Q3 2023 Banco Santander (Brasil) SA Earnings Call

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Speaker 1: Good morning everyone, welcome. We are here at São Paulo's headquarters to the live to the conference for the third trimestre of 2023. Today we will divide this event into three blocks. On the first block, our CEO , Mario Leão, will talk about our strategy and the main highlights of this trimestre.

Good morning everyone, welcome. We are here at our headquarters in São Paulo, live, for the third quarter 2023 earnings conference call. Today we will divide this event into three segments. In the first segment, our CEO , Mário Leão, will talk about our strategy and the main highlights of this quarter. Next, Gustavo Alerro, our CFO , will discuss in more detail the numbers that marked our results for the period. Finally, we will have the Q&A session, where you can interact directly with us. I remind you that we have simultaneous translation, so you can choose whether to follow this broadcast in Portuguese, English, or the original audio. I would also like to inform you that the presentation you will see next is already available on our investor relations website. Now I hand over to Mário Leão to start the presentation. Hello, good morning everyone. It's a pleasure to be here with you again, in a slightly different format. I hope you enjoy it. We continue to evolve. We are live here, it's 10:02. It's a pleasure to have the chance to share with you our third quarter, along with Gustavo, Camila, and our entire IR team. I would like to start here with page 4, where I basically highlight the most relevant points of the quarter, which we will detail on the following pages. Of course, I will also talk about the numbers and the outlook for this year. The most important highlights are here, to my right, to the left for those looking at the screen. The first major point is that we have been talking for quite some time with you in conferences, I was with Gustavo and Camila recently at an important conference in New York, with several investors, over these one year and nine months already, we have been talking about the diversification of our portfolio. This is a super important point. We built our great growth cycle until 2021 with a disproportionately large emphasis on credit and, particularly, low-income credit and markets. And we clearly saw last year that we needed to have a much more balanced portfolio with a multi-year investment, actually, a permanent investment, which takes many years and we will do, in liabilities and also in the commission business, which was already relevant but needed to be even more relevant. In this trio, we give quite clear demonstrations that the strategy is being executed, we will see progress and we will, obviously, continue to be very strong in these two dimensions of our diversification. The second major highlight is that we continue to have a very positive evolution in asset quality. We can see, I would say, practically all metrics, whether NPL formation, coverage ratio, credit cost, or the PDD result itself, all of them evolve, I would say, materially in the quarter. This, obviously, makes us happy because it is the consistency of something we have been working on and talking to the market about patiently and consistently over the last six quarters. And now, we consolidate, as I had already mentioned in the last one, that we have turned the curve and we clearly have the capacity to resume growth that we will do intelligently, in a focused, selective manner, but with a bias, without a doubt, more constructive from now on. We already show some data ahead.

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Speaker 1: In the following, Gustavo Alerro, our CFO , will talk in more detail about the numbers that marked our results in the period. And finally, we will have questions and answers in which you can interact directly with us.

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Speaker 1: I remember you, which we tell you about the simultaneous translation. If you can choose, if you want to follow this transmission in Portuguese, in English or in the original audio. I would also like to warn you that the presentation you will see following is already available in our relationship sites with the investor.

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Speaker 1: Now I will pass it over to Marielle to introduce herself.

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Speaker 2: Hello everyone, I'm Praseta here with you again, in a different format, I hope you enjoy it. We're evolving. We're here to live, we're 10 and 2. I hope you'll be able to tell us about our third or third season, how it was, how it was, how it was, and how it was, and how it was, and how it was, and how it was. I'd like to start... here with the page...

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Speaker 2: The first point is that we are talking about a lot of time with you, in conferences, I had with the Fabo Camila recently a very important conference in New York, with many investors, along with these one and nine months, we have already talked about the diversification of our portfolio. This is a very important point. We built our great growth cycles until 2021, with an emphasis disproportionately large in credits, particularly low-income credits and market.

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Speaker 2: We looked at the past that we needed to have a much more balanced portfolio with a global investment, in fact, a permanent investment that took many years, and we will do it in passives and also in business commissions that were relevant but it would be more relevant there.

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Speaker 2: This is the demonstration of clear clear facts, of the strategy, being executed, we will see progress, and we will obviously continue very strong in these two dimensions of our diversification.

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Speaker 2: We continue to have a positive evolution in the quality of the activities.

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Speaker 2: to be in coverage, to be a source of credit, to be the right answer to PDD, to all of them evolve and I would say to fill in the three and obviously leave us content because it is the consistency of what we have worked and spoken with the market, that is, patient and consistent for the last six months and now we have consolidated that I had already commented on the last one since we turned the curve and we have clearly a capacity to retake the growth that we are going to do and form an intelligent and focused way, you

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Speaker 2: In terms of financial margin, we have an evolution, once again, a quarter in markets. We will discuss this a bit more with Gustavo. In terms of clients, we have a very positive outlook, even though the notri number showed a slight decline, but it is clearly justified by the way we have been selecting, over the past year and a half, a year and nine months, to build our growth with clients with higher reitem and, obviously, with products that have lower credit costs. And, to conclude, we continue with an important agenda of productivity and efficiency, and I have highlighted this throughout the TRI. It is part of Santander's culture, you will see the numbers, and it is important because it means we can continue investing in growth without compromising the overall results account because of it. Speaking of profit, you have already seen, the net profit has an important progression in the TRI. We are, of course, working to ensure that this progression continues. We will see this over time, but we have a TRI against TRI growth of 18% and with the ROE improving by almost 2 percentage points, so 2.7 billion against the previous TRI, slightly above 2 billion, and we have the ROE rising from 11% to 13%. In terms of priorities for the year, here to my left, to your right, three main highlight points that are consistent with everything we have been talking about. Huge focus on the client dimension. You will see the presentation talking about clients more and more, of course, everyone talks and has to talk about it, but Santander's obsession with the client has never been higher, and with that, we are not in a race for the number of clients, the number of clients is an important data, no doubt, but we are less concerned with the ranking of the number of clients and much more with how I monetize, how I bring them closer, how I become more principal than ever for these clients, this great strategic agency we have and everything we are doing in relation to technology, innovation, focus on prioritized businesses, in the client's view, everything has to do with that. I will now give a bit more insights. On slide 5, I detail a bit more this client agenda, we have two pages that touch a lot on the client dimension. First, to highlight again, our great obsession, the pursuit of principality. In this TRI, we have a really nice data point, which I highlight here, which is the growth in the quarter of 300 in linked clients. Here at Santander, we have a very high bar for what we call linked clients, we are always reviewing and challenging ourselves on how to improve, but in the metric consistent with what we have seen for some years, which is a hard metric of linkage, we grow 300 tri against tri, which is a data point that makes us happy because this grows due to several vectors in which we have been working simultaneously and in a very disciplined way. One of them is a huge focus on CRM. We are redesigning, I have already talked about this with the market, we are completely redesigning our CRM pipeline, we have been striving to do better and better with what we have, to make increasingly customized offers, to stop having the offer everything for everyone, which the market as a whole often does, we are customizing, customizing the communication, customizing and connecting the client much better at different points a little, but our offer is very broad, so our agenda has been much more about simplifying the offer than expanding the offer and with offer simplification we gain efficiency, gain agility, gain the ability to serve clients and obviously gain linkage with that. The NPS that is here...

Speaker 2: We are in financial image. There is a more and more advanced evolution in the market. We will comment on this a little bit more. Inclients, we are with a positive perspective. There is still a number of nutrients that have been an evolution, small. But it is clearly justified in the way we have selected. In this one and a half year, one and a half year, build our growth with more and more clients. And obviously with products that have a smaller cost of credit.

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Speaker 2: And to close up, we continue with a very important productivity and science. And I have this all over the world. It's part of the culture of the Santanderas, they will see the numbers. And it's important because it means that we can continue to invest in growth and not go to promote the results as everything is going to be.

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Speaker 2: Speaking of the lucro, you've seen the lucro leak has an important progression in the tri. We obviously are working to find out that this progression continues to happen. We'll see that in a while, but we have a 3-3-2-8-100 increase and with a Roy, which is almost 2.5-2-1-2-7-B, against the tri passed, a little above 2-B, we have a Roy that goes up to 11-13%. We have priorities for years, This is not very good for an organization, but for the natural club of the country.

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Speaker 2: three points of the main highlight that are consistent with everything we have talked about. It's huge in the dimension of the client. You will see the presentation talking about the client more and more.

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Speaker 2: But we will be obsessed with the client, it was never so bad. And with that we are not in a race for clients' amount. The amount of clients is an important thing in doubt. But we are less concerned with the ranking of clients and much more.

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Speaker 2: Slide 5, I'll detail a little more of this kind of client. We have two pages that play a lot in the client dimension.

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Speaker 2: then the system in common with CRM. We are reviewing our value proposal for all segments. I will give more emphasis on the next slide about the select on our high-end proposal that is growing in a fairly accelerated way. We...

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Speaker 2: In your view, on the right, at the top, we have constantly talked about NPS in all quarters, and this quarter we have a lot of good things to comment on. In all channels and in all segments, we have seen progress, and in some cases, I highlight our remote channel with a year-over-year improvement of 32% in NPS, and our corporate segment, which is still an NPS we want to improve significantly. It's the first time we talk about NPS and the corporate segment, 39 is a number that has a lot of room for improvement, yes, but this number was below 30, and consistently between 20 and 25 for quite some time. We progress year over year by 19 points, and obviously, our commitment is to seek much higher levels than that. To conclude, we have some elements of revenue consolidation that I highlight here at the bottom, the main one, and we will cover it in detail later, is that we have a quarter-over-quarter growth in commissions of almost 7%, which shows that the volume is growing significantly, which shows that transactionality is growing significantly, and with that, we are bringing customers to negotiate and transact here, which is super relevant. Here, giving two more highlights, I mentioned high income, we have been redesigning our value proposition for high income for a year now, and I have consistently with some leeway. We also have significant revenue growth for credit in the Select segment, so the accounts here are quite aligned, of course, everyone is looking at high income with a lot of focus and should be, but we believe we have differentiators in our investment service model, the AAA, which I will talk about shortly, our store model, which has spectacular stores spread across Brazil, in the right locations, our service as a whole, and with that, we will have completeness, and with that, of course, bring the customer even closer. On slide 7, we zoom in on the investment theme, I highlighted some elements to show how the strategic focus we decided to give since last year is starting to show results with more materiality, and this, of course, begins to reflect in the income statement. Strategically, we decided that we needed to change the bank's fund mix, we never had a liquidity issue, of course, but we had, and still have, much of our funding coming from the so-called wholesale, whether from large companies or institutional clients. Nothing wrong with that in terms of volume, but in terms of price, of course, there is. We are strategically and structurally changing our funding mix from a majority in wholesale to a majority in retail. The progress in retail, mainly in personal finance, but also in SMEs, is being significant, we show a data point here, of course, I want much more, we will seek much more, but the year-over-year data already shows a relevant figure. If we regressed this to 2021, the number on the left of you, we had negative net inflow in the accumulated in 21. So we move to positive last year and we increase the gap, and obviously, we are working hard to seek much more.

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Speaker 2: And this trip we have a lot of good things to comment on on all channels and all the segments we have in the evolution and in some cases, I tell you...

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Speaker 2: Our remote channel, with an annual growth of 32% in NPS. And our PJ, which is still the NPS that we want to evolve a lot, it's the first time we talk about PJ's NPS. 39 is a number that has everything to improve, yes, but that number was below 30, and consistently between 20 and 25 for a long time. We progress, year on year, 19 points, and obviously our commitment to reach much higher levels than that.

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Speaker 2: To conclude, we have some elements of consolidating the recipe that I highlight here below. The main one, which we will cover later in detail, is that we have a growth, three against three, in commissions of almost 7%, which shows that the volume is growing a lot, which shows that the transactionality is growing a lot, and with that, we are bringing customers to negotiate and transact here. This is super relevant.

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Speaker 2: Here in the next two more highlights, I commented on the other screen, we are already a year since we have redesigned our total value proposal.

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Speaker 2: He has a basic client that increases almost 50% in contract. We go from 664,000 to almost a million, remembering that one year ago, he signed a public commitment, when we were at 670, that we beat a million client selects until the end of the year, all the day that we beat and will beat some crazy people.

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Speaker 2: We also have a receipt for credit in Select that grows a lot, so the accounts here are quite well-fitted. Of course, everyone is looking at high income with a lot of focus, and they should, but we believe that we have differentials between our service model in investments, the AAA, which I will talk about soon, our store model, which has spectacular stores spread throughout Brazil, in the right places.

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Speaker 2: our 24x7 service, and now the offer is complete.

Speaker 2: This is a spoiler, but I'm already launching it to the market. In a few weeks, we will launch our international account offer, which is Select Global, with this brand, by the way.

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Speaker 2: We will finish testing Friends and Family in the next few weeks and in about a month we will make a big launch for the market and with that we will complete it. Then there will really be nothing missing, we will have total integration for customers not only from Select, but in your international account with your app here from Santander as a whole. And with that we will have the completeness and, of course, bring the customer even closer.

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Speaker 2: In slide 7, we'll zoom in on the topic of investments. Investments, I've underlined.

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Speaker 2: to show how the strategic focus that we have decided to give since last year is starting to bear fruit with more materiality. And this, of course, starts to transmit to the content of the project.

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Speaker 2: But we had, and still have, a lot of our funding coming from the so-called ATACADO, be it large companies or institutional clients.

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Speaker 2: The progress in retail, mainly in P&F, but also in PYMEs, is being material. We show here a data. Of course I want much more and we will look for much more, but the year-on-year shows a data that is already relevant. If we regress this to 2021, the number that is here on your left,

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Speaker 2: we had a negative liquid accumulation in 2021. So, we move to the positive in the past and we increase the benefits. Obviously, we are working hard to get much more.

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Speaker 2: but. Within retail, an emphasis on AAA, which is our strategy, our response to the advisory theme. AAA is a business that is here to stay, it's been a little over a year since we launched it, it's still consolidating, but we already show, whether by NPS, by net capture per advisor in the TRI, that we want, of course, much more, whether by volume and, obviously, by customer experience, which NPS also measures, that we got the model right, it's a model that has the lowest load, that is, the lowest advisor coverage index per client, or clients per advisor, and with that we can give much more attention, provide the correct advice, with the client's vision, we are not thinking, obviously, about the result for the bank, it is a consequence of a satisfied client, who brings their volume from the competition here and who maintains what they have with us, and then yes we, of course, generate results. So, the TRIPOEU I imagine advances a lot the technological pieces and ways of operating quite digitally and quite agile, really, because it is a fintech that became a digital broker of the nores of Brazil, we will bring a lot of technology, a lot of knowledge, in addition to the talent of people to the Centro Andar as a whole. And to close here on my left, your right, our PRIVET, I have been talking about PRIVET more and more, we are having a record year in PRIVET, I would say it has all dimensions, record capture and look at the evolution, record revenue, record result and the NPS kept up there. So PRIVET is an essential part of our franchise, an individual that also combines with a legal entity, we do a lot of this cross of PRIVET with our wholesale bank, there is much more to do, but the progress here is clear. Here on slide 8 I give more emphasis than I did in the last ones on products without guarantee. We, in practice, slow down more on cards and personal credit than on other products, so much so that in other products we are, including, working and gaining quota, and here we knew that for a year, a year and a half, we would end up reducing the active customer base by our decision and, therefore, the share. It's time for us to start resuming. We, in this TRI, as I had said in the last one, that we had turned the curve, in cards we are showing that we are starting to sell many more cards than we had, had been selling, including in the second TRI and also throughout last year, we came from a base 100 in the third TRI of 21, that we sold, well, in this base X cards, we reduced to more than half, I would say almost a third, in the last TRI, and we already return to a proportionally much higher level. This does not mean that we have reopened our vision, our appetite, just as we were operating in 2021. This means, one, a much better understanding of our customer base, all the investments we are making in CRM, which I have already mentioned, in hyper-personalization, this is an important term, we have been working a lot on hyper-personalization, that is, on hyper-understanding and knowledge of the client, their consumption dynamics, their income dynamics, their market data, so everything we have been working on in data use, data architecture and the connection of all this for the benefit

Speaker 2: Within the retail sector, there is an emphasis on the AAA, which is our strategy, our response to the theme of advisory. AAA is a business that came to stay, it's been a year and a little bit since we launched it, it's still consolidating, but we already show it, either by NPS, or by liquid acquisition per advisory on the TRI, which we want, of course, much more, either by volume.

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Speaker 2: And, obviously, from the experience of the client, which Unipass also measures, we got the model right. It is a model that has the lowest load, that is, the lowest coverage index of client-by-client or client-by-assessor. And with that, we can pay much more attention, give the correct advice. With the client's vision, we are not obviously thinking about the result for the bank. It is the consequence of a satisfied client, which brings its volume of competition here and which maintains what it has with us. And then, of course, we generate results. So, I imagine that 3PO is doing quite well.

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Speaker 2: very digital and very agile, really, because it's a fintech that has become a digital broker in the north of Brazil. We're going to bring a lot of technology, a lot of knowledge, beyond people's relatives, to Santander as a whole. And to close, here on my left, on your right,

Speaker 2: Our Private. I have talked about Private more and more. We are having a record in Private, I would say, in all dimensions. Capture record, and look at the evolution here. Recipe record, result record. And an NPS kept up there. So Private is an essential part of our franchise. A physical person who also joins a legal person. We do a lot of this Private cross with our attacked bank. There's a lot more to do, but the progress here is clear.

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Speaker 2: Here on slide 8, I emphasize more than I did in the last three months.

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Speaker 2: about the card business. Obviously the market is very curious. How are you dealing with this? Do you know that the active client base has fallen? Do you know that your market share has fallen? And the answer is yes. In this last conference that I mentioned, I spoke with a lot of tranquility to the market that when we decide to stop before the rest of the market, at the end of 2021, we knew

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Speaker 2: In practice, we freeze more in card and personal credit than in other products, so much so that in other products we are even working and earning quotas. And here we knew that for a year, a year and a half, we were going to end up reducing the base of active clients by our decision and therefore by the share.

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Speaker 2: In this X-Cartons base, we reduced it to more than half, I would say almost a third, in the past three years and we have returned to a much higher level proportionally. This does not mean that we have reopened our vision, our appetite, as we were operating in 2021.

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Speaker 2: and it means a much better understanding in our client base. All the investments that we are doing, in our RME, I already mentioned, in IPP, this is an important theme, we have worked a lot in IPP, that is, in Hyper, understanding the knowledge of the client, of its dynamic consumption, of its dynamic income, of the market's data, so everything we are working on, data, architecture, data, and the connection of all this, in Prold, Cervi Meroro.

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Speaker 2: client. A large part of this increase, this acceleration in cards, is from clients who were already with us, and a part, yes, are new clients that we are capturing, mainly in our business, which is a major pillar of the payroll strategy. So, the card business is growing again, and we are very happy about that. This, of course, already appears in the commission account, as Gustavo will show, but it will appear more and more, both in commissions and in margin. All this without compromising the quality with cards, and every time we have the ability to sell Sfera and cards, the card volume is much higher, in fact, the volume here, on the same client base, increased year over year by 15%. So, we reduced the active client base and the share, but we increased the average spending per client by 15%, which is not insignificant. And when we add Sfera to the equation, this multiplies even more, because the client feels even more connected with us and transacts with Santander, besides the card transaction itself, they buy and sell using points. On slide 9, I emphasize again the theme of companies. This is another fundamental point of this strategy, I talked a lot about this recently in New York, and basically what we are saying here is, we have two major businesses and companies, but both are more and more connected in common pieces. What are the common pieces? Technology, the vast majority of products are common, much of the way I want to position myself and the value offer is common, we call this a single PJ. So, we have been thinking as an organization, and this in a large bank is not easy, but we have been thinking more and more horizontally, thinking of PJ as a whole. We really have an ambition, which I have talked about here, which is the ambition to be the bank of choice for companies. We really want to be the bank that PJ thinks of when they call Santander. Well, they call in different formats. We, in large companies, have the natural customization of investment banking, some more customized transactional services, international, we are the major international bank in Brazil, or the major Brazilian bank with a global position, we also benefit from this. We continue to be number one in the exchange ranking, number one in local trade finance, we are in the top 3 of the capital market as a whole, debt, equity, M&A, which shows that we are here to stay on this more strategic side, making a lot of investment in talent, here it is a people business, and we are very happy with how this part is fitting. We continue to grow in large revenues in companies and even more in SMEs. I have talked with analysts and investors about our enormous focus, even greater, on significantly growing our SME business, we already have good data to show you in portfolio growth, we will see soon. So SMEs are starting to respond, we had a first semester where we moved sideways, again, consciously, we were cautious in the first semester and throughout last year, because we wanted to see how the CDI would unfold at the level it is, the economy not exactly booming, how this would reflect in the chains where our SMEs are. We made the adjustments we needed to make and we are already back this quarter to grow and from now on we will aim in the medium term to double this business. This is the size of the mission.

Speaker 2: A large part of this increase in cash flow is from clients that were already with us, and a part, yes, are new clients that we are capturing, especially in our business, which is a great pillar of the payment sheet strategy.

Speaker 2: So, I think that the Catois will grow soon. We're very happy with this. Of course, it already appears in the Comissions Contents, as you know, it will show, but it will appear more and more in both Comissions and Continments.

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Speaker 2: All without giving up on the credit quality, as you can see here on the right side of the slide. The other comment, which is also new, that I'm bringing here is that we have a super relevant loyalty business, we have talked a little about it, which is Sfera.

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Speaker 2: I imagine that many are watching and know about it, they are clients. The SPHERE is a spectacular experience in itself. It is connected to the Santander macroecosystem, but it is a business that grows almost 100% year on year.

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Speaker 2: It has a great link with cards, and every time we have the ability to sell the sphere and the cards...

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Speaker 2: The volume of cards is much higher. In fact, the volume here, in the same client base, went up by 15% year on year. So we reduced the active client base and the share, but we increased the average spending per client by 15%, which is no less. And when we put the sphere in the equation, it multiplies even more.

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Speaker 2: Because the client feels more connected to us and he translates to Santander in addition to the translation of the letter in C he buys and sells using...

Speaker 2: On slide 9, I bring an emphasis again to the topic of companies. This is another fundamental point of this strategy. I talked a lot about this recently in New York. And deep down, what we are saying here is that we have two big business and companies, but both more and more connected in the common parts. What are the common parts? Technology, the vast majority of products.

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Speaker 2: A lot of the way I want to position myself and the value offer is common. We call it a one-PJ. So we have thought, as an organization, and this is not easy in a big bank, but we have thought in a more and more horizontal way, thinking of PJ as a whole. We really have an ambition, which I have spoken here, which is the ambition of being the choice bank of companies. We really want to be the bank that PJ thinks it calls Santander. Well, it calls in the most different formats. I think it's not going to be easy.

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Speaker 2: natural customization of investment banks, of some more customized international transactional services. We are the big international bank in Brazil, or the big Brazilian bank with a global position. We also benefit from this. We are still number 1 in the exchange rate, number 1 in local trade finance. We are in the top 3.

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Speaker 2: capital markets as a whole, equity debt, M&A, which shows that we came to stay on this more strategic side, we are making a lot of investment in talent, here it is a business of a lot of people, and we are very happy with how this part has fit in.

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Speaker 2: We continue to grow recipes well in large companies and even more in small ones.

Speaker 2: I've talked to analysts and investors about our huge and even bigger focus on growing our team business.

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Speaker 2: We've already given the best for you to show the cards. We'll see. So, PIMS starts to respond. We have a first semester in which we've been on the side. Again, we've been cautelous, the first semester and, along the way, we want to see how the CDI will work in the digital world, the economy, not yet, exactly, as this would reflect on the SDGs in which our PIMS are.

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Speaker 2: We made the adjustments we needed to make, and we're already back on this tree, including growing. And from now on, we will seek, in the medium term, to double this business. This is the size of the mission.

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Speaker 2: Speaking quickly about strategic business, we have, since a year ago, in the third Trídex 22, when I told the market, this is still a growth story. We do not give up on that. We are going to manage a complex portfolio, which the entire market is doing, meanwhile choosing the levers, and we have been growing in these levers, not in a linear way, because linear would not be smart, but we are growing strongly in all the ones we chose to grow. And there are, I talk about three, the financial one, which is growing production a lot again, we were producing, in the second Tri, 8.8 billion, and we grow production by almost 20% by the third Tri. This, of course, brings commissions, because we know how to do well in the financial sector, the issue of spread, the issue of commissions, especially insurance, this makes the customer margin, in this big business where we are leaders, with a 22% share, the margin will appear, with the acceleration we do, from the middle to the end of the Tri, obviously it will appear more in the fourth Tri than in the third, this will be super good, and we are not satisfied even with the 10.5 billion, we will seek more. So, the financial sector is a business that we also, on purpose, moved reasonably sideways in the first half, and at the curve turn, as I told you, three months ago, we are already more eager to grow, it is a business that we know quite well and think we will do better and better. In the payroll loan, here in the middle, we have constantly talked to the market, we are gaining share, it is one of the products we chose to focus on, it is a super binding product, it is a nervous product, the market is very competitive, we believe we know how to do well, just like many other players, but we have managed to grow even more than the market, without giving up absolutely anything in terms of quality. We have super good indices, just like in the financial sector, just like in cards, so the control part is quite good, which makes us comfortable to continue growing and grow above the market. And to finish, for the small one here, but no less relevant, another big focus of ours has been agro. Agro has actually been a big focus of Santander for 5, 6 years, we are gaining several share points over the years, but a year ago I set a public mission to reach a 50 billion portfolio, to make it clear, agro products, agro clients sometimes transact with non-agro products, 4131, etc., etc., this is not counted, so here are the agro products, CPR, etc., we are almost there, so here I don't even need to give a spoiler, it seems likely that we will surpass 50 billion in the fourth tri, so the question will be how well we enter 24 and obviously we will continue to grow. To finish my part, speaking of technology, we could talk for hours here because it is at the center of the strategy, it is at the center of a lot of the time I dedicate and all the leadership is being, we don't just have the technology area, the first, as we call it, but I will give you some highlights. First, in a few years, it doubles or triples, depending on when we look, the volume of transactions, it is even scary, we talked about 9 months, of 6.8, almost 7 billion transactions that we processed here, it gives a much higher volume than any cut, 2, 3, 4 years ago, it's good that we have very clear in our culture the dimension of science, of knowing how to invest, of doing well and we cut the cost per transaction in half, otherwise obviously our result account would be feeling it and it is not.

Speaker 2: Speaking quickly about strategic business, we have, since a year ago, in the third TRIG22, when I spoke to the market, here we still have a history of growth, we don't give up on that. We will manage a complex portfolio, which the whole market is doing, while choosing the levers, and we have grown on these levers, not in a linear way, because linear would not be smart, but we are growing with strength in all the ones we have chosen to grow.

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Speaker 2: This T I speak of three, the financial one, which again increases production a lot, we were producing 8.8 billion in the second TRI and we grow almost 20% for the third TRI.

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Speaker 2: This, of course, brings commissions, because we know how to do well in the financial sector, the issue of spreads, the issue of commissions, especially insurance. This means that the margin of clients in this great business, in which we are a leader with 22% of quotas,

Speaker 2: the margin will appear, so the acceleration that we do from the middle to the end of the tree will obviously appear more in the fourth tree than in the third, this will be super good.

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Speaker 2: and we're not even happy with the 10.5 billion, we're going to look for more. So, the financial side is something that we also, on purpose, walked reasonably sideways in the first semester, and in the turn of the curve, as I told you three months ago, we're already back to having more appetite to grow. It's something we know a lot and think will get better and better. In the consignate, here in the middle, we constantly have

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Speaker 2: We are winning the COP. It is one of the products that we chose to focus on, it is a product that is super linked, it is a product that is nervous, the market is very competitive, we believe that we know how to do well, just like many other players, but we have managed to grow even more than the market, without giving up on quality at all. We have super good indexes, just like in the financial sector, just like in cards, so the control part is pretty good, which makes us comfortable to continue growing and growing above the market.

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Speaker 2: But not least, the relevant, another big fire we have been to. The fire has been in fact for five or six years, it's a big fire of Santander. We are gaining several points of quota in the year. But one of the attractions, I set up a public mission, we arrive at 50 B.C. It's going to be clear. Fire products, fire plants, trans-action, sometimes with fire products, not fire, 4.3.1, etc., etc., and if it's not being completed, then here are the fire products, CPR, etc., we're almost there.

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Speaker 2: So here I don't even need to go to the spoiler, it seems likely that we'll pass 50b in 4.3 Which is going to be good, we're going to go in 24 and obviously we'll continue to grow.

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Speaker 2: Speaking of technology, we could talk about the hours here because it's in the center of this area, it's in the center of a lot of the time I dedicate and all the adherence to it. I don't have the time to talk about technology, the strength as we are. But I'll give you some facts for you. First.

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Speaker 2: It's good that we have, very clear in our culture, the dimension of science, of knowing how to invest, of doing good, and we fall by half in the cost per transaction. Otherwise, obviously, our account would be sinking, and it's not.

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Speaker 2: And on the right, we provide various elements of what technology has to do with the client agenda, with main focus, with experience, it has everything to do with it. Some data. We were number 1 on the TRI, on Down Detector, for those who don't know, it's a public site that records incidents, bugs, failures, etc. We were number 1, which shows that we are focusing well on how to have and provide the best journey for clients. We have a highly recognized app, anyway, that's a nice piece of data. We already have 94% of operations in the cloud, which is a growth of 2 points in the TRI. So we are almost at 100, we expect to reach 100 in a few more quarters, so we have a lot of operations in the cloud, which means agility, capacity, cost efficiency. We have almost a quarter more deployments year over year, which means we are increasingly agile in delivering to the client what they ask from us, improving journeys, correcting things, which also happens, and 86% of this happens automatically. And we are deeply maturing what we call Business Domains, which are our horizontality, it's our ability not to be defined by organizational charts, by closed structures and silos, we have horizontality between products, operational platforms, and technology for each of our major businesses, there are 27 Business Domains. We started this year and it is maturing in a super accelerated way and will do a lot of good in the client dimension, because it is the client who defines how they want us to organize in the Business Domains. With that, I will pause for Gustavo to continue with the numbers and I will return for the Q&A later. Thank you. Thank you, Mário. Good morning everyone. Let's start with the performance of our financial margin. We presented a growth of the total NAI of 2.1% in the accumulated 9 months, a growth in product margin and growth of the portfolio with expected quality. This quarter we had a good dynamic of asset volume growth between the months of the quarter, given the better performance of liabilities, which I will comment on the better funding result. The composition of credit growth and our greater selectivity since the beginning of 2022 has an effect on the spreads of the quarter, resulting in a drop of 20 basis points in the spread and causing the client margin to show a drop of 1.3% in the period. In market operations, we continue to present the best gradual improvements in our L&M positions, given the SELIC resolutions. This quarter, this improvement was partially offset by the lower trading result. We expect this trend of gradual improvements in market operations to continue in the coming quarters and that the client margin will show better performance as the portfolio grows. Now we present the evolution of our credit portfolio. We had a better performance in retail this quarter and adjusting the consumer portfolio for the sale of Banco PSA's stake, which occurred in August , and as already mentioned, we would have a growth in this portfolio of 1.4% as I highlight here.

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Speaker 2: I'm going to pause to continue with the numbers and I'll see you later.

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Speaker 3: Thank you, Mário. Good morning, everyone. Let's start with the performance of our financial margin. We have seen a growth of 2.1% in the accumulated of 9 months, a growth of product margin.

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Speaker 3: In operations with the market, we continue to show gradual improvements in our L&M positions, given the results of CELI. This quarter, this improvement was partially compensated with a lower trade result.

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Speaker 3: Now, we present the evolution of our credit card. We have a better performance in the spring in this spring. And the amount of credit for the consumption, the sale of the bank's participation, the loss of the money, and the aforementioned way. We have a growth, too, in this card of 1,4% as it is here.

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Speaker 3: In terms of individuals, in line with what we planned, we had a good performance in real estate, payroll loans, and rural credit, which has been repeated over the quarters. I see the 2% increase in card pollution as very positive for the quarter. And vehicle financing for individuals grew by 2.6% in the quarter. This was the best performance since December 2020, excluding the sale of the PSA stake. This performance is a reflection of the strategic partnerships already mentioned. And, acemis, it was possible to resume the growth of our portfolio, thanks to good credit quality indicators, both in the short and long term. The performance in the quarter was a growth of 3.1%, a level we hadn't seen since the third quarter of last year, when we grew due to government programs. Currently, 67% of our individual credit portfolio, including financial, has guarantees. An increase of 2.5% in the last 12 months. In the next slide, we provide more details on the composition of our balance sheet. We continue with our strategy, as Mario mentioned, in expanding liabilities, and we can see growth in funding. I highlight sight deposits, growing 10%, and term deposits, growing 6% in the quarter. The year-over-year evolution is also quite satisfactory, mainly due to the participation of retail, which is strategic for us. Total funding increased by 16% in the last 12 months, and 4.4% in the quarter, as mentioned. Our loan-to-deposit indicator has shown continuous improvements in the quarter and is at the lowest historical level, which reinforces the solidity of our balance sheet. Here, I highlight the evolution of commissions, as Mario mentioned, part of our strategy growing 6.5% in the quarter. We achieved a positive performance, and we can see it in almost all commission lines. The best performer was insurance, benefited by the launch of new products and specific campaigns that occurred during this period. Additionally, we had good performance in consortia and checking accounts, as you can see here. Mainly, checking accounts, it comes from greater transactional activity in PJ, as Mario mentioned. So, SMIs growing in credit and growing in commissions is a good sign. Credit operations had better performance, given the performance of vehicle financing, and cards also showed good evolution in the quarter of 3.2%, which is double the evolution of the previous quarter. Let's now move on to the evolution of the quality of our assets. The best vintages gain relevance and positively reflect all our indicators. Our PDD expense fell 6% in the quarter, and the quarterly credit cost reached the lowest level since the first quarter of 2022.

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Speaker 3: And this is it, it was possible to retake the growth of our wallet. Thanks to the good credit quality indicators both in the short term and in the long term. The triple-messing campaign was a growth of 13 to 1% the level we presented since the third triple-mess last year when we grew up in the program's functional government programs.

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Speaker 3: Currently, 67% of our credit portfolio, including the financial one, has guarantees, an increase of 2.5% in the last 12 months.

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Speaker 3: As the view is growing 10% and the price is growing 6% in the trimester. The evolution of the year against year is also quite satisfactory, especially by the participation of the strategic challenge for us. The total total population is 16% in the last 12 months and 4.4% in the trimester, as comment says.

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Speaker 3: It already shows normalization, closing the third quarter at 1.05%, with provisions again above delinquency, which raised our coverage level to 230%. Regarding the renegotiated portfolio, we continue to see a decline relative to the total portfolio, about 30 basis points in the last 12 months, reflecting the effectiveness of all the adjustments made to the risk models in recent months. Now, I bring a bit more detail about the delinquency indicators. As expected, they continue to show favorable trends. The over 90-day index improves by 30 basis points, both in the APF and in the corporate segment. The 15 to 90-day index shows an improvement of 20 basis points, with a positive effect from individuals. The corporate portfolio shows a slight movement in the short-term indicator, which is something punctual and not a concern. Moving now to slide 19, we can see the behavior of our expenses, which grew by 0.9% in the quarter, super controlled, and 7.5% in the accumulated nine months. Personnel expenses were impacted by the collective agreement in recent months. Administrative expenses remain under control. This quarter, we are providing a view of expenses, separating those related to products, business expansion, and recurring expenses. The first includes expenses that should support our future growth, such as software amortization and third-party commissions in the context of increased sales, and we continue with strong control of administrative expenses, seeking improvements in this index every day. This index improved by 70 basis points in the quarter. And to close, I wanted to talk about our income statement. As a consequence of all the dynamics we have discussed so far, we grew pre-tax profit significantly by 32.2%. Our net profit, as mentioned, grew by 18% and the ROE advanced to 13.1%, which shows that we are gradually recovering profitability. This is a trend we expect to continue in the coming quarters. Our capital index rose by 60 basis points to 11.2%, mainly due to the entry into force of resolution 229, which took effect from July and brought a benefit to our CITI One. With that, I'll stop here and hand over to Mário for final remarks. Mário, over to you. Thank you, Gustavo. Here, just a minute to wrap up the messages, which essentially consolidate what we've been discussing in this first half-hour. Four major messages. I'll start with the consolidation of the portfolio management strategy. We had already spoken strongly in the third quarter that we were comfortable that the peak had passed, I declared this formally, so it's clear that the peak had indeed passed, we only know the peak has passed afterward, not during. In the second quarter, we already saw this, and in the third quarter, we clearly consolidate our strategy of 18, 21 continuous months of managing a portfolio in which we grew significantly, like the entire market in 21, which proportionally took more from the result, and knowing this, we worked as quickly and agilely as possible to digest and now in parallel working on growth in different areas. So, the first major message, the consolidation of the strategy, which leaves us quite secure.

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Speaker 2: Thank you, Gustavo. Here's another minute to close the closed doors that we were talking about in this first half hour. Four big messages.

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Speaker 2: The second message is, the businesses we chose to grow, we are growing, so we have continued to be all this time, a growth story, a growth story does not mean that the bottom line grows every quarter, there is no linearity, especially for a large company in a sector like ours, but we continued to grow where we wanted to grow and where we knew we needed to either slow down or even decrease, we did so calmly, maturely, and consciously, and in some cases, it's time to resume, and we are already showing the first signs. The third big message, the client, a huge focus on profitability, on engagement, on how to bring this client more broadly and at the same time diversify our portfolio. Fundamental, I will talk about this for many years with you, we have to have credit without a doubt, we are a bank, we like and know how to give credit, even within credit we have to diversify among the different portfolios, do much more middle-income and high-income, as I showed in Select, do much more SMEs, continue doing well with a focus on profitability, in wholesale, here it is not about growing for the sake of growing the balance sheet, it is also not a balance sheet race and within credit diversify and outside of credit our liabilities agenda, whether balance, off-balance, and commissions. And to close, seek obsessively, this word is strong, but that's how we operate here, seek obsessively the main relationship, but actually looking beyond the discourse itself which is important, looking at the details, looking at the journey, looking at the experience, listening to verbatim from the UNPS, seeing research, talking to the client incessantly and being humble to listen to them more and more and knowing that we have a lot of things to fix, but focusing on what we have to fix with priority, with discipline, knowing how to say no to what needs to be said no to, to be able to say yes with emphasis on what matters to the client. With that, I pass, thank you all, it's a pleasure to be here again and we move on to the Q&A. Camila, please. Thank you very much Mari and Gustavo, we will now start our question and answer session, from now on you will have the opportunity to clear your doubts, just click on the hand icon that appears on your screen. You can ask this question in Portuguese or English and we will answer the question in the same language. So that everyone has the opportunity to participate, I will ask each one to ask only one question, and then you can ask for clarification at the end. We now look at our first question, it comes from Bernardo Gutmann, from XP. Bernardo, good morning, welcome. Good morning Camila, Mari, and Gustavo, thank you for the space here to ask. I would like to explore a little more the theme of quality and growth of the portfolio, the bank delivered a relevant drop in delinquency and the lowest range between 15 and 90 days points to a continuation of this movement. Apparently, you managed to get ahead here with good management in the quality of the portfolio, but on the other hand, the pace of growth in credit origination still seems a bit timid, so it would be nice to understand a little more about the priorities in terms of growth, if it makes sense to increase appetite in less collateralized lines, with higher spreads, Mario mentioned the resumption in cards, but it would be nice to understand a broader strategy, what are the most interesting income ranges here, for example, thank you.

Speaker 2: The second message is that the businesses we chose to grow are growing. So we continue to be all this time, the history of growth, the history of growth doesn't mean that the bottom line grows all three, there is linearity, there is a big company, there is a big company like ours, but we continue to grow where we want to grow, and where we knew we needed to cool down or even to reduce, we made it easy, mature and conscious, and in some cases it's time to resume, we show the first signs. Ew.

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Speaker 1: Thank you very much, Margo Stavo. We'll start now, our session of answers. From now on, you will have the opportunity to take your doubts, just click on the icon of your hand, which appears on your screen. You can ask this question in Portuguese or English, and we will answer the question in the same language. For everyone has the opportunity to participate, I'll ask each one to ask one question, after asking some final explanation.

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Speaker 1: We look here now, our first question comes from Bernardo Gutmann from XP.

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Speaker 4: Good morning, Camila, Mário, Gustavo, thank you for the space to ask. I would like to explore a little more the issue of quality and growth of the portfolio. The bank delivered a relevant fall in the inadequacy and the lowest range between 15 and 90 days points to a continuity of this movement.

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Speaker 4: Apparently, you were able to get ahead with good management in the quality of the portfolio.

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Speaker 4: But on the other hand, the growth rhythm in the creation of the credits is still a bit timid.

Speaker 4: So it would be nice to understand a little more the priorities in terms of growth. It makes sense to increase the appetite in less collateralized with higher spread.

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Speaker 4: Bernardo, thank you. I will start, and Gustavo, feel free to add if you wish. The question is great and legitimate, above all. We show a trend that continued and it accelerates even in the last three, in the management of this portfolio that we were calling old and new harvests. You see that we no longer break down old and new harvests because I think we have reached another stage of maturity in managing our portfolio. We are undoubtedly following the evolution every day, we challenge ourselves on how we can translate this into a greater appetite. I was recently asked a lot, the IR team, oh, but then you are going to reopen, the fact that you are selling more cards, are you going to emulate the growth you had in 2021. We are not looking to emulate the growth we had in 2021. As I said, since then we know the client much better, which is super important. So, two years, two and a half years later, we believe we know the client better, we know the market dynamics better, everyone here has matured, just like the entire market. I would summarize the strategy as follows, we will continue wanting to grow in the strategic businesses that we designed exactly in the third quarter of last year, which for credit were the more collateralized businesses and in SMEs and also large companies. We will continue to make this growth, we show in this quarter an acceleration in SMEs, we show a reacceleration in the financial sector, which is one of these strategic businesses, it is a collateralized business, with some challenges, of course, of recovery, but anyway, a new legal framework, this should improve. This business, you will see quarter by quarter, we evolving, again, it will not be linear, it does not mean that I am obliged to show x% growth every quarter, but directionally, clearly, we will do it. What we will do more, and the question is super good, is we will be more open to less collateralized portfolios, and here I will highlight, you mentioned the card, I myself highlighted for the first time in a long time the theme of cards, but we will also look at personal credit within what makes sense, which we are constantly testing, we will look at overdrafts also in a more constructive way, so I would say that this combo of clean credit, in themes that are relevant to the client, I am not putting products there just to increase the account, whether in margin or commissions, we will do more, but with better knowledge of the client, seeking to focus on the client who is in-house, not that the client is not in-house, we do not want to deal with them, but we will prioritize those who are on the payrolls we manage, those who are not on payroll or are ex-payroll, that we know well the income dynamics, consumption dynamics, and credit dynamics, and of course, we will continue to welcome clients who are not connected today to the Santander ecosystem, and one final thing we will do is, we will increasingly focus on connecting the different points of the Santander ecosystem, we indeed have a broad ecosystem, we have a credit recovery company, called Return, which is doing very well as a business and can be a source of clients, the healthy clients we recover, we can bring to the parent bank and be able to operate, we have a business sphere that I mentioned, we have a huge ecosystem in autos that we can plug more and more, so the answer is yes, we will continue in the collateralized businesses, we do not want to slow down now, but we will marginally be more constructive, to make greater growth in the non-collateralized ones, this will happen and will appear over time, we grow some portfolios more than the NII, I recognize, but part of this is because this recovery was during the quarter, so part of the SMEs, part of the financial sector, we will impact the full margin in the fourth quarter, along with the acceleration we continue to make in the fourth quarter.

Speaker 2: Bernardo, thank you. I'll start, and Gustavo, if you want to add something. No, the question is great and legitimate, above all. We show a trend that has continued and it has accelerated, even in the last three, in the management of this portfolio that we had been calling old and new saplings. You see that we no longer break old and new saplings, because I think we have reached another stage of maturity in the management of our portfolio. We, without a doubt,

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Speaker 2: As I said, we know a lot more customers, it's super important. So, two years, two and a half years later, we think we know better customers, we know the best market dynamic, everyone here is matured, as well as the whole market.

Speaker 2: I'll summarize the following strategy. We'll continue to want to grow our strategic businesses that we designed exactly on the third third in the past.

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Speaker 2: What we're going to do the most and the question is really good, we're going to be more open to the less collateralized portfolios.

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Speaker 2: But we will also look at personal credit within what makes sense, because we are testing all the time.

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Speaker 2: not that clients don't have a house, they don't want to give it to us. But we will prioritize that it is in the payment forums that we just show, those that are not in the portfolio or are in the portfolio, that we know well the dynamic of income, the dynamic of consumption, and the dynamic of credit. And of course, we will continue to give good income to the clients that are not connected to the system. And one final thing we will do is we will increasingly focus on connecting the different points of the system of the standard. We are in fact not the system of the system, we have a company of the recovery of credit.

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Speaker 2: We turn, which goes super well, as a business, and which can be a source of clients.

Speaker 2: The healthy clients that we get, we can bring them to the bank, to the mother and to be able to operate. We have a little sphere that I have. We have a higher system, which we can plug more and more.

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Speaker 2: So the response is yes, we will continue in the industrialized business, we don't want to lose it now, but we will in the margin, to more constructive, to make a growing, not industrialized, and that will happen and it will appear with time. We want to grow more, some of the posters that I know, recognize.

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Speaker 2: But part of this is because this retomada was during the 3rd. So the PIM part, the financial part, we're going to see the FU part in the 4th 3rd. Along with the final preparation we're going to do in the 4th 3rd. I want to have answered.

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Speaker 2: I hope I have answered. Thank you, very clear. We now have our second question, which comes from Mário Pierre, from Bank of America. Good morning, Mário. Good morning, everyone. Congratulations on the result. I'm trying to connect via Zoom, I don't know if you can hear me. Mário appeared. Mário, good morning. Good morning. How are you? Congratulations on the result. Now yes, now yes. Can you hear me? Let's go. Let me try here, third time. I wanted to understand a little better, you are showing that the appetite for credit cards has increased, you are gaining share again. But there is a lot of uncertainty about the profitability of the sector, given the regulatory changes that may be coming. I wanted to understand how you are seeing these changes, what do you expect from the regulator? Mário, great question. Thank you for the chance to comment on this, it's a common theme. And I will try to make the brief version here, if you feel that I haven't answered everything, feel free to comment in a reply. We are actively participating in these discussions. I am personally involved, if I may say, it is a theme in which the CEOs have gotten involved and it is good that it happens, because what the banks, what the issuers have been doing here all this year, I would say since February , was to promote a technical debate. We are not defending our business model, several of us have directly or indirectly the acquiring business, so it is not about promoting the issuer and harming the acquirer, we basically want to build, through the regulator, Mário, a new balance, a truly sustainable balance. Today we have an unstable, unsustainable balance, which obviously has as a side effect a disproportionately high revolving credit interest, especially when we annualize it, we know, it doesn't exist annualized, you know well, but the print is bad, the headline is bad, the government is bothered and is right to be bothered. What have we been seeking since February ? And now I would say that this agenda is finally accelerating and converging, even because of the 90-day regulation deadline, as you mentioned. We are provoking more and more, in a good way, the technical debate and showing that the evolution of this has to go through a rebalancing, yes, of the revolving credit interest, we do not take this point off the table, which is a relevant point, it has to fall, it has to fall significantly, but the entire credit card financing structure has to change as well. This involves interest-free installments, which is a Brazilian peculiarity, which is important for consumption, therefore it is important for employment, for income, but it has to be gradually balanced so that the economy is not so dependent on it. We never proposed that it be ended or eliminated, we always proposed a phasing out, it seems that the discussion is going in this direction, Mário, which is good, and we propose not only as a counterpoint, not only the reduction of the revolving credit interest, but also the insertion of what exists worldwide, the famous buy now pay later, which is the installment with interest, at very competitive levels. So, we start from a super unbalanced design, in which the issuer takes the risk for the entire portfolio and charges from a small piece, to a design in which the revolving credit, which is who actually finances itself, pays less.

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Speaker 1: We have now our second question, what is Mario Pierre and Ben Cavamerican. Good morning, Mario.

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Speaker 1: Good day people, good evening, I'm going to the results. I'm going to connect to the 1, 6, 6, 7, 8, go. It's going to appear, Mario, Mario, good day.

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Speaker 5: Let's try to have a look. I wanted to understand a little better you are showing the appetite for credit card, I increased, I'm gaining a lot of money again, but I'm quite sure about the profitability of the sector of the regulatory changes that can be seen. I wanted to understand how these changes are seen what you expect from the regulator.

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Speaker 2: Mario, great question. Thank you for the opportunity to comment on this topic. I'll try to make a brief version. If you feel like it, I'll answer everything. Keep the comment down below. There's no reply.

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Speaker 2: It was promoting the BAT technique. We are not defending our business model, we have several direct and direct business of the client, so it is not about mental, emissor and client prejudicating, we are not in the background that is to build through a regular regulator, a new balance, a sustainable balance. We have a unstable balance, not sustainable.

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Speaker 2: and showing that the evolution of this has to go through a rebalancing of the rotational yield. We don't take away from the table this point, which is a relevant point. It has to fall, it has to fall in an important way.

Speaker 2: But all the different kinds of letters have to be changed. This happens because of a couple of juros, which is a Brazilian jabot, which is important for consumption, so much for the company, for the income, but...

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Speaker 2: The entire chain finances itself through installment payments, the entire chain starts to have a balance between shorter interest-free installments, perhaps more phased, decreasing over time, over the years, and installments with interest, for those who really want to pay in installments, available from X installments, will be available from all issuers. So, this agenda is evolving, it's far from being completed, but we are present at the table, we believe that the regulator, which is the Central Bank, will converge to some design that addresses this, that's what we expect, and we sit here until the end of the year to discuss. So, we believe it will evolve, back to the principle of your question, we are not worried about, oh, just now that you are resuming card sales, could there be a regulatory element? There could be, but we believe that regulatory evolution will be positive and not negative, so we are quite confident with the growth we are making, which is a calculated, calibrated growth, in the rating ranges we wanted and with the clients we wanted. I hope I have answered, Mário. Nothing, great, perfect, thank you. Thank you. We now have our next question from Eduardo Rosman, from BTG Pactual. Rosman, good morning, thank you for the question, thank you for participating. Well, good morning, good morning to everyone, congratulations on the numbers. My question is about payroll loans, right, I think Santander has been gaining relevance for some time in the segment, right, with OLE, which then now incorporated 100% and more recently we have seen a greater focus on the segment with stronger growth. We saw yesterday, right, a large digital bank announcing rates, right, in the INSS of 1.35 per month, which is much lower than the market and I think they argue that they don't need to pay commissions, right. Santander still has a greater exposure, right, via correspondent than its peers. So I wanted to understand a little how you expect to compete here, right, and how to retain the client, how to link the client, what other offers you can have to keep the client in-house. Thank you. Thank you, Rosman. This is a super good question about a business that we have indeed been talking to you about for a year, that we are growing rapidly, of course, always looking at risk metrics and everything else. I will divide the answer into some blocks. We have a proportionally larger presence than our competitors in what we call private payroll loans. We have thousands of agreements with companies, we have a large payroll bank, we have managed over the years, this is not a recent sprint, we have over the years built a super strong franchise, private payroll loans. Private payroll loans give us a lot of price flexibility because the caps that are public sector, mainly from INSS, do not prevail here. We can have bilateral negotiations and we have done what we call digitalization, Rosman, which is allowing that in the Santander client's app and who has the payroll with us, they can contract the payroll loan literally with one or two clicks and at that second, in the full digital payroll loan, as we call it, the credit goes there. So our experience in private payroll loans is from the industry and we have this quite relevant in the portfolio. We also have a lot in governments, in general, municipalities, states, we have large payrolls in municipalities, states and some state-owned companies and there is the INSS. The point you mentioned happens in all, but it is more predominant in the INSS and in some shared governments. But the INSS is super relevant and you are right. We have a historically smaller share than our competitors and we identified this and started working on it. So this growth you saw and the market saw in the last 12 months or 18, cut that we want to give, it was very based proportionally on the INSS. What did we do to make it different? We looked at our store network, which is an asset we have and that digital banks, respectfully, do not have, because the model is different, we redesigned which are our stores dedicated to serving the INSS client. We actually did a geolocation, CRM work, we crossed data with ATM usage, with cash consultation, etc. And in the last 12 months, we redesigned, we placed several stores that were not dedicated to serving the INSS and others that we thought were, we stopped having. So, in practice, we have a much more efficient use of our store network, which means that, Eduardo, we don't need correspondents as much as we did in the past. With the integration of OLE, you mentioned well, we not only bought 100% of OLE a few years ago, but in this trio we finished integrating systems. The gain we will have in efficiency, productivity, on the bottom line, on the cost line, but also the ability to react to the client, is also much greater.

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Speaker 2: but shorter, maybe more often, a little more often, for a year and a half, and the passers-by, for those who are in fact, to settle, from the x-parts, will be available for all the emissores. So, this agenda is evolving, it's long-term, but we are present in the table, we believe that the regulator, which is the central bank, will converge to some design, which starts, which we wait for, and we feel like it's the end of the year to debate. So, we believe that it will evolve, back to the beginning of your question. We don't have the concern of, well, now that you are getting back to the card...

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Speaker 2: We don't have the concern of, well, now that you are getting back to the map, you can have an E-T-G-L-T-E. But we believe that the E-T-G-L-T-E will be positive and not negative. So we are very sure with the growth we are doing, that is a calculated growth in the low weight-in that we want, the claims we wanted. I hope you answered better.

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Speaker 1: We now have our next question from Eduardo Rosman, from BTG Pactual. Rosman, good morning, thank you for the question, thank you for participating.

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Speaker 6: Good day, good day to everyone, good bye for the numbers

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Speaker 6: My question is about Consignado. Santander has been gaining relevance for some time in the segment, with Oler, who later now incorporated 100%, and more recently has seen a greater focus on the segment with stronger growth.

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Speaker 6: I think they have as an argument the fact that they don't need to pay commissions. Santander still has a bigger exposure, via correspondence, than its peers. So I wanted to understand a little bit how you expect to compete here, how to hold the client, how to link the client, what other offers can you have to be able to keep the client at home. Thank you.

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Speaker 2: Thank you, Asma. It's just a superboard question. A thing we've been talking about for a year, we've been growing in a way, in a way, being celebrated. Of course, always looking at the risk and everything else. I'll have a response.

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Speaker 2: and there's the NSS. The point you said, it's all happening, but it's more predominant in the NSS and some of the governments are shared. But the NSS is super relevant and it's a reason. We have a historic share, the smaller one than we've ever heard.

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Speaker 2: We looked at our store park, which is an asset that we have and that digital banks respectfully do not have, because the model is different. We redesigned what our stores are designed to serve the INSS client. We actually did a geolocation work, CRM, we crossed data with the use of ATM, with in-box consultation, etc., etc. And in the last 12 months we redesigned, we...

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Speaker 2: We put several stores that were not intended to serve INSS and others that we thought were, we stopped having. So, in practice, we have a much more efficient use of our store pack, which means that, Eduardo, we don't need as many correspondents as we did in the past.

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Speaker 2: With the integration of the OLEC, we don't only buy the OLEC for a few years ago, but in this trip we end up integrating the system.

Speaker 2: The gain that we will have efficiency, productivity, in the low line, in the low line, but also the passage of reagent to the client is also much greater.

Speaker 2: And on the Corbans side, which is indeed a relevant part of our origination, mainly via the LEP and a little bit from the bank, we are going with the INSS ceilings that are being renewed downwards, and we find this agenda a bad one, fundamentally anti-client, and we have tried to explain this to the government so far without as much success as we would like. We are, in essence, redesigning the way we remunerate these Corbans to keep the business viable. So, the best answer I can give you about this is that whatever we do, we want to continue doing it profitably, we are not here in the race for the market share sprint, I have been growing, but I have been growing profitably, in fact, our building has risen from the consigned and not fallen, and this must also apply to the INSS, so with that, the return equation for the Corbans is becoming increasingly complex. So, this is indeed a topic, but it's more of a Corbans issue than I would say of the banks holding the risk in the end. I hope I have answered you. No, that's great, thank you very much, Mário. Thank you, Eduardo. Now, we have a question from Yuri Fernandes, from JP Morgan Bank. Good morning, Yuri. Good morning, Camila. Good morning, Mário, Gustavo. I think congratulations on the growth of the Imposto à Vista and the quality of the portfolio. My question is about your product spreads. We are still seeing a drop in product spreads, about 20 bps quarter over quarter, but you have been commenting a little about taking more risk, SMI grew a little more, Consumer Finance grew a little more, and I think the Imposto à Vista, the migration a little more to retail deposits, should help you a little on the margin. So, my question is what is your expectation, if this is correct, if the margin should start to improve a little from here on, and if so, how much and when does this margin start to improve for the Bank? Thank you. No, directionally, that's it, you are correct, I mean, this is the composition we expect. Obviously, the speed of portfolio growth will dictate how much we can recover the spreads, the SMIs bring a positive aspect in this sense, and obviously the entire deposit base, both at sight and term, and the growth volume also carry this account. Now, it's not possible to specify when, the day, month, and hour, but what we are doing is exactly what you said, directionally this is the path. So, with price discipline, without losing price discipline, we are incrementing this line, this ratio, satisfactorily. So, that's exactly what we are doing, now it depends a bit on the movements, we saw demand for SMIs, we advanced SMIs, if there continues to be demand, we will advance more, and then this portfolio balance completes itself. So, this trend, now, more or less precise, depends, one on our dynamics which is going very well, another on the market dynamics, which depends a bit on the demand we have, both in credit and the income, the money available for application in the Bank, but this is exactly the line. Let me complement, Yuri, because the question is super good, I wanted to complement two points from Gustavo, first, we have already debated here a bit in the Q&A about the card theme, so everyone knows the dynamics, cards you start selling, then the card is activated, then the client starts billing, at first, all, practically, are there paying, so you have there a non-financed card portfolio, which is good to have, of course, and ours grows quite well in the TRI, and part of this, after the second or third TRI, becomes a financed part of the card, which has a high margin. So, part of what you are talking about is almost contracted, but it is natural that it takes time, so when we resume card sales, Yuri, we were not doing a 23 agenda, let's say, thinking about the calendar, it was a 24 agenda, again, without seeking, I want to do the same as I did in 21, when I managed to sell many hundreds of thousands of cards per month, we are not seeking this that exists in the market, and it is super healthy that the market returns, but prices converge, so we were even more disciplined in this TRI, you remember that in the first TRI, we had a very strong growth, TRI over TRI, in large companies, because we saw there a capital market that closed, we were agile, modesty aside, we had limits, we were quick to transact with clients, made an important growth that has helped us in the ENAE in the year, and in the two following TRIs, the ROE theme was more relevant, I don't think we will continue having minus 0.6 or minus 1, we are working to grow again, but we will not grow because we have to grow, because we are looking at an ROE that we want to deliver to the market that has to recover to the closest historical levels we had, just to complement. Thank you Yuri.

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Speaker 2: I have grown, but I have grown by gaining. In fact, our building has gone up from the designated and not fallen. And this also has to apply to INSS. So, with this, the return equation for the corbans is getting more and more complex. So, this is a theme, yes, but it is a theme more for the corbans than, I would say, for the banks that hold the risk in the end.

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Speaker 6: I hope I have answered your question. No, it's great. Thank you very much, Mário.

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Speaker 1: Now we have a question from Yuri Fernandes from JP Morgan Bank. Good morning, Yuri.

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Speaker 3: Good morning Camila, good morning Mario, Gustavo, congratulations for the win.

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Speaker 3: We are still seeing a drop in the product spread, something like 20 bps in the TRI vs TRI. But you have commented a little bit about taking more risk, increasing a little bit more S&E, increasing a little bit more consumer finance. And I think that the Depósito à Vista, the migration a little more to the retail deposit, should help you a little bit on the margin. So my question is, what is your expectation? If this is correct, if the margin should start to improve a little bit from now on.

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Speaker 7: This trend now, more or less, depends on our dynamic that is very well. Another dynamic of the market that depends a little on the demand that we have, both in credit and the income or the money available for the bank application. But this is exactly there.

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Speaker 2: That's a great question. I'd like to add two things to what Gustavo said.

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Speaker 2: We are not looking for this benchmark. We will resume, yes, but it will take a few years to come back. The second comment I want to make is about big companies.

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Speaker 2: Maybe it will come up here in the next questions, there are still many. But big companies had a small drop in the second, a small drop in the third. Yes, we are not here to decrease portfolios, that's not it.

Speaker 2: But in large companies, in particular, the theme of the Red Cross is super relevant.

Speaker 2: And with the fixed-interest capital markets coming back, we benefit from this, on the other hand, we are one of the big distributors.

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Speaker 1: We have a very strong growth between companies and companies. We saw a market that closed. We were in the middle of the market, we were quickly in the international customers, we made an important growth that helped us in the year. And in the next two years, the theme of Roy was more relevant. I don't think we're going to continue at least 6 or less 1. We're working to grow again. But we won't grow because we have to grow. Because we're talking about a Roy that we want to deliver to the market that has to be recovered to the next stories we have. Just to complement it. Thank you. Thank you, guys.

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Speaker 1: Thank you very much, everyone. We now have a question from Gustavo Schrödinger from Bradesco BBI. Hi, Gustavo. How are you, Cami? Thank you. Good morning, Mário. Good morning, Gustavo. Thank you for the opportunity. Congratulations on the improvement in delinquency. I think it's quite visible to everyone the work you are doing in being more selective. I wanted to think a bit about the retail story and business composition, right? I think that despite you having commented on retail, some lines in consumption that should return soon, I also felt you stressing a lot about the high-income story, right? And I wanted to hear from you if you think that the retail story, especially the lower-income retail, open sea, that everyone surfed, do you think it has improved? I think people got a bit hurt from this last cycle and now it's a trend for us to see banks trying to find a greater balance, especially in medium and high income and also SME that you commented a lot on. I wanted to understand a little how you are seeing this and if we should see a better balance from now on in this composition between low income, medium and high income, and even the SME there that sometimes gets confused with the retail part, right? If you could explain a bit the bank's mindset regarding this, I think it would be interesting for us to understand the dynamics of the financial system currently, right? Which I think is going through a significant transformation. Thank you. Great, Gustavo. No, thank you. Great question. This is about us developing a very important point of this strategy. So I did talk about high income, I have been talking about high income for the last three. I am unique, I recognize. I even said, it's natural for the market to be looking at this, I think it's great because it raises the bar for everyone and the high-income client is increasingly better served, right? I mentioned high income because a year ago we decided to focus on it, decided that we needed to fit in quickly because it was indeed a counterpoint to our management that continues to happen with our medium and low-income portfolio, especially low. It's not that we didn't have PDD in high income, high income also has PDD, but there the recovery speed has been better. So high income, to summarize, is a business that we consider to be fitted, which doesn't mean we have nothing else to do, but it is fitted, the value offer is fitted, the positioning of the stores is fitted, the advisory is working super well, we can reach the client 24/7 the way we would like and the NPS is one of, not the only, but one of the indicators that proves this. What are you doing regarding medium and low income? Super important question and we will talk more about this with you over the next three. We are dedicating the time we dedicated a year ago, rethinking the offer, the positioning, the differentiation of high income, we are doing exactly this now for medium and low. I would say that for medium we already have a very clear vision of how we are going to do it. In medium income, we have less of a cost to serve issue, Gustavo, and more of a positioning issue, footprint, how to deal with people, bricks, with the digital issue as well, of course, medium income is a bit of everything, right? It is the client who borrows, it is the client who invests, it is the client who has a card, who travels, but, anyway, there are several groups within medium income, but we are very close to fitting this vision into the model and we will talk a lot about this, without a doubt, in the fourth quarter disclosure, but throughout 24, I guarantee it will be a relevant agenda, we intend, it has always been a relevant business for us, our medium income is the Van Gogh, which is our brand, it has always been a super relevant business, it suffered in these two years, of course, but we have a very clear vision of what we have to do. Low income, which we call special here, for us, I think for the market as a whole, truly, is the big challenge. I don't have all the answers, but we are asking the questions, it starts with the questions, we have been asking all the questions for quite some time and some of the answers we have. The most obvious answer, which everyone knows, but it's good to say anyway, is that you can only have a low income, a special in our case, profitable, if we bring the cost to serve way down.

Speaker 8: Obrigado, pessoal.

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Speaker 9: We have a question from Gustavo Choden, from Bradescu, BDI. Hello, Gustavo. Good morning, everyone. Good morning, Mario. Good morning, Gustavo. Thank you for the opportunity. Congratulations on the best performance.

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Speaker 9: I think it's very visible here for everyone, your work in relation to being more selective. I would like to think here a little more about the strategy and the business composition. Although you have commented on retail, some...

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Speaker 9: And I'd like to hear from you, if you think that the history of retail, especially the low-income retail, open sea, that everyone surfed, do you think it was kind of exhausted, I think people got a little hurt in this last cycle, and now it's a trend for us to see banks

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Speaker 9: trying to find a greater balance, especially in mid- and high-income, and also in SME, which you mentioned a lot. I'd like to understand a little bit how you're seeing this, and if we should see a better balance from now on in this composition between low-income, mid- and high-income, and even the SME, which is sometimes confused with the retail part, right? If you could explain...

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Speaker 9: the bank's head regarding this, I think it would be interesting for us to understand.

Speaker 9: the dynamics of the current financial system, which I think is undergoing a relevant transformation.

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Speaker 2: I like it, I'm going to give you a great question. This is the chance to develop a very important point of this strategy. So I said yes, it's still up. I've talked about it in the last three. I know I'm not only familiar with it, but I'm talking about nature, the market is going to be going on for it, I think it's great because it's going to be a big deal. Everyone is higher. And the client is still up. It's going to be more and more.

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Speaker 2: which was a counterpoint, yes, to our management, which continues to happen, of our mid-income and low-income portfolios, mainly low-income. It's not that we didn't have GDP in the high-income, the high-income also has GDP, but there the recovery rate has been much better. So, the high-income, to sum up, is a business that we consider to be fitted, which doesn't mean that we have nothing else to do, but it is fitted. The value added tax is fitted, the store's position is fitted, the advisory is working super well.

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Speaker 2: We can reach the customer 24x7, and the NPS is one of the indicators.

Speaker 2: What are you doing in relation to the medium and low incomes? A very important question, and we will talk more about this with you in the next three sessions.

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Speaker 2: We are dedicating the time we dedicated a year ago to rethink the offer, the positioning, the differentiation of high-income. We are doing, as we speak, exactly that now, for average and low-income. I would say that the average, we already have a very clear vision of how we are going to do it. In the average income, we have less of a theme of cost of service, Gustavo, and more of a theme of positioning, of footprint, of how to deal with people, bricks, with the issue of digital as well, of course. The average income is a little bit of everything. It is the client who takes, it is the client who applies, it is the client who has a card, who travels. Anyway, there are several groups within the average income, but we are very close to fitting this vision into the model, and we will talk a lot about it, no doubt, in the disclosure of the fourth TRI, but throughout 2024, I guarantee you that it will be a relevant agenda.

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Speaker 2: It has always been an important business for us. Our average income is the Van Gogh, which is our brand. It has always been a super relevant business. It has suffered in these two years, of course, but we have a very clear vision of what we have to do.

Speaker 2: The low-income, which we call special, for us, for the market as a whole, is really the big challenge. I don't have all the answers, but we are asking ourselves the questions, we have been asking ourselves the questions for a long time, and we have some answers. The most obvious answer, which everyone knows, but it's good to say anyway, is that you can only have a low-income, or a special, in our case, profitable, if we lower the service cost.

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Speaker 2: So, there is no answer that doesn't... 10% below, 20% below is very little. So, if we don't redesign, in fact, not just the value proposition, also the value proposition, also the brand positioning, also the differentiation, but if I don't deal with the infrastructure that serves, which is not only related to the store, but also related to the store or agency, but I have to see the chain as a whole. So, in the low-income segment, having a digitalization, automation, offer simplification agenda, which has to be brutal. We are exactly on this agenda, writing, Gustavo, exactly what that means. So, also for next year, we intend to enter with a new positioning and a new way of serving the low-income client, completely different. If you ask if this is an industry theme, I think so, I think we all had our growth cycles in the low-income segment, until the moment when the low-income segment mainly had 5, 6 accounts with the bank, 3 or 4 active cards, there was a simultaneous credit concession, ours, from other incumbents and from the digital ones, kind of all together there, throughout 20, mainly 21, this client became super indebted and became a more problematic portfolio for all banks in the following years. And I don't think it will return the way it happened in 2021. Because it was proven to the market, Gustavo, that this client has a limit of income capacity and, therefore, a limit of top line generation capacity for the banks. So, a model in which credit fosters a high amount of income for the financial system, I think this model will not return, because that client does not have the capacity to generate this income for the system. So, the answer has to come from knowing how to capture income with principal, with experience, etc., etc., but with a service cost base that is much, much lower, and I am talking drastically lower. And we are exactly on this agenda, I hope I have answered your question. Perfect, super clear, Mário. Thank you and congratulations on the work at Jim Plancy. Thank you, thank you again. We will now go to Tiago Batista, from UBS, to ask his question. Opa, good morning, good morning everyone. My question is about the efficiency of Santander Brazil. We have some, when you make some comparisons, you see digital banks with much better efficiency. Your own Santander, in this quarter, reached 42% efficiency, a small drop, but still well above the bank's historical average, which is around 40%. Probably this, given the margin pressure, which I think reduced the revenue, I think this impacted the current efficiency of the bank. But it caught my attention, when I look at Santander's efficiency in FRS, disclosed by Spain, the bank has an efficiency of 35% versus the group with an efficiency of 44%. So, I'm talking about nine months here, so the efficiency is much better than the group. So we have different dynamics, there are much better players and the bank's own consolidated controller, worse than Santander Brazil. How are you seeing the efficiency dynamics in the medium term, is it possible to have significant efficiency improvement over the next two, three years? Great, great question, thank you. It is true that we, from time to time, have this challenge, but Brazil reports efficiency from the Spain point of view, UFS-9, different, there are several percentage points, I recognize that it can bring confusion, but the metric, in the end, accounting, the BRGAP itself is not yet equal to UFS-9, so there is a difference, but the direction always moves relatively together. But focusing here on BRGAP, you are right, we have an improvement of 70 basis points in efficiency, of course we are happy because the direction is right, but we are still in the 42 and below range.

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Speaker 2: But I have to see the chain as a whole, so in the low-income, there is a digitalization, automation agenda.

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Speaker 2: If you ask me if this is an industry issue, I think it is. I think we all had our growth cycles in the low-income sector, until the moment when the low-income sector mainly had 5 or 6 accounts per bank.

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Speaker 2: Because it was proven to the market, Gustavo, that this client has a limit of income capacity and, therefore, a limit of capacity to generate top line for the banks.

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Speaker 2: So, a model in which credit promotes a high amount of income for the financial system, I don't think this model will come back, because the client doesn't have the capacity to generate this income for the system.

Speaker 2: So, the response is to know if it's going to capture the performance, with the first speed, with the experience, etc. But with a very less servir course, I'm talking about drastically less. And we're exactly in this agenda, I hope you have a good time.

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Speaker 9: Perfect. Super clear, Mario. Thank you, and congratulations on your work at Jim Plancy.

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Speaker 1: We will now go to Thiago Batista from UBS to ask his question.

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Speaker 10: Good morning everyone. My question is about the efficiency of Santo Dario Brasil.

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Speaker 10: We have some, when you make some comparisons, you see digital banks as a much better science. Santander itself, this quarter, reached 42% of science, a small drop, but still well above the bank's historical average, which is around 40%.

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Speaker 10: This is probably due to the March pressure, which I think reduced the receipts, which is what impacted the current efficiency of the bank. But it caught my attention that when I look at the efficiency of Santander in FRS, released by Spain, the bank has an efficiency of 35 versus the group with an efficiency of 44. So, it's been 9 months here, so the efficiency is much better than the group.

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Speaker 10: So we have different dynamics, we have much better players, and the bank's own controller is worse than Santonario Brasil. How are you seeing the dynamic of efficiency in the medium term? Is it possible to have an important efficiency improvement over the next 2, 3 years?

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Speaker 2: Thank you. It's true that, from time to time, we have to challenge ourselves, but Brazil reports a different efficiency from the point of view of Spain or EFS9. There are several percentage points. I recognize that it can cause confusion, but the metric is, in the end, countable. BRGAP itself is still not the same as EFS9, so there is a difference, but the direction always goes relatively together. But focusing here on BRGAP, you're right. We have an improvement of 70 basic points in efficiency. Of course, we are happy because the direction is right, but we are still in the house of 42 and below.

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Speaker 2: 30 highs, that is, returning to the level of 30 and something, will still take some time because obviously it is an equation of numerator and denominator, but the answer I gave to Gustavo a little while ago, Thiago, covers the spending element of this equation that we will have to do, otherwise, again, our low income cannot be a business that generates profit in this negative tax, and obviously today it does. So how do I bring this to breakeven and then how do I make it a profitable business, not in a sprint, in a positive credit or macro cycle, but in a sustainable way, I can only do this knowing how to have the top line, but knowing even better how to control spending. So the spending agenda I mentioned a little while ago will help the efficiency account because it is the only way I can answer how I have each segment I cover profitable and sustainable, and it is a premise I have before the market that each segment has to be profitable in the cycle, in the medium and long term. And there is the revenue side, when we talk about, well, this T we already show in commissions in particular and some aspects of the margin, although in total less than we would like, of course, but when we see the direction of the margin with clients and the direction of the margin with the market that continues to fall in the negative and at some point will clearly return to being positive, we will have an improvement on the top line and an improvement that will continue to be gradual and, again, a discipline of spending and in the low-income segment an obsession to reduce more strongly and, with that, efficiency, the jaw, I would say, revenue and spending will open again and efficiency will naturally fall. So we seek, thus, to return to an efficiency level in the back gap as we had a few years ago, we work for that. It is a consequence of a strategy, of management, but it will happen as a derivative an improvement in efficiency, without a doubt. Very clear. After a very quick follow-up, you commented on the SMI and the long application, that this is a focus of the bank, the bank would like to double the size. SMI is a very broad sector, what would be the focus, more on the low-end, more on the S, more on the M? What would be your focus in this expansion? Cool. When I say that no growth here, when I talk about growing, I am always talking directionally and I even said a few times, growth cannot be linear. So I will answer your question in the same way, we divide here into three large blocks, the SMEs, the smaller ones, but which have a huge volume, the large but the medium SMEs already have a behavior a little more similar to the middle corp, which are in our wholesale bank and some banks even actually segment these companies as wholesale, anyway, this is detail, but they have a behavior more on this side. The medium SMEs and the small SMEs, the medium ones mainly demand greater credit attention, because there you often make a cleaner credit, so the structure of guarantees, looking at the working capital cycle, so we moved sideways in the medium SMEs in the first semester, sideways, on purpose, because we wanted to manage this portfolio well and now in the third quarter we start to have comfort, the large SMEs we continued to grow continuously and the small SMEs too, so the response of each one has to do with the macro, has to do with competition, of course, it is not a profitability issue, the way we manage the SME portfolio is super profitable, so we prefer to grow at the pace we can grow as much as possible, but maintaining the profitability equation.

Speaker 2: 30 high, that is, to return to the level of 30 and something, it will take some time because obviously it is an equation of numerator and denominator, but the answer I gave to Gustavo a little while ago, Thiago, it covers the element of the expense of this equation that we will have to do, if not, again, our low income cannot be a business that generates profits from the negative tax.

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Speaker 2: And obviously today it generates. So, how do I bring this to breakeven? And then, how do I bring this to be a profitable business? Not in a sprint, in a positive credit or macro cycle, but in a sustainable way. I can only do this.

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Speaker 2: knowing how to have the top line, but knowing even better how to control spending. So, the spending agenda that I just mentioned will help the efficiency account, because it's the only way for me to answer how I have each segment that I cover profitable and sustainable. And it's a premise that I have in front of the market that each segment has to be profitable in the cycle, in the medium and long term.

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Speaker 2: And the direction in the magical market, which continues to fall in the negative and in some time will be positive again, clearly, we will have on the top line an improvement, an improvement that will continue to be gradual, and again, a spending discipline, and in the low-income segment, an obsession to reduce stronger, and with that efficiency, the jaw, I would say, the spending recipe will open again, and efficiency will naturally fall. So we seek to return to a level of efficiency in the bear gap, as we had a few years ago, we work for it. It is a consequence of a strategy, of a management, but it will happen as a derivative, an improvement of efficiency, without a doubt.

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Speaker 2: What would be your focus in this expansion? When I say that there is no growth here, when I talk about growth, I'm always talking in a directional way, and I've even said it a few times, growth can't be linear. So I'm going to answer your question in the same way. We divide the PYMs here into three big blocks.

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Speaker 2: the smaller ones, but that have a huge volume, right? A large part of our 1.3 million PIMs are in this segment of companies. And even in this segment of the smaller ones, we are looking at it as a sub-segment to be able to be even more customized, even more assertive in the offer. This is what we are doing now for the fourth trimester. We will talk more about this in the next publication, at the end of January . So...

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Speaker 2: We're going to grow in three sub-segment. In small films, medium films and large films. What I don't want to say is that all of them grow in the same time. Medium films already have a slightly smaller behavior with the mid or copets that are in our bank that are attacked. And some banks even make the same movements with the companies that are attacked. That's a detail. But they have a more practical behavior. Medium films and small films, mediums especially demand a greater credit attention. Because there you make a more clear credit attention. So we have a lot of guarantees, we have to look at the capital of the money. So we have a lot of money on the medium films, on the first one and a half.

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Speaker 2: because we wanted to manage this portfolio well. And now, in the third year, we started to feel comfortable. We continued to grow in the large PIMs and in the small PIMs as well. So, each one's response has to do with the macro, it has to do with the competition, of course. It's not a matter of profitability. The way we manage the PIMs portfolio is super profitable, so we prefer to grow as fast as we can, as fast as possible, but maintaining the profitability equation. We have ROIs, we don't disclose ROIs to the portfolio, but our ROIs and PIMs are quite high.

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Speaker 11: I hope I have answered your question.

Speaker 11: Thank you. Next up is Daniel Vaz from Banco Safra. Hello, Vaz. Good morning. How are you, Camila? Thank you for the opportunity. Good morning, Mário. Good morning, Gustavo. I will extend Thiago's question a little bit regarding efficiency, thinking about the branch experience you mentioned with the WorkCafe. I would like to understand from you, if you could share a bit with us, the economics of having a branch like the WorkCafe compared to a more traditional branch. I think it's unlikely we'll be able to open up all the details due to your strategic part, but I would like to understand some big numbers here, if you can share with us, if this has shown good results, since you can reap benefits from it. And then I'll do a follow-up. It's a slightly different question, so I'll leave it here for you to answer. Thank you. Okay. Thank you. Thank you. Here, you mentioned the WorkCafe, I'll just expand the topic of physical distribution and stores a little bit, we started last year a movement that we hadn't done until then, until 2020, we hadn't made a move to significantly grow our number of stores, we indeed had space to occupy, whether in cities, in neighborhoods where we weren't, or in new cities. We expanded the bank a lot into the interior, it was very important for us to do that, we don't regret it. But we started looking in 2022, already with an efficiency agenda, a new service model, where the store, partly due to the pandemic, became less relevant proportionally than it was before, and digital, as everyone knows, accelerated a lot, and we, along with that, investing in digital to do better. So last year was the first year we consciously closed stores, with super technology, heat maps, georeferencing, CRM, and a lot of communication with customers. We closed more than 150 stores last year, and this number doubles this year. So between last year and this year, we will have closed around 460 stores compared to what we had in 2021. So it's not a small movement, we hadn't done anything similar before, and proportionally it's quite significant, more than 20% of our network. This obviously helps with Thiago's question, yours, regarding the efficiency topic, and we are doing this in a very conscious and scientific way, because we see that these customers who still go to the store can be served with very close radii, as long as communication, CRM, and everything else are well done. So we are already at a point where we are looking at the store topic differently than we did last year. This doesn't mean we will give up on them, we talk about the Digital Bank with Branches, we strongly believe in having the right stores, in the right place, whether to serve, to cover the flow, to serve the micro-region around the store, we have stores positioned, of course, where there is a wealth of small commerce, services, etc., and also individuals, whether for brand positioning. Some stores have less flow, but they are important for brand positioning. The WorkCafe is one of these examples, connecting with your question. So Vaz, what we have in the WorkCafes, first, we don't have that many yet, we don't have dozens, but we have some WorkCafes positioned and we are opening one or two more to continue testing the model. I would say that we have a higher investment per store, obviously, just enter one to see, they are nice stores, which cost more, and we have been measuring the payback of this very scientifically. Part of it is not so measurable, because it has to do with the positioning theme, having some flagships, perhaps, for those here in São Paulo, we reopened our Select flagship on AJK with Faria Lima, which may be the most beautiful branch we have, the store, and we will have some others like these, so we will choose well where to have flagships, the WorkCafe is a different flagship concept, which brings a flow from the cafe, which, by the way, is great, and we have there the concept of a bit of co-working, and we try to engage the non-customer, mainly, digitally, with Wi-Fi and everything else, so we are still investing in this, the data is good, but I won't tell you, ah, so I'm going to convert, it's not what you're suggesting, but I'm not going to convert, then, my network or a good part to make WorkCafes in Brazil, as, in a way, Santander in Chile has, some other geographies already have, but we will mature the model.

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Speaker 1: The next one is Daniel Vaz from Banco Safra. Hello, Vaz. Good morning.

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Speaker 12: All right, Camila. Thank you for the opportunity. Good morning, Mário. Good morning, Gustavo. I'm going to extend a little bit Thiago's question in relation to science, thinking about the experience of agencies that you put with that WorkCafe. I would like to understand with you, if you could share a little bit with us.

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Speaker 2: more than 150 stores last year and this number, this index, doubles this year. So, between last year and this year...

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Speaker 2: be it for brand positioning. Some stores have less profit, but they are important for brand positioning. Orcafé is one of those examples, connecting with your question.

Speaker 2: So, Vasco, what we have in the Orcafés, first, we don't have many yet, we don't have dozens, but we have some Orcafés positioned and we are opening one or two more to continue testing the model.

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Speaker 2: I'd tell you that we have a bigger investment in stores, obviously, just go to one to see, there are cool stores that cost more.

Speaker 2: And we have measured this in a very scientific way. Part of it is not so measurable, because it has to do with the theme of positioning, of having some flagships, maybe. For those here in São Paulo, we have re-inaugurated our flagship.

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Speaker 11: Select, not J.K. Kofari Lima, which may be the most beautiful agency we have in the store. And we will have some more of these. So we will choose well where to have flagships. Orcafé is a concept.

Speaker 11: a different flagship that brings the flow of coffee, which, by the way, is great. And we have the concept of co-working, and we try to engage non-clients, mainly in a digital way, with Wi-Fi and everything else. So we're still investing in it, the data is good, but I'm not going to tell you, so I'm going to fall, it's not that you're suggesting, but I'm not going to fall, so my partner, I go to part to make World Cafés in Brazil, as Santander in Chile and some other geographies already have. But we will mature the model.

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Speaker 11: No, it's super clear, I wanted to maybe move on to the next question for Gustavo. We see that indicator of yours for profitability in new crops, the Loss Absorption, so I wanted to understand, it seems like this quarter there was a slight drop, but when we look at the Consumer Finance financing line and the payroll loan part, they increased. So, it seems to us that some other lines that are a bit less collateralized, the riskier lines, still have this slightly more difficult profitability. Is it too presumptuous to assume this, or is there actually another line that is catching more of your attention here? No, we didn't see any change in performance from the second quarter to the third quarter, there was nothing material in terms of performance in all indices, including the LA, so there's no big difference to be honest. So no, I don't think you can say what you mentioned, everything is under control to be honest. We see control in the rollovers and in the PDD dynamics, and there was no major or minor material adjustment in the portfolios due to performance, so the performance is exactly as Clean more nervous, we are constantly making adjustments, but they are fine-tuning, we are not making big moves. In fact, I would say that in 21 months we haven't made any big moves more than uptick, 90% was at the end of 21 and the rest were smaller calibrations. Great, thank you very much and congratulations on the result. Thank you. The next question comes from Matheus Rafael and Banco Itaú BBA, hello Matheus. Good morning everyone, thank you for the question, which is about portfolio growth, which for Santander should close the year around high single digits. Looking ahead, volumes should be helped by potential cuts in the Selic rate, but we still see families highly leveraged, the credit quality problem in PJ still unresolved, there should also be competition in the capital market. So in this context, I wanted to understand how you are thinking about portfolio growth for next year, what are the main challenges the bank sees, if we can expect for 2024 growth above, similar, or even more timid than we saw in 2023. Thank you very much. Thank you, Matheus. You've given me a challenge here because since we don't give guidance, you're asking for a semi-guidance, a soft guidance, but I already appreciate your question because it's a good one. We will certainly not seek more timid portfolio growth in 2024 compared to 2023. So, starting with your last point, we will not seek more timid growth. Of course, there are a lot of factors we don't control, like demand, competitiveness in the capital market, macro, regulation, so we don't control all the factors, but the ones we do control do not point to us having more timid growth, so by definition, I'm telling you that we will seek to grow equally or ideally more. We have a capital base, we have a very good command, without false modesty, of the portfolio, we are producing new crops exactly where we want and are finishing digesting, if I can call it that, managing the portfolio of old crops. So, there's nothing in front of us that appears as, 'guys, you have to enter more conservatively in 2024 than you did in 2023.' We will seek to grow with a focus on profitability and on not building the PDD of the future. There will be some PDD because our business is a risk business, of course, but we want to build the PDD of the future that is calibrated with the risk appetite we have and with the profitability we want to deliver to the market. So, directionally grow, yes, with a bias of more than we have been growing, with an even more diversified portfolio, which is an important point I also want to register with you, and that we will seek the low-income equation.

Speaker 12: No, it's super clear. I would like to get into a next question for Gustavo. We see your profitability indicator in the new Loss Absorption.

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Speaker 12: I would like to understand, I think this trimester there was a slight drop, but when we enter the consumer finance financing line and the consignment part, they increased. So it seems to us that some other lines, a little less collateralized, the more risky lines, still have this a little more difficult profitability.

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Speaker 12: Is it too light to assume that? Or is there another line that is drawing your attention here?

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Speaker 7: No, we didn't see any performance changes from the 2nd TRI to the 3rd TRI. So there was no material in terms of performance in all indices, including LA. So there is no big difference.

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Speaker 7: And there was no major or minor adjustment in the performance portfolios. So the performance is exactly as we expected. So, really, there are no major changes.

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Speaker 12: Thank you very much and congratulations on the result. Thank you.

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Speaker 1: The next question comes from Mateus Rafael from Banco Itaú BBA. Hello, Mateus.

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Speaker 4: Good morning everyone. Thank you for the question. We are going to talk about the growth of the portfolio. Santander should close the year around high single digits. Looking forward...

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Speaker 12: The volumes should be helped by the potential cuts in SELIC, but we still see the families highly leveraged, the problem of credit quality in PJ is not yet solved.

Speaker 4: There must also be competition in the capital market. So, in this context, I would like to understand how you are thinking about the growth of the portfolio for next year. What are the main challenges that the bank sees?

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Speaker 4: If we can wait for 2024 to grow up like this, but it seems to me that something even more stimulus than we saw in 2023. Thank you.

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Speaker 2: Thank you, Matheus. You gave me a challenge here, because as we don't give guidance, you're asking for a semi-guidance, a guidance software, but I already thanked your question, because the question is good. We will undoubtedly not seek a more timid growth of the portfolio in 2024 compared to 2023. So starting with your last point, we will not seek a more timid growth.

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Speaker 2: Of course, there are a lot of factors that we don't control, such as demand, competitiveness, capital markets, macro regulation. So, we don't control all the factors.

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Speaker 11: But what we control doesn't point us to a more timid growth. So, by definition, I'm telling you that we're going to seek to grow in an equal or, ideally, greater way. We have a capital base. We have a fairly good domain, without false modesty, of the portfolio. We're producing new safras exactly where we want. And we're finishing digesting, if I may call it that, of managing the old safras portfolio. So, there's nothing in front of us that says, man, you have to have more conservatives in 2024 than you have in 2023. That's not the discussion we have in the executive committee or the risk committees. It's not.

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Speaker 2: What we have, as I said before, it is also super important to calibrate this, Matheus. We will not look for growth by growth, because I prefer to be here with you every three months and in the conferences showing clear growth.

Speaker 2: So it won't be linear, I mean, it won't be the same in all portfolios and each tree will be a little bit different from the others, but directionally we will look to grow, we will look to grow some percentage points per tree, no doubt, on average.

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Speaker 2: and will try to grow with a focus on profitability and focus on not building the PDD of the future. Some PDD will have, because our business is a risk business, of course, but we want to build the PDD of the future that is calibrated with the risk appetite that we have and with the profitability that we want to deliver to the market. So, directionally, yes, with more than what we have been growing, with a portfolio.

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Speaker 2: even more diversified, which is an important point that I also want to leave recorded with you, and that we will look for the low-income equation also with credit, but in a much less dependent way proportionally to what we did in the first great cycle of our growth until 2021. I hope I have answered, Matheus. Thank you.

Speaker 2: I hope I have answered, Mateus, thank you. Super clear, thank you.

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Speaker 13: We will now switch to English for our last question with Tito Labarta from Goldman Sachs. Hello, Tito. Hi, Camila. Thank you. Good morning, Mario. Gustavo, thanks for the call and taking my question. My question is on the profitability of the bank. We did see an improvement in the quarter, but you're still benefiting from a relatively low tax rate.

We will now switch to English for our last question with Tito <unk> from Goldman Sachs Hello Tito.

Thank you.

Mario Gustavo Thanks for the call and taking my question I guess my question is on the profitability of the Bank you know, we did see an improvement in the quarter, but you're still benefiting from a relatively low tax rate.

Speaker 13: you know, more normalized tax rate of 30%, you know, you still would be around 10% ROE. So just think, I assume you expect it to improve from here, but what do you think is the sustainable level of ROE and what are gonna be the main drivers to improve it from here? Yeah.

Our normalized tax rate to 30% and you still would be around 10% Roe.

So just to think I assume you expect it to improve from here, but what do you think is the sustainable level of ROE and what are going to be the main drivers to improve it from here yes.

Speaker 2: Yeah, thanks. Thanks, Ito. It's a very good question. So Gustavo, please feel free to add.

Yeah. Thanks, Thanks for your thoughts it's a very good question so Gustavo.

Gustavo please feel free to add.

Speaker 2: So, as we're talking a lot of things about the direction we're taking for sure, as a federal self, we're looking at improving the teams from the low teams, almost 10, depending the way you look, even close to 10. We published 13.1, it's better than less quarter. It's not enough, obviously. We're gonna get much better as we continue to progress portfolio results. And obviously the whole client experience surrounding how this

So directionally as we're talking a lot of things about the direction, we're taking for sure as I said yourself, we're looking at improving the teens to the from the low teens almost 10.

Our defending the way you look even closer to 10.

We published $13, one it's better than last quarter. It is not enough obviously when I get.

Much better as we continue to progress portfolio results and obviously the whole client experience.

So all in all this so we were targeting to get back to the high meat and then higher teens as we've been.

Speaker 2: So we were targeting to get back to the high mid and then higher teens as we've been delivering for many quarters up until 2020.

Delivering for many quarters up until 2021 again, it's a it's a very different mix.

Speaker 2: Again, it's a very different mix, Tito. I'm sure you know that. So it's not going to be the same kind of ROE, then we delivered in 2021, for example, which was our record ROE, the 21+.

I'm sure you know that so it's not going to be the same kind of ROE than we delivered in 2021 for example, which was our.

ROE of 21 plus.

Speaker 2: we believe we need to get to the high teams. We will work to get to the high teams. We will get there. Eventually, it's going to take quarters.

We believe we need to get to the high teens, we will work to get to the high teens, we will get there eventually it's going to take quarters, but we're going to get there there is no target number which.

Speaker 2: but we're going to get there. There's no target number which otherwise will fail. We'll get to the mid-teens first, then the high-teens, then we're going to work even more towards getting back to the 20, 20 plus number and this is going to be the progress we're aiming for. So I touched profitability in many aspects in my speech and Q&A today, you'll notice.

Otherwise well.

We will fail, we will get to the mid teens first then the high teens, then we're going to work even more towards getting back to the 2020 plus number and this is going to be the progress. We're in before so I searched profitability in many aspects in my speech and Q&A today, you'll notice.

Speaker 2: So we're gonna grow with profitability, we're gonna get

So we're going to grow with profitability, we're going to get the low.

Speaker 2: the low income mass market segment to become from unprofitable as it is right now and it's obviously hurting our P&L to break even.

Low income mass market segment should become from unprofitable as it is right now and it's obviously hurting our P&L to breakeven sooner.

Speaker 2: soon enough, and then profitable. And all that together with middle income, high income, SMEs, and then the wholesale business as a whole, which is already obviously profitable, all that together will point to the same direction. That's very clear to management. It's very aligned with the group. The group is very focused on ROE as well, which is good because we have the same agenda. So capital, profitability, choosing the clients to do, to sell, to securitize, all that is in the top of our agenda. So we're going to get there. It's a matter of.

Soon enough and then profitable and all of that together with middle income high income Smes.

And then the wholesale business as a whole which is already obviously profitable all of that together will point to the same direction.

That's very clear to management, it's very aligned with the group. The group is very focused on ROE as well, which is good because we have the same agenda. So capital profitability choosing the clients to do to sell to securitize. All of that is in the top of our agenda. So we're gonna get there it's a matter of time.

Speaker 13: If I can ask a follow up along those lines maybe a little bit more backward looking actually in this case Right, you know going from that 20 plus percent early you had a few years ago to today And I know you've you know dealing with high interest rates the credit cycle. I mean you're appropriately slow down long growth ahead

Okay. If I can ask a follow up along those lines, maybe a little bit more backward looking actually in this case right you know going from that 20 plus percent of our we had a few years ago to today and I know you're dealing with high interest rates or credit cycle. I mean, you appropriately slowed down loan growth ahead of that but if you go back you know the.

Speaker 13: But if you go back, you know, the sharp decline that we've seen the last couple of years, do you think it was all cyclical just where you are in the credit cycle, where interest rates are?

<unk> decline that we've seen the last couple of years do you think it was all cyclical just where you are in the credit cycle, where interest rates are do you think the competitive dynamics of the industry have overall change that maybe cause some of that just to think about what those dynamics were that caused that compression to come.

Speaker 13: Do you think the competitive dynamics of the industry have overall changed that have maybe caused some of that just to think about what those dynamics were that caused that compression to, you know, compare today to where you were back.

Compare today to where you were back then.

Speaker 13: Yes, it is a deep question. I believe that, like many things, it is a combination of different vectors, different things that happened together. Yes, competition increased a lot until 2021. It continued to increase, but each of us accelerated our credit portfolios in 2021. The incumbents, the digital banks, this is part of the problem because we did this together, unknowingly, of course, of each other. So, I believe some models changed, and I touched on this a few questions ago. So, I think the model changed from a low-income average market, which is much more professional for the entire industry. I do not believe this will still hold because it is impossible for everyone to make a lot of money with the low-income market, the low-income market, the way we did, at least the way we did until 2021. So, part of the evolution is a model change. But, as I said, today my ROE would be maybe one or two points better if I didn't have some segments, like low-income, that are providing a negative PBT. So, when I solved the equation in low-income, it naturally led me back, not necessarily to the 2021 numbers, because they were not, in my opinion, on a sustainable basis, but back to a more professional professionalism with a more professional low-income segment. Regulation evolved as well. So, from 2019 to 2020, and then from 2020 to 2021, there was an evolution in capital hedge and some other things. There is the INSS, the income cap, the INSS in account spending income, so there are regulatory things that also evolved and we have to deal with it, whether through third-party providers, banking correspondents, through our own cost base. So, there are many evolutions in sequence. But many things we are doing, or the biggest things we are doing, are responses to counter these changes, competitively, regulatively, and even portfolio-wise. So, when I say I believe we will return to higher levels, I am saying this because we are providing new answers to old or new questions, but we are working hard with these new answers so that we can counter what is happening competitively, regulatively, and even portfolio-wise. And I have confidence that we are aligned, we are on the path in this agenda. Great, great, great. Thank you very much for the answer, Mário. I want to thank everyone for being with us this morning. After this conference, I and the entire IR team here at Santander Brazil are available to clarify any remaining doubts. Thank you very much, have a great day and see you next time.

Yeah.

Speaker 2: Well, yes, it's a profound question. I believe so. As many things, it's a combination of different factors, different things that happen all together.

Well, yes, the pro phone question I believe at Heathrow as many things. It's a combination of different factors different things that have happened altogether, yes competition increased a lot.

Speaker 2: Yes, competition increased a lot up until 2021. It kept increasing, but every one of us accelerated their credit portfolios back in 2021. The incumbents, the digital banks, that is part of the problem because we all accelerated and we all did it together without knowing, of course, of each other. So I believe some of the more

Up until 2021, it kept kept increasing but everyone every one of us accelerated their credit portfolios back in 2021, the incumbents. The digital banks that is part of the problem because we all accelerated and we all did it together without knowing of course.

<unk> of each other so I believe some of the model changed and I touched it a few questions ago. So I think the model has changed from a low low income mass market.

Speaker 2: changed and I touched it a few questions ago so I think the model has changed from a low low-income mass market which is hugely profitable for the whole economy

Hugely profitable for the whole industry.

Speaker 2: I don't believe that's still going to maintain because it's impossible that everyone is going to make a lot of money with low low market, low income market, the way we did at least the way we did up until 2021. So part of part of the part of the evolution is a model change. But like I said, today, my ROV would be.

I don't believe that's still going to maintain because it is impossible that everyone is going to make a lot of money with low low market.

The low income market the way we did at least the way we did up until 2021, so part of part of the part of the the evolution as a model change, but like I said today, my or we would be maybe one point or two points better if I did not have some segments like low income, which are providing a negative PBT. So.

Speaker 2: maybe one point or two points better if I did not have some segments like low income which are providing a negative PBQ.

Speaker 2: So when I solve the equation on low income, that naturally will bring me back, not necessarily to the 2021 figures, because they were not, in my view, on a forward-looking basis sustainable, but back to a more profitability with a profitable low income segment. Regulation evolved as well.

When I solve the equation, although low income that naturally will bring me back not necessarily to the 2021 figures because they were not in my view on a forward looking basis sustainable but back to a to a profitable one.

More profitability with a profitable low income segment.

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Speaker 2: 19 to 20 and then 20 to 21 there was an evolution on the capital hedge and some other things. There's the INSS cap on on on on interest rates in the building payroll loans. So there are regular authority things which also evolve and we got to handle that whether via the third party providers that bank respondents via our own cost base. So there are many evolutions altogether. But many

19% to 20, and then 'twenty to 'twenty, one there wasn't evolution on the.

The capital hedge and some other things there is the NSS.

The cap on interest rates and cost of going out and payroll loans. So there are regulatory things, which also will fall and we got a handle that whether via the third party providers of bank respondents via our own cost base. So there are many evolutions altogether.

But many many things that we're doing are most things. We're doing are answers to counteract those changes competitive wise regulation wise and even portfolio wise. So when I tell you that I believe we're going to get back to the high teens.

Speaker 2: many things that we are doing or most things we are doing are answers to counteract those changes. Comparative wise, regulation wise, and even portfolio wise. So when I tell you that I believe we're going to get back to the higher teams, I'm saying that because we are providing new...

I'm, saying that because we are providing new answers.

Speaker 2: to old questions or new questions, but we're working a lot on those new answers so that we can counteract what's happening competition-wise, regulatory-wise, and even portfolio-wise. And I'm confident we are encaixados, we are on track in that agenda. Great.

Two questions.

Questions are new questions, but we are working a lot on those new answers. So that we can counteract what's happening competition wise regulatory wise and even portfolio wise and I am confident we are encouraged shadows, we are on track in that agenda.

Great perfect great. Thanks, so much for the answer.

Speaker 1: I want to thank you all for being here with us this morning. After this conference, me and the entire R&I team here in Santander, Brazil, we are available to clarify any remaining questions. Thank you very much, have a great day and see you next time.

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