Q4 2023 Banco Bradesco SA Earnings Call

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Operator: Bye. Bye.

Good morning.

Thank you.

Speaker: More than 70 million Brazilians choose to count on Bradesco daily, and we choose to be your financial partner. We choose to be the solidarity and the evolution in this world that does not get tired of transforming itself, merging innovation with the safety of those who advance to be the exact contribution that our customers need. In financial centers, in the countryside, in the waters of the Amazon, in the colors of our culture, in every corner and movement of this country, we are present, with ethics, respect, and diversity, ready to create opportunities for the fulfillment of people, driving the sustainable development of companies and societies, whether through credit, advice, care, security, sustainability, education, or digital transformation. We are aware of what makes a difference for people, with the credibility of those who open doors A mais de oitinho anos, from Bradesco.

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Marcelo Marconcini: Good morning, everyone. I am Marcelo Marconcini, for the full year of 2023 and for Q4 2023. After that, we will have a second topic, our guidance for 2024. You probably read our book and our guidance for 2024. To us, 2023 was a challenging year. It's not the result we would have loved to deliver to you.

While there before you'll Soma Selma Goldman, Illinois, going on and I'm sure Lamy speaking from Siddhartha. Good news, it's 10 32 a M.

To present the numbers one of you but for the full year of 2020, a tree end of Q4 2023 and four after that we will have a second topping our guidance for 'twenty 'twenty four two months.

Probably ray adopt book and on side those were 2020 point towards 2023 was a challenging year not the result, we would have loved to deliver to your guidance public nudity RASK and the guidance of 2024 falls short of bid, but to us Super 'twenty 'twenty four will be a year of true.

Marcelo Marconcini: And the guidance of 2024 falls short a bit. But to us, 2024 will be a year of transition and transformation at Bradesco. And lastly, the third topic is our strategic plan. Of course, here I'm bringing the executive summary of the plan that we put together in the last 60 days. I will present that to all of you, and then we'll be able to debate it during the Q&A, and I will be available to all investors for us to talk later. We already have some meetings scheduled for buy-side and sell-side investors so we can speak about our plans for the next five years in Moiti, from 2024 to 2028.

Session of transformation I put this girl and lastly, the third topic.

Our strategic plan of course, he and bringing the executive summary of the Blender, we put together in the last 60 days and we'll present that to all of you and then we'll be able to debate that during the Q&A for magazines and books and I will be available to all investors for us to talk later, we already have.

The meetings scheduled for buy side and sell side investors. So we can speak of bedrock plan for the next five years in more detail from 'twenty 'twenty four to 'twenty 'twenty of your chosen THAAD missile no I have the challenge of presenter at the same time that we present our income statement.

Speaker: So now I have the challenge of presenting, at the same time that we present our income statement for 2024-2023, speaking about a full year. This is the result, the guidance, and the strategic plan in an executive summary, if I may. So I'll try to do this as quickly as possible so we can have our Q&A with our numbers. As you can see, we have an additional number in the ledger that was the end of the quarter with $4.3 billion. Here, we had an ALL reinforcement for two cases in the wholesale bank. We were a little more conservative in these two cases.

024, twenty-three from guys, who speak about Dyssymbolia supermodel results. He starts the guidance I mean Tso has indeed strategic plan with an aim executive summary information will still try to do this as quickly as possible. So we can have a Q&A months left.

Let's start with our Netherlands, Belgium.

As you can see we'll have an additional number in the lighter colored overall citrix shop visit we would look at Mexico Guaco building was the end of the quarter with at a club when treated billions tier progress we've got head in a L. L replacement for two cases in the home I failed bank, where we were a little more conservative in these two.

Speaker: Here, we had an ALL reinforcement for two cases in the wholesale bank. We are just waiting. That's why our recurring net income was $2.9 billion, and in addition, we have two major non-recurring events, as you can see here in this last slide, topic here on the right of the screen, for the restructuring that we have and a contingent liability. I think we should comment on some positive aspects of our income. Wholesale ALL was reinforced in the two cases that I mentioned. If this is relevant, we have a comfortable coverage level for wholesale, and just like we're going to show you a reduction in all delinquency ratios. We control the higher delinquency rate that we have for FME and men. Thank you for watching, and I'll see you in the next video.

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We buy all the regions. The rating will use will also be a little and that's why of our recurring net income was 2.9 billion before it can be Rls. In addition, going to advance my own at two major nonrecurring event an issue as you can see here end of life on ticket <unk> topic coherent over the home.

On the right of the screen for appropriate optimal new zone, but our haynesville put ourselves into the automotive provision for the restructuring.

We had almost four months values will grow kind of contingent liabilities total I think I could comment on some positive aspects of our income from what we saw in this most consequent to home fail Alo overthrew alongside one in the two cases that I mentioned and this is relevant we have a comfortable coverage level for the wholesale bank. We saw this year.

We had a reduction of a L. L immensely by more straw man of employee pay off board roofing, the cardboard and United Voices I'm, just look we're going to show a reduction in all in from a delinquency ratio Michael Russell the higher delinquencies that we had for ethylene and most recently in terms of credit marks that was accelerating and Hello Soma peso.

Three years ago I will show you that this happened for individuals.

Speaker: I will show you that this happened for individuals and SMEs. Market NII recovered, total NPL dropping 50, and here, there's another positive point which differentiates this. We are a group that has a bank business and also the largest insurance group in Latin America. Our insurance groups were at a higher level with an ROA rate close to 25%. Operating expenses were within, and I'll detail more. Moving forward, like I said, we had an inflection of the curve for both individuals and entrepreneurs. Individuals growing by 1.3%, a reduction we had in our..., and also a change of level or ethnicity posting a 1.5% growth. And we have the write-off of a well-known case which happened at the end of 2022 in Q4 of 2022 in Q4 of 2022 in Q4 of 2022 in Q4 of 2022 in Q4 of 2022 in Q4 of 2022 in Q4 of 2022 in Q4 of 2022 in Q4 of 2022 in Q4 of 2022 in Q4 of 2022 in Q4 of 2022 in Q4 of 2022

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In a higher level with Anoro a rate closer to 25% off its frequent collateralized and Chicago that operating expenses were within the guidance will be market and I'll detail more estrogen and our expense it will implement favorable moving forward very well like I said, we had talked about presenting the inflection of the curve lebow's each individual.

And it's a nice healthy individuals going 1.3% up in southern Cal or herbal submerged goodbye now won't be due to a reduction we own in Iowa is once an appetite for risk in 2022 2023.

And also a change of levels and much more SME Memphis hosting a 1.5% grow room courtyard on QUADRA alien until we had the write off of a well known case, which happened in the end up 2022 ish in Q4 of 2020 kidney Hello, Saul for OXXO, Mexico, even ancient our average daily production.

Duction Moshi Moshi mastered a sale was up in the second half will get crazy because of the change in deferred he could head of our credit models and Brebach policy for individuals which became more restrictive than into pattern. Yes, if all goes well with HUD with a new controller da Vinci General defend go forever means we tested models in April.

We implemented the new models as of September 12 are increasingly oriented group, Okay and Mr. Kennedy Meadows and produce in the segment to us from bankers more you could add and monetize companies again with more controllable credit policies. So we won't have any issues and the new vintages, which are performing really well bring for Ken if I may.

Speaker: [inaudible] in the segment of small and other companies, again with more controlled credit policies. So we won't have any issues in the new vintages, which are performing really well. And, as I mentioned, the delinquency ratio.

Delinquency ratio, we can see all the archives of Npls are helping some for the second consecutive winter momentum can we have this portfolio under control and.

Speaker: We can see all curbs of NPL dropping, some for the second consecutive year, and we have this portfolio under control, coverage, racial groups, 265%, and NPO CREATION. I mentioned these two cases we had in the wholesale bank, with total provisions of 10.5 billion branches in Q4. Moving forward, this is our net interest income, NII. We reduced our risk appetite, as I mentioned at the end of 2022, and, of course, we stopped having replications for a while.

Coverage ratio grew sample law, you NPL for U 200, influx at 5% and NPL creation decreasing Scott I mentioned these nuclear for hedging the wholesale bank zone, where you're doing sort of provisions up $10 5 billion in theory, a lot in Q4 attendance Rainbow Jud Hakia market model before.

One of them and this is John that buttressed income NII, we reduced our risk appetite designation, indeed, a 2022 and throughout 2020 to raise money funds and of course, there's always stopped having oil productions for awhile, we resumed vessel towards the end of the year and continuing to grow global pet definitely growth, but seven.

Speaker: We resumed that more towards the end of the year and continued to grow. We will definitely grow, but step-by-step, with good faith, in terms of personal credit, working capital, and other lines that have been growing. And I will mark it NII as the highest.

Quest dogwood, good vintage collection, both in mass retail and of the need and it's a first of all in cost on these renewals in terms of personal credit data to working capital and other I'm also Mark line step within Grambling shocking of a magnet NII was a highlight glasses reinforcing growth ensuring from a company point Fatima it's piano.

Speaker: Puss in Growth in Q4. The end, commissioner. We know that this is a line item that is under pressure. I think the whole market... particularly in card income with both, that animal payments for part over time were compromised because... We had a structural change. That impacted hard income, but our loan operations grew quite well, as you can see, because of this wisdom. We grew in consortium management and in checking accounts. We have challenges because of payment accounts, but we continue to work on that to offer better. I think I should make three comments, and looking at the line item, other operators. We posted a reduction in 2020. So that's a baseline for comparison in 22 niches; it's a word.

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He and commission kind of pressure, we know that this is a line item that is under pressure I think cohort market looking at all of that particularly in card income to complete both of them to Charcot Marie 0.4% grower in quarter, one quarter out because however, we knew yield ramp of that annual payments from hard overtime chemical come from.

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Mental health and in checking accounts, we have challenges because of payment of Cologuard inflicted regard consumer we continue to work on brand are going to offer adequate backup economic logic of call have a good expectation for capital markets Board Hawthorne alternatives will put us on a north central operate regardless as I think I should make three comments here premium.

Lids nimble and thank.

Hey, good luck at village Ngos mitigated those 22 ultra just looking at the line item other operating expense lines as we did with liquor the reduction in 2022, so that's sort of a baseline for comparison in 'twenty to nutrition. So widely from Honeywell standpoint, we have a greater deterioration jaws are in wait imbalance. This line item of our.

Speaker: We have a greater variation, and we balance this line item of other operating expenses in 2024, bringing them back to the levels of 2019, 2020. So there's some fluctuation in the rate. All personnel exposed, looking at the last indicator, we see a..., including by the Collective Bargaining Agreement, regrouped 2.5% below inflation. We had the reduction, as you can see on the screen. You can see this on the screen and in our... I spoke about the insurance problems, and I think that this is a big highlight in our Results, growing by about 21. 21.1 percent, 2023 over. Net income has grown significantly, almost 25% ROAE, with revenues greater than $100 billion. Billion and billion.

Other operating expenses for 2024, it started bringing them back to the levels up 2019 trend between myself, there's some fluctuation in lumpy moderation, that's noteworthy and that much pivoted peso personnel eggs doses look at glass, a nimbler indicator Ics expense spending include local despite station <unk>.

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Net earnings attributable Washrooms, let's talk about the insurance group and I think that this is a big highlight trophy probably in our results. We had exceptional results along 2023 dollar going to zinc growing about 21 with a 1% to 21.1 and 2023 over 2020 could Sue net income grew significantly almost two.

95% or OA pain with revenues greater than 100 billion and Bobby Ralph instant issuance grew Bora went into a whole new level amount of film no recording or are you seeing any way you want to create 11 with tree.

Speaker: Insurance Group, to a whole new level. And now, regarding our IUC, we declared 11.3, as you can see, the graph in our Buffalo Sheer 1 Group 81, compared to Q4, reaching 13.2% Now, done with that, let's move. Row, for our loan portfolio of 7% to 11%, in the middle of what we're talking about now. Like me above, but the mind... Yes, the expectation is around $800,000. Why is it that the NIA does not follow the loan book?

As you can see energy budget line in the graph in our Buffalo Tier one grew 81 believes the mccreedy compared with Q4 2022, reaching 13 point to this event and volume can disrupt the brain form of guidance now done with Android, let's move to the consolidation of infotainment Christian medical materials that may have been unexpected.

Specter it grow for sure from our core auto loan portfolio of 7% to 11% in the mall Midland point, we're talking about nine containment cotton does slightly above E mail at the market or observe should expect therefore, the expectation is around eight underwritten twin languish at the Niagara from Palo Verde go longer because of the average portfolio back to Merck Roma.

Speaker: Because if the average portfolio is back to work, it will grow month by month, step by step. And naturally, we will have a total NIA, depending on the mix. [inaudible] but above the average portfolio, and we are going to see improvements in 2022. C, income, 2 to 6%, suffering some pressure, as I mentioned, operating expenses, that's not the best way to raise money, and a few others. But I think that we are doing quite well regarding personnel and administration, with the expected growth of five children. Regarding the insurance group, we're expecting growth from 4% to 8%. The natural question from you is, why only 4% to 8%? But that's the phenomenon, and, of course, the Reduction of Interest Raid Session. 9.5% in 2024, December 24th.

I loved by fans of IC, Scott and clearly we will have a total NIH funding on the makes me should also improve on legacy American but above the average QUADRA folio of I love on complex Antoine and those have been reoccur lantus and improvements in 2020 Phytotherapy encumbrance.

Once completed the single sustainable tree suffering some pressures as I mentioned well below operating expenses, that's not the best now that ratios are we.

You have any feedback.

Mcdonald with revenues and to walk us through a bank hello, somewhat but I'm, saying that we are doing quite well regarding personnel and administrative.

Most of us that people think about our goal in terms of operating efficiency target. So they wont expected growth was five 9%, Washington regarding insurance group, you're expecting growth from core trade percent natural question for new isn't like white, only 428%, but our three phenomena tuition Hartford would hurt the reduction of interest rates.

Could reach 9.5 lifespan of a this year on the deployment of its cargo ship in 2024 equity of sabotage and embodies. The then we have the variation of the indices all fronts preparing our wuxi would've RGB M. A pivotal one for Sheryl Palmer again for the Santa we can see also the variation among showing squealing, Andrew grills go from 4% to 8% for <unk>.

Speaker: And then we have the variety of the industry. And we can also see the variety of things showing up, and the Grills of Fort Tweed for mean that if we go back... Thank you for watching! Eduardo.

24 names that as long as the go back to 2022 and saltwater received insurance group.

Great.

Second grows what nickel 25, 30% into a year ago, My report and insurance group as large go lives of certain Latin America, Refinish, and Leslie L extended E. L. F 35 to 39 billion thereof, Christmas, reducing Florida, but why not reducing more to be soften again because of you had to give up on increasing to show them on our loan book.

Speaker: And lastly, our extended AOL, 35 to 39 billion euros. This is falling, but why not reduce it more? Because of that increasing alone book and the mix, which requires more provisions for expected loss. If the portfolio were more stable, we would have an extended ALL provision, a lot lower. So now, ladies and gentlemen, I'm going to move to our..., mention. The expectation is that 20.4 will be a year of permission and..., and I'd like to make a comment. That's such a strategic plan, would naturally take about six months. Pierry, on the other hand, is doing it in 60 days. I can't see it.

And the mix of iPhone standard Federal Dmitry requires more provisions for external vantage line and shape the portfolio with more stable. We would have an extended a O L provision unlocks who would go lower them bidirectional. So now ladies and gentlemen, I'm going to move to 150 per plane like mentioning my expectations.

So for my expectation is that only from a Ford will be a year of ambition and Russell transformation.

I'd like to make a comment because it's such a strategic plan such as someone who have adopted with naturally take about six months for us to execute.

Box governance and ones that you established when caboodle.

Heres a simple yes.

Michael is a huge challenge on doing it in 60 days. Unfortunately are going to do it with a renowned consulting flaring much interest with Mckinsey I can tell their name and also in Britain civil avoided by other consulting assignments that we can have cannot say positive and monitoring is for so that we can execute perfectly and I'll give you examples.

So what we've done was in sugar followed by the academia by the more gradual shall be met with a market diagnosis was automotive bradesco than developing a plan so and now moving on towards the execution here of course, Volkswagen Washington, I've got to have the entire market diagnose it does lead to Val.

Speaker: I can tell, and we're being supported by others. Be safe, so that we can execute perfectly. So what we've done was, with a market that knows. [inaudible] And we will have an entire market diagnosis as we develop. It wasn't only the involvement of Brazil's consulting team but from different countries in the world, supporters, in this Diagnosis of the Market with Benchmarking Technology, credit, and so on. In addition to, well, after the diagnosis, we developed a plan that's actually a set of initiatives. Ongoing initiatives in the bank. And what we did was to revalidate those initiatives, measuring everything we had determined to make sure the initiative was valid. And then there are others that were not part of our plan, and we included them in the set of initiatives to develop, and then we moved into the execution of those, and many more. In some cases, we are already making progress; we are already entering the execution and detailing phase, others are just starting this process to further detail and execute. But what happened?

Alex that wasn't on leaving Volkmann doesn't Brazil's consulting team from different countries in the world who came here to support us.

And this diagnosis up the market with benchmark handling technology.

And so why not put them in in addition to that while after the diagnosis. We the landlord island. This land and factually effect of initiatives hearings that people can be had ongoing initiatives in the bank and what we did was Jim Reid validate those initiatives.

Measuring everything we had to determine to make sure. The initiative was valid and like what you are bound and whether or not we should continue with them. We maintained somewhat others. We identified that we had to change the way of getting it done in the perspective that we have now installed and then there are others that were not part of our plan and we will.

Blue Day program and a set of initiatives to develop a landmark year of exome and then we move into the execution phase for people to get to know the consulting companies.

Companys Org and stage of execution, what we do is take the initiative I'd break it down at greater detail laterals to inform the economic intervals that we determine that the timeline is different and destroy the development on what type of investments with HMA got puzzle in some cases, we are already making progress away already answering.

The execution and detailing phase others are just starting to stage for this year's process will be better than this process sure whether dovetail and execute the glamour model, but what happens when we developed Muslim unions one over to.

Speaker: We started with a new structure, based on that strategic line, and now we have... and more in the framework for us to pursue over the next five years. Of course, when you develop... Your plan is not that you stick to it and do only that. No, the initiatives are reviewed. We may include new initiatives over time and also adjust whatever is may not be working out. So we entered into this execution process, which is the toughest, but it's the science, and Albrecht D. Allow me to say that the plan is dense; it's ambitious. And of course, we can't talk about the entire Brazilian market in one go. I have here some overall lines to discuss with you because this is the basis for what we're doing. You're going to see our starting point... First, the Brazilian market. I don't have to tell you that it's one of the most resilient, profitable markets in the world. And other people that are not in this room. I will leave you to think about it.

You added with the newness on drug charges based on that strategic line and now we have more and.

And margins pressure and a framework for us to pursue over the next five years of course that when you develop a novel, Egypt Atlantis select actually spot Youre Atlanta's model parts of paddock that you'll stick to it and do only that no. The initiatives have reviewed we may include new initiatives over time.

And also adjust whatever is don't may not be working out as expected. So we entered into this acquisition process, which is the tough medicine, but it's the size of interest spread for us to be able to deliver what we expect to deliver an ice traveler and I'll detail. This execution problems that news organization.

Allow me to say that the plan is yours dense infill ambitions or no dollars at end of ours. So we cant and one screen shot, but I want to talk about the entire Brazilian market I have here is an overall line sort of discuss with you. Because this is the basis for what we're doing is youre going to see our starting point of demand. So first the Brazilian market.

I don't have Alitalia with you one of the most resilient profitable market in the world and what good retired on hepatitis a second I'm appointing the market represented according to our measures one point Monty.

Speaker: The market represented, according to our measures, 1, with approximately 30-40% of this revenue coming from mass retail, where we have... And, of course, the main challenge of mass retail is the cost to serve. There is still some media...

<unk> trillion and most risked revenues in 2023 fossil model with approximately 30% to 40% and as revenue coming on from <unk> Alfa for mass retail where we have.

Extensive penetration.

Of course, the main challenge of mass retail is the cost to serve in here and I'll begin our pocket demerger I mean, there is still some medium income on office to share forever SME vital circuit represented nearly 15% talking about God residue of Brazilian market total revenues and our expectation for the vessel segment is that it should.

Speaker: Presented nearly 15, Brazilian Market Total Revenues, and our... This segment is that it should double in value in five years, Bradesco maintaining its leadership position, with 1.7 million clients, the largest loan portfolio with approximately $100 billion in revenue, and Corrente do Centro Banco has one of the largest portfolios of affluent clients, prime, We have 1.7 million, and of course, here there's an opportunity, our share of wallets. Why am I bringing this customer base to you? I think it was never disclosed, the market, but it's simple.

Double in value in five years, bradesco, maintaining a leadership position with $1 7 million might be reliance and the compute on most of the largest loan portfolio with approximately 100 billion in revenue and if we get those two projects.

According to the Central Bank is concerned about my wife's birthday occasions on which new policies and political has one of the largest portfolio of affluent providing client rise as a primate Marshall the prime my supplier and will flow through private dehydrated reliant young person, who can we have 1.7 million will client of course here, there's an opportunity.

<unk> for us to expand our share of wallet declared why am I, bringing this into our customer base to you I think it was never disclosed to the market, but it's the simple scrambles because we've received many questions on how are we going to companies in high income if you're not in high ecologists, how are you going to penetrate and bring these.

Speaker: How are you going to compete in high-income if you're not in a... How are you going to penetrate and bring these five clients in? They're already here, and we are, as well. So, of course, there's a lot of work that needs to be done and what we've seen. [inaudible] or even three, as well as the incumbent banks, both for individuals and corporate loans, and we have the opportunity to improve our credit structure. That's what we've been doing, as well as to improve our model. We have plenty of that and more, as well as General... For the organizational structure, I'm going to talk a little bit more about that. It's very important.

Science, and we're not going to bring the clients and they're already here. What we have to do is under proposal being crew our value proposition and our share of wallet and I'll put a depressed value provided is D anchor farmers' ability as well so of course I'm going to ages. Some very important figures of film during this presentation view and what we've seen in this lag.

There's a portion that's in Texas are beginning to grow but they don't.

To respond to those equals or even 3% and to enable us to declare as you've got to remember the main players are the incumbent banks, both in individuals and with more credit on la system loans, and we have the opportunity to improve our credit structure, that's what we've been doing or some of them as well as improve our modeling dodson using more transactional data that we have once if I could.

We have plenty of data and Brendan and open with them as well as generative AI and control and the organizational structure I'm going to talk a little bit more about this because this is very important to us here, we've already got a undergraduate squamous regular disclose organizational structure in our diagnosis from blacks with a capacity layer.

Speaker: Disco's organizational structure, in our diagnosis, with excessive layers, an unbalanced span, we need to admit it. [inaudible] We've already changed, and I will talk about this organizational structure in a minute. Investments in technology. Here with the stakeholders, we saw that we clearly invest the same amount the other incumbent banks invest in technology. However, we've been working on an IT transformation, migrating to the cloud. We

Ours unbalanced ban actually we need to admit it or not right. What we had to improve muscle mothers and that increases decision, making time and of course all of those audience ensemble cleared that makes glance orientation difficult, we've already changed and I will talk about this organizational structure that in a minute and you are investment in technology, yeah with this diagnosis.

We work all of that we clearly in Vas Dalton bumped the same amount the other incumbent banks invest in technology. However, we've been working on iron and IC transformation migrating to the cloud, but we could deploy and actually we can accelerate this migration to the cloud.

Speaker: And actually, we can accelerate this migration to the cloud before that deadline that we had, and we can also gain. And now we're time to market, that's what we saw, and I really looked at this diagnosis with our IT team and the consulting firm. I had doubts about this, and it could be a driver for Time to March.

Before that deadline that we had expected and we can now sign gain and instructors into view.

And our time to Matt in a market. That's what we saw in I really looked at this point most of diagnosis without I T team, Andy who consulting company because all men I had down about this increasing credit perimetry there could be a driver for the times of market. If it departments and what we have to do is to effectively transformed on items with outsourced personnel into bank employees.

Speaker: And what we have to do is to effectively transform... But replacing with third parties, it's not a matter of cost, it's the way of doing it, and we are top three or leader in all customer segments as we... I'm going to tell you a little bit about our ambitions without getting into too many details.

So that we can gain productivity and that's what we're going to do wiring three or 4000 employees much technology department, assisting but I'm honestly not name, we're replacing with third parties and it's not a matter of cost us the way of doing it chain, you'll formally when finally Ashanti thing virus portfolio that we have a series of them trying to spend more.

Speaker: I can read it later, but we are either leaders or top three in all major finance segments, get from that market share that you see of 14% for loans, I'm talking about the expanded portfolio here in Brazil, to a share between 15 and 19, within pride, increase our SME client base going from 1.7 million to here on the screen, reducing our operating efficiency, around 8% and up, that's the goal that we have set, to mention briefly, Although one of the main objectives of this plan, it is actually the main objective of this plan, profitability. I would like to thank all of you for joining us today, and I look forward to seeing you again next time.

And then 771 million and labor.

Customers and where it goes we'll see you bought inquiry or leader and all of them are customer segments. As we are going to CEO, Paul and Paul Best Snapshots, All I'll do a little bit about our ambitions without getting into too. Many details upholstery you can read it later, but weekly are either leaders on top three in all major biotech meant so our ambition is to find themselves gotten from that.

Sure that you can see a 14% of our loans I'm talking about the expanded portfolio here in Brazil sure sure.

Two a share between 15 and 19% line within five years by 2022 external somebody just increase our SME client base going from 157 million to this figure here on the screen as she is reducing our operating efficiency ratio sampling of around 8% and up to five years. That's the goal that we have.

That alone before this plan.

Speaker: That's our... Where are we starting from? That was the beginning of a very important debate. We're not building a new bank. There's no silver bullet here.

Sure, but not knowable shoddy Nickelodeon.

Nucor Menthol ingestion mentioned briefly this box here at the bottom of original principle, Oliver you've may be one of the maintenance the objectives of this plan. It is actually the main objective of this plan is to increase profitability.

Speaker: Reorganizing our bank to make it more competitive. The starting point for Bradesco is high. Whatever way you look at it, we have NPL problems. We do.

Profitability correct gummies are retiring by the liver more our OE, but not in the next quarter not only in 2028, but throughout this period during the five years in Florida after quarters that by Stanford That's our objective here heavily demand sooner and to summarize at box.

Speaker: Are we going to pay for this? We are. We're paying for it. That's fine.

Speaker: We're going to pay. We're going to turn it around. And we're going to increase profitability over time. So we are leaders in SME, as I said, top two corporate and middle, top two private banking, and the affluent market, as I mentioned. We're one of the leaders in retail with more than 60 million clients and almost 30 million account holders in this country. Through Retail Base, we have the largest bank correspondent in Brazil, Bradesco Express.

There are we are starting from that was the beginning of a very important debate for head for signals are close to remember we're not building a new bank cabal of these put us theres no silver bullet here, we I organize ourselves reorganizing our bank in particular to make it more competitive but long capacity that the starting point for Bradesco is high enough whatever one way.

You look at it we had bumper NPL problems with did a were going to pay for this year. We're paying it's fine we're going to pay we're going to turn it around and we're going to increase our profitability over time as yesterday. So we are leaders in SME as I said talk to corporate and middle accomplish a private banking in Brazil went from top two in the affluent market as I.

Speaker: We had important deliveries at the end of the year, combining eight... More than 38... And that's the key to our turnaround in the world, model. What I mean here is yellow, yellow bar, in partnership with Banco do Brasil, with more, Moving, and a little part with those. The yellow that has another partner has effectively 10 billion of yellow that responds a little bit to our strategic... And we are doing it here because we are highly able to invest with all of that cash available in this segment that remains profitable with companies that, reports of 40% are OEF. I have no need, and America, with more than 100 billion BRLs in revenue in 2019, are very important starting points, and one of the...

Imagine in literacy, where one of the leaders in retail with more than 60 million clients, almost 30 million account holders and dismantle my retail base rate. When we have the largest bank correspondent in Brazil political express sample size, but we had important deliveries at the end of the year, combining a platforms more than 38.

Points are about 1000 for most of your dog Alliance and that's been a huge suite for our turnaround and the service model the reduction of our cost of xylem and the penetration of this retail federal interest, but we have a breadth of appointments of offers triple funnel connected payment you know what I mean here is shallow yellow bar and partnership with Banco do Brasil with.

More than 1.2 trillion won totaled two busy end of year, just reminding you of these companies here that unless you have no lavaret, Iowa, removing mcadow massive antelope Elkhart without if it's one big yellow that has another Gartner has effectively then violin ocado solvable and we're calling them for them.

Speaker: [inaudible] AI, and the client's day-to-day life with our PIA, we're top of mind for 18% of the world. Humanized customer service that is extremely valued by our employees. This point here of our belonging that our employees have, and that sound bread. Mandala image with ten initiatives, five business initiatives, and five enablement initiatives, Mentioning very quickly, to revolutionize our model, will create a new affluent sector. Prime, it was the top of the Prime segment. We're going to talk more about the future.

Dr Lebel yellow that respond a little bit July strategic plan doesn't go and we're doing it here because we are highly able to invest with all of that cash available and in segments that remain unprofitable or just like with the companies then Frank.

Upwards of 40% our OE every year would lead to an extent non agency would say this that we're leaders in the insurance group. It's the largest insurance group in Latin America with more than 100 billion B R. Ellison revenue in 2023 it's a very important flatting point for Bradesco and one of our qualitative points that I consider important here is the first bank was used.

Speaker: I don't know exactly how this segment is, but this is an ongoing initiative. We're going to adjust our approach to the SMEs with a new network of platforms. We're already doing this, delivering it, and Platform, three and 50 million years of revenue and improving our value, remote digital, for those up to 3 million BRLs that are part of our network, as well as my crew. The payment model for us here... It is to redefine our action and one of the items that goes through. We are a lot more competitive with SMEs and larger companies. What we did was create a credit business unit that was sponsored by the Federal Reserve.

AI and the client's day to day life with our beer, Brazil top of mind for 18% of resilience.

Humanized customer service that extremely valued by our clients, but also there's a point here of our culture. If youll ask Neil Vogel that I think is a value he referenced that high sense of belonging that our employees have and that song sound brand from inside that Bradesco has a dollar and promote and then I moved to this mandala.

Image with van initiatives, five business initiatives and drive enabling factors mentioning very quickly have also an almost more than we.

We want to revolutionize their models with Sem Regal for retail will create a new affluent segment thoughtful lager prime witness.

It was a couple of the prime segment are going to adopt more of this detail governmental measures were not going to say exactly. How this segment is but this is an ongoing initiative wallboard, you'll definitely we're going to adjust a hour.

Speaker: Parts that were fragmented in the... and Julio Menez, collection, for your management unit, everything combined, increased, all of that, and a lot more data for us to increase the efficiency. Operating Efficiency. Competitiveness and Return created our organization. We have a series of initiatives that will be developed for us to evolve, including a good review of our footprint that is... We'll talk to you about that in a minute. It's very important that we're already working on this. Thank you very much.

All of our customer service model to the Smbs with a new network of Islamic arms were already doing this delivering 122 platforms will shoot fuckwit unmatched clients building free antihistamine, an ear of revenue and improve our value proposition with remote digital services for those up to 3 million via our hours that are part of our network as well as her.

Micro companies as well heralded payments Sofia for example payment model for asset here.

And also it is to redefine our action and we're one of the items that goes through a guy in yellow so much public offering that we mentioned about CLO and we are a lot more competitive with Axel Smes and larger companies now you go together with our acquired and other businesses that are for credit cyclone procurement business, what we do.

Speaker: And how do we guarantee a safe, efficient economy? of our Strip, separating the team to run the bank, and change. This is the bank we're creating. CTO figure, the Chief Transformation Officer, vice president is from the company, exactly which keys open the door.

Did was create a credit business units that responds directly to Jimmy Feldman forgive me, but I'm encouraged that we're fragment in the fragmented in the bag. This Zhong analysis decision on the craft beer portfolio management and run with it could add football actual collection credit program or aqueous film and now just on the portfolio a portfolio management G&A.

Speaker: Every initiative has a senior team led by a superintendent from, with a dedicated, at a fast pace every week. New MIS that we're implementing in our organization that will be able to follow each of the initiatives online and in real-time. And we're going to execute all of the different points at once. That's why.

Everything combined and we're going to increase all of that using generative AI and a lot more data. So far is to increase the efficiency of our model.

Weighting efficiency or do you think about you ensure competitiveness and return Wilsonville. So this is a fight as you can see upgraded our organization. We have a series of initiatives that will be developed barrios into evolves and put us on opened an operation on operating efficiency, including a good review of our footprint that is ongoing.

Total unearned voucher model organizational structure, Eric I will talk to you about in a minute and a very important it will already working on this with medallion estimates already announced before technology. The idea is to accelerate technology and all the and intra group synergies and innovation that we have a lot of detailed initiatives, but I will not get into the details out in this presentation.

Speaker: This year is our new structure, there's six support units plus a chief of staff, and we created wealth. We had the spin-off from retail creating the business unit for digital, focused on mass retail customers. I can't detail everything right now. We can talk about it later.

How do we guarantee a safe efficient execution, but also plumbing if one of our strategic plan of the scheme has eroded separating teams into run the liner and change the bank should be on the fifth sees the banquet, creating much like D. C. T O cheaper figure, that's chief transformation Officer, Krakow, which is.

Speaker: The CRED-EBU, responding directly to me, or reporting directly to me, Treasury, CTO, is our CIO, so with a separate... He will dedicate most of his time, or most of his time, to this video, CRO, related to risk, HR, and education, and others, initiatives, and the whole inorganic row. It is important to observe the bottom part, what we have already done during this period with that diagnosis about destruction. We increased the average spend by 50% in that group that reports to the CEO with a number of around 6, but we changed the span of control throughout the organization. We have reduced significantly the layers of the leadership in one country, and one is the Vice President.

The Gaza by the vice presidential election, as from the company because he knows exactly which keys opened the doors every initiative has a senior team led by a director a superintendent from the bank side with a dedicated team script on your pro forma phone plus hopefully transformation office to provide support to the CTO and or else you'll be able to do.

Oliver there's execution at a fast pace every week and we're going to keep track and suffering to announce new M. I ask that we're implementing in our organization that will be able to follow each of the initiatives online in real time that you saw and we're going to execute them all of the different point as of at once that's why execution is crucial.

At our business by them off in August of this year is unmoved structured there six business unit supports more support units plus a chip a battle, we created them while not somebody we had the spinoff from retail, creating the business unit, our digital businesses that it's going to focus on bio mass retail customers I can't detail everything right now we can talk about it.

Speaker: Only 40 percent of this number of executives were between N1 and N3, but now 100% of them are in these levels N1 to N3, which means we have significantly reduced our leadership group. Vice Presidents, all the way to executives, superintendents, eliminating some positions. I don't need to mention them individually here, but it is a fact that we have had some colleagues leaving since last year. And more recently, we also had some colleagues who helped us in the past to leave the company. And the fact is, we have been changing. For example, the officer that in the past..., took over as an executive officer.

Later on them get up and they brought me liquidity you responding directly to a moment ago reporting directly to me treasury.

T O is a riskier or those with a separate structures. He will dedicate most of the time of Muslim his time to the CDO CLO related to risk solutions and HR vendor chiefs are found in sandwiches literally has been used for digital initiatives and the whole inorganic growth countries something almost talking about underhill.

Important to understand why it is important to observe live bottom carton shop, what we have already walked into done funding. During this period with that diagnosis about the structure that I mentioned, we increased the average spend by 15% a point that you're in that group that reports to the CEO sees with a number of around six.

But we changed the span of control throughout the organization, we reduced significantly the layer. The winner of the leadership and went went through inland as the vice president of only 40% of what it is that if this known earthquake executive.

Between in one and three and 100% of them are in these levels in one two and three which means we have significantly reduced our leadership groups, if anything else Vice President's old way to executive superintendents, eliminating firms compositions I don't need to mention them individually here, but.

Speaker: Alex from Corporate, who's the head of a corporate unit, was promoted to executive officer. He would be replaced as head of corporate. And, of course, that other job position was filled by somebody, and he would go to the fort.

It is back to call. It that we had some colleagues one leading clinical last year might have sent to methanol aimed at more recently, we also had some colleagues who helped us in the past are leaving the company and the fact is we have been changing for example, New York Seattle and show that in the past our formal commentary those are takeover of an executive officer from <unk>.

Speaker: Now, the executive officer will be in the front line. It is the case of one colleague that we recognize the skills, ability to do the job, of this person, to prepare for my future succession and the succession of the advised president. So, he will continue to run that business unit. We didn't replenish those empty seats.

<unk> was ahead of our cooperative Laguna, who was promoted to executive officer, a smoker Haywood radical Mojave to cooperate he would be replacements had a corporate solution for you from Venezuela and of course, the other job position.

Speaker: We did have some promotions, President and Executive Officers, but with no replacements, so that, at the end of the day, reduces our management, and it leads to a simplification of our structure. We created this executive committee and these two blue boxes, digital business. Not bringing you details now, but we are in the process of hiring one person in the market. For the first time, we'll bring in a C-level, C-suite officer from the market. And here we have the C-level of human resources, with the Human Resources Structure, to help us in the transformation process and in the process of partly changing our culture to a culture of transformation.

It was filled by somebody and ending where he will go to the court system.

Now on the executive officer will be the frontline. It is called a one colleague that we reorganized backup and that this position will be filled and fighting to keep up their skills for our ability to execute of this person from me to prepare the vehicle my teacher succession, and the succession of Divine law President.

So pivotal container to run that business unit within Replenishable himself MTV previously, but did have some promotion of the vice presidents aimed executives.

But with no replacement of heavy snows agile work at the end of the day Green Juice. In addition, our customer manage on cough order and they lead to simplification Volvo Truck Trail. This committee as an example to do organization. We created discussion its executive Committee and these huge advice little bulkier items physical biz.

Speaker: This is a practical example of what we've done, and very soon, we'll be announcing the names of these two C-suite colleagues and other colleagues who will complete our executive management. Moving towards the end, I'm bringing some initiatives here with some of our ambitions in the case of retail. This is our ambition to grow the customer base, to maintain customer centricity, but the fact is, we have high penetration with 60% principality in this. Second, we have ambition to have a strong presence on this train, but in this case... We are delivering this new segment of the new affluent. I have a colleague leading this with her own team, and with the support of the consulting firm, she mapped 105 opportunities in this affluent client group, and we will be improving our value proposition for high net worth clients.

This will not bringing in E.

Details now we in the process of hiring Bacon, one Mahindra Vice President issue in the market for the first time, we'll bring in a C level suite suite budget officer from the officer from the market and here, we have the C level of the human resources with a human resources drug Drexel to help us in <unk>.

Transformation process itself and in the process Susquehanna, partly changing our culture to a culture of transformation, but I think this is a practical example of what we've done and very soon we'll be announcing the names of these two C suite colleagues and other colleagues who were.

We'll complete our occupancy executive for management.

Speaker: In SMEs, as I mentioned, the implementation of new branches and a change in our way to manage. And in our value proposition, I'd like to remind you we hold 20% market share. We did have high delinquency, that's true, but we've changed the model.

I'm moving on towards the end up against some of our key initiatives here with some of our ambitions in the case of real tail off and be so this is a real ambition you might be able to grow the customer base to maintain customer centricity concern, but the fact is we have high penetration with a 60% principal upheld.

Let them in on this as it got retail customer boundary to limit budgeted something second who wants to become acquisitive ambition whoever cram-full acquired the strain on it but in this case Broadridge is we are delivering the newhall segment of the new affluent segment winter can support local slab of colleague named those that with her own.

Speaker: So we will compete to remain in the leading position in this market with our ambitions on the screen. I spoke about credit. Our ambition is to grow our market share from 15 to 19% in a five-year time frame. And we know what this means, and we will know what this means in our final conclusion. I'm not going to be mentioning each one of them.

<unk> team and with the support of the consulting firm she mapped onto the five opportunity in this outflow winner and highlighting the Masan group will be improving our value proposition and high net worth clients and Smes a relation to and all those are good implementation of new branches.

And a change in a new.

The way to manage and in our value proposition I'd like to remind that we hold with 20% market share. We did have high delinquency. It had gone through hardware, we haven't changed the model homes. So we will continue to remain in the leading position in this market with our ambitions on this created I spoke about credit for our ambitions to grow our market share.

Speaker: I'll just say that our conclusions represent a significant, advanced, profitable financial market. We are already in the execution phase of a solid five-year strategy. The group has friends that will be loved.

Speaker: [inaudible] We're making great strides towards delivering our ambition initiative, realigning our organizational structure, particularly in the last 30 days. We will have a new human resource. We are working on it. We will sit and debate in the month of February to approve by March this new board structure connecting all of the levels of evaluation, compensation, and performance for the executive group. We have these goals here on this topic I talked about, the efficiency ratio, and we will fight for leadership in the most profitable way. There's no reason why we shouldn't be fighting for these retail companies. It's not binary; they're not physical or digital; they're both.

So 15% to 19%.

In a five year timeframe and all what Michigan and wanted initially more time finding I'm also so we know what this means for United and Liberal knew what this means in our final conclusion that not going to be the bottlenecks in each one of them, but I'll just say that our conclusions are a represents a significant advance into and through profitable financial model.

We are already she can take vacation phase of a finale of idea strategic plan goes into Buck with relevant guide the group hospital trends there will be leverage dropped out Australia point of Bradesco now quite high muscle report, we're making great strides on ethanol towards delivering our ambition initiative re aligning our.

Organizational structure, particularly in the last 30 days long vehicles. So we will have a new human resource of Colorado, and we are working or not.

Equivalent as they try and debates in the month of February to approve by March This new line of truck trailer connecting wells.

Speaker: We are mapping all that, and we will compete by reducing the cost to serve, improving our value proposition with solid credit modeling, and taking advantage of our competitive adage and our level of penetration in retail. Here, I have some data for you. What does credit growth mean? Credit is the big anchor of results and revenues in the Brazilian market. It is now dominated by the incumbent banks, with some share of the Fintechs, as I mentioned. But if the market grows, as our team has forecasted, together with the consulting firms, 8% bigger... until 2028, this means that in 2028, we are going to have an extended, additional expanded loan book of 3.3 trillion euros. From 2019 to date, 2023, the loan book grew $2.1 trillion, again expanding loans.

The levels of evaluation compensation and performance for the Executive group upset English is arguably have the goal of weird or my thoughts on this topic I talked about the advance ratio and value that we will fight for the leadership of MTV, most profitable pockets on the screen.

No reason why we shouldn't be fighting for these retail no deferral for retail clients, it's not binary theyre not physical or digital Hippo refuse. We are mapping all of that and Google can go eat our own juicing the cost of serving proofing undervalued for promotion with a solid credit modeling onetime gain.

Vantage OVO and its competitive advantage and our level of penetration in retail and in front of us and hearing it gets significant data for <unk> in Atlanta.

The growth of ammonia in credit is the big anchor of results on revenue in the Brazilian mildly I'd answer it is slow dominated by the incumbent bank extra lane with some of the share of the Fintech Rockville nation, depending on what if the market grows as everything has sort of your forecast it together with the consulting firms to aid with.

Stinker Octavus nudity Jordan until 'twenty 'twenty eight this means that in 2020, we're going on Java and expected new.

Additionally, expanded loan book of <unk> 313 trillion, the around and see vulnerability assessing its deployment of an order.

Women named him today of a kind of similar trades or the loan book grew 20.1 trillion again it ended loans, you're going to see it says if we granted on Christmas on a shared all of this potential for potential growth here I can see.

Speaker: So if we grow and are shared, there's potential for potential growth here, and we have the potential to grow even further in... get back a significant portion of the 3.3 trillion. And the big ambition, our big goal is to increase our profitability and return over the next few years, transforming the organization and executing the plan with disability. We will be periodically showing you everything we are doing and everything we intend to deliver. Thank you for your attention. We'll start the Q&A. I am here with my colleague. I said, I'm speaking to you live, and we will continue to be live.

They have the potential to grow even further to get gain misses parish once again back a significant portion of the 3.3 trailing Guernsey border and they'll make our ambition. Our speakers took a larger increase our profitability and return over the next eight years long transforming an organization we have been executing the plan with discipline.

It made the most of the way it will be periodically showing you a briefing we are doing and everything we've boulevard Bruno. Thank you for your attention and we'll start the Q&A you've called out as a tie in here with my colleagues with Fedrick Youll I'm sticking to your life and we continue to be like a half I'll shoot my colleague <unk> CFO and now.

So our CTO, our I R O Carlos if you need a T. The bank sitting on my left.

Speaker: I have my colleague, Castiano, CFO, and now our CDO, our IRO, Carlos Firetti, sitting on my left, and André Carvalho, who is going to be the new IR officer. He has been working with us for seven years now. Andre has a good background.

Londoner and on other than kind of our ideal Zheng who is going to be there for their niche.

The new ones like Iowa Officer, Anthony accounts, Baidu has been working with us for seven years now at ebay Walmart Royal drafts, because background again boehner wood chips.

Speaker: Until recently, he was the chief of equity strategy in the global markets of BDI. He works really well with the buying side. So, he'll be starting in a new role. He will already have a transition period with André, and then our colleague Firetti will take over a new role at the bank, together with us and Dr. Firetti. I think I've spoken too much. That's why we have four people here, so we can all speak a little.

Recently, he was the chief of equity strategy in the global market for Bebe I electronics really well with the buy side. It is a pocket of Hugo South Dakota is trading in the new role to ready from a decline of a transition period with <unk> and then our colleague Fidelity Newport will take.

A new rule, but here at the bank.

With us are polymeric longer affinity I think its spoken too much from these Barbara that's why we have core people here. So that we can all speak of Midwest Noncommercial Agua before anything I would like to welcome Andre called Viale. Johann I'll jump has been one of the songs is ourselves that we're going to have a transition from interacting with you for a while it is still in.

Speaker: Thank you, Marcelo. Before anything, I would like to welcome André Carvalho. As Marcelo said, we're going to have a transition. So, I'll be interacting with you for a while still.

Speaker: So, welcome, André Carvalho, and good luck. Thank you. Thank you for the opportunity. It will be a pleasure to work with you, call through to Marcelo Cassiano, the whole management. I'd like to thank Firetti for the support during the transition period. It will be a pleasure to take on this new role. Thank you. All right.

So welcome Andre our value in good luck and advanced I don't think you. Thank you for the opportunity will be a pleasure to work with you closer to my fellow casciano, the whole management I'd like to thank ready for their support during the transition period charter it will be a pleasure to take on this new role or got a hit thank you Ms <unk>.

Alright, and for Sanofi will will begin Q&A session for analysts and investors as Austin was really lung we have even goes tissue <unk> insurance group are also joining us.

Operator: So, now we will begin the Q&A session for analysts and investors. We have Ivan Gontijo, CEO of the Insurance Group, also joining us online. He will be participating in the Q&A. Questions can be asked in Portuguese or English. We will answer the questions always in Portuguese, to facilitate the process. You can choose to hear the translation, or to hear the original audio.

<unk> will be participating in the Q&A.

Questions can be asked in Portuguese all English traumas responded US then we will answer the question of pass the ball is in Portuguese.

Ooh facilitate the process no not fail.

So you can choose to share the translation or Jeremy what as you know the new.

Operator: So we'll start the Q&A session now with Thiago Batista from UBS. Hello, good morning. Can you hear me?

To hear the original audio so we'll start the Q&A session now what Thiago Batista with UBS.

Cordless phone Hello, good morning, so.

Can you hear me, Yes, Inc.

Thiago Bovolenta Batista: Yes. Good luck in your new roles. I have two questions. First, in your strategic plan, you indicate 8 percentage points. That would be an ROAE of about 400.

And that was one general narrowing it Andre good luck in your new role as Luis Felipe I have two questions, let's see first senior strategic play Indeed that you joined honestly dwy viewing to cleaning up 8% ultraclean, but that would be in Oh, a year of about 400 Finfet useful joy. This is only the O N E.

Marcelo Marconcini: If this is only the ROAE, it will not go to be the cost of capital. It will be close to the cost of capital people use between 14 and 15. So do you just want to go back to the cost of capital? Or could we expect an ROA above the cost of capital? That's number one.

Well not all but it'd be broad go to beat our cost of capital it will be close to the cost left capital people use the can contain and 15 south when suddenly you just want to go back to the cost of capital or could we expect in our OE above the cost of capital. So that's number one second question regarding lately can affect amendment to screen the Lincoln have to perfection.

Marcelo Marconcini: Second question regarding the low income segment. We in the market have the perception that this segment is experiencing negative returns. How are you addressing this point in your strategic plan? Thiago, thank you for the question. It is a pleasure to be speaking with you.

The segmental election is having negative retiring discussed how are you addressing this point a newest strategic online and Godzilla prepared well Thiago. Thank you for the question. It is a pleasure to be speaking with you additional data decrementals would be renewal Garuda moslems cystitis, our ambition is not to deliver just the cost of capital.

Marcelo Marconcini: Well, first, our ambition is not to deliver just the coffin's capital; this is an indication of ER. We have a number of indicators, ambitious indicators, some things we haven't spoken about here, we are not going to be talking about to the market, but we want to deliver. Our main goal is to deliver superior profitability and return. And we want to grow step by step, quarter after quarter, but in a five-year time frame, we want to be at a different game level. I don't want to promise; I prefer to surprise you rather than promise and not deliver.

You've got bigger deal says an indication in the truck brokerage side.

E R who have a number of indicators ambitious indicators some things that we haven't spoken about here, we are not going to be talking about the market, but we want to deliver and collect a hint on main goes to deliver superior profitability and return if it's warranted and we wont ups gorilla.

By that quarter after quarter, but in no time ear.

In a five year timeframe they want to be in a different game level, absolutely I don't want to promise I prefer to surprise, you rather than promise and not deliver immigration bankey. One expectation we have is that naturally.

Marcelo Marconcini: One expectation we have is that, naturally, in the quarters of 2026, perhaps in one of these quarters, we will be surpassing the cost of capital. We have a high ambition regarding operating efficiency, and we will make this happen. We have room to evolve, particularly re-evaluating our footprint. To me, operating efficiency is cross-cutting.

The only known the quarters as I hinted bought off 21, new Baileys bakes tussle better perhaps on one of these quarters, we will be surpassing the cost of capital we have a high ambition regarding operating efficiency and we will make this happen we always we.

Room growth to evolve, particularly aged re evaluating our sled train Washington Me operating efficiencies cross cutting it is in our strategic plan and perhaps this is the biggest lever for operating efficiency gain S for retail, while we have seen with a consultant for a minute.

Marcelo Marconcini: It is in our strategic plan, and perhaps this is the biggest lever for operating efficiency gains. As for retail, what we have seen with the consulting firm, and I'm not going to get into too many details, is that we have clusters. In some clusters, we are profitable, and we have a significant share of wallet. Let's talk about our principality.

We're going to get into Glu many details.

We havent class participation in some of the clusters, we are profitable.

Channel four and we have a significant internal share of wallet and notebook about options a paddle that equals the secret here of clients and the cost to serve and that's why we want to review our exciting brands within to reduce that but it's not by net binary.

Marcelo Marconcini: The secret here lies in the cost to serve. That's why we want to review our footprint. We tend to reduce it, but it's not binary. 100% physical, 100% digital.

100% physical under a percentage of your new course for my Crane types of digital have canoeing, which channel to operate at least remembering bradesco expresso here, we'll have one department, which is b to b to C and I said, we implemented a new system and with the tablets to our merchant market they serve.

Marcelo Marconcini: Of course, we'll migrate to digital. We'll have to know in which channel to operate. Please remember, at Bradesco Expresso, we have one department which is B to B to C. I said we implemented a new system with tablets for our merchants. They serve clients by doing business, providing customer credit, selling cards, opening checking accounts, and having transactions as well.

Clients by doing business as well.

Writing consumer credit selling cards around the opening checking accounts and having transaction sidebar. So hate that they have the ability to thoroughly clan Guild Wars authority. So we do enjoy some advantages compared to that I don't see in other competitors. They have on other advantages that we might not have a respected competition.

Marcelo Marconcini: So they have the ability to serve clients. So we do enjoy some advantages that I don't see in other competitors. But they have other advantages that we might not have.

Marcelo Marconcini: I respect competition a lot. I think we have very competent people in Brazil, both in the incumbent banks and in the newcomers, the insurgents. But we have the largest correspondent banking system in Brazil, with more than 38,000 points of service.

I think we have very competent people in Brazil, both in the incumbent banks in India newcomers being fragile, but rehab the largest correspondent banking system in Brazil with more than 38000 debris quaintness hallmarks of service and we can compete very well in the low income segment. In addition to the cost to serve.

Marcelo Marconcini: And we can compete very well in the low-income segment. In addition to the cost to serve, we have the credit risk. We are monitoring this closely with good credit modeling to capture what is necessary and to be profitable in most of these clusters. There might be a cluster here and there that we don't want to work with. Okay, Thiago, that's the rationale, but we can compete. This is what we proved in our own internal diagnosis.

We have the credit risk when you go down the chain. We are monitoring this closely cup with a good credit modeling to capture what is necessary.

To be profitable or is that more tricky in most of these clusters that might be a cluster here and there that we don't want to wake web first alloys.

Okay, Thiago Dexter rationale, but true we can compete more tricky because what we proved in our own internal diagnosis. These age levels say trailing button there, we make similar tail Solomon and overtime, we will be delivering.

Marcelo Marconcini: It's really important that we mention this, and over time, we will be delivering these results. Thank you, Thiago. Now, next question. Daniel Vaz from Safra.

These results, regardless Thiago smaller thank you Thiago now MACRA Quest channel Baas Dunhill Vos from thereafter.

Daniel Vaz: Obrigado, Firetti. Thank you, Firetti. Good morning. I wish Noronha success as the new CEO of the bank, coming in with a good challenge of putting the strategic plan into place. Good luck, Firetti and André, in your new department. I'd like to explore the culture and targets for the high-level C-suite of the bank.

Hey, guys. Good afternoon, Thank you financing or good morning.

Some successful ramping more so.

I'm glad I asked the fast and the news here of the bank coming in with a good challenge of putting the strategic plan into place. Good luck fit at CNN, Daniel No departments I'd like to explore the culture and method and targets for the group.

Can be soon a high level some of my wrist C suites by the bank and others.

Marcelo Marconcini: I know there's a greater span of control, more agile, more efficient, and we see experiences outside of Brazil, or throughout Brazil, that this target for the C-level is essential. So if you can talk about the changes that you're working on, or outlining, for this, thank you. Thank you, Daniel.

Dave greatest span of control more agile more efficient and we see experiences outside of Brazil, our trough, Brazil that this target for the C level is essential so if we can talk about the changes that you're working on are outlining before.

Before this thank you Danielle.

Thank you Danielle micrometer hopefully acute.

Good under President of idled during the presentation I said that no biologic drug we've been working on a new plan for human resources that will be discussed in February and delivered in March from all that that takes into account. This new structure precisely and I talked to all of the bank's leadership team. It is slow by showing the new plan those who work directly with us.

Marcelo Marconcini: During the presentation, I said that we've been working on a new plan for human resources that will be discussed in February and delivered in March that takes into account this new structure precisely. And I talked to all of the bank's leadership team, showing the new plan, those who work directly with us at every step of the way had already seen it, and that we are going to deliver a new performance assessment methodology. Depending on the level, the weights are different, and we are going to recognize and compensate that team that's going to run the bank and the team that's going to change the bank as well. We're taking excellent people to change the bank because that's crucial to us. We are going to deliver a new payment scheme for the executives of the bank. We have that already in many departments, and we're going to replicate it across the entire organization with greater flexibility for some positions that somehow were kind of socialized when we were to hire or pay a variable income, and we're changing all of that. This is all well-based. After that, with our team. Obrigado.

At every step of the way had already seen my answer Roger that we are going to the liver of a new the performance assessment methodology, depending on the level setting the weights are different and we are going to have recognized and compensate that tune that kind of run the bank and the team that's on the change the bank as well.

We're taking excellent people to change the bank, because that's crucial to raise or hidden behind Paragon AD. We are going to deliver a new methods of payment Aqua constructing Jim not for the executives of the bank. We have we have that already in many departments and we're going to replicate it to the entire organization with them greater flexibility gardens.

Woman or some position of that fossil is somehow we're kind of tests socialized when we willing seller a phone out of their higher or am let us own videography said you pay the variables or is it some of it probably doubled the lease income and we're changing all of that this is all wells base that we are going to make progress and you will.

I'll be able to see that over time, I factor conversions, yet, but our expectation is to approve a recall of this quarter. So that we can implement its tricky stuff after that with our team.

Marcelo Marconcini: Thank you. Moving on to the next question, Renato Meloni, Autonomous. Good morning.

Thank you Danielle.

Borgata Boes per park Plaza moving onto the next question Pineapple Maloney autonomous.

Renato Meloni: Thank you for this opportunity. My first question is about credit quality. NPL is dropping, but that's based a lot on write-offs. So, starting in 2024, how do you see the credit quality of the new vintages, and how is that translating into origination, especially for low-income? And second, it's more strategic. What are you thinking about in terms of the team you want to attract at this stage, this phase of the company? I know that's the perspective of someone who lives in it.

Good morning.

Awesome. Thank you for this opportunity in mind for those plants generic without the credit policy and engine placement. Thank Aida My speech NPI was dropping but that's based on a lot of write offs. So starting 'twenty 'twenty four housing and free cash is not a softer the credit quality of the new vintages, and how is that translating into originations, especially for low income.

And second it's more strategic and sending them on so what are you thinking about in terms of the team you want to attract for the stage of this phase for the company and all that stuff is effective but you think bring out will help you succeed.

Marcelo Marconcini: What do you think will help you succeed? Thank you, Renato. Great question.

Thank you and I talked the last great great question with velocity and Premier luxury somewhat biased we are monitoring very closely all of the new vintages, we working with much better ratings non who can have a bone score with an individual loans and for Smes as well from this Brazil all of the V P.

Marcelo Marconcini: First, we are monitoring very closely all of the new vintages. We're working with much better ratings, both for individual loans and for SMEs as well. So all of the VPs are involved. We didn't focus only on the credit people and the segment people, but everybody is involved, and we are monitoring this very closely. We're seeing good vintages.

These are involved to assortment because we didn't focus only on the credit people. When this segment people, but everybody is involved and what he put them in and we are monitoring. This very closely we're seeing good vintages, we still need to separate aimed prove some lines to improve our magazine there and help us simply answers when this growth of ni.

Marcelo Marconcini: We still need to improve some lines to improve our mix and help us in this growth of NII, client NII. It's step by step, but it is going to happen. You can be certain.

Client NII is that my stuff, but it is going to happen you can be certain and this last quarter I saw the inflection point of this curve both Brian's event individuals' land micro small and mid sized companies and were working on during the year will maintain traction should grow during 2020.

Marcelo Marconcini: In this last quarter, I saw the inflection point of this curve, both for individuals and micro, small, and mid-sized companies, and we're working, and during the year, we'll maintain traction to grow during 2024 with controlled vintages. So I think that here we also have an important quick win in this new credit structure where we can capture value for other initiatives that we're implementing as well. Now, the team that we want to attract, and we have a headhunter doing the selection for us and discussing, debating, we had an assessment process in our team starting in December, so we've been working, creating development plans for our leadership colleagues who will remain with us either on change or on run.

Four with controlled vintages disturbing so I think that here.

We also have an important quick when Greg and this new credit structure that we can capture value.

Old prison issue at least for other initiatives that we're implementing as well.

Now the team that we want to attract and we at <unk> have a headhunter during this election Flores and discussing debating the estimate we had an assessment process in our teams centered this filing in December but we've been working with Matthew Miller, So almost creating development plan.

<unk> for our leadership colleagues, who will remain with us either unchanged or on Brian who by the way. So heliacal amphidromia, we even we will attract people witness the different skills from what we already have people with flexibility equal with an easy relationship and our ability dive is diverse and that can deliver it.

Marcelo Marconcini: So, Renato, we will attract people with different skills from what we already have, people with flexibility, with easy relationships, and a person that can deliver digital skills with our colleagues at Next, Bradesco, and Digio as well, and who can also bring more knowledge. And in human resources, we also want to change our paradigms to be more aligned with the market, having growing ambitions for our organizational development. I can also tell you another concern that we've had since you talked about the team, and I think it's very important: we are giving recognition without increasing the operating cost. As I said, we're actually reducing this cost, and this is also an example for the organization. We were only able to set aside a team for change and a team for running because we reduced the layers and changed the span.

Most of the digital skills with our colleagues at Lax Bradesco on diesel as well.

<unk> also got drain more knowledge and in human resources. We also want to change our paradigms to be more aligned with the market, having a growing ambition with Midland and thus far our organizational youth developmental anymore. I can also tell you. Another concern that we had since you talked about the team and I think it's very important in children.

When she meant we're giving recognition without increasing the operating cost as I said, we're actually reducing this cost stronger and this is also an example for the organization and we were only able to satisfy that theme for change and her team for run because we reduced the layers of disciplines and changed the span otherwise how long were weak.

Marcelo Marconcini: Otherwise, how were we going to do that with departures and taking people or changing the bank? It was difficult to run this business with the directors leading. So, of all the subordinates, five of them are old enough to replace me, to be in the succession plan, as well as the vice president. And those who have been recognized as new executive officers who will continue to run their departments not being replaced, there are also five of them with the age and background to replace any of the vice presidents who are here, as well as myself, take on my seat in the dual time for the association. Thank you, Renato. Thank you, Renato. Next question, Bernardo from SISP. XC. Good morning.

Going to do that with the departures and taking people out or change the bank. It was difficult to run this business with the use of directors ouseba, leading so of all subordinates five of them. So we should bring that are owed unethical to replace me to be invoked succession plan as well as the vice President and.

Those who have been recognized new executive officers, who will continue to run their departments not being replaced there's also five of them a solution with the age and background to replace any of the vice presidents were here as well as my salary in or you take on my seat and the dual time card The association. Thank you.

Oh.

Regarding an awful lot of wholesale. Thank you hang onto next question bass shoes that Bernardo from she's pace X being salt anybody Garden village concert Kid money here for deprecation of you to ask questions Marcelo narrowing of issue a lot of success in your new role since you're building on the prior question on incentives and as well.

Marcelo Marconcini: Thank you for the opportunity to ask questions. Marcelo and Noronha wish you a lot of success in your new role, building on the prior question on incentives. Can I just ask a question, but in a broader way, regarding the transformation process at Bradesco? Although you've been in this role for a little time, Noronha, you've had different positions at the bank, and in the presentation, it's clear that you have a broad diagnosis of the necessary changes to be made. But I'd like to focus on one specifically. Bradesco has a very traditional culture that has been very well worked on over the years in terms of robustness and trust, but the new environment is quite competitive, and the moment that the bank is dealing with brings about a different sense of urgency. You need to have different agility, too, yes, and change a few things.

Have a good question, but in a broader way recording the transformation process arthritis, amphora, although you've been nimbus roll through any little time, not owing a you've had different armstrong positions of the bank and in the presentation info cleared at Apple y diagnosis.

Necessary changes to be made but I'd like to focus on one specific OEM stretched on all but this one is a very traditional culture that has been very well worked on over the years in terms of robustness and cross your mutual but the new environment is quite competitive and the moment that the bank is filling with bringing with her about her.

Different sensor, where it can change anytime.

You need to have different agility to react interchange of care thing Igt's fit HD, what home our husbands richly initiative are being received in the bank regarding the adjustments that need to be made here between what paradigm do you still have a break now because that will give me an idea of the priorities of your agenda of <unk>.

Marcelo Marconcini: How has this initiative been received in the bank regarding the adjustments that need to be made? And what paradigms do you still have to break? Because that will give me an idea of the priorities of your agenda of transformation. Thank you for the question.

Transformation Berwick Approx wondered thank you for the question. This is a big question, but I can tell you is.

Marcelo Marconcini: Number one, I think that we have to learn from the past. We did have some convictions. And when we sit and deeply debate each topic, it's almost like you open up your kimono, and you see what you need to do. So, without beating around the bush,

I think it was nimble on I'm not really seeing I think that will have to learn from the past yield. Originally we did have some conviction I wanted people to sample and when Luis Central Sundar and we deeply debate each topic I would like to open up your kimono and you see what do you need to do so.

No no without beating around the Bush Algoma Octagon answer I know you've been up Riyadh. The board of Directors gave me autonomy and has been supporting me in a 100% of the changes or else I wouldn't have changed to go back to your oil truck like ours. So I wouldn't be telling you that I'm in the process of hiring a C level four H R. N a C level afoot manageable.

Marcelo Marconcini: I'll give you an answer. The Board of Directors gave me autonomy and has been supporting me in 100% of the changes, or else I wouldn't have changed the OIEC structure. I wouldn't be telling you that I'm in the process of hiring a C-level for HR and a C-level for digital, and at other levels of the org structure as well. We are in the process of hiring a lot of people, so I have the support of the Board of Directors. 100% support. And this has been really nice.

Universal brand recognition in other levels of the oil structure as well we in the process of hiring a lot of people all of us. So I have the super hard to garner profiles of the board of directors for a 100% so quite often and this has been really nine months considering kind of the state.

Marcelo Marconcini: The kind of debate we are having. The Board of Directors is aware, and we put everything on the table. We were very pragmatic. It's no use being a philosopher.

We are having a critical board of directors aware and we put everything on the table, we will very pragmatic no use being up the lots of process gives a sense of urgency we have to change if we have to do it.

Marcelo Marconcini: There's a sense of urgency. We have to change. We have to do it now.

Marcelo Marconcini: And that's kind of my style and the style of some colleagues here in the executive management. We go straight to the point, Bernardo. Little philosophy, a lot of pragmatism.

One kind of my style in this filing with some colleagues here of the executive management, because treated appoint Bernardo little philosophy, a lot of pragmatism I think constitute camera I think we were able to break down the main paradigms. The other paradigm is the compensation that we are delivering out there was no time spin to six.

Marcelo Marconcini: I think we were able to break down the main paradigm. The other paradigm is the compensation that we're delivering now. There was no time.

Marcelo Marconcini: It's been just 60 days since I took over. And in order to do all that, we just didn't work during Christmas night, Christmas Eve, and New Year's Eve. Other than that, everyone, including the consulting firms, has been working long hours on Sundays. I've been working on Sundays with my colleagues to deliver this urgently, with this level of depth, because if you look at the whole thing we're doing, it's not a little. And we're already executing, because that's crucial. It's no use having a beautiful book and promising things if you don't do them.

The days effective Cobra and in order to do all of the edge, which has been a week during Christmas night.

Christmas Eve, and new year's Eve element that gosh, everyone, including the consulting firm.

Have been working long hours configured on Sundays I've been working on Sunday took my colleagues to deliver those leases urgently logic with this level of Fabs all over that because if you look at the whole thing we're doing it's not a lot of attention and we are already exit, Utah and because that's a crucial.

New use having a beautiful local original hammered promising things along with the window, but we are doing it.

Marcelo Marconcini: But we are doing it already. Thank you, Bernardo. Our next question comes from Mario Pierri with Bank of America. Good morning.

Already Managua think of I know I don't have our next question comes from Myopia. He wasn't bank of America Baidu.

Well, Jeff it's wrong.

Michigan, how good morning, he mine.

Mario Pierry: I have a question about cost and efficiency, not only because you talked about improving the efficiency ratio, but when I look here, your provision is 570 million barrels this quarter to restructure branches. So I'd like to understand what that means in the short term, and what are you thinking to get to this efficiency ratio target? How do you think about your headcount and number of branches? Because, you see, when we look at the bank today, the bank has about 86,000 employees with about 2,700 branches, 32 employees per branch. It seems to be very high, a high number.

My somebody somebody grew strongly caution about cost and efficiency not only the efficiency you talked about improving the efficiency ratio.

Big bear market, but when I look here your provision is 570 million barrels disappointed to lease structure branches.

I'd like to understand what that means who into short term.

And Pasha gunning for baggage efficiency read what you're thinking to get to the sufficiency ratio target. How do you think about your head count number of branches because you'll see that when we look at the bank today. The bank has about 86000 employees with about 2700 branches 32 employees per branch.

It seems to be very high a high number at all.

Marcelo Marconcini: How are you thinking about this metric? That's my question. Thank you. Mario, thank you for the question. So let me answer it. I'll ask you to recalculate your metrics because you can see 2,700 branches, but in practice, we have 7,000 points of failure, 7,000. Even with the reduction of 7,000, we have traditional branches. We have points of service, which are like mini branches. And so we have even smaller than mini

How are you thinking about this metric. That's my question. Thank you Audrey regard clinical care Mitra. Thank you for the question complement blocker with social mute it will be deployed so let me answer it was Mary I'll ask you to calculate.

Calculate ROE metrics, because you can see 2007 hundred breakfast, but in fact this would have a 7000 dedicated links of failed 7000 vehicles, even though even with the reduction of several thousand journal, we have traditional branches peer we have here my point social services arguably target incremental which is gwen like many branches.

Designed for me Bill.

And incremental just so it's clear we have even smaller than many branches. This soon.

Since I took rentals with different characteristics. So you would have to divide the number of employees by Southern town center and not by 2700.

Marcelo Marconcini: So we have a set of branches with different logistics. So you would have to divide the number of employees by 7,000 and not by 2,700. Having said that, we are reviewing our footprint, and we will make some changes. We had an expectation, and now, with the new plan, we have changed our expectations. We are being more ambitious and stricter. And I want to mention two things. The idea is not to reduce the sales force but rather to gain efficiency.

As I think the for example, I had was on footprint, having said that we are reviewing our pine.

And Craig Apple aimed hemo perspective will deliver something personally Super limited, we had an expectation and now with the new claim what changed almost vacation, we adding more ambitious most trick enabled tuition to thinks the idea is not to reduce the force. The sales force barometer to gain efficiency I'm sure is on the second thing I told you we are.

Going to be having three to 4000 people and technology. So we accept changing expense related personnel lines later creditable, we would routinely operating at.

Says with hiring enough that there is a high season.

That's the main point in terms of efficiency gain but a cost cutting initiative and the organization. We have discussed in some areas we are discussing with them.

The existence of the books of the points of fail yoga scale modular. So we will automate the processes and execute this modular Australia. It's all mapped out the whole operating efficiency project is divided into air for several initiatives are not quite in line with the one I mentioned here is the largest country.

Marcelo Marconcini: And the second thing, I told you we are going to be hiring 3,000 to 4,000 people in technology. So we are changing expense lines. Personnel lines will grow, but we will reduce operating expenses by hiring third parties. So perhaps that's the main point in terms of efficiency gains.

Very adequately we won't be updating you are showing.

Pollution, and all performance quarter after quarter marched proceed to one of our screens voted by quarter right. So more towards the end of the year beginning of next year, we will be seeing some important changes in the organization a village one of it equal inhibition to everything relation of Mr. Louis should note on podcasts are restructuring.

Marcelo Marconcini: But this is a cross-cutting initiative in the organization. We are discussing some areas. We are discussing... the existence of the points of sale, the scale. We will automate the processes and execute this much faster. It's all mapped out.

The affluent segment from a lot of the sales force will be allocated to improve calculating is drilling and the way we will manage loss such important clients for the bank <unk> trim girl ranked efficiency, it's a lot more comprehensive and leave them awesome arteries via vaccine is yoga it has to.

Marcelo Marconcini: The whole operating efficiency project is divided into several initiatives, not just one. The one I mentioned here is the largest, but periodically, we will be updating you, showing our evolution and our performance quarter after quarter. Quarter by quarter. So, more towards the end of the year, beginning of next year, we will be seeing some important changes in the organization. Marcelo, do you want to add?

You do get operating synergies among the different departments at the banks are under this piggish greywacke, there will be a reallocation of people that's a fundamental for us to have.

Change initiative and the rightful initiative working continuously and going in the same direction linear to our casino said measure and proponents of Youku postal kind of things that I can have a brain shading equilibrium at one manager must Greek gods, describing the synthes mass retail and this would not make sense.

<unk> train and bus amused I could be managing S. Amy So we will be reallocating the failed yagur assemble effort. It's all mapped out and we are now finding it so that we can strike executing.

Okay.

The module to think about it one of our golf rosman.

Cadillac law glass of unwanted Levada Goldman Sachs to Togo ahead.

Everybody. Thank you for the call you taking my question.

A couple of questions on the strategic plan from just looking at slide 13.

Marcelo Marconcini: Well, in addition to everything you mentioned, Marcelo, we should not forget the restructuring of the affluent segment. A lot of the sales force will be allocated to improve our account load and the way we will manage such important clients for the bank. So, in terms of branch efficiency, it's a lot more comprehensive.

The comments you made right at the market, representing 1.3, Julien imposed risk revenues 30, 43% to 40%.

In retail and that's the biggest challenge is the cost to serve and you mentioned for the entire market I mean, just.

You could argue that that's really the biggest challenge for the incumbent banks right for the fin techs at a much lower cost to serve I don't have the branch network to have their employee base that you had.

Employee base that you have.

What can you do to get your cost to serve down does it mean that you will need to invest quite a bit in the business first stratum b look at your expense guidance above inflation. I mean do you think that continues for some time before you're able to bring down the cost to serve and then somewhat related on that same slide a couple of bullet points later.

Marcelo Marconcini: It has to do with operating synergies among the different departments of the bank. So, under this big framework, there will be a reallocation of people, and that is fundamental for us to have a change initiative and the operational initiative working continuously and going in the same direction.

Mentioned that credit is the primary anchor and challenge for Fintech, which represent less than 3%.

Marcelo Marconcini: What Cassiano is saying is that I can have a branch with one manager serving mass retail, and this would not make sense as the manager could be managing SMEs, so we will be reallocating the sales. It's all mapped out, and we are now refining it so that we can start executing. OK. Thank you, everybody. Next question, Tito Labarta, Goldman Sachs. Tito, go ahead.

Of the market.

But you could argue they also gaining share.

One or two who are gaining share very rapidly.

So just to understand your ambition to get to that 15% to 19% given that you could argue that the market a guy and more competitive for the last few years.

What can you do to really capture that market share given that other competitor is also growing very fast.

Okay.

And our goal line, though.

Tito. Thank you for your question, we're going to answer in Portuguese. It is lime fidelity is determined did okay. Next time, we want to yard Hanky Panky Brooklyn.

Daer Labarta: Hi, good morning everybody. Thank you for the call and taking my question. A couple questions on the strategic plan from just looking at slide 13, some of the comments you made, right, that the market represents 1.3 trillion in post-risk revenues, you know, 30, 40, 30 to 40% in retail, and that the biggest challenge is the cost to serve, and you mentioned it for the entire market. I mean, just, you know, could argue that that's really the biggest challenge for the incumbent banks, right, for the fintechs, you know What can you do to get your cost to serve down?

We have year to compete in this market as you asked that our history to be able to you will soon see the revenue I manage Sanjay mentioned it again and then you said.

So the death of bus bus Sogou body about the flooding of the bullshit mindset of books out there of retail, but it actually is 40% of total revenue how can we compete God I assume with the cost often tangled. It's the fact that our main challenge is the cost of them of course at the marketplace I can ride credit model for that cost to serve.

Isn't he got and as I said, because we assessed and evaluated clusters and we found out that in some clusters, we are able to compete and we have a significant share of wallet.

Marcelo Marconcini: Do you think that you will need to invest quite a bit in the business first, right? If we look at your expense guidance above inflation, I mean, do you think that will continue for some time before you're able to bring down the cost to serve? And then, somewhat related to that same slide, a couple of bullet points later, you mentioned that credit is the primary anchor and challenge for fintechs, which represent less than 3% of the market. But you could argue they're also gaining share, you know; at least one or two are gaining share very rapidly. So just understand your ambition to get to that 15 to 19%, given that you could argue, "What can you do to really capture that market share, given that other competitors are also growing very fast?" OK. So, Tito, thank you for your question; we're going to answer it in Portuguese this time, Firetti determined it, okay; next time we won't.

Well, we are going to have to reduce the cost of tariffs and we identified exactly sugar, where we have to get shoes and now we're detailing desktop, but let me tell you what the cause of some other things that are worth mentioning.

The mouth of peanut Bradesco has high penetration in this segment not all incumbents have that Brad beautiful tumor responds bradesco Principality as I said is again.

Around 60% not all incumbents have that Bradesco has in its DNA. The relationship with this type of customer we need to change the cost of certain and broad business Pradesh, we have bradesco expresso as a very important competitive lever not only as a channel, but I also soldier weekend, who serve them.

<unk> customers with a variable cost structure, instead of having fixed costs and some points of sale around throughout Brazil are developed so we have different competitive levers that can allow us to compete in this market bad luck.

Uh huh.

Due to subdued.

Please note that God would we have a market of a 30% to 40% of the total revenue of banking business in Brazil don't wear goggles.

Silica and it's a market that can be divided.

All with three or four banks are fintech and everybody can hold mid 20 percentage of share.

Marcelo Marconcini: But what we have here to compete in this market, as you asked, the revenue I mentioned, you mentioned it again, and then you said... about the share of retail, 40% of total revenue. How can we compete with the cost of FinTech? It's a fact that our main challenge is the cost to serve. Of course, the right credit model for that, but cost to serve is key. And as I said, we assessed and evaluated the clusters, and we found that in some clusters we are able to compete, and we have a significant share of wallet, but we are going to have to reduce the cost to serve. And we identified exactly where we have to get to, and now we're detailing this. But let me tell you some other things that are worth mentioning. First, Bradesco has high penetration in this segment. Not all incumbents have that. Bradesco's principality, as I said, is again around 60%. Not all incumbents have that.

And being a big that's another important thing here to have scale, we have scale.

There's two other of this market and to be able to compete in this market. That's how I see it there is room for those who will serve in a certain way and there is space for those who will serve in a more connected way that's what I think for Bradesco over time, and we're going to show you that.

Homogeneity Irish was apparel, and then I'm going to ask about the credit how we're going to grow well connects on that yes.

Actually if I can see if we arent going to want row effectively with good models, we have basically the capacity to do that with good credit models of crude what good follow up portfolio management I got kicked into brick and mortar stores reported we're going to have after disciplined portfolio management looking at the entire X.

Banded portfolio from the retail bank to wholesale but also bank rule and how we're going to operate capital allocation. That's all obvious, but we have distribution capacity, sometimes I believe that's a bay competition is a lot more among the incumbent banks rather than fintech. They still have a small share of course, they have opportunity and they will grow a little bit more.

Marcelo Marconcini: Bradesco has in its DNA the relationship with this type of customer. But we need to change the cost to serve. We have Bradesco Espresso as a very important competitive lever, not only as a channel, but I also told you we can serve those customers at a variable cost instead of having fixed costs at some points of sale throughout Brazil. So we have different competitive levers that can allow us to compete in this market. But look.

But we have the levers and we have the capacity to distribute and grow with depending on our models. That's what I showed in the last quarter, we had that inflection point for the curve both for individuals and SME us. Thank you.

But he got them done.

They are beautiful thank you Tito and ask questions. The Morgan Stanley geologic would eat Morgan Stanley Gardner.

Yeah.

Good morning, everyone. Thanks for your advice Blue vision Congrats Marcello.

And best of luck.

Marcelo Marconcini: Dido, note that we have a market of 30 to 40% of the total revenue of the banking business in Brazil. And it's a market that can be divided, with three or four banks or fintechs, and everybody can hold 20% of a share and be big. That's another important thing here, to have scale.

I wanted to ask about.

The return on equity that's embedded in your plan and your ambition your return on equity based on the 'twenty 'twenty four guidance is going to end up roughly 10% to 11%.

Harmful what's the guidance for Evo, which is your biggest peer is I wonder how long do you think is going to take you to close the gap recovery.

Your best in class peers five years out if you execute your transformational program, where shall be R. O b.

Marcelo Marconcini: We have the scale to serve this market and to be able to compete in this market. That's how I see it. There is room for those who will serve in a certain way, and there is space for those who will serve in a more connected way. That's what I think for Bradesco over time, and we're going to show you that.

Doug My first question on first of all a multiple one later thanks.

Okay.

Uh huh.

The Georgia.

But he got closer Pat Walker Columbia says I should thank you for your question Awesome B, So as I mentioned, our ambition baggage our main target.

Marcelo Marconcini: And then I think you asked about credit, how we're going to grow. Yes, we are going to grow effectively with good models. We have the capacity to do that with good credit models, and good follow-up portfolio management. And we are going to have portfolio management looking at the entire expended portfolio, from the retail bank to the wholesale bank, how we're going to operate, and capital allocation. That's all obvious, but we have distribution capacity. So I believe that today there is a lot more competition among incumbent banks rather than fintechs. They still have a small share. Of course, they have opportunities, and they will grow a little bit more, but we have the levers, and we have the capacity to distribute and grow, depending on our models. That's what I showed in the last quarter.

And Ross and I believe is to grow our profitability over the next five years of Florida by water.

Most of them with our partners, we have an opportunity for a more strong well north shore Marui, Milwaukee to show better our OE Aw Booth Remax.

Maybe at some quarter doing 2026, as I mentioned I believe in the first question that was asked so that's when we probably will be able to exceed that cost of capital Elsa and the idea is for us to grow during these five years delivering.

Delivering comparable returns with our shareholders' expectations and compatible what our expectation that's our ambition water. There's no date in time, there is no deadline, a specific dates or desert deliberate. Thank you as always interests go your question, but this is what we pursue as well.

And then also the main goal of our strategic plan. Thank you. Thank you Marcel.

Marcelo Marconcini: We have reached that inflection point for the curve, both for individuals and SMEs. Thank you. Thank you, Tito. Our next question is from Jorge Curi, Morgan Stanley. Yeah, good morning, everyone.

My second question is about.

Then C level compensation packaging, particularly Europe implementation patents, one word puzzle target.

The link to is it return on equity is a market share issue stock price you can walk us through how.

Jorge Curi: Thanks for taking the time to do this and congratulations, Marcello, on the new role and best of luck. I wanted to ask about the return on equity that's embedded in your plan and your ambition. Your return on equity, based on the 2024 guidance, is going to end up roughly at 10 to 11 percent. That's half of what the guidance for Ita, which is your biggest peer, is. I wonder how long you think it's going to take you to close the gap vis-a-vis your best-in-class peers?

The success of the bank and you're successful tied together.

Oh boy.

Visual Archie Okay. So block biodiesel, we are reviewing them on open up by those this land we are preparing as I said, a new human resources, Atlanta, Aida Nishu be implemented by the end of this quarter, we'll discuss it during the months of February and the idea is to approve it in March.

So in order to implement it and then it's a C level the invite fee level. Some vehicles will be connected to the total compensation that we're going to have the time and of course, we already have references in benchmarks in the bank. We are still working with the much like the previous call.

Marcelo Marconcini: Five years out, if you execute your transformational program, where should the ROE be? That's my first question, and the first question I'll ask my second one later. Thanks. Okay. Uh.

Let's see but I believe that we are competitive enough to bring C level.

The individuals to our organization with competitive compensation and will compensate Boston.

Marcelo Marconcini: Jorge, thank you for your question. As I mentioned, our ambition, and our main target, is to grow our profitability over the next five years, quarter by quarter. We have an opportunity to show better ROE, maybe in some quarter during 2026, as I mentioned, I believe in the first question that was asked. That's when we probably will be able to exceed that cost of capital. And the idea is for us to grow during these five years, delivering returns compatible with our shareholders' expectations and compatible with our expectations. That's our ambition. There's no date and time; there's no deadline, or specific date for this delivery.

Who are on the run the bank and those on change the bank recognizing their respective roles here.

Thank you and then look pizza parlor JV, you talked about the indicators as well as where the passage of the indicators will depend on each of the departments right.

Where they are we have indicators related to the plan and we're going to have relate the indicators department by department for a digital workforce physical them in person appointments to effectively implement this global blood, there's new human resources plan or of course, the higher the level of the executive more incremental.

Linked to the home they are the more the higher the hierarchy effective homage, causing more relationship it has with what they effectively do and deliver thank you.

Got it.

Per room per Haynesville ex question from Eduardo Nishu with Virginia invest Lantus issue a loop on Jetblue Hello. Good morning, everyone. Thank you for the opportunity I wish you a lot of success in the new strategic plan not only Amazon because my question is more related to the cycle and hold it.

Marcelo Marconcini: Thank you, Jorge, for your question, but this is what we are pursuing. The main goal of our strategic plan. Thank you. Thank you, Marcello. And my second question is about the... C-level compensation package, and particularly your compensation package. What type of targets is it linked to?

Should change with the new strategic plan I saw in this past cycle in my own assessment of the space.

You had three big challenges, if we can call. It some VAT treasury market NII spotty. There was some way below the peers, which is a L. L. A particularly in the low income segment, which negatively impacted the results of the bank and your digital strategy.

Marcelo Marconcini: Is it return on equity? Or is it market share? Is it the stock price? Can you walk us through how the success of the bank and your success are tied together? Okay, so, look, we're reviewing this plan, and we're preparing, as I said, a new human resources plan to be implemented by the end of this quarter. We'll discuss it during the month of February, and the idea is to approve it in March in order to implement it. And then, the C-level will be connected to this total compensation that we're going to determine. Of course, we already have references and benchmarks in the bank, and we're still working with the previous policy, but I believe that we are competitive enough to bring C-level individuals to our organization with competitive compensation, and we'll compensate both people who are on the Render Bank and those on Change the Bank, recognizing their respective roles. And then, look,

It was been restructured and ours under that for bank investors. So if you could speak about these macs Shri.

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What will they be like with a new strategy. I know you have very few days, just 60 days Fisher to Culver, but do you see any structural change in these three pillars.

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As you say edge, possibly unimpeachable suffered in 2022 'twenty trade around 2023 recovered almost $1 7 billion compared to 2022 and it became positive in 2020 for it in our guidance, it's base Gleamed as bottled ice Columbia, the natural levels that we had in prior.

Year on year. So that's a phase that is behind us the whole loan book originated in the prepaid area of music.

Marcelo Marconcini: You talked about the indicators. Jorge, the indicators will depend on each of the departments, right? Jorge, the indicators will depend on each of the departments, right? where they are.

Did well in our trading desk and client tests working strongly so for the treasury, where possible. We believe actually the busto impact could be we now are handing the baton from the cyclical period to a more normalized period of 'twenty 'twenty, four and onward of Atlanta for a L. L Muchmore papadakis.

Marcelo Marconcini: We have indicators related to the plan, and we're going to have indicators department by department for digital, for physical, to effectively implement it. This new human resources plan, of course, the higher the level of the executives, the more linked to the whole they are, the higher the hierarchy, and the more relationship it has with what they effectively do and deliver. Thank you. Next question from Eduardo Nishio with Genial Investimentos.

Michelle.

Numerous all delinquency curves are reaching thing, which is very good or testing in the new cohort in Boston It boy Hela cell.

Puts us in a very good position regarding additional a L. L alliance allowance for loan losses. So this isn't crystal closest en masse to Intel just what's been happening and growth given the growth of the loan book of the nature of the loan portfolio mix deepening with different.

Eduardo Nishio: Hello. Good morning, everyone. Thank you for the opportunity. I wish you a lot of success in the new strategic plan, Noronha. My question is more related to this cycle and how this should change with the new strategic plan. In this past cycle, in my own assessment, you had three big challenges, if we can call them that. Treasury, market NII, There was, way below the peers, ALL, particularly in the low-income segment, which negatively impacted the results of the bank.

[noise] type his musical of clients' minds at brokers on a map, but more riskier clients, who need more proficient language. So this year. That's when we will be paying the bill this past bill in starting in 2025, we will have a more natural cycle in terms of gallons for loan losses.

As for the a L. L. As most Hello show do we recognize that we have adjustments to make them, but only in a L. L. But in the whole credit cycle and also gives me which is reflected in our credit business unit you figured out they will look at credit in an integrated way that you can add to the loan book quality of.

Credit approval. So is owned by bumps lease structure that you know if you messages will give a lot more effectiveness to credit mainland you made by gooseneck. There will also be making adjustments in terms of credit modeling I think that modeling has always been a strength in this bank, but who knows there is a whole is.

Marcelo Marconcini: And your digital strategy, which was then restructured and is now under the bank. So, if you could speak about these three points, what will they be like with a new strategy?

Room to evolve and we added constant improvement ethnic merchandising. So we do acknowledge the need for adjustments in this part of the strategic claim amounts and Nishu, Let me add a commuter states at all or what's going on with their strategic paths are not limited to one that is you can choose different partners financial offering and through different paths.

Marcelo Marconcini: I know you have very few days, just 60 days since you took over, but do you see any structural change in these three pillars? Thank you, Nishio, for the question. I will divide the answer with my colleague. So I won't be the only one speaking here.

Different organizations, who can achieve common goals with both initiatives being successful we decided in the past that Tibet. Our next deposit these yoga, Nova and we saw that the aliens right. So so much of the business changed towards the end of the market.

Marcelo Marconcini: I'll ask my colleagues to begin, and I will add to their themes. Cassiano, and then Firetti. You feel free to contribute.

Marcelo Marconcini: Thank you. The market NII, as you said, suffered in 2022-23. 2023 recovered almost 1.7 billion compared to 2022, and it became positive. In 2024, in our guidance, it's basically at the natural levels that we had in prior years. So that's a phase that is behind us.

With a different approach so no we brought the schools to predict because it's a core business growth, but there are a lot of lessons learned in value hearing better addressed in detail in next time.

Rate base continues to grow we'll continue to do things differently outside that T. G. O is an important laboratory umbrella also in our strategy.

Of the skull articles actually if you're buying pig irrational splutter. So everything is closer to us whether we are going to integrate the platforms are not well we are seeing so many interesting things with a new diagnosis of a marker that or do you think that I can perhaps will integrate next to keep the brand. If you put it but we have market beyond bank.

Marcelo Marconcini: The whole loan book originated in the prefix area, which did well in our trading desk and client desks working strongly. So for the treasury, we believe that we are now handing the baton from the difficult period to a more normalized period, 2024 onwards. That's for ALL, the news that all delinquency curves are reducing, which is very good. All our testing in the new cohort puts us in a very good position regarding additional ALL, allowance for living loss.

Oh my complaint mix, we brought it from NEC regimen frame with just deliberative, a friends and family O'hara hepatitis care critical so.

So we are testing this in because it goes with Bradesco base, but also connected to named Frank we'll have another part of beyond bank will to agribusiness another marketplace.

So you saw us reversal joined FEMA beyond bank has its own lighter Furman at Wassa equity project. So we do some of that business for us and shows a hand them a move around so those three goals to preserve and mass retail low and middle income clients that then potentially.

Marcelo Marconcini: So this, of course, is a return to mass retail; this has been happening, and growth, given the growth of the loan book, and the nature of the loan portfolio, with different types of clients, but more risky clients, we need more provisioning. So this year, that's when we will be paying the bill.

As our business with multi brand or is it. This is not totally defined yet we can take on patent for a different kind of life secondly regarding market NII they've talked about this affect you on it we haven't modeled expectation notion Oh normalization, along 2024 and thirdly, a L. L allow that was Poland.

Marcelo Marconcini: This past bill and starting in 2025, we will have a more natural cycle in terms of the allowance for loan losses. That's where the ALL, as Marcelo showed, that we recognize that we have adjustments to make, not only in ALL but in the whole credit cycle, which is reflected in our credit business unit. They will look at credit in an integrated way. The Loan Book, Quality of Credit, Approval, Foo.

Losses will determine what we're going to have a higher cost in 'twenty, 'twenty, four which I consider to be a transition year. After I finish off because we will have a substantial growth with the law.

The loan portfolio investment bookmark due to expected long missiles called Allocca, who suffer if we were flat and growth we would have less a L. L. A orange, Belgium, we're putting effort to have our client NII with adequate losses in the new cohort vintages approximate Birmingham next question from Russell.

<unk> with Citi.

Go ahead.

What are your thoughts.

Marcelo Marconcini: These structures, in our view, will give a lot more effectiveness to credit management and will also make adjustments in terms of credit modeling. I think that modeling has always been a strength in this bank, but, you know, there's always room to evolve and constant improvement. So we do acknowledge the need for adjustments in this part of the strategic plan. And Nishio, let me ask you something.

Good morning to all Smithville, along with allergic because a lot of success to all of you in your new role and for some kudos for example, I wanted to tap into.

That news.

We have a lot of discussions in the market in terms of how.

<unk>, a low profitability of the desk in the last two years was linked to a structural issue.

Sure.

Related to the context, the discuss more exposure to smaller companies the lower income segment, but I think theres also a market element.

Marcelo Marconcini: Beautiful. The strategic paths are not limited to one. You can choose different paths, and through different paths, different organizations, you can achieve common goals with both initiatives being successful. We decided in the past to bet on Next and Digio, but then we saw that the values and prices of the business changed in the market with a different approach. So now we bring this closer to Bradesco because it's a core business for us. But there are a lot of lessons learned and values embedded in Digio and Next.

I'm also saying that you have a lot of opportunities to improve your operations you spoke a lot about literally income segments I'd like to understand more about SME sooner.

Hello.

Gaining fed batch of you do.

This will give us a leader in the F. N E segmented. It is an important part of your profitability or maybe.

Surprised that you're starting that had an important portion of the NPL formation in 'twenty drainage.

So what have you identified in your diagnostics that could be quickly improve something that could be deficient, perhaps you could elaborate on the diagnosis for this segment of SME.

Thank you flagged equal levels of Norbert and good to see you again.

Famagusta use where things alright SME political.

Marcelo Marconcini: Our client base continues to grow, we continue to do things differently, and I've said that Digio is an important laboratory for us, also in our strategy for Bradesco Digital. So everything is closer to us, whether we're going to integrate the platforms or not, well, so this theme of beyond the bank is part of NAC. So we do some business for us to move around. So this goes to serve mass retail, low, and middle income clients that can potentially expand our business with multi-brand. This is not properly defined yet.

Comment they will say major change we are leaders in the Australian governmental Selina Scott, we have a significant share of that but to Friday will have to admit to properly predict I think there we had a credit policy, which was absolutely more openings into their curriculum behalf pye-dog with Polk reported we misread, perhaps we've stopped granting credit.

Is a little later than we should have I have to admit these things, but with Cisco is the grade of the Brazilian social pyramid in lower income and SME literary present in these segments for lenders of delinquency issue Rockwell surely tend to suffer more proportionally origin, absolut tradeoffs and peers it would be.

All of them, regardless, so again, having a higher leverage when we should have the dodgers, but won't be before earlier when a funny award missile given this bill has been paid for.

Marcelo Marconcini: We can take one path or a different path. Secondly, regarding market NII, they've talked about this. We have a good expectation of full normalization by 2024. Thirdly, ALL allows for loan loss. You're going to have a higher cost in 2024, which I consider to be a transition year because we have a substantial growth of the loan portfolio. Due to expected loss, this is called ALL.

When I look at the segment because it has the right size. It is profitable and I'll tell you most of our clients and SME L. Arbaugh being there alone. They are not delinquent most of them are okay. They have been paying off their loans and they have been making in doing business with as well we had latest.

They have new credit modeling because he can as you know we have new credit policy by these credit policies are they more of a strict it somewhat more restrictive than in the past, yes, we are a little more conservative in that regard glass cost derivative in the transformation of the bank the more conservative in managing credit risk is if you want based on their new models.

Marcelo Marconcini: If we were flat in growth, we would have less ALL, but we are making efforts to have client NII with adequate losses in the new cohort for Vintage. Next question, from Rafael Frade with Citi. Frade, go ahead. Good morning to all, Marcelo. I wish a lot of success to all of you in your new roles. I wanted to tap into your diagnosis.

Well, we have a huge opportunity so quickly there nothing that he doesn't Brooklyn, npls troubling delinquencies dropping that's under control.

We went back to growing the like I said, we had an inflection point in two parts. So the number is under control and if yes. What are we doing in the Sacramento area, creating 122 in the laboratory and the surgical Congress or the leadership of accumulative limitation, we have delivered some drag on the under the usual, we'll deliver our Huntington 22 platforms.

In 2024, and as quickly as possible, regardless of where their machines Taco liter and dedicated work to this target of client tier one between lotteries by central 50 million per year in the main cities, but do you think now we started working with some radio as well.

We're increasingly English.

English sub segmenting shelters directing this client base for when we have a complete network of claim that has been drawn but to try get from zero to 20 million. If we improve the whole work on remote service also for micro level enter printers diesel do have more in terms of double.

Digital rather than physical servers, and we most like Uganda online services. So increase the force of fails peer group in Shanghai Dasani Overcoil in this segment have a similar to it and why because we see this opportunity my suit besides.

To get more traction and more safely with road in some credit analysts to work more physically all of us.

With the platforms and we have been doing some good testing with them in that way.

Just want a ruling Charlotte was in pocket is it closer to neutral because I hope this credit granting is judgmental.

Management model and we May have a different management model, a shrinking pool of different than what we had been implemented in our client management all see demand for displays at least try dividend pigmentosa four three.

2 million with a different way of managing support for many Agua I got to know with Chinese yoga H opened in clean a miniature almost and probably will have to be monitoring what goes on the centralized session. So that we can do.

Marcelo Marconcini: We have had a lot of discussions in the market in terms of how the low profitability of Bradesco in the last two years was linked to a structural issue or related to the context. Bradesco has more exposure to smaller companies and lower income segments, but I think there's also a market element. But you're also saying that you have a lot of opportunities to improve your operation. Let's talk a lot about lower-income segments. I'd like to understand more about SMEs.

Beautiful time management and monitoring of the portfolio. So we can make decisions regarding those mandates going together, regardless of our central livestock portfolio longer manage our mail parcel and I. These are operational detail for solar so I do risk assessment.

Is that the contracts and how do I monitor sugar, putting little better value for Georgia, because if you'd get their first healing toy benefits. So we have models and indicators work to manage those just like we do in the oven segment. So here, we are improving risk management model. So we can be a lot more competitive spirit.

In terms of delivering goods to the customer service and experience and in terms of managing our credit risk regardless of other people and other tools managing the portfolio of the bank will use the appropriate work added to that we have the public acquisition offering of.

Marcelo Marconcini: Marcelo, at the beginning, you said that Bradesco is a leader in the SME segment. It is an important part of your profitability. It's a product that will have an important portion of the NPL formation in 2020. So, what have you identified in your diagnosis that could be quickly improved, something that could be deficient? Perhaps you could elaborate on the diagnosis for this segment of SMEs. Thank you, Fradi. Good to see you again.

Cielo will be Coco palms, your for Cynosure, we want to bring payments and other synergies with this SME segment, which is highly profitable and should double in size in the next five years explanation. Thank you Ah processor Volta veins are known Mega election, Arnon Ziggy Santander. Please alone go ahead Joe.

Good morning, Leroy and it'll be below God willing a welcome Shar. This division makes it but my question is more related to trailing financials more to talk about your guidance that you gave us an expectation of the increase in the loan portfolio, but I'd flex will defend why this growth is coming from if it's more individuals more once but the big companies and also about.

Marcelo Marconcini: Alright, SMEs, as I mentioned, we are leaders in the SME segment. We have a significant share, but Frade, we have to admit, I think that we had a credit policy which was perhaps a little more open. Perhaps we misread, perhaps we stopped granting credit a little later than we should have. We have to admit these things.

He asked me today, a grade 424, I think it changes the perspective that the analysts have for the air it'll build a little girls, calling the bonds I can answer it anyway in terms of pros I saw Kurdistan I believe I can say that we're going to be growing and our mainline my Vinci very closely as we've been fan at Oslo region.

We're accelerating AG credit origination and retail not something could if this origination has been cut significantly grow Wang Transborder is still not an overflowing can lead to volume growth no here, you'll notice that the portfolio has it responded yet but the main driver for growth on the book estimate includes.

Marcelo Marconcini: But Bradesco is part of the Brazilian social pyramid in lower income and SMEs. We are very present in these segments. So when there is a delinquency issue, we tend to suffer more, proportionally or in absolute terms, than peers, regardless of having higher leverage when we should have stopped before, earlier. That's a given.

The growth in all lines on wholesale retail and small and midsized companies, where we're also accelerating Atlanta this growth will accelerate during the year guidance as the guidance includes a seven to a laugh and we have significant growth in simo as CMO.

Marcelo Marconcini: This bill is being paid. But when I look at this segment, it has the right size, it is profitable, and I'll tell you, most clients in SMEs are profitable, paying their loans. They are not delinquent. Most of them are OK.

India in line or above the market kind of theory of course that the average portfolio minerals growth liable.

And that's what our guidance translates into the income was Dr. Lee could the margin guidance that slightly lower in terms of the rates you can consider between 16 and 18 as a reference the tax rate.

Marcelo Marconcini: They have been paying off their loans, and they have been doing business with us. We are leaders. We have new credit policies. These credit policies, are they more restrictive?

Our decorative say, yes on the idea is to grow mcguffey for the entire portfolio with the expanded portfolio.

Marcelo Marconcini: Somewhat more restrictive than in the past? Yes. We are a little more conservative in that we got less conservative in the transformation of the bank but more conservative in managing credit risks based on the new modeling. But we have a huge opportunity of quickly reversing that. NPL is dropping.

As Phil that you mentioned thank you there are no. Thank you I learned method won't double you reflect the question Judy Fernandez J P. Morgan <unk>.

Weibo's search Clinton warning that locked with a pen.

When you go sort of management of the company and the plan would be my first question is about the bank's capital generation I believe that this has good capsule.

Marcelo Marconcini: Delinquency is dropping. That's under control. We went back to growing, and like I said, we had an inflection point in Q4, so the number is under control. Yes, what are we doing in this segment? We are creating 122 platforms in Brazil, as I mentioned during the presentation. We have delivered some at the end of the year.

Little Blemish 2.7, it's not a matter of you.

But when we think about our own E. As you mentioned not only are may be in 2026, it will exceed the cost of capital and we look at the 'twenty 'twenty four guidance it should be a rate of 10, 11%, maybe slightly higher but with the portfolio accelerating as fit as you mentioned and in the past years been looking at you know maximizing the benefits of IOC.

Marcelo Marconcini: We'll deliver 122 platforms in 2024, as quickly as possible, with a team fully dedicated to this target of clients, Tier 1, between 3 and 50 million per year, in the main cities. But you see, we started working with some radius, but we are increasing this segmentation, this targeting for this client base when we have a complete network of platforms. For the target from zero to three million, we improved the whole work on the remote service.

<unk> and the bank has been payment relatively good dividends, but that implies a smaller capital growth. My doubt is how I should think about the choice between growth and capital on how to fund the growth considering it may take until 'twenty 'twenty six to improve profitability a little bit.

<unk> kept our costs may be if you got a broad and this plan for you to get to that 15% to 19% market share. So if you can talk a little bit more how to think about the payout.

Marcelo Marconcini: Also for micro entrepreneurs, in terms of digital, physical service, and remote online service. So we increased the force of sales in the segment of SMEs. And why?

And as dilemma.

Between investment and growth and capital would be my first question on the second very quickly not only about shallow.

If you can give us more details about the strategy behind as if there's any discussion.

Marcelo Marconcini: Because we see this opportunity. Besides, in order to get more traction and more safety, we brought in some credit analysts to work more physically close to these platforms. We have been doing some good testing with them.

And about these public acquisition or if there's any discussion about the selic rate around the price of this offer dividends was very clear that the questions you have relevant focus on finally, CLO, but theres no. It's not clear whether there's a correction for the selic rates in a bit more.

Marcelo Marconcini: This will ensure us more speed because part of this credit granting is judgmental. And we have a different management model. It's different than what we had before.

<unk> for the question S. N I believe you could began and I'll add.

And talk about CLO, but he got the union. Thank you Ute and it's a pleasure to see you here again couple of dollars into the capital side, we understand here that you can come to.

Marcelo Marconcini: We implemented in our client management pool. We started with that segment of three to 50 million with a different way of managing the portfolio. Now we are trying to educate and train our managers. We'll have to be monitoring this in a centralized fashion so that we can do full-time management and monitoring of the portfolio so that we can make decisions regarding risk management, regardless of centralized portfolio management. These are operational details. So I do the risk assessment, the contract, and how do I monitor it? Because if you get there first, you enjoy benefits.

Our projections at all considering sufficient capital to maintain the credit for the lost luggage truck of course in our strategic plan and even for the new approach for the central bank's operating rates that we've been discussing and some of the Bronx, and we can talk about it in person a disease that a washed it whistled Gaba me the resolved.

Hey, Chris Hey, becoming try then to Gopro and it also makes capital more robust on the so the strategy is Marcello sat up our transformation pattern is to seek the growth of our profitability growth and our net income on boy that are also large loss a significant part of our capital composition on the Dodge.

Marcelo Marconcini: So we have models and indicators to manage this, just like we do in other segments. So here we are improving this management model so we can be a lot more competitive here in terms of delivering good services, customer service, and experience, and in terms of managing our credit risk, regardless of other people and other tools managing the portfolio.

And we see it as natural to continue to work the basic benefit of IOC for as long as it exists today and this year is no different for the for the moment from everything we're seeing with our business cases, and the planning and the budget process be below me. It was nice we understand that at least over the few next few years.

We will be comfortable in terms of capital to support that struggled in transformation process and the bank's growth or if you would had built yes, Judy that's what casciano sad we ran all projections.

Marcelo Marconcini: Added to that, we have the public acquisition offering of Cielo, what we call OPA. We want to bring payments and other synergies with this FME segment, which is highly profitable and should double in size in the next five years as a nation. Thank you. Next question, Arnon Santander. Please, Arnon, go ahead.

This method with the expected growth levels, and we have sufficient capital to do it and we're comfortable with analyst Tomas Yeah in terms of Taylor now.

Most appraised Lewisburg you asked two questions right. So first by a required whether theres going to vehicle reaction. That's not the information we have that something what we have in mind for the time being we don't have that perspective about this you'll see correctional aesthetic locked in and the second is about the casino Theres no discussion about our separation from casino at this time.

Marcelo Marconcini: Good morning, Moronha. Welcome to this position. My question is more related to 2024, to talk about your guidance. You gave an expectation of an increase in the loan portfolio, but I'd like to understand where this growth is coming from, whether it's more individuals, more companies, and also about the rate for 2024. What is the perspective that the analysts have for the year? I can answer that.

So we'll put a similar powerful we are offering this is.

Talks or the market the public acquisition of brain, because theres some important strategic points that I mentioned in our plan and on Banco do Brasil. The size. They also have good penetration on legal entities their ships and for both of them. The strategic aspect is essential because then that gives us greater strategic freedom, who had used all do.

Carlos Firetti: In terms of growth, I believe I can say that we're going to be growing in our main line very closely. As we've been saying, we're accelerating credit origination in retail. This origination has been significantly growing, but it's still not overflowing to lead to portfolio growth.

We view our value proposition here for Smes and even for larger companies and CLO can priority also penetrate larger companies in their books about acquiring business and Banco do Brasil, we won't get into their strategic decisions that they they don't get into hours, but we'll have the liberty to do that to find out there are already separate commercial teams.

Carlos Firetti: The portfolio hasn't responded yet, but the main driver for growth includes growth in all lines, wholesale, retail, and small and mid-sized companies, where we're also accelerating. This growth will accelerate during the year. As the guidance includes in 7 to 11, we have significant growth in line or above the market. Of course, the average portfolio grows less, and that's what translates into the margin guidance that's slightly lower. In terms of the rate, you can consider between 16 and 18 as a reference, the tax rate.

When the company got coffee shop, but it's a close capital accompany that.

Effectively allows us to move faster and make faster decisions. So fuzzy somewhat because we need to do that now with adults and then a question that may originate from your question and I'd like to adhere is that all body shop. So if it's a closed capital requirement will then I'll you going to be able to have the governance subdue that.

Carlos Firetti: Yes, and the idea is to grow the entire portfolio with the extended portfolio, as Firetti mentioned. Thank you. Thank you, Arnon.

Marcelo Marconcini: Next question, Yuri Fernandes, JP Morgan. Good morning, good luck with the..., and the management of the company and the plan. My first question is about the bank's capital generation. I believe Bradesco has good capital. 2.7 is not a matter of, But when we think about ROE, as you mentioned, Noronha, maybe in 2026 it will exceed the cost of capital.

As soon the answers yes.

And it is yes, because we have other partnerships with Banco do Brazil, a landlord Lee velo and their broker sure. They are all in use wall delisted companies and we have those scripts don't view of one than the other and we have very good who show non sugar management, each one of us driving our channels and making the <unk>.

As Ms develop and it's not going to be in a different and Clo's case. Thank you Ute for your question I think of note anecdotal yacht and Casciano adult digitally left quest channel by Pedro Leduc with Italo BBA.

Carlos Firetti: And when we look at the 2024 guidance, it should be a rate of 10%, 11%, maybe slightly higher, but with the portfolio accelerating, as Firetti mentioned. And in the past years, we've been looking at you maximizing the benefits of IOC. The bank has been paying relatively good dividends, but that implies a smaller capital growth. My question is how to think about this choice between growth and capital and how to fund growth.

Maybe the modal. Thank you Philipp welcome pneumonia Andre I wish you a long list fantasy in this new chapter of your life on optical that's a quick question just to clarify will keep J P regarding the outlook for efficiency.

We see the F E M. A N O tanks up this year running above inflation.

So this is a period of investments ahead of you to look at other costs that come with their transformation as you know SG&A I guess, we could imagine is DNA grown a lot less than inflation.

Carlos Firetti: Considering it may take until 2026 to improve profitability a little bit, the capital cost may be high in this plan for you to get to that 15% to 19% market share. So if you can talk a little bit more about how to think about the payout, and this dilemma, between investment and growth and capital, that would be my first question. And the second, very quickly, Noronha, about Cielo. If you can give us more details about the strategy behind it, if there's any discussion.

Patient inflammatory 85, total kidney failure or should we think that efficiency ratio would improve because of revenues well investments are kind of multi annual volume in our sales executives and we obviously want to corral revenues along with a host of skills that you can answer them both.

But the adjustments that we will be making in terms of reducing the cost to serve in our structure anchors in whoa Mopani don't won't be implemented partly along 'twenty 'twenty four and.

And that should start, giving us higher defect in 'twenty or 'twenty five in terms of ripping dependent peds restaurants, improving the efficiencies in our spend evolving those line items here, but when we look at our expenses for 2020 or like the administrative and personnel expenses will grow based.

Carlos Firetti: And about this public acquisition, if there's any discussion about the SELIC rate around the price of this offer, dividends were very clear, you have a relevant focus on Cielo, but there's no, it's not clear whether there's a correction for the SELIC rate. Thank you for the question. Cassiano, I believe you could begin, and I'll add... and the World Bank, of course, in our strategic plan, and even for the new approach to the central bank's operating risk that we've been discussing on some fronts, and we can talk about it in person. The result tends to grow, and it also makes capital more robust. So the strategy, as Marcelo said, our transformation pattern is to seek growth in our profitability, growth in our net income, which is also a significant part of our capital composition. And we see it as natural to continue to work the basic benefit of the IOC for as long as it exists.

Fully in line with inflation in our projections and now there's a slightly more pressure on the line item others because of provision.

For fiscal civil claims and other provisions that are part of that line item.

But it's likely that this will be an administrative and personnel line items, we already have a bit of a level of control for 'twenty to 'twenty five we'll start capturing the benefits of mobile.

Fred to summarize stable revenues.

Revenues are important module maker capital my argument, but of course, the biggest capture will come from reduced expenses three here. Thank you very much.

If I may ask a question about SME.

But I hit the moniker subsidiary discussing our strategy to sustain growth in retail and I knew that SME are a relevant segment for bradesco. It's a profitable portfolio. He turned around so what is the turnaround strategies back integrated with the recent announcement of CLO.

Carlos Firetti: And this year is no different for the moment from everything we're seeing with our business cases, and the planning, and the budget process. We understand that at least over the next few years, we'll be comfortable in terms of capital to support the transformation process and the bank's growth. Yes, Judy, that's what Castellanos said.

If we if you could elaborate for us an easy would be welcomed.

As I mentioned Pedro timeframe.

Throw it into an era of you in.

Dividing sme's should you mean, two three segment alone Pier one three the suite revenue North Street 50 million voice when you dive.

In Korea, but having new platforms that are being opened in the main cities of presume will expand the radius of those eventually bought AGA. So reallocating the sales force with more prepared people we're training people.

Carlos Firetti: We ran all the projections with the expected growth levels, and we have sufficient capital to do it, and we're comfortable with that. In terms of Cielo now, you asked two questions, right? First, whether there's going to be a correction. That's not the information we have. That's not what we have in mind for the time being. We don't have that perspective about the correction factor. And the second is about Caten

Treaded opening these types of wins in the end of last year and will continue these openings along 2020, we expect to deliver 122, new quite buoyant with a much more focused and established management like I said with a new management model.

Including portfolio management, the former central is not just in a centralized way, but also decentralized and a better customer experience for our clients, but also changing the value proposition an honest here is increasing the sales force.

Marcelo Marconcini: There's no discussion about separation from Cateno at this time. We are offering this to the markets, the public acquisition offering, because there are some important strategic points that I mentioned in our plan. And on Banco do Brasil's side, they also have good penetration in legal entities. And for both of them, the strategic aspect is essential, because then that gives us greater strategic freedom to review our value proposition here for SMEs and even for larger companies, since Sielo can also penetrate larger companies in its acquiring business. And at Banco do Brasil, we won't get into their strategic decisions that they don't get into ours, but we'll have the liberty to do that. There are already separate commercial teams in the company, but it's a closed capital company that effectively allows us to move faster, make faster decisions, because we need to do that now. And then a question that may originate from your question, and I'd like to add here, is that, oh, but so if it's a closed-capital firm, are you going to be able to have the governance to do that? The answer is yes.

The estimates zero to $3 million because these are more decentralized in the branches.

Brazil and also from micro interpret areas with remote service and digital Shadows Nosocomial Milord eyes, very naturally we expect to improve the value proposition and it's linked to the U S. O pause it said the CLO OCA or opens the public acquisition offering.

In other strategists will bring to the market if I may add load oyama bustling closer they used a transactional information that's the best use we can put our CRM or have you feels like we've been working a lot on the sand the product verticals looking more and more into this niche of new cash platform that we're introducing.

We urge gob CRM, the transactions database or a new product and the new account loading dock.

Oh, it's advantaged subdivisions of SME.

With all that I believe that we are well positioned to have growth in this new segment, but let me add something to anybody else.

We've accelerated credit granting to small companies into four that was the inflection point in time was about films how what we see is that now that we have this monetary easing in Brazil, Russia, that's a.

A tailwind double benefit as more companies and low income segment Delaware's for small companies as Marcel mentioned fund they have they account for 15% of the banking value to be captured in the market at this low double in five years. These 15 can become 25.

Here's where we can create value and grow that's why we will increase from $1 7 million to two or 2.5 million clients here, showing clearly that we want to gain market share. In this segment are associated in a bedroom to lose but I can tell you all incumbent banks on this our hero banner fighting for their smart carrier.

Marcelo Marconcini: And the answer is yes, because we have other partnerships with Banco do Brasil, Alelo, and Livelo, and they are all D-listed companies, and we have this view of one and the other, and we have very good management, each one of us driving our channels and making the business develop, and it's not going to be any different in Sielo's case. Thank you, Yuri, for your question. Thank you, Noronha and Castiano. Next question by Pedro Leduc with Ita BBA. Thank you, Firetti. Welcome, Noronha, and André.

As Wally said, Dubai, and I'll tell you would be on the Buffalo Big competing because we don't want to give up the leading role that we play in that figure to figure. Thank you for the question and thank you for the transparency for all the time, you're devoting to US today. Thank you all fix out of homes right. Now we are moving to the left the quest.

Chen from Carlos Gomez with HSBC. Thank you Carlos Thank you for waiting. Thank you very much I'll do it in English.

Good luck.

This new stage and really good to see and remarks.

Pedro Leduc: I wish you a lot of success in this new chapter of your life. I have a quick question, just to clarify, regarding the outlook for efficiency. We see the S&P 500 and OPEC this year running above inflation. Well, this is a period of investments and other costs that come with the transformation. I guess we could imagine this DNA growing less than inflation in 2025 and 2026.

Our locally.

Good luck to his new role as well and creating.

I had two questions. The first one goes back to capital and could you give us the potential impact of the proposed tax reform.

Capital ratio.

In the sense that the Ppas would probably be embarrassed if it is specialty is now what would happen to your capital where we've got 11, 47% and pier. One go and also related to that what I mean, you said you have an adequate level of capital, but what is the level that you want to maintain.

The coming years.

My second question is more generic <unk> in your new strategic plan. One of the assumption is that you are going to grow market share that's unusual for relaxed bank.

Carlos Firetti: Or should we think that the efficiency ratio would improve because of revenues, while investments are kind of multi-annual in a sense? Obviously, we want to grow our revenues a lot. But the adjustments that we will be making in terms of reducing the cost to serve in our structure will be implemented partly in 2024, and that should start giving us a higher effect in 2025 in terms of reaping the benefits, improving the efficiency, and evolving those line items. Now, when we look at our expenses for 2024, administrative and personal expenses will grow basically in line with inflation in our projections. There's slightly more pressure on the line item others because of provisions for civil claims and other provisions that are part of that line item.

Nigel what makes you seem that bradesco can significantly increase <unk> in a very competitive market.

Okay.

Okay.

But he got the gorilla.

<unk> for the question I am not seeing a positive use of Carlo so from the standpoint of our capital with the aim to tax credits of about <unk> eight to one percentage point starting in 2025 people thought in terms of you said it.

Operationally if you used by <unk>. This is rod good theme now obviously, we'll still have a year central bank of Brazil, what they're looking at this as a whole so there might be some changes in terms of capital a bias in terms of capital of the anatomy.

Carlos Firetti: But in administrative and personnel line items, we already have a good level of control. For 2025, we'll start capturing the benefits. So, Ferretti, I'll summarize.

But if they're there with the box if there are no specific assessments for the banks the impact should be between point, a two one percentage points and butter Hubers, let me add to that there are a number of changes underway for this resolution to two nine in a minutes recap it changes the capital requirement for operational risk that's the impact of 0.8%.

Pitch points on capital. There's also the I V. A really boring, but it will be implemented very very gradually and we will have a little impact on capital and there is a third in front here, which is the income tax reform. This has now been submitted yet, but it will probably be submitted.

Carlos Firetti: Revenues are important, but, of course, the biggest revenue will come from REGIS. Thank you very much. If I may, I have a question about SMEs. We are discussing the strategy to resume growth in retail, and I know that SMEs are a relevant segment for Bradesco. It's a profitable portfolio. So what is the turnaround strategy that's integrated with the recent announcement about Cielo? If you could elaborate for us on this, it would be welcome, as I mentioned, Pedro. Construindo, né? A gente viu esse lugar... A gente viu...

March and then we'll be able to do our assessment of having all the details on the table to evaluate those.

Uh huh.

Really blowing Luton is on our.

So this impact is for the export taxes or for recovery if 0.821%.

Oh percentage pretty simple.

It's deferred boy he'll also are going to market share gains we're going for the micro share gain I think that all the businesses you.

You have to remember that in this past year. So the most of it because of a reduction in risk appetite to control delinquency, we ended up losing some market share in some markets with pods.

Marcelo Marconcini: Dividing Affinity into two, three segments, here one, three to 50 million, and we're having new platforms that are being opened in the main cities of Brazil, and we'll expand the radius of those eventually. So we are locating the sales force with more prepared people; we are training people. We started opening these platforms at the end of last year, and we'll continue opening them throughout 2020.

Where we can play an important role so zooming.

Assuming credit origination was incentive is coupled with our initiatives and our strategic plan. It for my remarks, we see room to regain this market share that was lost.

That happened because we reduced our risk appetite and also the strategic Colin brings with it.

Some initiatives that will increase our competitiveness in lung.

In the credit market by integrating into credit Kral says Oh through those initiatives for at Goldman affiliates for example, and the whole positioning of all said we are reviewing in our retail operating model. We believe that this resumption and I'll hand, Mike another increase will come naturally.

Marcelo Marconcini: We expect to deliver 122 new platforms with a much more focused and established management, like I said, with a new management model including portfolio management, not just in a centralized way but also decentralized, and a better customer experience for our clients. We're also changing the value proposition and increasing the sales force in the SMEs 0 to 3 million because these are more decentralized in branches in Brazil and also for micro entrepreneurs with remote service and digital service. Naturally, we expect to improve the value proposition, and it's linked to this OPA, the Cielo OPA, or OPA is the Public Acquisition Offering, and other strategies we'll bring to the market.

Lee given our positioning at this moment, let me add to what you saturate H&R block regarding the Epsilon segment high net worth client sentiment that Marcello makes sense in the strategic related three important will have $1 7 million clients, we're going to use a very important potential share of wallet.

We believe that by doing all of this.

Work TRP demand pressure may wish enough delivery would you give us a male for content and relationship building with Epsilon clan and we have possibility of expanding our share of wallet of naturally get a bylaw ocean air and market share of these high net worth client.

Marcelo Marconcini: If I may add Noronha, also the use of transactional information, that's the best use we can put our CRM for. We've been working a lot on this, and the product verticals are looking more and more to this need, the new cash platform that we are introducing. So we add CRM, the transaction database, our new products, and the new account loading, all subdivisions of SMEs. With all that, I believe that we are well positioned to grow in this new segment. But let me add something. We've accelerated credit granting to small companies in Q4. That was the inflection point.

Gotta go very well.

May I just add.

Carlos.

We have Carlos new strengths in different segments.

The S M use.

In our retail business. There. We go low income clients that we have a strong penetration there, but we have many strengths and wholesale bank not enough lamp now for high income clients Smes.

As I mentioned, we are leader in Smes.

We have unimportant penetration in mobile over the country with different value propositions that we breathe.

Marcelo Marconcini: What we see is that now that we have this monetary easing in Brazil, that's a tailwind that will benefit small companies and low-income segments. For small companies, as Marcelo mentioned, they account for 15% of the banking value to be captured in the market. And this will double in five years. These 15 could become 25.

Different segments inside of S and use so we believe that we have a strong distribution channels.

Julien rules.

Our loan portfolio.

Sure.

Maybe in 2024, but over the next few.

Years over the next five years that is the the plan. Thank you very much and therefore your question.

Marcelo Marconcini: And here's where we can create value and grow. That's why we will increase from 1.7 million to 2 or 2.5 million clients, showing clearly that we want to gain market share in this sector and Pedro. I can tell you that all the incumbent banks are here fighting for this market. This is what we see. And I'll tell you, we'll be in this battle, we'll be competing, because we don't want to give up the leading role that we play in this segment.

Thank you Regan Thank you Marcello.

Don a garda naus curricular and setup broaden out I would like to think of every one we are going to close the Slingo video conference call and I remind you that all of the questions that were not answered during the meeting will be answered by our investors Relations Department May I, just make a final comment.

Sure.

Or if this is my first conference with all of you and I would like to say appears to be out there. So that I. Thank you all for your attention here today Bill moves from local meant there we already have as I said in the beginning was Illinois marker, but we already have some meetings scheduled western assurance International Biocide meetings tomorrow.

Marcelo Marconcini: Thank you for the question. Thank you for the transparency and for all the time you're devoting to us today. Thank you. Success. Now we are moving to the last question from Carlos Gomez with HSBC. Thank you, Carlos. Thank you for waiting.

Carlos Gomez: Again, there you go. Good luck in this new role as well. I had two questions.

Investors tomorrow sizable local biocides colleagues sell Pfizer colleagues and we are open to talk sort of explain with more details all of these plans for the future not only myself, but my colleagues here as well from the Investor Relations departmental Schlossl chicken.

Carlos Gomez: The first one goes back to capital. Could you give us the potential impact of the proposed tax reform on your capital ratio in the sense that the DTAs would probably be imperative if passed as they are now? What would happen to your capital?

Carlos Firetti: Where would that 11.7% Tier 1 go? And also related to that, you said you have an adequate level of capital, but what is the level that you want to maintain in the coming years? And my second question is more generic. I mean, in your new strategic plan, one of the assumptions is that you are going to grow market share. That's unusual for a large bank like yours.

You're more detail not only this week, but even later.

Am open to us as well.

Welcome you here it will always be my pleasure to talk to all of you and thank you for that T mobile anything of a beautiful. Thank you once again and thank you everyone and this concludes our video conference. Thank you very much.

Carlos Firetti: What makes you think that, you know, Bradesco can significantly increase its size in a very competitive market? Thank you. Carlos, from the standpoint of TAMPAPO, the impact of tax credits is about 0.8 to 1 percentage point starting in 2025, in terms of tax credit operations.

Okay.

Yeah.

Okay.

Carlos Firetti: This is what we've seen. Now, obviously, we still have a year. The Central Bank of Brazil will be looking at this as a whole, so there might be some changes in terms of capital, some bias in terms of capital. But if there are no specific assessments for the banks, the impact should be between 0.8 and 1 percentage point.

Carlos Firetti: Let me answer that. There are a number of changes underway. There's Resolution 229.

Carlos Firetti: It changes the capital requirement for operational risks, so that's the impact of 0.8 percentage points on capital. There is also the IVA reform.

Okay.

Carlos Firetti: It will be implemented very, very gradually. It will have a little impact on capital. And there is the third front here, which is the income tax reform. This has not been submitted yet. It will probably be submitted in March, and then we'll be able to do our assessment. But I don't have the details on the table to evaluate this. So this impact is for deferred taxes or for recovery, 0.8 to 1 percent, all percentage points. It's different.

Okay.

Okay.

Okay.

Okay.

Yeah.

Carlos Firetti: And as regards market share gain, I think that, to start, we have to remember that in this past year, because of our reduction in risk appetite to control delinquency, we ended up losing some market share in some markets where we can play an important role. So in resuming credit origination, coupled with our initiatives in our strategic plan, we see room to regain this market share that was lost. That happened because we had reduced our risk appetite.

Carlos Firetti: And also, the strategic plan brings some initiatives that will increase our competitiveness in the credit market by integrating the credit process or through those initiatives for SMEs, for example. And the whole positioning that we are reviewing in our retail operation. We believe that this resumption and market share increase will come naturally, given our positioning at this moment. Let me add to what you said, Ferretti, regarding the affluent segment and high net worth clients that Marcelo mentioned in the strategic plan. It's very important.

Carlos Firetti: We have 1.7 million clients, a very important potential share of wallet. We believe that by doing all this work of transformation, of delivery, of content, and relationship building with our foreign clients, we have the possibility of expanding our share of wallet and naturally getting a share, a market share, of these high net worth clients. Very well.

Carlos Firetti: May I just add... and Carlos, in retail business with low-income clients. We have a strong penetration there, but we have many strengths in wholesale banks, in affluent, for high-income clients, SMEs. As I mentioned, we are leading in SMEs. We have an important penetration all over the country with different value propositions, with three different segments inside SMEs.

Carlos Firetti: So, we believe that we have strong distribution channels to improve our long portfolio, maybe in 2024, but over the next... Peele years, over the next five years, that is the plan. Thank you very much for your question. Thank you. Thank you, Marcelo.

Carlos Firetti: So now, I would like to thank everyone. We are going to close this video conference call. And I remind you that all of the questions that were not answered during the meeting will be answered by our Investors Relations Department. May I just make a final comment here? This is my first conference with all of you, and I would like to say that I thank you all for your attention here today. We already have, as I said at the beginning, we already have some meetings scheduled with international buy-site meetings, Investors Tomorrow, local buy-site colleagues, and sell-site colleagues, and we are open to talking and explaining in more detail all of these plans for the future. Not only myself but my colleagues here as well, from the Investors Relations Department, to give you more detail, not only this week but even later.

Carlos Firetti: I am open to welcoming you here. It will always be my pleasure to talk to all of you. Thank you, Firetti. Thank you. Once again, a thank you, everyone, and this concludes our video conference. Thank you very much. Goodbye.

Goodbye.