Ex-Morgan Stanley Banker Becomes CFO of Fintech He Took Public

As a banker at Morgan Stanley, Santiago Stel helped some of the biggest names in Latin America’s once-booming fintech industry go public, including XP Inc. and Nu Holdings Ltd.

(Bloomberg) — As a banker at Morgan Stanley, Santiago Stel helped some of the biggest names in Latin America’s once-booming fintech industry go public, including XP Inc. and Nu Holdings Ltd.

But as the craze for initial public offerings cooled and Stel was considering his next career moves, it was one of his IPO clients that caught his eye: Inter & Co., the digital bank controlled by Brazil’s billionaire Menin family. Intrigued by the company’s business model, he left Wall Street in 2022 and joined the firm. Now, after a year running strategy, he was just named chief financial officer.

“There was a moment when I realized that it was significantly more interesting to be on the client side than to be on the investment-banker side, but I wanted to pick the right platform,” Stel said in an interview in Miami, where he’s based. “I fell in love with what I saw — a fully digital platform that goes beyond banking to solve the entire transactional life of the client.”

For Stel, an Argentine native who spent a decade at Morgan Stanley, the opportunity to help expand Inter’s digital bank in Brazil and the US is his biggest challenge yet. And few people know Inter’s competitors better than the man who helped take many of them public.

Unlike the Wall Street giant Stel used to work for, Inter pales in size to the industry leaders in the region — Itau Unibanco Holding SA, Banco Bradesco SA, Mercado Pago and Nubank, as Nu Holdings is known. To claw its way up the ranks, Inter is focusing on the US as its biggest opportunity outside of Brazil, while many of its rivals are choosing to expand in Mexico, Colombia and Argentina. 

Inter’s five-year plan aims to more than double its client list to 60 million and expand its loan portfolio fourfold by 2027, to 100 billion reais ($20.4 billion), Stel said. The company releases second-quarter earnings next week.

Controlled and founded by the Menin family, Inter was originally created as a consumer lender in the 1990s, but became a digital bank and expanded into insurance, asset-management services and e-commerce through its own marketplace under Chief Executive Officer Joao Vitor Menin.

After an initial public offering in 2018 in Brazil and a successive follow-on, Inter listed its shares in the US in 2022. The stock has gained more than 40% this year and the market capitalization sits at $1.4 billion. Of 11 analyst ratings, Inter has the equivalent of six buys, five holds and two sells, according to data compiled by Bloomberg. The Menin family owns about 30% of the company while SoftBank is the second-largest holder, with 16%.

Read More from 2019: Fintech in Brazil Vows to Prove Goldman, Morgan Stanley Wrong

Stel, 43, brings a raft of IPO experience from his time at Morgan Stanley, having worked on the public listings of PagSeguro Digital Ltd., StoneCo Ltd. and DLocal Ltd., as well as a follow-on for MercadoLibre Inc., Mercado Pago’s parent. Before Morgan Stanley, he worked at Itau Unibanco Holding SA in Buenos Aires.

Inter’s “super app,” as they call it, performs normal banking transactions in Brazil and can help clients transfer money to a US account, seek loans and even make retail purchases. Other services include doctor consultations through telehealth technology and contracts on mobile-phone international roaming plans.

The firm has about 3,500 employees, mostly in Belo Horizonte, Brazil. But Stel — who has an economics degree from the University of Buenos Aires and a master’s degree in finance from Duke University — sits in a small office in Miami along with the new country chief, Cassio Segura, who previously held a similar role at Banco do Brasil.

Inter, which has opened about 1.5 million accounts in the US for its Brazilian clients, has started to offer mortgages and plans to lend to small businesses soon. The bank recently got its broker-dealer license and acquired a remittance company a few years ago that’s popular with Brazilians in the US to send cash home.

“When we look at the US, we see that our clients in Brazil travel to Miami or Orlando or New York,” Stel said. “In Brazil, you can’t have a dollar account. So if you want to save, you have to send money abroad. There’s a tax on credit cards if you use them outside of Brazil. So there are many ways that we can use that to our advantage.”

The US and other countries have a lot to learn from the advancements in digital banking and payments that have been made in Brazil, he said, pointing to the central bank’s instant-payment system, Pix, which lets even the homeless in Brazil receive handouts in seconds. Meanwhile, tipping valets in the US still usually requires cash.

“You can do transfers in Brazil 24/7 with no fees, so innovation is going quickly and is clearly ahead of the pack,” he said. “I had to make a transfer today for my mortgage in the US, and if I do it the same day I’m charged $30.”

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