PicS N.V. (PICS) Delivers Credit Portfolio Momentum and Q2 Outperformance Across the Board

PicS N.V. (PICS) reported strong performance in Q2, surpassing its own guidance across all profitability metrics. The total account base reached 70.4 million, a 10% increase from the previous year. Adjusted earnings before tax amounted to R$291 million, which was 2.1% above the R$285 million forecast. Adjusted net income for the quarter was R$283 million, marking a 15.5% increase over the R$245 million projection.

The company saw a 9% annual and 2% sequential growth in its client base, totaling 45.4 million active users. The credit portfolio increased to R$31.9 billion, exceeding guidance by 3%. This growth was attributed to a larger number of mature credit card cohorts and accelerated origination in secured and partly secured categories.

Managerial revenue grew to R$3,730 million, surpassing guidance by 3.6%, and net interest income reached R$2,002 million, 5.4% higher than expected, driven by increasing credit income. Total cash inflow reached R$136.4 billion, a 17% rise compared to the prior year and 9% compared to the previous quarter. However, non-performing loans over 90 days increased to 9.8% of the credit portfolio, a 93 basis point increase from the previous quarter.

Funding costs concluded the quarter at 96% over CDI, a 2 percentage point increase from the previous quarter due to diversified funding sources. Institutional interest in the company has decreased, with hedge fund ownership dropping from 23 funds to 13. Goldman Sachs holds the largest stake, owning 7.31% of the stock. Despite the concerns regarding the loan portfolio, PicS demonstrated strong financial performance and a diversified funding base, instilling confidence in management's risk management practices.