Q2 2020 Grupo Financiero Galicia SA Earnings Call

Please stand by robots.

Welcome to the Google.

Second quarter 2020.

This call is being recorded.

On the call over to Pablo Firvida. Please go ahead.

Thank you.

Good morning, welcome to these conference calls.

Like a short introduction.

Your question.

Some statements made during these conference calls before you can statements.

You did the meaning of the so called <unk> well be shows the U.S. So she can get slow.

That's subject to leave so can eat up these calls please.

He was talking about do you have you from those expressed.

According to the National Institute.

Most people don't you can you give today so well.

Yes.

Do you have just been economy, we called either 19.6, that's true.

Well you have construction during the second quartile Toby.

Oh, okay.

Yeah, well your construction to fund.

You mean in particular displayed on the construction.

In monkey.

She said.

Let's see somebody adjusted.

That's a consequence.

Called like seemed pandemic Linkedin page on Monday, we show she'll be talking to.

In order to reduce the least contagion.

You made the economy, we thought were.

No I wouldn't say that's true.

Hey, guys pacing.

Accordingly.

7.4% one concept.

During the quarter.

Piece comes on them I might just seven.

So before it's a 52.

So that's kind of GDP.

End of June definitely Easter this year.

Well for the year.

Well.

Thank you.

We felt the problem increase in public spending under construction.

Right.

This was a consequence that we live in thinking about 60 goes.

Okay.

Maybe close to the restaurants for you then.

So just loved in a few choice for most of the workers.

So I used to call the formal legal tax reduction Oh, you participate.

In the kitchen, where did you know we got to whats called economic policies and good luck.

So somebody starts you that's true.

During the second quarter did you get caught you looked like seemed actually according to fight once that's done.

On the only place on the more than 30 days, so somebody up 57.6 billion pesos.

She is supposed to these actions against the first forklift Becky.

Usually starts is still under construction.

Well I can be good young pizza.

The work done that's it sounds like monetary expansion.

Between May and June.

How do you come to 7.4 video.

Yes, that's expansionary trends continued into light on was maybe possibly but it sounds like some of the since I'm the fish for instance, and among.

One important 16 billion pesos between 80.

If I got to the fiscal stimulus package, partially compensated by your operational suite.

Meanwhile, Meanwhile, the official exchange rate.

69 point.

Okay. So it's really enjoying it simple 2% increase against yeah rich for March contingency.

58.8% well in June but nothing.

The average interest rate something so there's I mean, they didnt quite a particular funded bullshit well keep it when they.

Well, thank you I'm going to 51% for June.

So your point 54 percentage points about yeah, we're reporting mark.

Let me pick up the Boston based on a monkey.

4.3, Threed in Texas in June.

Reaching 55.2% during the second quarter.

So you, 99% when compared to June 29.

Lets touch on the closer to pay so well get gate when they supposed to get smart that gets done.

How do you agree.

I'm going to 16.5% either.

Well, it's something I mean, they tend to close you increased 55.4% either second quarter.

Do you like 40% year over year.

So you end up doing it's certainly not me, making ultra thin sector. Amongst your Q2 point 6 billion pesos reporting at 14.3% usually you ended the quarter Onyx, 46.6% increase when compared to June 50 like you.

Well you know looking at sea audience you did its work remind you that seems to be New York turnkey chunky.

Well. These figures are adjusted for inflation that ladies expected late last fall the corporation.

Taking DCG once you reach and I'm going to formation for the second quarter net income amounted to 5.6 billion pesos, though 43% somebody here a little walking.

You still people, it's mainly due to get someone called each year for 4.8 basis.

Let me just kind of holding 40, having 64 million pitches.

And at least 70, so a formula for 296 is a bit so I'm from tough because you're not leave for 15 years ago.

Yes, the last week I don't have it probably it's tough for 2.7% that we've done well never show that they could you just keeps getting 0.5%.

Well he comprehensive income that's used in several global reach.

Hi, videotapes, you'll probably be cyclists and they'll work done a good thing B M. Pesa reported it's important.

Going to one core these yeah. They didn't got pulled the quarter decreased 48 supposed to somebody a little quarter.

As a consequence, okay, 34% <unk> operating income.

Indeed, each a 50% no one they didn't come from I guess I need to somebody else.

61%, how your operating expenses.

Right.

1275% growth and they seem to.

Interest income for the quarter increased 9% that's been brought to the safety of simply lumpy when interest expense he's worked out for pizza.

Although its independent Watson.

Fourth down 19 billion pesos or 3% year, what do you.

Mainly due to the degree so they'll be coming at the loans on a fall in that situation.

Partially upset by the girls so the only make it knows.

Although usually there's something else.

Well the same do you feel you agree it's having a 17 point that's the point.

Right you have to lower yields and although this I mean nothing.

So some though.

On the wall and securely.

I'll say the study how your coverage you on going into July.

Yeah foreign currency you too right.

You just bringing they get <unk> decreased 66 billion pesos or let's say some of the took important steps you guys did.

So I really due to lower balances <unk> dollar denominated deposits.

And it's close to three states kind of the 61 basis point made yet so we saw no work other teams. It's like another either thing, though these disease and it's just a little bit she'll be eliminated sensible.

Net income increased type of said that sometimes you can get seats. They did you break thoughts that you see once the speed up.

They didn't go something that's an instrument degrees teach people said.

Because of lower holding a yield I'm not convinced themselves on.

Well feeds from goals I'm, calling telling people vision defenses amounted to 865 million pesos.

Including and then can be an 86 million pesos to gain some foreign currency trading.

Well be shuffle, and we don't see what student used for sense, how you're doing the things worked out it's like New York, mainly due to the evolution of a good part I mean, theres you shouldn't expect it great little small but.

Personal expenses decreased 5% assumptions you ever before.

We did decrease in there.

You got each of these are the expenses.

That said.

Maybe due to the award fees compensates us for Sun.

Other operating expenses, we chose point 5 billion pesos, reaching 61%.

The second quarter once again.

When you have to quantify what are you still be shows related to the evolution of the but probably like <unk>.

Device financing.

The private sector.

We have you had an 18 billion pesos.

That's the end of the quarter Playbooks and ended up football.

Maybe due to the recent launches itself.

At least partially upset by no was blown out the level of edges.

Net exposure to public sector increased 7% year over year I'm, excluding they need.

Completely sensient expects that helped a lot.

Dr Pepper test at the second quarter.

The bolstered leach.

The among the 3 billion pesos.

Up 2% you know here.

So the eliminated the bullshit, if we spoke the focus so when you go down the ball sheets. So you see particles.

The same time, there was an improvement in the me, it's sort of Boston.

Selling accounts were 71%.

Yes, I was 91% one thing the bolstered the 11.

Got it maybe you can look at your closest they took the wall plug for 90%.

You, probably about 30 basis points, how you're done nothing you end up a year ago water on them, but that's your deposits from the break fix the was 10.4%.

We've seen 55 basis points to the thank you.

After we got that's when the NPL ratio ended the quarter up to four until a person.

We called <unk> hundred 71 basis point.

And then a front there are we to 4.4% off the second quarter of the players.

I look forward to from P.S., we allow once you reach it has to be up 52.5%.

From 81.4% from a year.

That's the end of June 20, thinking they don't support so lazy doubling pepsico exceeds.

74 billion pesos or something like that so.

53 billion pesos, meaning we've got the southern Florida.

We'll talk a little like well that they've got the glacier week, 19.6% <unk>.

Increasing by 260 basis points somebody else that's important because it doesn't look as you know.

In summary, during the second quarter Flaky strength, you book and that she or these yet.

So we started seeing a very challenging and volatile came up and down I mean.

<unk> keeping degrees each southern Sudan profitability metrics levels.

We are now ready to answer the questions that you make.

Thank you.

Jennifer <unk>, yes, if you like to ask a question on today's call that a star one on your telephone keypad.

Well go first to Ernesto Gabilondo.

Hi, Good morning, Pablo Tom how are your wealth.

My first question is related to the creation of how your charges.

You should not Privy shares that were recognized in other expenses.

She doesn't baby recognize provisions fast write offs or what is your rationale to include them in other expenses.

Oh, so we have seen that your created a year over year charges for right also for around.

4.6 million young Argentine pesos, so how much additional provisions to do you expect to reuse during the next letters and and good luck I love worried or how much Oh, the auto loan portfolio has been degree program or restructure.

I think it'll be interesting to see how much else traditional reinsurance in other expenses represented reprogram old restructured portfolio.

And then my second question that you saw the regulation on banking fees.

I believe you can help charts and.

The result was he made yeah I'm sure you cannot reprice fees due next year.

So you just want to see your view obese and how do you expect to mitigate the impact and then my last question just on the GAAP on credit cards.

<unk> <unk> has been offset by lower that plus he requirements. However, thinking about the mix you're caught your things just how about impacting margins. Thank you.

Okay.

Hi, Michelle and well to well, let me ask what let's go with the first one.

Oh, that's you know it this year, we began we do expect great they'll small though.

Dave provisioning, we have in the life of loan loss provision.

Yes, what comes from did smaller.

Yeah.

We also how did you give you the today show you didn't get regulation.

But the central bank polling place.

When the pandemic it'd be guiding that basically give you more they.

To close either it alone.

Got it all.

Yeah, no current or no.

So how do you also it also or say pancaking parcel of one of your fourth Joe's.

Bob off they quit caused problems that wants to do.

The end off a base.

And the parts will begin youre facing.

He was yeah, we full run roughly 70% dot.

Oh.

They didn't do it was paid so concerning all d., we made some keep up the public.

Okay. So.

Not in any if you peak zone or what you can see ending balance sheet. It's off balance sheet. For example, all the ideal balance of course, dark pool or overdraft.

So we decided to hop.

So I'll be Charlie I didn't sharper pencil.

They are.

And.

So then growing so boring oh, well, we know we do.

Well the asset quality lets say well, we'll look at the number of off we thought.

<unk> <unk> 60, writing NPL ratio.

We don't be fixed utilization.

In the regulation would have been well keep on Facebook so.

That's why you also get called which we will probably obviously a lot but.

So when we pull what we think that once the Nols that what we will he will be it.

Hey, yellow or we will keep some a far there it deterioration that NPL and the costs up we for the full year. It right. Now we are if you maybe at a low 5.5%.

So I gave you.

No it's different.

Slide eight shows on on all that's important.

A follow on question.

<unk>.

Regarding banking fees. It a beginning the well then dispute in New York, they seem to long well if he wants to waste it right. It's Oh, Oh, yeah that started piece we grant.

At the beginning feel you will tell you then they will fall into December you end up the somebody to yet.

So basically what we are seeing.

Some improvement in net fee is being done basically.

I'd say phasing it <unk> fee related expense you. We are growing I would say cross selling on a number of corporations and up right.

Hey, they be waiting we mitigate this last call I definitely don't quite a few.

Each week, there, let's say you cost control or other means up your expense.

But as you saw all the work.

I would say very limited.

So with the local holders.

Regarding the because they start financing at a 43%.

We need maybe we are seeing.

We all do I would say even in today is very well.

Well point drop you all that but we've got the interest rates beginning with the leagues or you can butler and all that have you interest rates, we charge for the there's something else.

Yeah, we need in what we didn't have more pressure on the on margin we'd be demeaning when interest rates.

We are paying for them to policy.

Yeah. So yes, we foresee some you're guiding the margin compression maybe you can get third quarter. It perhaps you could get full quarter, we could see something that we've got very.

We expect deflation, we did pick up and you can be more and also we are forecasting. So I mean, it's the all these studies that say that I mentioned the league, but large under into slate.

I would say the average exactly yeah, that's right.

[laughter]. Thank you very much Gotta love just a follow up in the reprogram portfolio. So I am not mistaken humana's from 17% in credit cards.

What about the rest of the products or your expectations on all the thought on reprogram portfolio I suppose and touch on their consolidated loan book.

[laughter], 70% well separately.

I love them, 70% wall subsidy, what was paid in grade God wasn't there wasn't a phase and then came due at the beginning of fatally.

Yeah, we've got 43% interest rate you to the on demand the waste the Oh. They thought it was paid in you quote nine month, we've told many.

Many people decided to take that as a bomb did.

Late there is some people decided to we've gotta soon what they've got we find out.

So really it's not.

That big I I mean look you have really comfortable telling you. It's 50 pick a number of body smell, it, but very little and it from a year or beginning Oh well.

We see it.

It wouldn't be that the there that they men.

Or behavior or because the first installment they've gotten Neil so it will we see we knew that had the effect of the end of this month or beginning of September.

No other line that a rule.

Cost of up really well below what was that the line. They wanted to send me a 4%.

That's a self the end of June we became did roughly 11% or total loans.

I mean, we close here that this will be it paid or.

Very good because really they demonstrate <unk> no, arguing that complete and they got to it may have to let them.

So in.

The we need to.

Yeah, I would say the challenge is to you eat how.

They back to normal or to start done well maliki or appears it then the next to work there.

They are calling on genie need.

Oh really salary inflation right and so on so they basically we are making that will be open deals.

Do you end up the third quarter, perhaps something flattish at the end up the fourth quarter.

And my belief that they I would say a complicated <unk> a moment to give specific on that create your guidance.

Oh Super helpful. Thank you very much hurdle.

Your work on them.

The next two on holiday with Scotiabank.

Hi, good afternoon.

You get this is what you need to use less questions.

Two questions one on the profitability outlook Juan Fonseca, that's you're not just so we got in India.

You see actually it's expected to be topping facelifts anything funny thing. That's one cents tools, you say wrong or indication for the full years anything I need.

Yes, they didn't see Sean I think it's all seen around 16%.

So with that didn't mind send you don't need to read about holiday group you paid to Smith <unk> nephew stability.

Being expected increasing its nation I should see we see I really.

Remaining at mid single digit for the rest of the year.

That's fine too long.

[laughter] question would be related either.

So we still see no easy declining they are generally well see what percent indeed, well done.

So can you.

What else.

The main driver.

Sean.

Do you know how should we seem to also CW yet.

Then if you're not.

All meaning the next coming quarters. Thank you.

Yes.

Hello.

Well it for us in our expectation on inflation right, though.

Yeah, 37%.

And there we go in inflation on shifted it for the first months or myself. This year on first month <unk> next year. So we are.

Currently forecasting.

Okay. So for next year.

Yeah, well, 45%, so subject and this year 45, and the yes.

Well, if he's WBC it when we look at our away.

A little booking lets you know what do you feel worse I won't come from 7% <unk> first quarter two to pinpoint type books, ending the third in the second one or the first half something around 21%.

We are seeing some.

Right and we've actually I mean that following tool for those.

Then saw a are are we.

But definitely the.

We see for the full year it do did you.

We did I Miss it.

And of course, they see three yellow you get bought the question was what have you had very how do you want me a lot role we play can try what he's every other one.

So all these lumber we have figured out the everybody wants.

Well done so it definitely.

And they have many different the moving parts I would say that the all chill.

In may.

[music].

Turning to keep up where you thought we shouldn't even in that case, well Sharon you guys had agreed million pesos.

And because they again that's.

Great lots more though yeah.

And HM.

Brought it.

It or do you do they see the lower loan loss provision.

It also they do week doing to beats month, they use upgrade GARP wells, they know where they and then we speak in order to.

I would say to help work like 10 and also there was some.

I'd say that it stands here, we go there that I echo.

And then development will do or did you say butte flow wallet <unk>, yeah investing.

No it too.

So to get new there, we need seats or.

Victor and user experience.

So and we're going forward.

We are we seeing something so anything should we tend to the leverage we sold in the in the first quarter.

[laughter], that's very do you think would be my son.

No look.

Well go next to Jason.

Scotiabank.

Oh no problem I.

Thanks for the opportunity Twond already asked some questions, but maybe maybe you can just talk about.

What goes into that each is expected loss models. What's your base case at this point you mentioned.

That there might be I, obviously, it's difficult to forecast that perhaps you could see Pete.

In in.

Nonperforming loans in the fourth quarter of this year. The first quarter of next year, but what are the base case assumptions and and maybe if you can talk about some of the stress scenarios that that that could turn that could be part of the outlook for Argentina and the group. Thank you.

Yes, it was a third deep and expect it.

Great well for multiple needs and okay. All these though all these did though our external all these go once a year.

And also you I would say.

Oh, they did perhaps is the other REIT work, but it seems like that.

To at least once a year each quarter, we and update the main macroeconomic body of those.

But basically we are GDP evolution, probably larger than.

Yeah, we own salary.

Yes, I would tell you have the amazing to me.

We haven't really case scenario, where that 70 bucks and thought we'd be and then a best one on the was one week 15, it's that simple easy each.

There were each one we included in June Gonsior anything compressing up 13% for the year.

On March was something.

No. We're like I was looking probably recall correctly, what's how long Mariner 10 helpful.

Blaming rolling <unk> on chicken supposed foam.

Then on sounds like some loss that we use lumber.

And in we are the wage eat.

Contracting or not but it can but said.

<unk> close healing.

March March before they killed all the one way sorry once you're in.

Mark when thinking there can be lumpy to mark can you can see one well, what's the long pulte, but a lot.

In weight or our southern power of Stella.

And so and that you don't so of course here, there or selling situation or.

Loan book do you have to quality that's why we.

Deciding to.

Create these.

If you've got to refurbish them.

Some of their balance sheet.

But.

If we you know to split if we can see I would say that the worst case scenario.

Having at 5.5 per se.

Cost of risk for the full here.

Thank you.

But the worst case was below 8%, but really.

I don't remember the other variables that we need willful everybody's got a scenario.

That's very helpful. Pablo just thinking about that that gives us.

Some color on.

Scenarios of the base case for this year does it include the state's case like next year. I mean, you know looking at expected loss does it its does that have a big waiting the recovery and in 20.

21, 2022, or you know the duration of the loans aren't that.

That.

Long so maybe it's not that important the longer term outlook, but how important is it that we get the recovery next year for that for four so this outlook.

What it means that they could be the evening.

Well Mark to Mark there.

You May show up macroeconomic body that will never do you guys. Because they are well looking thing we need the medium term expectation you didn't have any impact on the wattenberg.

Okay well these seat for next year, we are forecasting right now.

A recovery Apollo seeks phone tyco tend to be repeat again, I mean, if problem mango 13 here, but you do then they have a.

I mean thought on goal will fall looking [laughter] numbers.

We've got delayed.

Understood.

That's very helpful once that process.

But I was in some.

Well the next two Lonzo Garcia with credit Suisse.

Thank you for taking my questions. Good morning, everyone. I just want to first start with a follow up on the cost of risk you mentioned at 5.5% for the full.

No.

[noise] well move to the next caller.

You are you Fernandez JP Morgan.

Hi, Pablo. Thank you. So what was the size of this vision you book and other expenses can you comment on decided because emissions is bus.

On off balance so I assume it does not reflect on your allowance on your balance sheet. So how big was a these brut sure. That's the first one.

The second one is regarding the credit card payment goals, they really I'm not sure Buddy. The first question I guess, you mentioned that 70%.

Well speed.

So does it mean that 30% wasn't based like what what does it mean here.

And my towards him last question is regarding our cost us money that was very good this quarter, but looking to the breaking down a time deposits. How does that mean good quarter bikes dandridge or you think business in local currency was about 40%. So my question is do you mean, a regulation that you need to have.

I can mean remuneration Randy do those why you had such a big improvement in that time deposit funding cost is it because having more wholesale funding like what what probably does he bring see plenty cost take it.

Have you been di di and the audio was not very clear.

So let me see if a younger through the over what.

The full equip the first question regarding there it really shutting off balance sheet.

And.

Oh accounts was around 5.4 billion pesos.

Yeah, Hey said these are the unused brought up himself great parts or over a drop or something got recipes.

And then you asked about.

And they tend to be bumpy.

And they go nutrition.

In the air in basically do they see shut off the bat.

It's true it okay I'm not <unk>, let's say all day, a week thing they tend to fall season.

Yeah.

When liquidity say, hi, we many times not.

And.

On Monday.

He gets raised we cold chain in there so.

<unk> and the cost of funding it went down because it.

Then just such a accounts basically saving accounts on checking accounts will more than the time deposits just I'd.

Like the email me the trade we paid.

Mostly new public on somebody they do a cost of funding and.

They are on margin it also what hats and or impact there they break down between based so and doors for their daughter bracket testing is shrinking.

Maybe if you look at it.

Second quarter publicly a figure it wasn't the case feel about kit has been growing they really I mean with very high yeah right.

So and I don't know probably need something else on your on your question.

No I was just concerned on the time deposits because it had the regulation now right that you need to pay up from 80 to 80, 90% of public.

And if you look to live today, It's 37 80 89, a we're talking about something close to 30%.

And then you would one time deposits you report to the local currency was a box to any so my question is why is this close to 20 and that's close to 30 definitely be even though like the kind of funding cost even the new regulation on time deposits.

Well it because it did break down off of the ball seats.

He gives you the weighted average and they are tend to fall seats, they otherwise, we'd cost, but did concepts or account saving accounts and checking accounts.

She gets you a cost so that's why that is funding cost.

The they tend to call cheaply and that they didn't even in the previous answer the margin compression, but people that he could come from the increase in the minimum interest rate and we are we are forced to pay it portend default.

But that again, they and they did go Oh funding anything up there the 30 or 33% real thing before then.

Okay, No that's clear and to find a one bedroom you said was regarding the credit card that 70%, yeah fade, implying 30% losses, a it's that's that's correct.

Well they all the great God funded by doesn't seem that will skew a.

Did beginning of 8 billion.

Yeah, Bob Im glad you had the and the chance to refinance.

43% with me and month Grace period, and then.

They've got a steady heavily lang Lang equal monthly installments.

Uhhuh, 70% of declared and paid at that moment second sea world. So we need 30%.

Took advantage of that and some of them I would say.

Well then paid perhaps.

It took advantage young Lady that arbitrage for speculated.

I'd tell me they following month it some people prepaid but that.

It really there and depth and refinancing of debt at the first installment can you now we know lost so we will see if the people that we find out looking for all took advantage of stability the possibility that the syntels I'm all for you.

And we'll be paying.

On that.

We believe me or any information that we don't see then I'll say it problem.

Oh, that's clear thanks very much below.

You're welcome.

Carlos Gomez.

<unk>.

No problem I could take.

My question he talks about this.

Research and cut is so much an off balance sheet. So we wanted to understand how easily work.

Back to because it's not on the balance sheet.

I understand correctly eatery first to all show off balance sheet items, So presumably you see piece used.

Only be wendy's off balance sheet, hi, temps become oxybate. It and then you can probably spend against them, how we're going to see any impact on the balance on that you kind of statement beyond what we have seen today and ultimately wise here [laughter] well wait wait would it be sunday into costs as opposed to them all.

Probably something.

Well I'm simply haven't days, so Pcs personally not part of your Miszewski should also or is it not part of the cost of risk. That's about these kind of think.

Hi, it's gotta look well and lead the British I mean that yeah. I think there is nothing that loan loss provision and no nothing the I loved ones you can see that separate account.

As far as off balance sheet, yeah, okay, but sexual financing.

And it could be a recover it so a you can and.

So I couldn't be if you look at how they're operating income.

The other or worked as you could see some yeah. We've got really this guy mall locations.

Going forward.

Yeah, I think that who will be.

Or better.

Do you try to do these no better they yeah why doesn't that I think because we need.

Yes, he loved though I would say confusion on all the way, we 71, but that's really the.

The policies to having the loan loss provision well don't expect you create lots from although there.

On the right you see within other paper lesions.

At the cost of suite.

And I didn't get Colbert, it's not including the only in days, one, but keep the R&D, but people the ratio that we showed in the first we need.

One of the first crazy, but it includes deep dish or urban setting and basically called which I've up 208, plus a 214%.

But when you look at that.

Yes, it coverage or cost of risk.

Do we.

Without these additional or up to keep likely provisioning that we'd have to being disgusting.

[laughter] Cadiz E children, who piece.

I'm, probably some things over her career. So 200, that's what people are soon but of course, that's me off balance sheet.

Great because that haven't been relationship.

So they do you do they then let's not forget is equipped and couple of <unk>.

So that is where they do deals you end up.

I guess repeating no I understand that you said that we could.

She said she knows well financially from patients.

The total we tend to go to your none of those reserves there outreach <unk>, 214%, but it'll be turned up 8% on B M. P. S that you currently tasks that correct.

Yes, that's correct.

Okay, and if I can sneak one more question I'm just tax rate is much higher.

Now we understand doesn't and you can only to that so much that exports that she'd you. So we expect the same level of stuck scripts in the coming to quarter screen I play so what happens to inflation.

Well there in the effective tax rate was in the although a 40% you are comparing it with there.

Second quarter off the beaten this year, which was much lower it basically because that second quarter last year, we began.

We've been placed on assessment for the purposes.

Basically we in the second quarter, we made the adjustment <unk> the first half of the so to corker.

Im going forward and there are certain differences between the Doc accounting on the go to the legal accounting. They net worth you have some difficulty and also.

I will add some that's supposed to start to see the loan was off so I wish I mean, they call it's either so if anything I.

I think the effective tax rate would be to go check disease like as a 40% done to 36 ends and the.

The headline number.

Okay, So we're going especially around 40% toward PCM and eat Smart mine do something entre <unk> to have some mtwenty two and begin to then I tend to learn how many young.

Oh.

Well, yeah, I think it.

That will depend on vehicle neutral on how they had definition on a net worth east I'm. The difference between have definitely need the between the yeah counting on where we probably I counting on that got stuck out with it. It has some I would say technicality.

Yeah theory, it again as we should be tied here, though therapy.

But I'm not sure you you can think pleasantly one will be how long faulty it really should be about a third you, but it wasn't necessarily I'll tell you asphalt.

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You're welcome.

Well the next <unk>.

City.

Hi, Pablo thank for that that's a tough questions I'm. The first one I have is or are you looking at any specific segments or sectors ER beds were exposed to.

Which would be more effective now by the locked on measures and by the you'll feel overall macroeconomic scenario as well and them. How are you I'm looking at them strategies to maybe mitigate these and risks and my second question. It's actually looking at efficiencies Oh, we have we see a lot of banks.

Oh, working very hard on this especially because.

Of the higher cost, which there soon and I was just like to understand whether the banks some strategies for efficiency. This year since you.

Hi.

And well regarding efficiency and we have yeah, I would say limits.

On the growth we can have on.

He and I don't keep saying you and more revenues coming from fees because of the enterprise, let's say GAAP or control. So we are having I would say savings on p. if anything.

The other action that we had thinking its golf control them look, though the rest of it meets up you can see.

So and then some income.

Yeah.

Yeah, B I would tell you would see Indian.

We are forecasting positive.

Yeah, we had growth in loans why do we see some contraction in margins. So won't efficiency should remain at these levels like I mean it worked.

And of course, and we'd be information that was up two they hadn't without table.

And I be shut out I would say.

Where do they haven't gotten from Columbus in Florida.

Sorry, what was the along with them.

Oh, yeah or they spoke about other close then that's a.

Hi.

Tired.

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And of course, they we analyze all that Nick rates on and we will be problem.

Yeah, I realize there's probably they they the loan will come to play Intel and easy to.

He yeah.

In some pick those are better than others.

He'd because he ever because of the sector is always there. It looks like you saw some growth varied and our loan book.

Hey, although it's a me.

Loans also woo.

Hey, I So June we had granted.

They said they are around 11% of our loan book to be it for me or would be.

Well all it can't be focus and the interest rate.

Roughly.

Jim the 3000, so it can't be 4000, if any.

Outdoor.

And universe of client Hello, 85000, that's anyway so.

Definitely.

It's the kind of loans are being.

And.

Chosen by the them.

Just a metal have doing it took those are very good that's been Saudis circle fairway wood.

Definitely there there was nothing more are.

And well, although that has to do it it will lead to them.

Restaurants you.

See enough on all these kinds of things that we'd be.

So small them so.

No exposure.

It comparable with I read does affect all then got it even construction you PDP or car English. So we need it's very small go to get the life.

The loans to be lumpy dark blue that segments, we <unk>, we feel more comfortable with on a pay said eight doing well so they but now.

Okay across all the effect those Bob May and June So we saw recovery and also in July so.

I am going forth perhaps.

Okay.

Some sectors will be.

No so it Bob.

Thinking from a at least a person that's up lending.

From the size of coffee bank.

All right that's difficult to where things are so much.

No work on weather.

Well the next step.

Our partners.

Oh.

Hi, everybody.

And thank you for taking my question and maybe live and most of the questions had been answered already but add Pablo definitely ablation accounting change in any way their strategy.

And do you approach any differently, how you manage day today, we did D or will be smashes segments, you went to increase exposure to.

Hi, how will you didn't know if any.

11 of inflation the effect.

Our strategy.

Yes, and you think being patient her husband and you're commenting I view.

Yes look when you you can management.

Mhm.

Well it differently in there.

Oh, Okay did they accounts you see the P OLED.

The inflation adjustment okay.

It is a year or the inflation than any quarter and how you there.

In the there they wait to calculate or try to take today. These basically.

Taking that you need shadow net worth.

The dock.

Thanks.

Peak fast, it's probably something does it unless it.

Our thereafter, but basically I think we'd be participation.

And that liquids network.

What is affected by the inflation I mean that so because we are the inflation in the quarter the behavior.

The impact on that account I mentioned that yet eggs.

But in when inflation and get it had here [laughter], if I missed that many moving parts.

And.

Well you can do your host ideally what happens is that interest rates.

Go up both for funding and also for or lending and definitely waste and more I would say close says, let the or short term approach to the I sit there like I mean liabilities Madison.

But really there in the post immediately to be fair. It's there we go dark pool season.

Limited due to regulations.

It also then the level of excess it's we have.

My opinion.

He goes and yeah, well, so really and detailed there, but the things we can do and though.

Great. Thank you very much.

You're welcome.

And at this time there no further questions.

Okay. Thank you and Jennifer Thank you all four of them Didnt. It's called if you have any questions. Please do not see people to conduct that.

Good morning, how they would be thank you.

This does concludes today's conference we thank you for your participation.

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