Start balance on 1/1/2019 915 3,945 14,226 19,086 (+) Complemented/updated provision 42 1,893 6,492 8,427 (-) Reversal / Write-off due to payment - (2,160) (6,837) (8,997) End balance on 12/31/2019 957 3,678 13,881 18,516

Main Fine Interest Total Main Fine Interest Total10,300 19,892 23,082 53,274 10,300 19,892 22,939 53,131

12/31/2020 12/31/2019


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ii) Cofins

Inter has a decision of the Federal Supreme Court, dated December 19, 2005, granting the right to pay COFINS based on the revenue from services rendered. During the period from 1999 to 2006, Inter made a judicial deposit and/or made the payment of the obligation. In 2006, Banco Inter, upon a favorable decision of the Federal Supreme Court and express agreement of the Revenue Service, carried out the release of the judicial deposit. In addition, the authorization of credits on the collection of taxes was ratified without challenge by Brazilian Federal Revenue Service, on May 11, 2006.

(i) On July 2, 2010, the Brazilian Federal Revenue Service, contrary to a decision of the Federal Supreme Court, which was final and unappealable, as specified in item (i) above, filed an administrative proceeding charging the amounts of judicial deposits related to COFINS raised by Inter in the case of the Writ of Mandamus no. 1999.38.00.016025, where the values updated to September 2020 are according to the table above.

On October 5, 2010, an injunction was granted demanding the processing of the defense presented in the Administrative Proceeding files, with the hierarchical appeal, with suspension of the liabilities of the tax credit.

(ii) On July 14, 2010, the Federal Revenue Service filed an administrative proceeding charging the amounts of return/compensation claims paid in excess of COFINS raised by Inter in the case files of Writ of Mandamus No. 1999.38.00.016025, where the amounts updated September 2020 are according to the table above.

After filing Expression of Dissatisfaction, the Administrative Council of Tax Appeals determined the suspension of the administrative process until the judgment at the Federal Supreme Court.

(iii) On November 11, 2010, notices were drawn up for constitution of diferred tax assets under PIS and COFINS, plus a fine of 75% and interest on arrears in the period from March 2006 to December 2008. Such contribution collections were considered insufficient. The values are updated to September 2020, according to the table above.

After filing Expression of Dissatisfaction, the Administrative Council of Tax Appeals determined the suspension of the administrative process until the judgment at the Federal Supreme Court.

(iv) On December 15, 2014, a tax assessment notice was issued demanding the constitution of a tax credit for COFINS, covering the period from January 2010 to December 2011, plus a fine of 75% and interest on arrears. The values are updated to September 2020, according to the table above.

Note Main Fine Interest Total Main Fine Interest Total(i) 1,254 251 2,553 4,058 1,254 251 2,516 4,021 (ii) 3,496 699 4,678 8,873 3,496 699 4,576 8,771 (iii) 10,027 14,889 - 24,918 10,027 - 14,563 24,590 (iv) 11,212 8,409 13,803 33,423 11,212 8,409 13,228 32,849 (v) 1,367 273 783 2,424 1,367 273 743 2,384 (vi) - 688 159 848 - 688 139 827 (vii) 8,586 6,439 6,846 21,871 8,804 6,603 6,567 21,975 (viii) 9,310 6,982 5,797 22,090 9,310 6,982 5,320 21,612

12/31/2020 12/31/2019


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The tax assessment notice was drawn up on the grounds that Inter had an insufficient collection of the contribution in question. In view of Inter’s defense arguments, we evaluated the expectation of outcome as possible, but with a lower likelihood of loss.

(v) On October 9, 2015, it was notified of the decision of dismissing the right to offset debts with credits arising from payments considered undue by Inter, carried out for COFINS (January and February 2014).

On November 3, 2015, an Expression of Dissatisfaction was filed, which answer is pending. The values are updated to September 2020, according to the table above.

(vi) On January 24, 2017,Inter was notified about the tax assessment notice drawn up for constitution of a tax credit related to an isolated fine of 50% on the amount of the debt whose offset was not approved in administrative proceeding no. 10680.723654/2015-41. The values are updated to December 2020, according to the table above.

(vii) On April 5, 2017, Inter was notified about the tax assessment notice drawn-up for constitution a COFINS tax credit, plus an ex-office fine of 75% and interest in arrears, on the allegation that Inter, in the calendar year 2013, carried out insufficient collections of the contribution due to the non-inclusion of “financial income” in the calculation basis. The values are updated to December 2020, according to the table above.

The values are updated to September 2020, according to the table above. On 03/26/2019, the voluntary appeal was distributed to the 1st Ordinary Class of the 2nd Chamber of the 3rd Judicial Section of CARF. It is expected the appeal to be included in the list of CARF judgments.

(viii) On October 31, 2018, Inter was notified about the tax assessment notice drawn-up for constitution a COFINS tax credit, plus an ex-office fine of 75% and interest in arrears, on the allegation that Inter, in the calendar year 2014, carried out insufficient collections of the contribution due to the non-inclusion of “financial income” in the calculation basis. The values are updated to December 2020, according to the table above. We are awaiting the judgment of challenge presented by Inter.

e. Financial guarantees

The commitments under sureties provided and controlled in memorandum accounts are as follows:

Inter Management and its subsidiaries do not record a provision for the financial guarantees provided because our analyzes indicate that the amount to be recognized is not significant.

12/31/2020 12/31/2019Given guarantees 127 5,318 Total financial guarantees 127 5,318


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23 Other liabilities

Financial liabilities measured at amortized cost, as shown below:

a) Assignments payable and miscellaneous payments: This balance is mainly represented by payments to be processed, in the amount of R $ 44,732 (2019: R $ 60,472); provision for creditors and various suppliers, in the amount of R $ 219,865 (2019: R $ 47,069); administrative check, in the amount of R $ 4,235 (2019: R $ 1,379); provisions for salaries, vacations and other labor charges, in the amount of R $ 21,518 (2019: R $ 11,855); and agreements, in the amount of R $ 29,223 (2019: R $ 50), financing to be released R $ 2,638 (2019: 3,752). (b) Liabilities of contracts: The balance consists of amounts received, not yet recognized in the income for the period, due to the exclusive contract for insurance products at the Inter branches signed between Inter Digital Corretora and Consultoria de Seguros Ltda. (“Inter Seguros”) (subsidiary of Inter) with Liberty Seguros.

a. Lease liability Below we show the changes of the year recorded in accordance with IFRS 16:

Lease maturity The maturity of the financial liabilities in 2020 is divided as follows: - BRL 514 within 1 year; - BRL 4,018 between 1 and 5 years; and - BRL 106,795 more than 5 years. Impact on income According to IFRS 16, lease payments previously entered as rental expenses in heading “Other Administrative Expenses” in the income statement, are now entered as

12/31/2020 12/31/2019Payable cessions and miscellaneous payments (a) 322,211 124,577 Lease financial liabilities (Note 24 a) 111,328 70,460 Contract liabilities (b) 38,867 - Payables to related companies - - Other liabilities 2,887 - Exchange transactions 119 - Payable Dividends 7 15,398 Amounts to transfer and miscellaneous payments - 5,167 Others - 513 Total other liabilities 475,720 216,115

Balance on January 1, 2020 70,460 Re-measurement and new contracts 52,528 Payments (29,909) Appropriation of financial charges 18,249 End balance on December 31, 2020 111,328

Initial adoption - IFRS 16 9,405 Adjusted balance on January 1, 2019 9,405 Re-measurement and new contracts 64,301 Payments (4,196) Appropriation of financial charges 950 End balance on December 31, 2019 70,460


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depreciation expenses and financial expenses. The impact on income for 20120 was: Depreciation expenses – BRL 1,318 (2019: BRL 3,410) and Financial expenses – BRL 2,064 (2019: BRL 950), totaling expenses at BRL 3,383 (2019: BRL 4,360).

24 Shareholder´s Equity

a. Breakdown of share capital

On April 15, 2019, the Administration Board approved the Board of Executive Officers' proposal for capital increase of BRL 627 upon issuance of up to 123,123 new preferred shares to cover the stock options exercised by the beneficiaries of the Plans, considering that the preemptive right of current shareholders to subscribe new shares does not apply, as provided for in §3, art. 171 of Law 6,404/1976. On July 29, 2019, the capital stock was increased within the primary public offer, with restricted placement efforts for, (a) share deposit certificates, representing 1 (one) common share and (2) preferred shares each, all registered, booked, with no par value, free and cleared of any lien or encumbrance (“Units” and “Institutional Offer”, respectively); and (b) exclusively to Inter shareholders, who, on July 18, 2019, held units, common shares and/or preferred shares issued by Inter “(Shareholders”), in order to entitle such Shareholders with the right to priority, common shares (“Common Shares”) and preferred shares “Preferred Shares” and together with the Common Shares, “Shares”) issued by Inter, all registered, booked and with no par value, free and cleared of any lien or encumbrance (“Priority Offer” and together with the Institutional Offer, “Offer”), in the terms of CVM Instruction No 476 dated January 16, 2009, as amended (“CVM Instruction No 476”. The capital stock of Inter increased from BRL 866,364 to BRL 2,114,052; therefore, increase by the amount of BRL 1,247,688, upon issuance of preferred shares, all registered, inscribed and without par value, and 31,200,000 common shares, all registered, inscribed and without par value, pursuant to the Offer. On September 27, 2019, the Administration Board approved the reform of the corporate bylaws of Inter to ratify and update the value of the capital stock of Inter, according to the increase of capital deliberated at the Meeting of the Board of Executive Officers held on July 29, 2019, within the authorized capital limit and the final number of shares effectively issued by Bank, subscribed and paid-off, considering the completion of the new period for conversion of shares issued by Banco Inter from one series to another, as provided in the program for issuance of share deposit certificates of Banco Inter, to form units (“Units“ and “Unit Program”, respectively), so the capital stock of Banco Inter is now represented by 702,805,002 nominal shares, with no par value, namely, 364,451,252 common shares and 338,353,750 preferred shares. On October 30, 2019, the Administration Board approved the Board of Executive Officers'

Description Total Common Preferred Capital Stock

End balance - 12/31/2018 101,411,044 50,767,085 50,643,959 848,760 Capital increase 133,650,134 70,980,947 62,669,187 1,219,545

End balance - 12/31/2019 235,061,178 121,748,032 113,313,146 2,068,305 Capital increase 529,383,467 261,703,997 267,679,470 1,148,150

End balance - 12/31/2020 764,444,645 383,452,029 380,992,616 3,216,455


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proposal for capital increase of BRL 1,954 upon issuance of 1,585,688 new preferred shares and 792,844 common shares to cover the stock options exercised by the beneficiaries of Plans II, Plans III and Plans IV, considering that the preemptive right of current shareholders to subscribe new shares does not apply, as provided for in §3, art. 171 of Law 6,404/1976. On March 05, 2020, capital increase at the amount of BRL 1,409 was deliberated, upon issuance of 1,179,664 preferred shares and 589,832 common shares, to cover the stock option exercised by the beneficiaries of the Option Plans. On June 29, 2020, the Administration board approved the increase of the capital stock within the limits of capital authorized by Inter, in the terms of art. 6 of its Corporate Bylaws, upon private subscription at the total amount of BRL 13,827, upon issuance of 1,502,715 new shares, namely 779,201 common shares and 723,514 preferred shares. On September 3, 2020, the capital stock was increased by BRL 1,166,249 within the primary distribution public offer, with restricted placement efforts for, (a) share deposit certificates, representing 1 (one) common share and (2) preferred shares each, all registered, booked, with no par value, free and cleared of any lien or encumbrance (“Units” and “Institutional Offer”, respectively); and (b) exclusively to Inter shareholders, who held units, common shares and/or preferred shares issued by Inter on the cut date to be set forth in the Offer documents (as defined hereunder), as verified in the custody positions at the central depository and the booker of the Bank (“Shareholders”), in order to entitle such Shareholders with the right to priority, common shares (“Common Shares”) and preferred shares (“Preferred Shares” and together with the Common Shares, “Shares”) issued by Inter, all registered, booked and with no par value, free and cleared of any lien or encumbrance (“Priority Offer” and together with the Institutional Offer, “Offer”), in the terms of Instruction of the Security Council (CVM) No 476 dated January 16, 2009, as amended (“CVM Instruction No 476”) and other applicable norms. On December 31, 2020, the fully subscribed and paid-off capital stock is BRL 3,216,455, composed of 764,444,645 registered shares, of which 383,452,029 are common shares and 380,992,616 are preferred shares, all with no par value

b. Profit reserves

• Legal reserve The legal reserve is recorded at 5% of net profit for each fiscal year in the terms of art. 193 of Law No. 6.404/76, up to a limit of 20% of capital stock.

• Statutory earnings retention reserve These are recorded in compliance with the bylaws Inter and its subsidiaries.

c. Other comprehensive income The balance of other comprehensive income of Inter is BRL (48,937) (December 31, 2019: BRL 3,780). The value corresponds to the variation of the market value of the federal public bonds available for sale.

d. Dividends and interest on equity Inter adopts a policy of capital remuneration by paying interest on equity at the maximum amount calculated in compliance with current legislation, which is charged, net of Withholding Income Tax, in the calculation of mandatory dividends for the fiscal year as


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provided for in the Bylaws and art. 202 of Law nº 6,404/1976. The allocations of the results for fiscal years ended on December 31, 2020 , and 2019 are presented below:

On March 26, 2020, the Administration Board approved the proposal of the Board of Executive Officers for announcement and payment of IoE at the gross amount of BRL 16,266. On June 25, 2020, the Administration Board approved the proposal of the Board of Executive Officers for announcement and payment of IoE at the gross amount of BRL 16,266. On July 21, 2020, the Administration Board re-ratified the payment of IoE dated June 25, 2020 and proposed and approved additional IoE at BRL 7,418 retroactively to June 30, 2020, amounting to 39,950 in the period.

The amounts paid were calculated based on the results obtained in compliance with corporate accounting standards applicable to financial institutions authorized to operate by the Central Bank of Brazil, and in compliance with the Corporate Law No. 6.404/1976.

e. Earnings per share

(i) Basic earnings per share Basic earnings per share are shown below:

(a) On December 31, 2019, the weighted average number of outstanding shares was 350,857,909; however,to comply with IAS 33, the calculations for referred base date were adjusted considering the weighted average of the shares on December 31, 2020.

Basic earnings per share are presented based on two classes of shares, namely: common and preferred, and calculated by dividing net income attributable to the parent company by the weighted average of each class of shares outstanding in the year.

Result Destination 12/31/2020 12/31/2019

Net Profit 17,911 55,403 Legal Reserve - 3,944 IoE paid and dividends provisioned 39,949 51,252 Statutory reserve (22,038) 207 Impacts initial adoption IFRS 9 - -

Amount provisioned

Amount per share

Amount provisioned

Amount per share

Interest on Equity paid in the period 37,868 0.05 38,439 0.05 Provisioned dividends (2,082) (0.00) - - Tax on Payable Interest on Equity (2,440) (0.00) (1,451) - Payable Interest on Equity 39,950 0.06 11,362 0.02

12/31/2020 12/31/2019

12/31/2020 12/31/2019Net Profit (Loss) attributable to shareholders (BRL thousand) 30,686 58,090 Average number of shares (a) 735,732,561 350,857,909 Basic earnings assigned (in R$ thousand) - - Basic earnings per share (BRL) 0.02422 0.07493 Diluted earnings per share (BRL) 0.02418 0.07479


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The amount of earnings per share was determined under the assumption that all earnings were paid and calculated in compliance with the requirements of IAS 33 – Earnings per share.

(ii) Diluted earnings per share The calculation of diluted earnings per share was based on the net income attributed to holders of preferred shares, and on the weighted average of preferred shares outstanding after the adjustments for all potential dilutive preferred shares.

f. Treasury shares On March 12, 2020, the Administration Board approved a program for acquisition of shares issued by Inter, to be held in treasury, cancellation or re-placement on the market, or yet destination to the Share Purchase Option Plans and/or Units of Inter, with 18 month period. As a result from the approval of this program, along 2020, there were 2,968,100 common shares and 4,742,500 preferred shares, totaling amount of 7,710,600 shares at BRL 153,109. In the second half-year 2020, 1,335,100 common shares and 2,670,200 preferred shares were placed on the market again, totaling 4,005,300 shares at cost of BRL 35,588, generating a positive result for Inter at the amount of BRL 81,909, recorded in capital reserves. On December 31, 2020, the balance of treasury shares totaled BRL 117,521, composed of 1,633,000 common shares and 2,072,300 preferred shares, totaling 3,705,300 shares. On December 31, 2019, Inter did not have shares in treasury.

Resultado básico Resultado diluído12/31/2020 12/31/2019 12/31/2020 12/31/2019

Outstanding shares 760,739,345 705,183,534 760,739,345 705,183,534Effect of the average period of the outstanding shares (25,006,784) (354,325,625) (25,006,784) (354,325,625) Effects of the treasury shares 3,705,300 - 3,705,300 - Effect of the plans of shares when performed - - 1,340,544 1,518,401 Weighted average of outstanding common shares 739,437,861 350,857,909 740,778,405 352,376,310


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25 Net interest income

26 Net result from services and commissions

12/31/2020 12/31/2019Revenues from interestIncome from interbank investments 126,619 139,642 Loans and advances to customers 809,628 635,308 Income from foreign exchange transactions 6,561 565 Total revenues from interest 942,808 775,515

Interest expensesSecurities issued (214,543) (261,699) Borrowing and onlending (1,544) (2,050) Financial lease operations (2,064) (950) Financial asset transf. and sale operations (9) (134) Total expense for interest (218,161) (264,833)

Total 724,647 510,683

12/31/2020 12/31/2019

Revenues from services and commissions 12,637 - Income from Bank Fees 40,436 29,397 Income from exchange 137,863 58,152 Commissions and intermediation 38,026 18,870 Third Parties´ funds administration 13,335 9,137 Exchange brokerage and securities 8,842 8,334 Income from credit card 184 17 Management and structuring fees 1,900 2,296 Other services 3,921 4,254 Total revenues from services and commissions 257,145 130,457

Expenses from services and commissionsCommissions and intermediation (6,147) (27,525) Total expenses from services and commissions (6,147) (27,525)

Total 250,998 102,931


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27 Other revenues

(a) Revenue from the sale of investment: consists substantially of amounts referring to the variable portion of the sale of 40% of the subsidiary Inter Digital Corretora e Consultoria de Seguros Ltda. (“Inter Seguros”), for Wiz Soluções e Corretagem de Seguros S.A. (“Wiz”), which is recognized in accordance with Interseguros' EBITDA. See note 17. (b) Performance revenue: consists substantially of the result of the partnership between Banco Inter and Mastercard, which offers performance bonuses to Banco Inter as the volume of card issuance increases.

28 Result from impairment losses on financial assets

(i) Balance reclassified from Interest Income, in compliance with the policy presented in Note 4d.

29 Personnel expenses

12/31/2020 12/31/2019Revenue from the sale of Investments (a) 109,216 45,000 Revenues from cards (b) 75,230 24,610 Foreign exchange revenues 17,318 5,976 Other operating income 8,406 9,200 Recovery of charges and expenses 3,321 3,977 Portability income 2,347 1,408 Evaluation fees 2,307 6,180 Receivable income from securities and credits 953 1,492 Total 219,098 97,843

12/31/2020 12/31/2019Loss on impairment adjustment of loans and advances to customers (256,116) (154,112)

Expected loss for financial assets classified as fair value through other comprehensive income - VJORA (759) -

Expected loss for financial assets classified as amortized cost (12,701) - Sub-total (269,576) (154,112)

Provision Reversal (Constitution) 16,276 (7,153) Recovery of written-off credits (i) 39,612 23,894 Total income from impairment loss on financial assets (213,688) (137,371)

12/31/2020 12/31/2019

Salaries (117,622) (78,738) Remuneration of the executive office and the Administration board(15,893) (12,820) Social and social security charges (37,128) (29,793) Profit share (2,685) (9,034) Expenses for vacation and thirteenth salary (21,480) (13,877) Benefits (32,150) (23,073) Other personnel expenses (2,137) (1,863) Total (229,096) (169,198)


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30 Other administrative revenues (expenses)

31 Current and deferred income tax and social contribution Please see policy in note 4 “k”.

a. Amounts recognized in income for the year

12/31/2020 12/31/2019Data processing and informatics (189,351) (109,199)Bank expenses (188,956) (84,773)Taxation expenses (69,676) (41,416)Rent, condominium fee and property maintenance (18,628) (13,145)Third party services (47,501) (29,134)Advertisement, publicity, publications and public relations (55,354) (40,242)Communication (81,892) (45,890)Notary public and legal expenses (5,066) (2,421)Granted discounts (7,612) (5,629)Gain (loss) from alienation of values and property (32) (413)Water and energy expenses (1,100) (1,319)Expenses for Serasa (2,016) (893)Travel expenses (319) (648)Portability expenses (4,928) (4,560)Other Administration expenses (revenues) (20,131) (23,023)Provision for Contingencies (14,227) (8,413)Provision for loss of non-current assets held for sale - (4,295)Total (706,791) (370,413)

12/31/2020 12/31/2019Current income tax and social contribution expensesExpenses of the current year (13,166) (5,859)

Deferred income tax and social contribution expensesProvision for impairment losses on loans and advances 22,706 16,381 Provision for contingencies 890 629 Evaluation at fair value market-marked operations 11,888 (12,388) Other temporary differences (152) (454) Hedge transactions 23,946 (3,054) Fiscal Loss 8,553 12,271 Share issuance cost - (9,064)

67,831 4,321

Deferred income tax and social contribution expenses - IFRS adjustmentProvision for impairment losses on loans and advances 11,555 12,122 Expected loss on financial instruments 6,057 - Provision for loss of non-current assets held for sale (1,980) 1,718 Commission deferral 2,731 (1,096) Contract assets (36,841) - Miscellaneous temporary differences 1,523 -

(16,956) 12,744

Total revenues from taxes 37,709 11,206


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b. Statement of calculation of charges

Income tax Social Contribution Income tax Social

ContributionDETERMINATION OF ACTUAL PROFIT Profit before income tax and social contribution (77,287) (77,287) 85,444 85,444

Net addition (exclusion):Interest on Own Capital (39,951) (39,951) (50,033) (50,033) Equity method (35,034) (35,034) (15,863) (15,863) Net PCLD 48,277 48,277 30,306 30,306 Fiscal Loss - - - - Provision for contingencies 2,038 2,038 (622) (622) Hedge operations income 53,368 53,368 (9,063) (9,063) Security market marking 26,413 26,413 - - Share issuance costs (60,599) (60,599) (50,221) (50,221) Others, net 3,105 3,105 4,015 4,015 Actual Profit calculation base (Fiscal Loss) (79,670) (79,720) (6,037) (6,037)

DETERMINATION OF PRESUMED PROFIT Revenues from services 118,950 118,950 20,601 20,601

Presumed Profit (32%) 38,064 38,064 6,592 6,592 Other revenues 886 886 205 205 Actual Profit calculation base (Fiscal Loss) 38,950 38,950 6,797 6,797

Effective rate (5,843) (3,506) 2,376 1,970 Additional rate (10%) (3,817) - 1,513 - Deferred IRPJ and CSLL 28,658 22,217 (10,666) (6,399) Tax benefits - - - -

18,998 18,711 (6,777) (4,429) Total

Effective rate -25% -24% -14% -9%

Current income tax and social contribution (13,166) (5,859) Deferred income tax and social contribution 50,875 17,065

12/31/2020 12/31/2019


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c. Changes in the balances of deferred assets

Balance on 12/31/2019 Constitution Realization Balance on

12/31/2020Recomposition of the deferred assetsProvision for impairment losses on loans and advances 43,978 48,387 (25,681) 66,684 Provision for contingencies 7,901 6,402 (5,512) 8,791 Adjustment of financial assets to market value (12,389) 16,012 (4,124) (501) Miscellaneous temporary differences 523 - (152) 371 Hedge transactions (1,751) 134,874 (110,928) 22,195 Fiscal Loss 23,108 183,865 (148,179) 58,794

Recomposition of the deferred assets with adjustment upon adoption of IFRSProvision for impairment losses on loans and advances 28,743 14,193 - 42,936

- - 6,057 6,057 Effects on the credit operation portfolio - - - - Provision for loss of non-current assets held for sale 5,656 - (1,273) 4,383 Commission deferral (7,384) 1,808 - (5,576) Contract assets - (36,841) - (36,841) Miscellaneous temporary differences - 1,522 - 1,522 Total tax credits on temporary differences 88,385 370,222 (289,793) 168,815

Balance on 12/31/2018 Constitution Realization Balance on

12/31/2019Recomposition of the deferred assetsProvision for impairment losses on loans and advances 27,598 20,106 (3,726) 43,978 Provision for contingencies 7,272 4,827 (4,198) 7,901 Adjustment of financial assets to market value 124 (12,389) (124) (12,389) Miscellaneous temporary differences 907 62 (446) 523 Hedge transactions 1,303 (1,751) (1,303) (1,751) Fiscal Loss 341 23,311 (544) 23,108

Recomposition of the deferred assets with adjustment upon adoption of IFRSProvision for impairment losses on loans and advances 12,868 15,875 - 28,743 Effects on the credit operation portfolio 2,903 (2,903) - - Provision for loss of non-current assets held for sale 3,938 1,718 - 5,656 Commission deferral (8,480) 1,096 - (7,384) Total tax credits on temporary differences 48,774 49,952 (10,341) 88,385


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d. Forecast for realization of deferred tax assets

The accounting records of these diferred tax assets are based on the expectation of generation of future taxable income and supported by technical studies and result forecasts. It is estimated that the realization of such diferred tax assets and the social contribution to offset will occur in the next two years as follows:

32 Share-based compensation Over the years, stock option plans have been granted by Inter to key Administration personnel. The Shares Stock Option Plan, established pursuant to art. 168, Paragraph 3, of Law no. 6,404/1976, is an initiative of Inter and its subsidiaries’s Administration Board, through which Inter and its subsidiaries’s managers, executives and employees were granted options for the acquisition of Shares of Inter, with a view to encouraging performance and favoring the retention of managers, executives and employees of Inter and its subsidiaries, insofar as their participation in Inter’s share capital will allow them to benefit from the results to which they contributed and which are reflected in the valuation of the price of its shares, thus forming, with the shareholders, a communion of interests. Considering the plans currently in force, the first one started in 2012 and will close in 2021. For 2013 and 2014 tranches (Plan 2), which will end in 2020 and 2021, respectively, the chosen employees will be entitled with the right to exercise the option to acquire 3,440,520 preferred shares, at unit value of BRL 3,69.

Period Base value Present value Credit value Present value Credit value Present value

2021 107,395 106,469 26,699 26,468 21,479 21,2942022 75,442 75,442 32,583 25,650 26,182 20,6352023 66,718 65,316 16,586 16,349 13,344 13,0632024 67,799 65,627 16,855 16,427 13,560 13,1252025 3,403 3,294 846 844 681 659

TOTAL 320,758 316,149 93,569 85,738 75,246 68,777

Period Base value Present value Credit value Present value Credit value Present value

2020 118,453 115,032 46,497 45,154 32,632 31,6892021 20,568 19,638 5,142 4,910 4,114 3,928

TOTAL 139,021 134,670 51,639 50,064 36,746 35,617

Deferred credits IT CSLL

2020Deferred credits IT CSLL

2019

1st year 2nd year 3rd year. 4th year. 5th year.% of tax credit realization 29% 35% 18% 18% 1%


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For 2013 and 2014 tranches, if the employee does not exercise the option, i.e., his/her employment at Inter is terminated, he/she will lose the right. Once the options are exercised, the grantee may not sell, transfer or dispose of such shares, as well as those that may be acquired by virtue of bonuses, splits, subscription or any other form of acquisition, provided that such rights have arisen for the employee from shares granted under the Plan, for a minimum period of five years as from the date of receipt of the first offer of shares offered to him/her by Inter. In 2016, a new Stock Option Plan (Plan 3) was launched, which entered into force in 2017 and will end in 2021, in which Banco Inter may increase the Share Capital by up to further 3,384,000 registered preferred shares, segregated into five tranches, subject to the rules of the regulation approved by the Administration Board. The options exercisable will have a par value of BRL 4.62 and may be exercised by the participant in up to three years as of the last lock-up period. On February 6, 2018, it was approved by the Administration board of Inter. Stock Option Plan 4. These options may be exercised within a period of three (3) years, counted from the respective lock-up periods, and after which they will be automatically be terminated, with no indemnification rights. The strike price of the options granted in the plans is equivalent to the book value per share at the end of the year prior to the grant. The rules for exercising and terminating the options are part of the plan’s regulations and are filed at the headquarters of Inter and its subsidiaries. The main characteristics of the Plans are described below: Plan Approval Options Vesting Average Strike

Price Participants Final Strike Term

2 2/24/2012 1,699,470 Up to 5 years BRL 3.69 Officers, managers and key employees

12/31/2019 12/31/2020 12/31/2021

3 9/30/2016 588,000 Up to 5 years BRL 4.62 Officers, managers and key employees 12/31/2023

4 2/15/2018 1,675,488 Up to 5 years BRL 4.50 Officers, managers and key employees 2/15/2025

The changes in the options of each plan for the period ended on December 31, 2020, and supplementary information are shown below:

Changes 12/31/2020 (Shares)

Plan Qty Collaborators Start Balance Granted Expired/

Canceled Exercised End balance

2 1 23,947 - - 23,947 - 3 16 491,100 - 5,100 90,000 396,000 4 33 1,259,293 160,000 46,529 280,969 1,091,795

Total 1,774,340 160,000 51,629 394,916 1,487,795

Weighted Average period of the Shares R$ 5.21 R$ 4.74 R$ 4.73 R$ 4.78 R$ 4.65


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The estimated remaining cost is related to the value of the option premiums granted to employees in the financial statements based on their fair value. The fair values of the programs were estimated based on the Black & Scholes option valuation model, considering the following assumptions:

The cost of premium related to the program no. 4 will be the responsibility of the participants, not being recognized any cost by the Bank.

33 Transactions with related parties Always in compliance with the legal provisions in force , related party transactions are carried out, as shown below:

In the year ended on December 31, 2020, Inter carried out a post working capital operation with one of its subsidiaries, Inter Distribuidora de Titulos e Valores Mobiliários Ltda., at lower rate than the other operations carried out by the Bank with its clients.

Changes 12/31/2019 (Shares)

Plan Qty Collaborators Start Balance Granted Expired/

Canceled Exercised End balance

2 12 240,288 - 15,480 200,861 23,947 3 18 540,900 - 7,600 42,200 491,100 4 25 1,641,248 50,000 21,600 410,355 1,209,293

Total 2,422,436 50,000 44,680 653,416 1,724,340

Weighted Average period of the Shares R$ 4.61 R$ 4.92 R$ 4.34 R$ 4.68 R$ 5.21

PlanNum. of

Outstanding Shares

Premium cost in the

quarter

Premium cost to be recognized

Remaining period of the

remuneration cost (in years)

Remaining Contract Life (in

years)

2 - - - - -3 468,000 48 48 0.5 3.64 1,149,795 - - 4 4.7

2(2013) 2(2014) 3(2016) 4(2018) 4(2020)

Strike Price 3.69 3.69 4.62 5.42 32.26Risk Free Rate 11.05% 11.15% 11.68% 9.97% 9.98%Duration of the Period (years) 8 8 7 7 7Expected Annualized Volatility 35.06% 35.06% 60.33% 64.28% 64.28%Fair Value of the Option on Grant/Share Date 0.88 0.99 1.13 0.32 0.16

Schedule

Parent company (a) Subsidiaries (b) Key personnel from the Administration (c) Other related parties (d)

12/31/2020 12/31/2019 12/31/2020 12/31/2019 12/31/2020 12/31/2019 12/31/2020 12/31/2019 12/31/2020 12/31/2019AssetsLoans and advances to customers 9 - 30,015 - 2,615 - 134,626 50,145 167,265 50,145 Securities - - 880 - - - - - 880 -

LiabilitiesDemand deposits (30) (205) (48,423) (6,027) (2,287) (466) (5,393) (3,676) (56,133) (10,374) Time deposits (22,471) (94,529) (116,955) (10,360) (37,816) (11,356) (224,553) (422,383) (401,795) (538,628) Other liabilities - - - - - - - - - -

Parent Company (a) Subsidiaries (b) Key personnel from the Administration (c) Other related parties (d)

12/31/2020 12/31/2019 12/31/2020 12/31/2019 12/31/2020 12/31/2019 12/31/2020 12/31/2019 12/31/2020 12/31/2019Revenues from interest - - 138 - - - - - 138 - Interest expenses (2,503) (3,564) (3,016) (1,087) (2,181) (797) (15,954) (10,595) (23,654) (16,043) Other administrative revenues (expenses) - - - (24) - - (1,085) - (1,085) (24) Other operating expenses - - (26,719) - - - - - (26,719) -

Total

Total


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. The average rate applied to post-domicile working capital operations is around 0.5% a.y. plus the monthly CDI. The loan between the institution and Inter S.A was agreed at rate of 110% of the monthly CDI, considering that it is a short-term operation due on December 22, 2021, and with payment in a single installment.

(b) any individual or legal entity that controls the Institution;

(c) any entity under the control of the institution;

(d) any officer, director, member of the fiscal council;

(e) any immediate family members of key management personnel or companies controlled by them;

Funding through deposits corresponds to CDBs, LCIs. Transactions with related parties are carried out at conditions and rates compatible with the averages practiced with third parties, when applicable, in force on the dates of operations. Since January 1, 2019, according to CMN Resolution No. 4,693, Inter and its subsidiaries may grant loans to its related parties as long as they fulfill the following limits:

• 1% of the shareholders' equity adjusted by the accumulated revenues and expenses for contracting with natural persons; and

• 5% of shareholders' equity adjusted by the accumulated revenues and expenses for contracting with a legal entity.

The sum of the balances of loans contracted, directly or indirectly, with related parties shall not exceed 10% of the value related to stockholders' equity adjusted by the accumulated income and expenses.

a. Bank Administrators´ Compensation The remuneration of Banco Inter’s administrators is fully paid by Banco Inter S.A, without reimbursement. Inter and its subsidiaries has a stock option plan for preferred shares for its Administrators. Further information on the plan is detailed in explanatory note nº 26. The remuneration of the Administrators of Inter and its subsidiaries S.A for the period ended on December 31, 2020 is presented in note nº 23, in row remuneration of the executive board and the administration board ad referendum to the Ordinary General Assembly meeting.

34 Other information a. Insurance contracted - Grupo Inter has insurance for its main assets in amounts considered

adequate by Management to cover possible losses on claims. ).

b. In the period endend on December 31, 2020, the events and the conditions generated by the dissemination of the new Coronavirus (COVID-19) and by the strict measures implemented to contain and/or retard the virus propagation resulted in levels of uncertainties and risks for Banco Inter, which have not been faced yet. Due to COVID-19, series of decisions were taken to keep the quality of the provided services and to assure the institution clients´, collaborators´ and suppliers´ safety. The economic and the financial impacts were the following: effect on the market marking of the securities held for trading available for sale, decrease in the receiving due to the extension and/or renegotiation of


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the installments of loans and financing. These impacts caused by the pandemic have been followed up closely by the Administration.

35 Subsequent events

On November 17, 2020, the Administration Board approved the acceleration of a Binding Memorandum of Understanding (“MOU Binding”) for the acquisition by Inter of equity interest in BMG Granito Soluções em Relógio S.A. (“Granito”). Inter will make a primary investment of BRL 90 million and will hold 45% (forty-five percent) of Granito's share capital, joining Banco BMG and Granito´s executives who will hold 45% (forty-five percent) and 10% (ten percent) of the company's capital, respectively. The definite closing of the transaction is subject to approval by the Central Bank of Brazil and CADE. On February 12, 2020, according to notification to the market published on December 18, 2020, the acquisition by Inter of 60% (sixty percent) of the share capital of Acerto Cobrança e Informação Cadastrais S.A. (“Meu Acerto”) was completed. On that date: (i) all precedent conditions for the closing of the transaction were met, as provided in the Agreement for Purchase and Sale and Subscription of Shares and Other Covenants (“SPA”), signed on December 18, 2020; and (ii) a shareholders' agreement between Inter and other shareholders was signed, among other documents. On March 1, 2021, provisional measure No. 1,034 was Law 7,689, dated December 15, 1988, to increase the rate of Social Contribution on Net Income due by legal entities from the financial sector to twenty-five percent u ntil December 31, 2021 and twenty percent as of January 1, 2022.


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* * * Administration Board Rubens Menin Teixeira de Souza - President

José Felipe Diniz - Board Member

Leonardo Guimarães Corrêa - Board Member

Maria Fernanda Nazareth Menin Teixeira de Souza - Board Member

Cristiano Henrique Vieira Gomes - Independent Councilor

Luiz Antônio Nogueira de França - Independent Councilor

André Guilherme Cazzaniga Maciel - Independent Councilor

Presidency João Vitor Nazareth Menin Teixeira de Souza

Vice presidents Alexandre Riccio de Oliveira

Marco Túlio Guimarães

Executive Office Ana Luiza Vieira Franco Forattini

André Jacques Luciano Uchoa Costa

Frederico Correa Ferreira de Melo

Guilherme Ximenes de Almeida

Helena Lopes Caldeira

Leonardo Guimarães Corrêa

Lucas de Souza Bernardes

Priscila Salles Vianna de Paula

Ray Tarick Pereira Chalub

Sebastião Luiz da Silva

Fiscal Council Paulino Ferreira Leite - Councilor

Thiago da Costa e Silva Lott - Councilor

Fernando Henrique da Fonseca - Councilor

Accountant in charge Sicomar Benigno de Araújo Soares - CRC-MG 67.120-O-3

consolidated financial with ifrs on december 31,

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