Q1 2024 Banco Bradesco SA Earnings Call

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All of the foregoing Hello, good morning, everyone myself I am Marcello <unk> I'm here to present the results for the first quarter of 'twenty 'twenty four of Bradesco I'm here lives speaking from Sudan did your deals on the city of God. It's.

Marcelo Noronha: Hello, good morning everyone. I am Marcelo Noronha. I am here to present the results for the first quarter of 2024 of Bradesco. I am speaking live from Cidade de Deus, the City of God. It is 10.31 a.m.

Marcelo Noronha: It is a great pleasure to be with you once again, and before we start the presentation, I would like to say that, unlike what we did in February when I started presenting the strategy in a more lengthier way, the idea here is not to present the strategy in so many details again, but we will summarize everything, and then we will revisit some of the topics as questions pop up. And so I'll talk throughout the presentation about what we deliver to them in addition to the members related to the first quarter.

Marcelo Noronha: 10, 31, a M. It's a great pleasure to be with you once again and before we start the presentation I would like to say.

Marcelo Noronha: That unlike what we did in February when I started presenting the strategy.

Marcelo Noronha: In.

Marcelo Noronha: In the in a more you know lengthier way. The idea here is not to present a strategy in so many details again, but we will summarize everything and then we will revisit some of the topics as the questions pop up and so I'll take I'll talk throughout the presentation about what we delivered in <unk>.

Marcelo Noronha: And to the members related to the first quarter and I'm sure I think you'll have the opportunity to take a look at the numbers since we publish we posted the presentation and the release after a six a M.

Marcelo Noronha: And I'm sure you have the opportunity to take a look at the members since we published, we posted the presentations and the release after 6 a.m. Our net income, recurring net income, was 4.2 billion. It was flat in relation to the previous quarter, but 46% better than the last quarter of 23.

Marcelo Noronha: Our net income recurring net income was 4.2 of building it was flat in relation to the previous quarter about 46% better than the last quarter or 23, and there are some points of attention here that our highlights of our balance sheet. Some are challenging in some other time.

Marcelo Noronha: And there are some points of attention here that are highlights on our balance sheet. Some are challenging, and some other topics relate to good delivery that we've been doing. First, the improvement in A.L. for both retail and wholesale that also leads to an improvement in our NPL that is improving in all segments. We also increased loans in all segments. I think there is a colleague from the sales side. Last quarter, he asked me a question. He said, Do you think you would resume traction?

Marcelo Noronha: Thanks relate to good deliveries that we've been doing first the improvement in a double L for both retail and wholesale that also smuggling glasser leads to any improvement of our npls that is improving in all segments. We also increase.

Marcelo Noronha: <unk> loan in all segments, but I think there is a colleague from the sell side to the last quarter asked me. A question. He said do you think you would resume traction and you will see through another charge that I'm about to show you that there is an inflection in that total loan portfolio and that's why we will show you we will sure.

Marcelo Noronha: And you will see in the next chart that I'm about to show you that there is an inflection in that total loan portfolio. And that's why we will show you growth in all loan segments with traction. And this is just to answer that question from the previous quarter. Well, the challenge is the gross client NII, but there is a justification for that, and that justification is in our guidance. First, we have the loan book, and then the margin follows suit.

Marcelo Noronha: So your growth in all loan segments, we'd traction and this is just to answer that question from the previous quarter as well. The the challenge is the gross client NII, but there is a justification for that and that justification as it is in our guidance. Firstly, we have the loan book and then the margin follow.

Marcelo Noronha: And I'll talk a little bit more about it when I talk about the loan book and the guidance. Another topic that is very satisfactory is the control of operating expenses, which grew 4.4%, as we will see in a very sound performance of the Bredesco insurance business. In all lines, we had a solid performance.

Marcelo Noronha: Suite, and I'll talk a little bit more about it when I talk about the the loan book.

Marcelo Noronha: The guidance another topic, which is very satisfactory is the control of operating expenses, which grew four 4% as we're able to see in a very sound performance of the Bradesco insurance business in all lines, we had a solid performance will not forever.

Marcelo Noronha: So the results for the first quarter were 4.2 billion BRL, very much in line with what we intend to deliver this year. And, as I said before, step by step, we will gradually grow. And I know that my clients on the cell side, in particular those that have been analyzing us, they can look at the presentation from the last quarter of 2023 and then take a look at everything I'm about to tell you and run a comparison with what we talked about the previous quarter. As a result, our loan portfolio reached almost 890 billion.

Marcelo Noronha: So the results for the first quarter. It was 4.2 billion BRL.

Marcelo Noronha: Very much in line with what we intend to deliver this year and as I said before my step by step we will gradually grow and I know that my clients on the sell side in particular those that have been analyzing as they they they can look at the presentation from the last quarter of 2023 and then.

Marcelo Noronha: When you take a look at everything I'm about to tell you and run a comparison with what we talked about the previous quarter. Therefore, our loan portfolio, reaching almost 890 billion.

Marcelo Noronha: We grew 1.2% year on year, and looking at the quarter alone, and the quarter says that we are growing steadily, we grew 1.4 quarter on quarter, and the inflection of the curve is saying that in the last two quarters the portfolio was coming down, but now it was declining, and now we are resuming growth. If we look at the free portfolio, if we were to look at the presentation from the previous quarter, you will see that traction is now much better based on the KPIs that we showed you in the previous quarter. Looking, you know, at an individual's portfolio, we grew year-on-year-on-year-2 percent and 1.9%. percent quarter and quarter, but this growth is well spread.

Marcelo Noronha: We grew 1.2% year on year and looking at the quarter alone.

Marcelo Noronha: In the quarter. So that says that we are growing steadily we grew 1.4 quarter on gorda quarter. The inflection of the curve and you can say that in the last two quarters the portfolio wasn't coming down but now it was bought was declining in a weird resuming growth. If we look at the free portfolio, if we were to them.

Marcelo Noronha: To look at the presentation from the previous quarter. You you will see that traction now is much better based on the Kpis that we showed you in the radios called looking you know at individuals' portfolio, we accrue year on year, 2% and one 9% quarter on quarter, but this growth is well.

Marcelo Noronha: Some portfolios give us a pretty good balance, and there are other portfolios where we have to grow products with higher margins, but we are getting there. Payroll loans grew 4 percent, 2.1 growth quarter and quarter. You know, mortgage loan or real estate. I think we are probably the largest private bank to deliver growth, 5.8 percent year on year and 1.8 percent quarter in quarter. Credit car we didn't grow. The risk was higher, but where is it that we are not growing? We are not growing in non-account holders.

Marcelo Noronha: <unk> spread for them also some portfolios gave us a pretty good balance and there are other portfolios, where we have to grow products with higher margins, but we are getting their payroll loans grew 4% 2.1 growth quarter on quarter.

Marcelo Noronha: Mortgage loan or real estate I think we are probably the.

Marcelo Noronha: Largest private banking for him to deliver growth five 8% year on year and one point a recent quote unquote, a credit card or we can grow for the rest of it was higher but where is it that we're not growing we're not growing in non account holders. When you look at prime banking, we posted 12, almost 12% growth when will look.

Marcelo Noronha: When we look at prime banking, we posted 12, almost 12 percent growth when we look at the credit card in the high income segment. Personal loan, 10.1 percent growth quarter and quarter, 1.8 percent year and year and year. Vehicles also.

Marcelo Noronha: And now with the credit card and high in the high income segment personal loans, and 10.1% growth quarter on quarter, and 1% one 8% year on year vehicles remember, Jeff also open and rural crowded the lines that are more secure and use these are.

Marcelo Noronha: Also, and real credit, the lines that are more secure, these are lines that are long-term lines, but at the same time, they carry smaller margins. Now, looking at SMEs or companies in wholesale banks, large companies, we grew 1.6 percent, and SME, micro-small, and mid-sized companies, we are beginning. We were beginning to see more traction, so we grew 2.3 percent quarter on quarter, but I will elaborate further on SME later on. Something new that I am now bringing to you is an example of vintages, vintages for mass individuals or individuals' mass market.

Marcelo Noronha: But most of it's been soft lines that you might want to put all our long term life, but at the same time they carry.

Marcelo Noronha: Smaller margin now looking at U S Emmys or company.

Marcelo Noronha: Wholesale bank large companies, we grew one 6% in SME and micro small and mid sized companies. Some of them. We are beginning to see more traction. So we grew two 3% quarter on quarter, but all will elaborate further in SME SME, but later on something new that I am now offer.

Marcelo Noronha: Bringing to you is an example of the vintages, Microsoft music vintages, almost before mess individuals' or thing individuals' mass market. So we started with 100 and back in 2019 and look at the second quarter of 2022.

Marcelo Noronha: So we started with 100 back in 2019 and look at the second quarter of 2022. The vintages that we have applied, or that's the blue line, starting with the base of 100, but the bar in gray means origination for 2019.

Marcelo Noronha: Integer is that we have been acquiring that's the blue line, starting with the base of a 100, but the bar in zurn all in Rea means origination for 2019. So so origination for individuals mass market you know and this is again answering the question that you asked them back in the third quarter what about the.

Marcelo Noronha: So origination for individuals' mass market, and this is, again, answering the question that you asked them back in the third quarter: what about the mass market? This is proof of our principality, meaning that we are increasingly bringing better ratings, even in the mass market, and this is true of our principality. Proof of what we're saying. I'm talking about vintages over 30, et cetera.

Marcelo Noronha: Mass market. This is proof of our principality, meaning ex minorities, we are increasingly bringing better ratings months, even in mass market and this is the truth of what we are saying, but I'm I'm talking about vintages over 30.

Marcelo Noronha: Et cetera.

Marcelo Noronha: We are not going to see you know vintages being right here they will be slightly above because we will get into a product.

Marcelo Noronha: With time, we are not going to see, you know, vintages being right here. They will be slightly above because we will get into products that carry a bit more risk, but they also lead to better margins. Here we have the right, you know, payrolls, stolen, and finance. Cards alone are the only line that is not growing.

Marcelo Noronha: Carry a bit more risk, but they also.

Marcelo Noronha: It leads to better margins more called here, we have to show the right along you know payroll loans stone fine in our cards alone is the only line that is not growing and I already explained and that was due to non non account holders clients that come on from.

Marcelo Noronha: And I already explained, and that was due to non-account holders, clients that come from the open sea and from the digital segment. But delinquency is coming down, and this is due to the quality of the collection service we are now providing. And now let's look at SMEs. I am exclusively talking about SMEs, starting with the base of 100, but look at the United Kingdom. at the quality of the vintages.

Marcelo Noronha: From open sea and from the digital segment, but delinquency is coming down and this is due to the quality of the collection service. We are now providing and now it will perform that just look at Smes.

Marcelo Noronha: I am exclusively talking about Smes so starting.

Marcelo Noronha: Starting with the base of 100, but look at the quality of the vintages.

Marcelo Noronha: In terms of SMEs or companies, the bar has not yet reached the levels of 2019 because we're being more conservative. Now, I would like to highlight some areas of growth, but there are some areas that we are not growing as much because of the risk involved. This today is a segment that presents the highest credit at risk. But nonetheless, we continue to grow, and this certainly explains why we haven't used to it.

Marcelo Noronha: Turns of Smes and companies, but the bars have not yet reached the levels of 2019, because we're being more conservative now I would like to highlight a few lines of gross but there are some lines that we are not growing as much because of the risk involved.

Marcelo Noronha: This today is a fragment and also does that present, the highest credit risk, but it's a subordinate Atlas we continue to grow and there's certainly explains why we haven't yet.

Marcelo Noronha: yet increased in the total NII. Now you see the linkancy levels falling, and soon I will talk about the net margin. So this is the NII.

Marcelo Noronha: Crazed and the total NII now Youll see delinquency levels are falling and soon I will talk about the net margin. So this is NII you already look at the Kpis and this is a snapshot of our portfolio. When you look at there's a column.

Marcelo Noronha: You already look at the KPIs, and this is a snapshot of our portfolio. When you look at this column that is available for you to look at, you look at how much we grow in terms of portfolios that are safer within our portfolio. And now we also leverage credit to these other two lines here. So the loan portfolio comes first, and then that's followed by the margin.

Marcelo Noronha: That is available for you to look at so you look at how much we grow in terms of portfolios that are safer within our portfolio and now we also leverage Hunter you does it credit to these other two lines here. So the loan portfolio margin of Newcastle It comes.

Marcelo Noronha: And then that's followed by the margin.

Marcelo Noronha: According to our expectation. This is what we expect to see throughout the year that the market NII goes down so the client NII is coming down, but when we look at.

Marcelo Noronha: According to our expectation, this is what we expect to see throughout the year as market NII goes down. So client NII is coming down, but when we look at the net client, and I look at the relative numbers, you know, where we were and where we stand today. So risk appetite is different.

Marcelo Noronha: The net client NII look at the relative numbers, you know, where we were and where we stand today. So risk appetite is different and therefore, we have new credit models, we have new things like credit policies and we are using a lot of machine learning.

Marcelo Noronha: Therefore, we have new credit models. We have new credit policies. We are using a lot of machine learning in our credit, you know, segment and with our team. Therefore, the quality of the risk is being monitored very closely, starting with FPD to control all of our portfolios. We are very much grounded.

Marcelo Noronha: In our.

Marcelo Noronha: In credit you know.

Marcelo Noronha: Segment and with our team therefore, the quality of the risk is being monitored very closely.

Marcelo Noronha: Controller, starting with <unk>.

Marcelo Noronha: <unk> to control all of our portfolios, we're very much ground air market and then you could see they will gain market share in February when compare to the central Bank portfolio is not the expanded portfolio because the central bank does not disclose that but I can tell you.

Marcelo Noronha: And then you could see that we gain market share in February when compared to the central bank's portfolio is not the expanded portfolio because the central bank does not disclose that. But I can tell you with a very good degree of certainty that we gain market share in March alone as well. We grew more in March when compared to January.

Marcelo Noronha: It's a very good degree of certainty that we gained shared in March alone as well as instead of somebody who's a weird meru more in February and March lingual better than January and Hilton Cogs over what we produced in January after 12 minutes. Because there was just one month when we increase our NII and whatever it was produced in March this will.

Marcelo Noronha: So what we produced in January, there was just one month when we increased our NIA. And whatever was produced in March, this will be reflected in April. So our overnight loan portfolio, everything is in control in all lines, NPL, 100% of provisions, and our coverage ratio is very flat and stable when compared to the previous quarter. Expended A.L. also brings important figures. I'm not going to look at the previous quarter, but we had almost 18% growth year on year. I mean, in terms of mass retail, there was a drop, but the quality of what we are bringing is much better, and we are much more effective in terms of our collection and credit. In recovery,

Marcelo Noronha: Would be reflected in a program off water. So the book our overnight.

Marcelo Noronha: Loan portfolio everything is under control in all lines N. P. L. 100% rule of provisions went off in Chicago, and our coverage ratio, so very much flatter leaner and stable when compared to the previous quarter.

Marcelo Noronha: Complete at this point expanded at a double L.

Marcelo Noronha: So it brings important figures I'm not going to look at the.

Marcelo Noronha: Previous quarter, but we had almost 18% growth year on year I mean in terms of mass retail there was a drop off quite a bit.

Marcelo Noronha: Quality of what we are bringing from us much better where we are much more attractive in terms of our collection and credit recoveries whenever we talk about a double L. Because I mean this product.

Marcelo Noronha: Whenever we talk about A.L., I mean, this provision indicator versus the annualized portfolio, this is an index that we haven't seen for quite some time. Therefore, the members are very important because it goes towards the NII that we presented in the previous quarter. Now, speaking about fees and commission income, this is very much leveraged on payments because of exchange and the companies that we have. So it is natural that it falls.

Marcelo Noronha: Revision indicator versus the annualized portfolio. This is an index that we haven't seen for quite some time therefore.

Marcelo Noronha: The members are very important because it goes towards the NII that we presented in the previous quarter.

Marcelo Noronha: Now speaking about fees and commission income this is very much leverage on payments. Besides those like valliant. So it doesn't change and the company that we have so this is net it's natural that it falls.

Marcelo Noronha: I mean, this type of revenue is the lowest in terms of all the previous quarters, and the second quarter is better because we have Mother's Day and the last quarter. You know, you have Children's Day, Black Friday, and all of the holidays, you know, the Christmas holidays.

Marcelo Noronha: I mean this type of revenue boost.

Marcelo Noronha: What are the lowest in terms of all of the previous quarters in the second quarter is better because we have mother's day and the last quarter and you know you have a child.

Marcelo Noronha: But black Friday, and all of the holidays.

Marcelo Noronha: Simple Christmas holidays, so one 3% a year gross amount of equipment is an indication that that growth would be according to our guidance, but so it was within our expectations and in all of the other lines I would like to highlight consortia with this level of growth you see.

Marcelo Noronha: So 1.3% a year grows. It is an indication that growth will be according to our guidance. So it's within our expectations. And on all of the other lines, I would like to highlight consortia with this level of growth that you see. I mean, loan operations can present. That means that we are well on track. And chucking accounts.

Marcelo Noronha: Well I mean loan vertical self Kumar operations, but the 10% that means that we are well on track and the checking accounts, we had been losing ground with checking account, but now we have resumed growing because of some of the intelligent packages that we are delivering in capturing the elements I think.

Marcelo Noronha: We had been losing ground with checking accounts, but now we are resuming growth because of some of the intelligent packages that we are delivering and capturing value. I think the most difficult part is equities and capital markets, and the expectation is low for this year, and all of the reasons are well known to all of you. But we are very pleased to see the level of growth in terms of fee and commission income.

Marcelo Noronha: The most difficult part is equities and capital markets and the expectation of slow for this year and all of the reasons, our west are well known to all of you, but we are very pleased to see the level of growth in terms of fees and commissions Inc.

Marcelo Noronha: When it comes to Bredesco running comparisons, I mean, other incumbents say that within the fee and commission income, they also include insurance revenues. That's separate because that is included in the insurance operations, our operating expenses. For me, that is a highlight.

Marcelo Noronha: When it comes for Bradesco to run comparisons.

Marcelo Noronha: Other unencumbered and say that within the fee and commissions income unless they also include insurance revenues, but in our case, that's a separate because that is included in the insurance operation. Our operating expenses for me that is a highlight that's our goal we talked about $4 four per.

Marcelo Noronha: That's our goal. We talked about 4.4% year-on-year growth. We are delivering things with a lot of seriousness and optimizing our footprint with about 300 movements in the first quarter of 2024. Now, when you look at the board, you will see a chart that shows branches and points of service. Within that point of service, we have what we call PA. We have small PAs and large PAs, which are points of service. This is another name used by the Central Bank, but it is a mini-branch in some municipalities. We shut down some of these PAs or points of service, but I will...

Marcelo Noronha: And year on year growth, we are delivering things with a lot of seriousness footprints and the optimization of our footprint with about 300 movements in the first quarter of 'twenty 'twenty four.

Marcelo Noronha: Now when you look at book.

Marcelo Noronha: You will see a chart that shows branches and Jim pointed out service students from within that point of service, where you have a what we call. The PPA we have at small.

Marcelo Noronha: And large global network, which are points of services. This is another name used by the Central Bank, but it is a mini branch in sound municipalities we shut.

Marcelo Noronha: Shut down some of the points of service, but boosted I will later on and talked about it from the company's segment. This is something that we referred to at the beginning of the year, we said that we.

Marcelo Noronha: I will... We'll talk about the company segments later on. This is something that we referred to at the beginning of the year. We said that we would do another segmentation with very specific services, with specific branches, to cater to companies. And that's what we did.

Marcelo Noronha: We would do another segmentation with very specific service with your specific branches to cater to companies and that's why we did so here you see a larger number of branches serving companies most of the variables that you for governments and we're in fact, there was a reduction or significant reduction or maybe it.

Marcelo Noronha: So here you see a larger number of branches serving companies. In fact, there was a significant reduction, or maybe at a faster pace than what was previously announced. And now, later on, I'll talk about these new branches for the company and Bredesco Expresso. When we talk about personnel and admin expenses, the growth was even below inflation in the Here, the results of the insurance group that defined a net income of 2 billion BRL, a 10% increase, here a near almost 20% ROAE, a substantial increase in premium income, pension plan contributions, and the result of almost 4 billion showed a significant increase.

Marcelo Noronha: A bigger pace than what was previously announced.

Marcelo Noronha: So Brazil later on I will talk about it is new.

Marcelo Noronha: But your branches for companies and it's why Bradesco expresso before when we talk about personnel and admin expenses the growth was even below inflation in the period ocular health groups.

Marcelo Noronha: The insurance group that is on the net income of boots business will be around 10% increase year on year almost 20%.

Marcelo Noronha: Essentially I mean, what trimas in premium income all pension plan contribution.

Marcelo Noronha: With almost a 4 billion showed a significant runoff and I'd like to highlight the technical provisions, which grew only 12%.

Marcelo Noronha: And I'd like to highlight technical provisions, which grew almost 12%, reaching 380 billion BRL, quite a significant amount for the insurance group, which is doing quite well, performing really well. And here is a bevel, the Tier 1 bevel ratio of 12.7%.

Marcelo Noronha: Reaching 384 billion and a bureau of quite a significant amount for the insurance group, which is doing quite well performing really well for us.

Marcelo Noronha: No bezel, so tier one that goes away well one 7%.

Marcelo Noronha: We have BAS in the book, so you can look at the total. And we have provisioned IOC for Tier 1 of about 2.6 billion. And this brings me to the guidance. Here's what I can say. When you look at this indicator, in the previous quarter, what did we have? A declining and a negative number, but we've got traction now, we are within the guidance, no doubt about that. And, of course, we have to move in this direction so that we will have a reduction in net interest income. So we have the loan book and then net interest income. And this could be the indicator that is the most challenging for all of us.

Marcelo Noronha: Yes in the book So you can look at the total journal.

Marcelo Noronha: We provisioned.

Marcelo Noronha: For Q1 of about two six.

Marcelo Noronha: And that brings me to the.

Marcelo Noronha: Sure.

Marcelo Noronha: Well, so here's what I can say is because when you look at this indicator of the pathology.

Marcelo Noronha: This quarter what did we have.

Marcelo Noronha: Claiming a negative non Barcelona.

Marcelo Noronha: We've got traction now and we are within the guidance no doubt about it.

Marcelo Noronha: Of course, we have to move in that direction. So we will have a reflection in England.

Marcelo Noronha: Income margin bottle. So we have to book and then net interest income.

Marcelo Noronha: Peter said is the most challenging for all of us below one.

Marcelo Noronha: But let's focus on 1.2%, and then net interest income will improve, and we believe it will be within the guidelines. Commission income, to me, was delivered for the whole year based on the expectation that I mentioned. Operating expenses, very, very, very.

Marcelo Noronha: 1.2% net interest income will improve and will believe will be without it.

Marcelo Noronha: I'd also like for you in commission income to me looks like to deliver it we put the whole year of base can be expectation that he mentioned.

Marcelo Noronha: Operating expenses.

Speaker Change: You bet.

Marcelo Noronha: And again, the expectation is that it will be in the guidance. Income from insurance operations, a little over, a little better, great. But we believe that it will be within the guidance. I'd like to remind you that the guidance is for the whole year, not just for one quarter. And AWL, as you can see, 7.8, 8 times 4, 32 billion. So you might think, will you be below the guidance? Are you being conservative? No; the calculation is simple.

Marcelo Noronha: Expectation is that it will be a source income.

Marcelo Noronha: Income from insurance offerings, and a little over a little better grades we believe but it will be the case.

Marcelo Noronha: I'd like to remind you that the guidance at this point for the whole year number just one water and AWS and as you can tell us at one point.

Marcelo Noronha: Eight times, all $3 2 billion, so will cause all of them I think will you'll be below the guidance are you being conservative there.

Marcelo Noronha: Calculations simple I'm going to grill.

Marcelo Noronha: If I'm going to grow here, and mass retail, and mass SMEs, I'll have more expected losses, even with the better vintages. So, of course, I'm going to have more provisions down here. And that's why we believe that it will be within the guidance. You can look at these indicators. I speak about the digital bank. 98% of transactions are carried out through digital channels at Fransisco.

Marcelo Noronha: And mass retail and that's I mean airports, Oh hub with more expected losses, even with the better choice.

Marcelo Noronha: So of course, I'm going to have more provision look down here and that's why the guidance. We believe that it will be within the guidance one Oh, how that line item a little more towards the bottom of the guidance and some others more towards the higher end of the guidance and experiences. We continue to believe and we continue to move forward.

Speaker Change: I think that was it.

Marcelo Noronha: As I mentioned in the previous quarter. So I'll make some comments about run out of bankruptcy do you change the bank lost right.

Marcelo Noronha: Along with that.

Marcelo Noronha: In the past, we spoke about them quick wins of arbitrage on a possible literally it's a plan that I said, we are not going to be delivering in the next few quarters.

Speaker Change: We won't be delivering that.

Marcelo Noronha: Then after a few years and that will happen quick reboot in recoveries in collections and some central intellectual. So is the reflection of that work over time and will be seen in our income sources.

Marcelo Noronha: Our balance sheet with the exception of some specific cases for example, the delivery accordingly.

Marcelo Noronha: Company in the form of <unk>.

Marcelo Noronha: So that's the segment that you can go to the branches.

Marcelo Noronha: People who are available.

Marcelo Noronha: So we will implement in your modeling.

Marcelo Noronha: Before I got to address.

Marcelo Noronha: Lower credit increase.

Marcelo Noronha: With your temperature, so run and change kind of mixed together, so because we do have a quick win.

Marcelo Noronha: Remember the 10 top things, but like I said in the beginning I'm not going to go over them.

Speaker Change: Again, but I would like to make a brief.

Marcelo Noronha: You can look at these integrators.

Marcelo Noronha: Farmer, Bob went through it to speak about the digital bank, a 98% of the transactions that came about through digital channels.

Marcelo Noronha: So I'm speaking about the app, mobile, and internet banking for companies. And this is our timeline for our strategic plan. You will remember that we presented a plan back in February. And what have we delivered so far? A new organizational structure, a reduction in the layers, and we are putting this into practice at the bank, and a span of control revision. So we have increased that span of control. The transformation office today counts with more than 800 people.

Marcelo Noronha: I'm speaking about the App mobile and Internet Bank doesn't play in the case of companies.

Marcelo Noronha: She will also stabilize and timeline.

Marcelo Noronha: Timeline for our strategic plan.

Marcelo Noronha: Remember they are weak for longer into the plant in Italy.

Marcelo Noronha: Back in February and what have we delivered so far.

Marcelo Noronha: Organizational structure.

Marcelo Noronha: The reduction of the layers ocular Brooklyn.

Marcelo Noronha: When we are putting this into practice at the bank and they have no control revision homeowner. So we will increase.

Marcelo Noronha: Of control the transformation.

Marcelo Noronha: The City Council.

Marcelo Noronha: With more than 800 pizza Empathizes this only possible because there's always real work that we have capacity.

Marcelo Noronha: And this was only possible because of this reorg that we had, or else we would not have the ability to allocate leaders here. So we are in a process of execution, which is very daring and bold and accelerated, and it's not easy. You know that.

Marcelo Noronha: We could not have the ability to allocate leadership.

Marcelo Noronha: So we are in ounces of execution, which is very telling and blue indigo solar such as travel and if.

Marcelo Noronha: And I Wonder if he does that you know that we spoke about diagnosis are playing a structure.

Marcelo Noronha: We spoke about diagnosis, a plan, a structure, and execution. And execution, of course, is the biggest challenge for any organization. But we are executing with determination, safety, and control, external hires. We also spoke about this. You will remember that we had two heads of departments that would report directly to me.

Marcelo Noronha: And Michael the intrusion of course, there's been a fatalist your telephone for any organization, but we are executing with determination safer and control.

Marcelo Noronha: Stan.

Marcelo Noronha: External hires we've also spoken about this you will remember that we had to eat has pointed heads of departments. They will report directly to me.

Marcelo Noronha: One in HR and the other one for the digital business unit, which will take mass market to digital. And I would like to announce that we have reinforced the credit BU with the whole reconfiguration and targeting we did. And the creation of a portfolio management part. So we hired in the market a new credit director who has already joined us, Julio Guedes. He came from Serasa but has a track record in the banking industry.

Marcelo Noronha: <unk>.

Marcelo Noronha: One of the business the digital business, you know, which ones to market Chicago mass market today to put on the shelf and are going to announce that we had to wing reinforcement of a credit leaves you with a whole reconfiguration and targeting with.

Marcelo Noronha: And Russia and other portfolio management departure, so we hired in the market.

Marcelo Noronha: Credit.

Marcelo Noronha: It was already joined US who do read this article came out I said other.

Marcelo Noronha: His background is in statistics. He has worked with credit for a long time. Well, the colleague who is coming for the digital unit as head of digital reporting directly to me is leading another company. And our agreement was that we would only disclose the person's name on May 9th.

Marcelo Noronha: It has a track record in the banking industry.

Marcelo Noronha: His background is a statistic.

Marcelo Noronha: Credit for a long time.

Marcelo Noronha: It was an entrepreneur in his prior role and he was already providing services to US I think it was great to bring to Julio to the company to room for our Credentialing and regarding the C level, we already hired those two office visits.

Marcelo Noronha: So kind of went.

Marcelo Noronha: Okay.

Marcelo Noronha: Many people ask me when will you be able to do it well.

Speaker Change: No problem.

Marcelo Noronha: I think of who's coming into the unit was head of our digital reporting directly to move.

Marcelo Noronha: He is leaving the company with Norfolk word for it and our countrymen alone said, we weren't going to go to school rational but competitive name.

Marcelo Noronha: So on May 9th, we will disclose the name, and he will start work on the 20th. So we used the press for that in our department. And we also hired a woman, a colleague who will be in the C-suite with us in HR, Silvana Machado. She started today. She is watching this call. And Silvana came from Advent.

Marcelo Noronha: Name.

Marcelo Noronha: <unk> nine antibody.

Marcelo Noronha: So on May 9th, we'll disclose the name and who will be working with you.

Marcelo Noronha: So we'll use a price for that in our mind.

Marcelo Noronha: And we also hired.

Marcelo Noronha: Wallman a colleague Colin.

Marcelo Noronha: In the C suite.

Marcelo Noronha: Yes.

Marcelo Noronha: Silvana.

Marcelo Noronha: She was a talent manager with us. She was also an agonizander for many years and reported that Silvana worked for Eddie Cranny and Bozala, always in financial services, in addition to having worked for many banks. So she is an asset for us. She couples experience in dealing with culture and talent as well as her financial services knowledge so that she can discuss anything about the banking industry with strong execution and the opening of 122 branches dedicated to companies. I'd like to congratulate the team that worked strongly on this to put together this team.

Marcelo Noronha: So let it drop to the answers Tim Gokey, almost salt life.

Marcelo Noronha: She's watching one call and Silverman from Edward.

Speaker Change: Tell him Atlanta Jonathan.

Marcelo Noronha: She was also negative vendor for mainly two one or something that Savannah was 480 crazy animal.

Marcelo Noronha: So all things.

Marcelo Noronha: Having worked for many banks. So she is and has that changed.

Marcelo Noronha: She says Oh, my couple of experience in dealing with cultural change.

Marcelo Noronha: As well as her avenues.

Marcelo Noronha: College, so tissue can be different language for breast cancer.

Marcelo Noronha: Any team apparel.

Marcelo Noronha: Banking industry.

Marcelo Noronha: And.

Marcelo Noronha: Print with us.

Marcelo Noronha: Devote this about three.

Marcelo Noronha: He wants to know what you know.

Marcelo Noronha: He is here this month of training until the year ahead.

Marcelo Noronha: Strong execution.

Marcelo Noronha: Roger.

Marcelo Noronha: The opening of 122, but wrenches dedicated to accompanies I'd like to congratulate the team.

Speaker Change: Totally understand.

Marcelo Noronha: They put together the team here.

Marcelo Noronha: And here I show you a picture of these branches dedicated to companies. We segmented 143,000 clients in this trajectory to 50 million BRLs, with 2,000 professionals focused on customer service for a specific vertical. This is outside the network.

Marcelo Noronha: Here I'll show you a picture of it.

Marcelo Noronha: These branches dedicated nucleus, we submitted 143000 claims and discharge three to 15 million.

Marcelo Noronha: Oh the nationals.

Marcelo Noronha: Mr specific vertical this is that right.

Marcelo Noronha: So that's why you know.

Marcelo Noronha: We are working on this to have a service model that is exclusive to companies with specialists that, in addition to their experience here, will manage risk. This is the name of the game here. We are a cultural arm. Just like we did with the middle market, we are now doing with these SMBs. Without losing sight of everything we're doing, but SMBs between 80,000 and 3 million BRLs per year use remote service via the app, but we increased the team that serves these legal entities, these enterprises.

Marcelo Noronha: Working with us.

Marcelo Noronha: This model, which is a loser for companies with a specialist.

Marcelo Noronha: In addition to jewelry out here.

Marcelo Noronha: Manage risk is the name of Michael historical margins, Okay. So it sounds like Oh, My God, we're now doing business.

Marcelo Noronha: But without losing sight of item digitally with or without but SME is between 80.

Marcelo Noronha: <unk> thousand three wailea.

Marcelo Noronha: We're using remote service via the App.

Marcelo Noronha: We use the two of them.

Marcelo Noronha: Illegal.

Marcelo Noronha: And our expectation is that by the end of the year, we'll have about 250,000 clients already targeted and allocated here. And after that, we will expand our radius of action for SMBs, and we're sure that we are going to have a lot of traction here. Looking forward, what are our expected deliveries until 2028? Looking at this timeline, the New Effluent segment will continue to hire for technology and digital channels, will have the footprint provision, as I mentioned, and will expand Bradesco. And here I'd like to comment on another delivery. You know that this is a differential about Bradesco. Bradesco has about 38,000 merchants using our Bradesco Express.

Marcelo Noronha: And our expectation is that by the player will have about 100 and with ourselves and our clients are ready to I didn't go on an allocated here how are you.

Marcelo Noronha: To that extent.

Marcelo Noronha: Our radio Shack.

Marcelo Noronha: And we assure that we are going to have a lot of traction or they'll do well.

Marcelo Noronha: For example prefer it.

Marcelo Noronha: So we're starting with the Internet.

Marcelo Noronha: Okay.

Marcelo Noronha: Liberalism 2000, Twenty's Bunny light well looking at this landline humira.

Marcelo Noronha: And your S. Four I think that will continue to hire for technology and IP.

Marcelo Noronha: Total channels, where you have the footprint revision assimilation and who experiment with discovery.

Marcelo Noronha: And here I'd like to comment on a another accelerator installed.

Marcelo Noronha: As a differential about Bradesco bradesco has about cemig.

Marcelo Noronha: In equal measure.

Marcelo Noronha: As for our merchants as long as you know Bradesco expresso.

Marcelo Noronha: We can use this to sell banking products and services, and also to have transactions with Bradesco. So we delivered a new platform. As you can see here in this photograph, in Q1, we already rolled out to just about 1,000 merchants, and they are having a totally different experience.

Marcelo Noronha: So you can use this to sell banking products and service complaint.

Marcelo Noronha: Transactions with that comes a lot plus a format with a live with a new platform.

Marcelo Noronha: Here in this graph and you look at them.

Marcelo Noronha: Middle three into one person already rolled out to about a thousand merchants accomplish them in at least I haven't heard about many different either.

Marcelo Noronha: I mentioned in the prior quarter that this is something we're developing and preparing. So at the moment, the merchants identify themselves with their taxpayer number automatically; our CRM engine uses intelligence. And even if they are not checking account holders, the system identifies what we can sell to these people, what we can offer them according to their profile and risk. So our level of efficiency tends to grow significantly here. You know, Bradesco Express has 100% presence in Brazilian municipalities.

Marcelo Noronha: I mentioned in the prior year quarter that this is something that we're developing and preparing us for the moment.

Marcelo Noronha: The maintenance identify what their taxpayer number actually our aim in June.

Marcelo Noronha: And TV Oh.

Marcelo Noronha: Go ahead, and even if there isn't we're not in a checking account holders clear system identifies when we can sell to these lawsuits that we can offer them, we want them to their portfolio.

Speaker Change: Oh, well I shouldn't say you got a significant way here.

Marcelo Noronha: You know if it is a good roster. So it has 100% of presence in Brazilian municipalities.

Marcelo Noronha: And this quarter, local insurance sales versus Q1 2023 were up 89% on this channel, and origination of payroll deductibles was a 361% increase. So we expect to give a lot more traction to this platform. There's another detail here, which is a game changer. We had four providers of these solutions go to the merchants with the traditional POS machine and some functionality and features in the machine.

Marcelo Noronha: And this quadrant locating sharing.

Marcelo Noronha: <unk> Q1, 'twenty three that's kind of up 18, 9% approximately from this channel.

Marcelo Noronha: And origination of payroll deductible loans 361 degrees Marshall, who we expect to give a lot more friction to that process.

Marcelo Noronha: There's another group.

Marcelo Noronha: With you, which is a game changer water proof point.

Marcelo Noronha: One four and our providers.

Marcelo Noronha: My circles, you can go into the merchant with the traditional.

Marcelo Noronha: Oh and smooth.

Marcelo Noronha: And some functionality in the future is indeed.

Marcelo Noronha: You're going to find all that. Two have left, and by the end of the year, we'll have just one platform with a lot more versatility. I'll highlight our external hires. I've just mentioned one of the names. This was the first delivery.

Marcelo Noronha: Machine of unifying all that we still have left and by the end of the year, we'll have just one vessel.

Marcelo Noronha: A lot more versatility or the ability of the park.

Marcelo Noronha: Functionalities and features to operate with those merchants.

Speaker Change: Oh, yes.

Marcelo Noronha: Basically we have to be to move to Michael spoke a lot about your underbanked chefs.

Marcelo Noronha: The bank has felt so it is one of just three months improvement of W. L. T O N Ho Oh.

Speaker Change: Makes sense.

Marcelo Noronha: So I'm thinking with robust credit growth has the settlement, but I guess in addition to the result and change the bank most of contracts I highlight our external hires to be definitely don't want me public safety trade press I I've just mentioned.

Marcelo Noronha: And then the reinforcement of the credit BU with a revision of processes. In the opening of branches for companies by SMEs, this has been delivered. Footprint revision, that's strongly on the way. And expansion of redistribution, as I've just mentioned. So, we are making progress. We are following the plan step by step, so that we'll offer better and better earnings every quarter. I thank you for your attention.

Marcelo Noronha: This was the first delivery and they've been going on the photo credits.

Marcelo Noronha: Credit fee, you've Iraq with Regal.

Marcelo Noronha: In the Gulf of newness.

Marcelo Noronha: So rentals for companies for Assamese granted.

Marcelo Noronha: Footprint progression strongly in both ways.

Marcelo Noronha: Expansion up with restructuring.

Marcelo Noronha: And separately, we have deliberately we are following the plan step by Mcdonald's, although will offer herself et cetera et cetera.

Marcelo Noronha: Every quarter I. Thank you for your attention.

Marcelo Noronha: And I now have my colleagues, Cassiano Scappelli, our CFO, and André Carvalho, our new IRR officer, taking over from Fireddi. And we'll start the Q&A. André, over to you. I think I've already said a lot. Good morning, everyone.

Marcelo Noronha: Now I have my colleague casinos Capelli CFO Andre did find value.

André Carvalho: I Oh that sister.

André Carvalho: Most of them taking over from but theoretically.

André Carvalho: So the Q&A and Ronald over two years with them.

André Carvalho: I already said a lot.

André Carvalho: Good morning, everyone.

Operator: I would like to inform all participants that Ivan Gontijo, the CEO of our insurance company, is also joining us during this Q&A session, and he's with us remotely. But if you want to send us your questions, you can send them either in Portuguese or English, and please do so using our email address. Investors, like you see on the screen, investors at bradesco.com.br, or using the WhatsApp number. The information appears on the screen. The first question comes from Renato Meloni from Autonomous. Renato, over to you. We can't hear you; I think you're muted.

Cassiano Scappelli: I would like to inform all participants that even gone tissue. The CEO of our insurance company, who is also joining us during this Q&A session.

Operator: Usually those remotely, but if you want to send in your questions you can send them either in Portuguese or English as a whole, but please do so using our email.

Operator: <unk> do you like you see on the screen investigators at Bradesco.

Operator: They are always use English was a number of information appears on the screen.

Operator: Your first question comes from Hank Elder Maloney from autonomous and now over to you.

Operator: Original basketball with certain we can't hear you I think you're muted.

Operator: Boy.

Ivan Gontijo: So good morning.

Renato Meloni: Good morning. Thank you for taking my question. I have two questions. The first question is about your transformation plan. Now that three months have gone by since the official launch of the program and you have more visibility, what is different when compared to the original plan? And, given your current visibility, whether there have been any changes in terms of delivering ROE above the cost of capital, and you said that you would do that throughout 2026?

Renato Meloni: Thank you for taking my questions I have two questions. The first question is about your transformation plan now that three months have gone by the launch of the program and you have more visibility.

Renato Meloni: And what is your friend when compared to the original plan and given your current visibility whether there has been any changes in terms of delivering.

Renato Meloni: Above the cost of capital and you said that you would do that throughout.

Renato Meloni: My second question relates to the guidance. To reach the NIA guidance, this means that you have to have better origination and better margin, because I think this will come with the mix and this will improve provisioning. So how do you see these three levers performing throughout the year, and what is the pace, and where do you see the risk of not delivering what you expect, not delivering on plan? Well, thank you for your question. I will ask Cassiano to start, and then I will add more.

Renato Meloni: My second question.

Speaker Change: Sort of a guide.

Renato Meloni: Sure.

Cassiano: The NII guidance means.

Cassiano: It means that you have to have better origination better my friend.

Cassiano: This will come with the mix and this will include provisioning. So how do you see these three ships.

Cassiano: The levers.

Cassiano: We are forming throughout the year and what is wrong.

Cassiano: And where do you see the risks of not delivering what you would break it out of there not deliberate but I want to thank you for your questions and I'll ask Josh to start and then well.

Marcelo Noronha: Not only is Cassiano a CFO, but he is also the CPO. So he is the best person to talk about the KPIs of our transformation plan. Thank you.

Cassiano: Not only casino is the CFO. He says the CPO. So that's here now is the best person to talk about the Kpis of our transformation plan. Thank you. Thank you and I have to thank you for your question.

Cassiano Scappelli: Thank you, Renato. Thank you for your question. Our Transformation Plan. I mean, what we did ratified what we envisioned in the diagnosis of our transformation process. As Marcelo put it quite well, we have over 800 people engaged, 2,600 initiatives, and the KPIs are very apparent. I mean, starting with the footprint, all the way to the Randa Bank and credit segments, also that involves recovery, risk, you know, hiring new people, technology, etc. So we launched the plan on February 19th, and that's when our new office started operating.

Cassiano Scappelli: Our transformation plan.

Cassiano Scappelli: Hi.

Cassiano Scappelli: What we did we ratify what we envision in the diagnosis of our transformation process as Marcello put it quite well we have over 800 people engaged 2600 initiative and the Kpis are very apparent I mean, starting with the footprint all the way.

Cassiano Scappelli: You can ramp the bank and credit segments also that involves rajesh kothari, Chris I can.

Cassiano Scappelli: Hiring new people technology et cetera.

Cassiano Scappelli: We launched the plan on February 19th when our new outlet started operating but looking back today, we can say that.

Cassiano Scappelli: But looking back today, we can say that this whole mapping was very important, and we found more things, which was quite interesting. We found other things that can lead us to having a more agile bank, a more digital bank, even more than what we are, rendering an even better customer experience. It's not, you know, way ahead in the future, but it's throughout the journey. And I am certain that the plan is well-structured and the deliveries are well on schedule, and we will improve performance. Renato, just to add to what he said.

Renato Meloni: He was very important and we found more things, which was quite interesting what we found the other things that can lead us to have.

Renato Meloni: Having a more agile banking more digital bank, even more than what we are.

Renato Meloni: Rendering even.

Renato Meloni: You know better customer experience it's not.

Renato Meloni: Way ahead in the future, but throughout the journey and I am just throughput Arctic why I'm certain that the plant is well structure and the deliveries are well in schedule and we will answer them.

Renato Meloni: Improved performance.

Renato Meloni: Just to add to what he said.

Marcelo Noronha: In fact, we reinstate that number. You might recall that I talked about the total number. You may have, you know, some small adjustments to the calendar. Okay, this was expected for December, but it may be earlier or later.

Renato Meloni: In fact, no middleman.

Cassiano Scappelli: We.

Renato Meloni: That number you might recall that I talked about the total number of months.

Renato Meloni: You may have.

Renato Meloni: Some small adjustments to the calendar. Okay. This was expected for December but he may be earlier or later I thought I'd ask me would help it would perform better further on but we were able to deliver the numbers before scheduled so we still have that expectation in terms of the numbers you might recall.

Marcelo Noronha: I thought that SME would help us, would perform better further on, but we were able to deliver the numbers before schedule. So we still have that expectation in terms of the numbers. You might recall that if our CAGR for the loan book materializes, if CAGR is 1% a year, our loan portfolio total growth for the expended portfolio will be 3.3 trillion in five years. I mean, we want to capture part of it, and the expectation remains firm, and we see through traction that we do have the capacity to get there. Secondly, in regards to that ROE expectation that you mentioned, I would just say it again. I don't want to just, you know, just promise things.

Marcelo Noronha: But if our CAGR for loan book loan book would materialize, if CAGR it would be 1% a year of growth.

Marcelo Noronha: Our loan portfolio total road for the expanded portfolio would be $3 three trillion in five years I mean, we want to capture part of that I expect that the expectation remains firm and we see traction that we do have the capacity to get there secondly, Eva.

Marcelo Noronha: In regards to that ROE expectation that you mentioned I would just say it again.

Marcelo Noronha: I don't want to just.

Marcelo Noronha: You know just promise things.

Marcelo Noronha: I want to deliver. As soon as I can deliver, we will deliver to expectations, and that's what we intend to do, to deliver things as time goes by. And the other question was about client NII. How do we expedite that?

Marcelo Noronha: One to deliver as soon as I can deliver we will deliver to expectations and that's what we intend to do to deliver things as time goes by and the other question was about our client NII, how do we expedite that I mean, we accelerates through euro.

Marcelo Noronha: I mean, we accelerate through growing our loan portfolio. And during my presentation, I said that, okay, we gained market share in February. In January, we did not gain market share, so we had to move faster in February, which we did. So I firmly believe that we will gain market share in March. In April, that's when we will see what has been done. I mean, NII, things will not happen overnight.

Marcelo Noronha: Our loan portfolio and during my presentation, I said that sure okay regain market share in February and January we did not go into the summer.

Marcelo Noronha: So we had to move faster in February we did so I'm I firmly believe that we will gain share in mind.

Marcelo Noronha: In April two that's when we will see as element of what has been done I mean that that NII.

Marcelo Noronha: NII was haynesville not happened overnight firstly, we'll see a growth in the portfolio and then we will see you will see an increase in our net margin because the bottom line is that the delinquency is under control we are bringing good quality things to our portfolio and that's when we will see some of them are.

Marcelo Noronha: First, we will see a growth in the portfolio, and then we will see an increase in our net margin because the bottom line is that the liquidity is under control. We are bringing good quality things to our portfolio, and that's when we will see a growth in NII, an effective growth in NII. But you might recall that I'm talking about two different types of portfolios and two different types of risk acceptance. This will require additional effort on the part of the bank. I don't know whether you would like to mention it,

Marcelo Noronha: A grows.

Marcelo Noronha: In NII.

Marcelo Noronha: Growth in NII fairly you might recall that I'm talking about two different types of portfolios and do different timezone risk acceptance.

Marcelo Noronha: Require additional effort on the part of the way I don't know, whether you would like to mention it I mean, the client NII will be better in the second quarter vis vis the first quarter because.

Marcelo Noronha: I mean, the client NII will be better in the second quarter vis-à-vis the first quarter because there is a gradual evolution. First quarter, lower ALL, and then, with time, the margin will grow with ALL because we will go to more risky sectors. And our funding cost is coming down as well, and this is what we are noticing, and this has an impact on the timeline. Renato, thank you for your question. The next question comes from Brian Flores from Citi. Hello, thank you for taking my question.

Marcelo Noronha: Three module there is a gradual evolution first quarter was much lower.

Brian Flores: And then with <unk>.

Brian Flores: Hi, there.

Marcelo Noronha: Margin will grow with a double L. Because we will go through more risky segments and our funding costs.

Brian Flores: Coming down as well, but this is what we are noticing.

Brian Flores: This has named badly.

Marcelo Noronha: Timeline and as a thank you for your question. The next question comes from Brian Flores from Citi.

Brian Flores: Go ahead Swamy.

Brian Flores: Hello, Thank you for.

Brian Flores: And for taking my question, a bulk sample of booking.

Brian Flores: With a more restrictive central bank, and you talked about funding, how does that change funding? And also, talking about market NII, what is your view of market NII? Hi, it's a pleasure to see you.

Brian Flores: With a more risky.

Brian Flores: Thanks, Ken you talked about funding funding you said, how does that change funny.

Brian Flores: And America stocking about it and also talking about market NII, but what is your view about March at NIH.

Brian Flores: It's a pleasure.

Marcelo Noronha: In terms of market NII, I would say that we don't see any major changes this year. There was a slight drop, you know, from one quarter to the next, and the central bank with a more restrictive curve, but that two-tip curve, as we say, is very important for our pre-fixed portfolio because it brings more interesting fee volume, and I believe that even though the landscape is more restrictive, it points to a decline in interest rates, because 9.5% or 10% is not very significant because it doesn't change the landscape as much in terms of Therefore, we see this as beneficial because, on the one hand, we reinstate our loan portfolio with higher rates. So in terms of the cycle as a whole, the cycle would indicate between 9.5% to 10%.

Brian Flores: In terms of market NII I would say that we don't see any major changes.

Marcelo Noronha: There was.

Marcelo Noronha: Like drop.

Marcelo Noronha: From one quarter to the lab.

Marcelo Noronha: And the central bank with a more restrictive.

Marcelo Noronha: Yes.

Marcelo Noronha: Puget curve as we say it is very important for our pre fixed portfolio because you bring.

Marcelo Noronha: A more interesting.

Marcelo Noronha: All of them and we believe that even though the landscape is more restrictive points to eight.

Marcelo Noronha: Declining interest rates, because 99 or 10% that is not very significant and because it doesn't change.

Marcelo Noronha: The landscape as much in terms of our treasury position and therefore, we see this as something beneficial because on the one hand, we reinstate our loan portfolio.

Marcelo Noronha: G stoppages or so higher rate when it's sold.

Marcelo Noronha: In terms of the cycle as a whole.

Marcelo Noronha: These days the cycle would indicate.

Marcelo Noronha: Nine and I have to turn for San Jose Columbia smaller economy, 0.9 point 25, I don't want you to leave in a cycle where interest rates oil spike after that.

Marcelo Noronha: Our economy points to 9.25%. I don't believe in a cycle where interest rates will spike after that. The scenario will bring about good results in the market. It's performing well, pretty much along the lines that we mentioned before, which is positive, and we see a positive trend toward 2025. Just to reinstate what he said, the expectation is that the market is very bullish from now on, and the fact that the rate will come down 50 or 25 basis points, nothing much will change. Okay? George Gordy with Morgan Stanley. Mr. Curie, Hi, good morning. Can you hear me now?

George Gordy: We're able to bring about good results in the market, that's performing well pretty much along the lines that we mentioned before which is positive and we see a positive trend towards 'twenty twenty-five.

Speaker Change: To reinstate what he said the expectation is that the market is very bullish from now on and the fact that their rate will come down 50, or 25 basis points nothing much will change okay.

Speaker Change: Thank you for your questions.

George Gordy: So recruiting with Morgan Stanley.

George Gordy: Plus Mr Coody.

Marcelo Noronha: Okay.

Marcelo Noronha:

George Gordy: Hi, Good morning can you hear me now.

George Gordy: Yes, yes, we can. Thank you. For the possibility to ask questions, I think that the positive highlight of the quarter was increased credit quality. There is a precedent to accelerate growth in those loans with higher spreads. The question is, is the bank ready to accelerate maintaining NPL under control, particularly in retail? What were the main adjustments the bank made in terms of policies, credit filters, and what were the main structural adjustments? If you can elaborate on that from a qualitative standpoint, that would be very helpful. Thank you.

Curie: Yes, yes.

Marcelo Noronha: Possible.

George Gordy: Yeah.

George Gordy: Was it a possibility.

George Gordy: To highlight our first quarter lifting.

George Gordy: A bankruptcy.

George Gordy: It varies.

George Gordy: Right.

George Gordy: And theres issue loans with higher spreads.

George Gordy: Regulatory accelerate mainframe infringe.

George Gordy: Control Tec.

George Gordy: Okay.

Speaker Change: Thank you.

George Gordy: Aimed to a much older policies.

George Gordy: There's one with diminished.

George Gordy: If you can.

Speaker Change: From the standpoint that would be very helpful. I really don't care about and want to thank you for the question.

Marcelo Noronha: Thank you for the question. As I mentioned during the presentation, we have been using a lot more machine learning than in the past, exactly to improve our modeling. So from a qualitative standpoint, if Andre Eduardo were sitting here, he would tell you exactly that. So that's number one.

Marcelo Noronha: As I mentioned during the presentation.

Marcelo Noronha: We have been using a lot more machine learning.

Marcelo Noronha: Exactly to improve on a mountain range of political spend.

Marcelo Noronha: They did all that standpoint, even drilled the words you are sitting here. He would tell you where exactly that so that's number one.

Marcelo Noronha: Number two, we worked on our credit policy. For certain credit ratings that are higher risk, we now have a policy in place which is a lot more reserved than in the past. When you talk about the proportion of income, the proportion of company or S&E revenue, what kind of proportion of that do you want to have in legal entities?

Marcelo Noronha: Number two we worked on one credit part of that.

Marcelo Noronha: Reed for certain credit rating on my own.

Marcelo Noronha: There are the higher rates, we now have a policy in place.

Marcelo Noronha: A lot more resilient than in the first for Sundar handle it when they talk about the proportion of income proportionate Oh company or ethane.

Marcelo Noronha: Revenues, what kind of proportion of that you're going to have legal entities water right.

Marcelo Noronha: What kind of quota do you want to have in this kind of loan? We have improved our policy a lot, and it will improve even more when Julio Guedes joins us. His mission is to manage the portfolio with pricing. With pricing, we have prices for products, and now pricing is in the credit department. And that will improve our value proposition, and that was an important structural change so that we could adequately price and adjust the levels of approval. But in the mass market, I'd say that this is it.

Marcelo Noronha: Kind of quarter or two one on when that kind of one <unk>.

Marcelo Noronha:

Marcelo Noronha: A lot to enable improved even more when you look at it is our children fuzzy.

Marcelo Noronha: It is too, but if you can manage the portfolio.

Marcelo Noronha: Friday depressed cause somebody to producers with crushing we have high school for Kodak.

Marcelo Noronha: Pricing.

Marcelo Noronha: Credit.

Marcelo Noronha: Proposition.

Marcelo Noronha: And that will improve our value proposition and that wasn't even part of kind of structural change also that we can.

Marcelo Noronha: I believe right.

Marcelo Noronha: And a chance for levels of approval, but in mass market I'd say that this is a police because new credit policies, new credit models for copper.

Marcelo Noronha: New credit policy, new credit model with a collection process that is very fine-tuned in the living portfolio management, which is what we do now. That gives us greater safety regarding everything we are seeing. We defined the indicators that we are measuring strictly.

Marcelo Noronha: E coli.

Marcelo Noronha: Which is a very fine them.

Marcelo Noronha: Two of them.

Marcelo Noronha: And in my living portfolio management, which is what we do now.

Marcelo Noronha: That gives us a lot of talk.

Marcelo Noronha: Great safety or cutting through everything with them.

Marcelo Noronha: You can find probably indicators, but we are monitoring strictly we are measuring them full time.

Marcelo Noronha: We are measuring them full-time. And also, in the wholesale bank, we made some changes. We hired other people. You know, it was not just one officer.

Marcelo Noronha: In the wholesale bank, we made some tune this waterfall behind other people do.

Marcelo Noronha: It was all just one officer, we learned a variety of things, but the credit Department are you still hiring more people.

Marcelo Noronha: We brought in chiefs for the credit department. We're still hiring more people, and we changed some processes so that we could have a lot more agility in serving legal entities. I'm talking about all the way from large corporations down to middle-income entities.

Marcelo Noronha: And we charge them with somebody else.

Marcelo Noronha: Although we did have a lot more like she already.

Marcelo Noronha: So having local entities that we're talking about all the way from large corporates down.

Marcelo Noronha: Literally a woman.

Marcelo Noronha: So with that, we have a much more productive organization than we had recently, and our managers feel that. If you speak with our regional managers throughout Brazil for corporates, they'll confirm what I'm saying. This whole modeling and these controls that are now in place, please remember that in the business unit with this portfolio management department, we have the first and second line of defense. We have colleagues in charge of modeling, and then colleagues who check the modeling and validate the modeling, regardless of the risk control department.

Marcelo Noronha: So with that we have a much more provocative organization than we had recently in our manager.

Marcelo Noronha: If you see with our regional managers.

Marcelo Noronha: So before Congress the comfort.

Marcelo Noronha: Some of the larger.

Marcelo Noronha: Two of them. This whole modeling tool has implemented numerous controls that are now in place. Please remember that in our business.

Marcelo Noronha: Yeah.

Marcelo Noronha: With this portfolio management Department operating leadership.

Marcelo Noronha: So we have the first and second the lineup.

Marcelo Noronha: Paul I guess get fuzzy about that we have colleagues who charge of modeling.

Marcelo Noronha: If a colleague.

Marcelo Noronha: Jack the model and validate the model was a little cartilage scab damage control Department. So what you can say whether discovery I mean of course, Nokia software like we've used I'm not going to be with the aim of brushing with adult Marine show.

Marcelo Noronha: So, what I can tell you is we are very safe. There is AI behind this, but AI is not the main tool. The main tool is machine learning. But this is what I believe in.

Marcelo Noronha: But a little higher which is the optimal point.

Marcelo Noronha: And I'll make with China.

Marcelo Noronha: And in.

Marcelo Noronha: Colorado.

Marcelo Noronha: So we can work with the Bottomline kalydeco advising thought so if it doesn't matter what are you expecting for US we're just going to do it because I used to say something.

Marcelo Noronha: What we deliver.

Marcelo Noronha: The library quality there.

Marcelo Noronha: But as I said.

Marcelo Noronha: Meanwhile, tool, it's the main machine-wash bushes getting components.

Speaker Change: I suppose the only punctuate because what do you mean.

Marcelo Noronha: Yes, I think that what you mentioned, which I think is very important, the concept of principality, having clients with us who have a lot of traction. We can see that in those curves of the vintages. And this is our DNA.

Marcelo Noronha: According to the cockpit upgrades.

Marcelo Noronha: <unk>.

Marcelo Noronha: Having the place of Argos and there's.

Marcelo Noronha: A lot of the fraction of weakness either at in those types of things.

Marcelo Noronha: Yes.

Marcelo Noronha: We know how to do this. We were able to reinvent ourselves with everything you said. And we have new colleagues and reskilling for the people in the credit department. So these are all fundamental pieces of the game.

Marcelo Noronha: So SG&A we know.

Marcelo Noronha: So we were able to really fantastic.

Marcelo Noronha: Yeah.

Marcelo Noronha: Okay.

Marcelo Noronha: We have new colleagues are annoying just killing.

Marcelo Noronha: So it's up in Oklahoma.

Marcelo Noronha: So these are all fundamental pillars.

Marcelo Noronha: These were positive, significant positive changes. These were adjustments made. Giving credit cards for non-checking account holders, that's a modality where we are more restricted for high-income clients. We are growing credit cards by almost 12%. So the open-sea credit offers a little more risk today, but we have modeling for that.

Marcelo Noronha: It was supposed to be.

Marcelo Noronha: Yes.

Marcelo Noronha: It wasn't difficult positive orders these are adjustments.

Marcelo Noronha: There's a lot of capital to correct for newborn is credit card one.

Marcelo Noronha: Isn't that much to do that's a modality, where we have more to play out.

Marcelo Noronha: Just like it is a high income clients, we are granted by the customer.

Marcelo Noronha: So.

Marcelo Noronha: Right.

Marcelo Noronha: A little more visible today.

Marcelo Noronha: And we have modeling.

Marcelo Noronha: So we have some peace of mind regarding what we're doing with one of the segments. We're not working with just one segment. We're talking about the mass market, high income, and companies of all sizes, including the wholesale bank. Thank you. Thank you. Pedro André, good morning everyone.

Marcelo Noronha: So it will have some peace of mind regarding what we are doing for volumes one number if all that much because we're not.

Speaker Change: Working with Jocelyn.

Pedro Leduc: Remember you talking about the mass market.

Speaker Change: Ooh ooh sizes, including wholesale.

Speaker Change: Thank you.

Pedro Leduc: You'll want to Daniela vials with Safra.

Speaker Change: Got it.

Pedro Leduc: Good morning, everyone.

Pedro Leduc: Just for me I'd like to ask a question about historically you.

Pedro Leduc: I'd like to ask a question about ANSI. You showed a chart of origination for companies in the mass market. You're still away from the average of 2019.

Pedro Leduc: So you chose to produce.

Pedro Leduc: Originators.

Pedro Leduc: Before mask.

Pedro Leduc: And the domestic companies Smiths Martin could you still walk away from the average of Canyon.

Pedro Leduc: How old you are doing this gap.

Marcelo Noronha: How do you explain this gap? We have above 90 days in Bell Better, but why is origination not at the same level in 2019? Is it a supply or demand issue? When can we expect this to grow?

Pedro Leduc: My pleasure.

Pedro Leduc: And once a day.

Marcelo Noronha: Sure.

Marcelo Noronha: The region is not at the same level of timing.

Marcelo Noronha: The issue when can we expect this to graduate them number one.

Marcelo Noronha: It's about risk appetite. This is the highest risk segment. The key for those companies is year to tree. But in trees, I spoke about managing a living portfolio.

Marcelo Noronha: It's about risk.

Marcelo Noronha: This is the highest.

Marcelo Noronha: And I tell them that in 'twenty.

Marcelo Noronha: Lilly for those companies.

Marcelo Noronha: Okay.

Speaker Change: That's cool.

Marcelo Noronha: Look about living.

Marcelo Noronha: Living.

Marcelo Noronha: Uh huh.

Marcelo Noronha: So there's a management model that is being implemented in this segment. It's like that for us, I mean, so we have a little appetite to get there, but we believe that we have started and we will continue to grow origination. And another reason to believe in that is that we totally changed our offering, what we offered to our sales force, what we approved, the way to approach clients with a commercial tool, it's all changed, and it started now in the month of April with a different set-up, a different configuration, in our opinion, in the opinion of the colleagues responsible for that segment, this will give a lot more traction to have a better credit quality, a better credit analysis, more specialists working that segment, a new commercial tool, I mean, it's not a new tool, it's a new commercial format for this segment, and this new segment, the 3 to 50 million that we've radicalized, there's a different traction compared to the segment of up to 3 million bureaus a year.

Marcelo Noronha: So Susan amendments muscles that is being implemented in this segment.

Marcelo Noronha: The positive market dynamics.

Marcelo Noronha: Okay, and then you must have loved to have fallen off.

Marcelo Noronha: In the living room protocols and act on it totally differently. It is automated.

Marcelo Noronha: At the things that makes council.

Marcelo Noronha: The managers.

Marcelo Noronha: England.

Marcelo Noronha: Alright.

Marcelo Noronha: So a woman proof already two choices.

Marcelo Noronha: But until 3 million my view.

Marcelo Noronha: There is definitely more risk because the Brazilian market on bookings because like rod for dollar hogwash.

Marcelo Noronha: Little appetite to get Vical mess I believe.

Marcelo Noronha: We have it in a little combined Roe.

Marcelo Noronha: You walked through water Hudson practices, Utah.

Marcelo Noronha: The other reason to leave in that as well.

Marcelo Noronha: Just two really bubble.

Marcelo Noronha: Supposedly offering.

Marcelo Noronha: While we offered to our sale of hours, hoping you too well.

Marcelo Noronha: The way to approach the audience.

Marcelo Noronha: So until you it'll change water.

Marcelo Noronha: And it's.

Marcelo Noronha: No in the month.

Marcelo Noronha: So he's not.

Marcelo Noronha: With that I will.

Marcelo Noronha: All the different continents.

Marcelo Noronha: In our opinion and the opinion of other colleagues respond for that segment.

Marcelo Noronha: This will give a lot more traction it might also have a better credit quality credit.

Marcelo Noronha: They're smaller specialists working in that segment.

Marcelo Noronha: For a new tool.

Marcelo Noronha: Our nuclear missiles.

Marcelo Noronha: When it is segmented brita filtering them.

Marcelo Noronha: We have different lives.

Marcelo Noronha: Different traction.

Marcelo Noronha: To this segment.

Marcelo Noronha: Segment.

Marcelo Noronha: Do you mean by virality.

Marcelo Noronha: So we believe we will increase our own origination, but with the right controls and quality. In Duet, when I look at the track record of delinquency, historical series shows that individuals drop first, and then affinities, and then small enterprises.

Marcelo Noronha: We're bullish on loan originations.

Marcelo Noronha: Nation, but with a variety of controls and rituals.

Marcelo Noronha: Weapon, along with a track record of delinquency.

Marcelo Noronha: A series of shows that demand drop.

Marcelo Noronha: First in thin.

Marcelo Noronha: A little easier.

Marcelo Noronha: Thanks, Alex and more enterprise.

Marcelo Noronha: So small enterprises are experiencing an inflection now, that's the market risk that Marcelo talked about, that's why our appetite will move step-by-step with safety, and in the future, we should accelerate in the segment of smaller companies, which will require more provisions, but the margin will more than offset that, and the credit policy will be adjusted. We work on it all the time. Daniel, thank you very much for the question. Now, Mario Pierri with Bank of America. Good morning.

Marcelo Noronha: Entrepreneurs are having big inflection Wow, that's a gym market risks.

Mario Pierry: That's why that's why arent happy Brian Bedell step with them.

Mario Pierry: In the future.

Mario Pierry: Celebrate lovefilm interventional move in margins.

Mario Pierry: Oh as a cloud company.

Mario Pierry: I am also visual put them much in the money.

Mario Pierry: And their credit policies into multiple children Ela, we work on it.

Marcelo Noronha:

Mario Pierry: Thank you very much two questions My theory with bank of America.

Marcelo Noronha: Yeah.

Mario Pierry: I have two questions. First, when we look at the bank coverage ratio, we calculate the ratio close to 162%. I mean, it's lower than your peers.

Mario Pierry: Good morning.

Mario Pierry: I have two questions.

Mario Pierry: First question H B.

Mario Pierry: When we look at the bank.

Mario Pierry: Coverage ratio.

Mario Pierry: We calculate the ratio close to 60% I mean, it's slower than your peers, but we also look at your faithful complementary provision close to six point until Dalian and historically it used to be around eight to 9 billion.

Marcelo Noronha: But we also look at your complementary provision, which is close to 6.2 billion and, historically, used to be around 8 to 9 billion. Do you intend to revisit those reserves? How do you feel the reserve level stands today? And the second question is about capital.

Marcelo Noronha: Do you intend to revisit those reserves.

Marcelo Noronha: How do you feel.

Marcelo Noronha: Our reserves.

Marcelo Noronha: Vote stands today.

Marcelo Noronha: Today and the second question is about capital there was a decline E. R. I cannot predict a CTO ratio a drop.

Marcelo Noronha: There was a decline in your CTO ratio, a drop quarter on quarter. So how do you see this, you know, CEP ratio impacting your dividend policy or even your capacity to grow? In terms of the coverage ratio, we do not have a target for that coverage ratio because it fluctuates according to the credit cycle. So if the cycle aggravates, you know, delinquency as well.

Marcelo Noronha: Quarter on quarter, So how do you see this.

Marcelo Noronha: C T ratio impacting your dividend policy or even your capacity to grow your costs will complement hello. So it's critical in terms of coverage ratio.

Marcelo Noronha: We do not have a target for that with caelum coverage ratio because it is so it fluctuates. According to the credit cycle. So she'll go with it.

Marcelo Noronha: If the cycle Aggravates, you know delinquency as well.

Marcelo Noronha: I mean, because we increase the amount of provisions. We make provisions for 100% of our clients. Once the credit cycle begins to change, as we saw that happening in the first quarter of the year, certainly, the coverage ratio increases because we originate credit that naturally at the beginning comes with higher provisions than delinquency coverage increases. Therefore, this is a very cyclical KPI. We are not very much concerned with it, in terms of the capacity to do all the traction that Marcello talked about, we can say that it grew vis-à-vis the third quarter of 2023. There was a slight drop in this first quarter basically focused on mark-to-market bonds, but this also has to do with IOC, and so we understand that it develops naturally. We don't anticipate any changes in this capital throughout the year.

Marcelo Noronha: Well I mean, because we increased the amount of provisions.

Marcelo Noronha: I mean, we provision for 100% of our clients as the credit cycle. These so called this begins to change when we saw that happening in the first quarter of the year equal now certainly the coverage ratio increases because we originate credit is that naturally at the beginning comments myself with higher provisions in place then.

Marcelo Noronha: It could be food delinquency coverage increases and therefore this is a very cyclical profile kpis. We are not very much concerned with it we think it's very.

Marcelo Noronha: Adequate for the current moment and certainly it has a natural recovery.

Marcelo Noronha: Now in terms of.

Marcelo Noronha: My feet, you Wanna appetite change continental.

Marcelo Noronha: Okay.

Marcelo Noronha: <unk> continued to say that capital is one of our capacity well in place and in terms of the capacity to do all the traction that Marcelo talking about we think the fact that he couldn't see weak.

Marcelo Noronha: We can say that it will be the third quarter of 23, there was a slight drop in the first quarter basically pass you back us focus on piano impart a mark to market bonds, but this also has to do with I O C and so we understand that it is a develops natural.

Marcelo Noronha: Really we don't anticipate any changes in this capsule throughout the year it will be very close to what you see today.

Marcelo Noronha: It will be very close to what you see today, and we believe that this could be a possible leverage to our credit increase, therefore, our capital is in a very comfortable position right now. Well, first of all, you know that we project capital going forward, and we project it for the following years. We see capital standing flat, even though the portfolio is growing.

Speaker Change: And you said you we.

Marcelo Noronha: We believe that this.

Marcelo Noronha: This could be cut.

Marcelo Noronha: Couple of a possible leverage to our credit inquiries, therefore capital or are capital. It's been a very comfortable position right now well first of all you know that we project.

Marcelo Noronha: Capital going forward equals he promised me games also we projected for following years, we see capital spending flat, even though the portfolio is growing.

Speaker Change: No problem no.

Marcelo Noronha: No problems here and there was no known bad, but secondly, I don't think this will be eliminating factor for growth or even the distribution of interest on capital and then coverage ratio.

Marcelo Noronha: Secondly, I don't think this will be a limiting factor for growth or even the distribution, I mean, of interest on capital and the coverage ratio. I think I told you in the first quarter how comfortable we are in terms of wholesale banking. Our total coverage ratio is very good, and in particular in terms of the wholesale bank, because I was asked this question by journalists during our press conference.

Marcelo Noronha: I think I told you in the.

Marcelo Noronha: First border I referred to.

Marcelo Noronha: Comfortable we are in terms of the wholesale banking portfolio.

Marcelo Noronha: Our total coverage ratio was very good and in particularly in terms of the wholesale bank because I was asking the question.

Marcelo Noronha: By journalists during our press conference. It is very much under control and I talked about that last quarter, we needed to go back to our coverage ratio is ideal and we even have some room before.

Marcelo Noronha: It is very much under control, and I talked about that last quarter. Our coverage ratio is ideal, and we even have some room for other cases related to expected losses. Therefore, no problem at all in terms of our coverage ratio. Mario, now we have Tiago Batista from UBS.

Thiago Bovolenta Batista: For all of their cases related to expected loss for us.

Thiago Bovolenta Batista: No problem at all in terms of all of our coverage ratios. Thank you for all the questions Jamario Nowadays, we have chagal about user from UBS.

Thiago Bovolenta Batista: Well that's the question.

Thiago Bovolenta Batista: Thank you for taking my question.

Thiago Bovolenta Batista: I have two questions. One is a follow-up question. My first question is about the insurance business. We could see an increase in technical provision, quite significant this quarter, but when you look at the details, you had R$ 2.4 billion in additional coverage provision. Moreover, there are other technical reasons. Last quarter, you used part of that technical provision. I would just like to understand two things. If this was part of your income statement, or if there was something that was recurring and you wanted to reset it, what was the reason for that additional coverage?

Thiago Bovolenta Batista: I have two questions. One is I mean, it's a follow up question. My first question is about the insurance.

Thiago Bovolenta Batista: We could see any increase in technical provisions.

Thiago Bovolenta Batista: I think in this quarter, but when you look at the little details you had $2 4 billion.

Thiago Bovolenta Batista: In additional Congress provision.

Thiago Bovolenta Batista: Moreover, there.

Thiago Bovolenta Batista: Other technical reasons.

Thiago Bovolenta Batista: Fabulous.

Thiago Bovolenta Batista: Last quarter, you use part of that technical credentials I'm, just like to understand two things.

Thiago Bovolenta Batista: It was part of your income statement or if there was something that was recurring and you wanted to read that one.

Thiago Bovolenta Batista: What's the reason for that additional coverage and I know I was speaking about marios question onto capital.

Marcelo Noronha: Speaking about Mario's question on capital, I understand that you said that maybe at the end of the year, your capital position will be similar to the one we have today. Does that include any kind of arrangement in terms of capital for the insurance company? Or I think in 2015 or 2016, you would get capital together with IOC. Is there anything included in this line?

Marcelo Noronha: I understand that you're saying that maybe it is a year of your capital position will be but when do we have to date does that include any kind of arrangement in terms of the capital for the insurance company or 50, I think in 2014 O 2016, and you will get capital together with Iot. It included in the slides maybe historically.

Marcelo Noronha: Or maybe, historically, you think that you could keep capital very stable because the portfolio, I think, increased by R$ 1.4 billion, and you consume R$ 1.3 billion in capital. So it doesn't seem ideal to keep it stable and maintain the guidance without any sort of arrangement in terms of the insurance company or IOC. To answer your second question, I would say no.

Marcelo Noronha: That to us because it keeps capital look very stable because.

Marcelo Noronha: The portfolio I think increased by one point floor and you can assume one from rebuilding capital. So it doesn't seem ideal to keep it stable and maintained the guidance without any sort of arrangement insurance of the insurance company or I don't see I mean to answer your second question I will say no I mean yours.

Marcelo Noronha: I mean, you're saying that you have additional flexibility. We won't even need to use that, because we could even think about using it, but I don't think we will need to. Our production leads us to say that with a great degree of certainty. What changed from last quarter to this quarter? The main motivation involved two things.

Speaker Change: Thank you.

Marcelo Noronha: You'll have an additional flexibility we won't even need to use that because we could even think about using it but I don't think our real needs are.

Marcelo Noronha: Our projection Jackie Michelle leads us to say that word.

Marcelo Noronha: So a degree of certainty what changed from last quarter to this quarter the main motivation for that.

Marcelo Noronha: Two things payrolls.

Marcelo Noronha: Well, payroll – we had the payment of two important payrolls. And also NGNP, which is mark-to-market bonds, and this is due to the natural hedge of our funding. And also this is related to private pension funds, which is an important part of this thing. So these were two big movements. And also this was a one-off event.

Marcelo Noronha: We had the payment of two important payrolls.

Marcelo Noronha: Also.

Marcelo Noronha: You know cause.

Marcelo Noronha: G N P, which is mark to market along and this was due to the natural hedge of our funding and also issues related to two private pension funds, which are an important part of this so these with you.

Marcelo Noronha: Moving so this was a fan and one offs.

Marcelo Noronha: One off event and the difference is due to the payroll payments.

Marcelo Noronha: And the difference is due to payroll payment. I mean, the payment of salaries. That's why our projections and our growth curve are very much under control. I think we can also ask Ivan to answer the second question, but I would like to recall another point about the insurance company. This is something that we have seen in the past.

Ivan: So the payment.

Ivan: They rose and I've also that's why our projections.

Marcelo Noronha: Our growth curve.

Marcelo Noronha: It's very much under control.

Ivan: You can also ask about.

Marcelo Noronha: Ask event will answer the second question, but I would like to recall another.

Marcelo Noronha: About the insurance company. This is something that we already saw in the past Thiago.

Marcelo Noronha: He said that this is part of the technical strategy. At some moments, we had to do some improvements in the provision. This was strictly technical, and the provision has to do with all of the economics of the insurance business. I now would like to ask Ivan to add to my comment. Ivan, I think you may recall the question. He talked about technical provisions and whether that had any impact on our income statement and what the additional provision would be. So, Ivan, go ahead.

Marcelo Noronha: Theres a pair sad that himself this as part of our strategy.

Ivan: The moment that we felt we had to do some.

Ivan: Improvements in their provisions and I don't want this.

Ivan: Strictly technical and the provision has to do with all of the economics of the insurance. This wage me off the shelf.

Ivan: I now would like.

Ivan: I'll ask Yvonne to or adds to my comment.

Ivan: I think you may recall, but question you're talking about technical provision. So she used within your portfolio and whether that yeah. You had any impact on our income statement and what would be that additional provision. So even go ahead of myself.

Ivan Gontijo: Thank you, Marcelo, and Cassiano. I think Cassiano already explained the technical view. I would just say that that increase in provision is linked to an increase in the revenue of insurance and pension funds, special pension funds, and savings bonds. So the link in that increase in provision is proportional to the increase in revenue. I mean, secondly, this is also due to the so-called product mix that we have. We have insurance products, pension fund products, and certainly they demand an adequate level of provision, always taking a very conservative approach.

Ivan: Marcello interaction I think casciano already explained the technical view I would just say that.

Ivan Gontijo: That increase in provisions.

Ivan Gontijo: Linked to.

Ivan Gontijo: An increase in the revenue of insurance and pension plans, especially pension funds and savings bonds. So that you can link and that increasing provisions.

Ivan Gontijo: Chanel to increase in revenues.

Ivan Gontijo: Secondly, this is also due to the so-called product make sure that we have we have insurance products no pension fund products and certainly they demand an adequate level of provisions.

Ivan Gontijo: Always having a very conservative approach and not a seller you mention our hours.

Ivan Gontijo: And, Marcelo, you mentioned our provisioning, which is close to R$380 million, especially products like pension funds that increased significantly during the period. I would just like to emphasize that there hasn't been any kind of recurring gain that could probably lead us to have anything different in our structure. So everything is business as usual and in compliance with the regulating agency because it's important that we comply with our short, mid, and long-term agreements. Okay, thank you very much. Next question from Tito Labarta with Goldman Sachs. Go ahead and mine in this quarter, and I know that you can choose an hourly.

Ivan Gontijo: Provisioning, which is close to 380 million realized especially products like pension funds that have increased significantly during the period I would just like to emphasize that there hasn't been any kind of recurring gain that would probably lead us to have anything different in hours.

Daer Labarta: And our structures so everything is business as usual.

Daer Labarta: And in compliance with the regulating agencies, because it's important that we comply with our short and long term agreements. Okay. Thank you very much for the Triple a box.

Daer Labarta: Question from Tito law, Blah, Blah Blah with Goldman Sachs go ahead Sir.

Daer Labarta: I've also seen a big shift in demand deposits and time deposits; now, that could be a function of rates. But just putting that in the context of the competitive environment that we're seeing, are you having to pay more to retain deposits and retain clients? And does that limit your ability to grow your NII?

Daer Labarta: Alright. Thank.

Daer Labarta: Thank you for your call.

Speaker Change: My question. My question is on your funding.

Daer Labarta: H.

Daer Labarta: Bonnie.

Daer Labarta: Seasonality.

Daer Labarta: That was up again.

Daer Labarta: And antibodies.

Daer Labarta: Now that could be.

Daer Labarta: I guess putting that into context.

Daer Labarta: It is environment that you're seeing are you having to pay more.

Daer Labarta: Okay.

Daer Labarta: Buying back.

Marcelo Noronha: Because in order to fund the growth, you will need to pay more for deposits. How are you thinking about that, given that we're starting to see it happening in such a big way? because we have to balance our credit granting. We have to optimize cash and cost. So funding cost somehow continues to grow. It has a little bit to do with the reduction in LCR and Credit Consumption. Demand deposits continue to suffer because, as a client... pay attention to their approach to our investment department or our platform, they tend to look for products with more profitability. Our funds grew almost 20 billion euros, and some of that comes from the movements of demand deposits and savings accounts. Savings accounts have been dropping in the system as a whole.

Daer Labarta: Yes.

Daer Labarta: Your NII.

Marcelo Noronha: In order to grow.

Marcelo Noronha: We need to pay more for deposits.

Marcelo Noronha: Thinking about that.

Marcelo Noronha: Your country.

Marcelo Noronha: Surgical method can produce.

Marcelo Noronha: Bush kept us off course.

Marcelo Noronha: Washington D Comm when he got a little bit about the tier two pelican walk through wholesale and of course captisol.

Speaker Change: Got you.

Marcelo Noronha: Some people don't want to live like liquidity ratio.

Marcelo Noronha: Boost is quite slow.

Marcelo Noronha: And so still we choose senior little.

Marcelo Noronha: Because you have to balance.

Marcelo Noronha: With our credit card credit granting I've talked to nice cash cost low funding cost with somehow continues to grow it has a little bit to do with a reduction in LCR.

Marcelo Noronha: And credit consumption.

Marcelo Noronha: Awesome.

Marcelo Noronha: Demand deposits continue to separate because as a client.

Marcelo Noronha: Please pay attention or their approach by our investment department or a plot plans they tend to look for.

Marcelo Noronha: With more profitability.

Marcelo Noronha: I'm Gonna funds grew almost 20 billion for all of us.

Marcelo Noronha: All of that comes through from the movements of demand deposits and savings accounts savings accounts had been dropping in the system as a whole is always there.

Marcelo Noronha: There is always this discussion about savings accounts and CDI, and this comes from the discussion with fintech. So clients look at differentiated opportunities. We have Agora, our experts onboarding the channels, the app, or internet banking, and they one way or another observe this and provide opportunities for clients. So we see this as a natural moment in the industry where we have products with different allocations to different clients. So with savings accounts and demand deposits, they are enough to maintain our strategy for rural loans or mortgages, real estate, and finance. Would you like to add anything?

Marcelo Noronha: And about the savings account in CDI and there.

Marcelo Noronha: This comes from the discussion about the Fintech. So clients look at depreciated opportunity, we have agora all right.

Marcelo Noronha: Excellent.

Marcelo Noronha: Onboarding the channel B.

Marcelo Noronha: According Internet banking.

Marcelo Noronha: One way or another observed this and provide opportunities to clients. So we see this as a natural moment in the industry, but we have products.

Speaker Change: I'll location two different clients. So it was.

Marcelo Noronha: Is that counts and demand deposits or they aren't enough to maintain our strategy for rural loans or mortgages real estate Finance book would you like to add anything but generally the savings accounts, we had a market share of 13% and that increased to 13, 1%.

Marcelo Noronha: But you know, in savings accounts, we had a market share of 13%, and that increased to 13.1%. This is kind of the DNA of our clients. We have a savings account DNA, so savings accounts tend to remain flat, but the non-floating products with higher interest rates have a trend to capture more clients, so we see this movement as being natural. And a lot of people have asked us about funding linked to changes in what we call exempt securities.

Marcelo Noronha: This is kind of the DNA of our clients.

Marcelo Noronha: We have a savings account DNA, so stratos accounts tend to remain flat.

Marcelo Noronha: The nuns loading products with higher interest rates have of trying to capture more clients. So we see this movement has been natural and a lot of people have asked us about funding linked to changes in those what we call exempt.

Marcelo Noronha: <unk> and the impact here is practically zero, which is first because we have funding with exams.

Marcelo Noronha: And the impact here is practically zero. Securities are being accelerated to purchase inventory, and then we have a natural replacement of these exempt securities by other bonds. So the impact here is practically zero on our funding. Next question from Eduardo Rosman with BTG. And thank you, Tito. Good morning.

Eduardo Rosman: Secrets that is being accelerated.

Marcelo Noronha: The purchase of inventory and then we have and that's what replacement of these exempt securities by other bonds. So the impact here is practically zero and our funding next question from Eduardo Rosman with BTG.

Eduardo Rosman: And thank you Tito.

Eduardo Rosman: I have a question about the results in the different segments of the bank. Because the earnings of the bank improved, the insurance company remains, well, it lost a little bit of relevance as a whole in this quarter. And you don't really disclose the results for high income, low income, retail, and wholesale. So it would be interesting to hear from you where you see easier improvements in the results, if in low income, if the reduced provision is already improving the results, and whether there is any segment that is deficient. If you could elaborate on the different segments of the bank, thank you.

Eduardo Rosman: Good morning.

Eduardo Rosman: Have a question about the reserve.

Eduardo Rosman: Also in the different segments. So that's I think because.

Eduardo Rosman: The earnings of the bank improved with insurance company remained solid.

Eduardo Rosman: A little bit of relevance as a whole in this quarter.

Speaker Change: We don't really disclose the results for high income low income retail and wholesale.

Eduardo Rosman: Interesting to hear from you where do you see is your improvements in the results. If in low income is the reduced provision is already improving the resolved and whether there is any.

Eduardo Rosman: Segmented that is sufficient if you could elaborate about the different segments of the bank. Thank you. Thank you rosman for the question.

Marcelo Noronha: Thank you, Rosman, for the question. Well, we are doing more in the wholesale bank. We have an RAR that is high for the different segments, and this is also for high-income segments, not to mention private.

Marcelo Noronha: Okay.

Marcelo Noronha: Uh huh.

Marcelo Noronha:

Marcelo Noronha: Well.

Speaker Change: We are doing well in the wholesale bank.

Marcelo Noronha: Yeah.

Marcelo Noronha: And our a R. Samsung that is high for the different segments and this is also for high income segment not to mention private.

Marcelo Noronha: So that's.

Speaker Change: It's doing quite well.

Marcelo Noronha: So that's doing quite well. Our challenge, as you know, is talking about the insurance group, but our challenge, as you know, comes from our mass market clients, given the cost of service and delinquency. And we've been paying that bill.

Speaker Change: As you know spoke about insurance group and our challenge as you know comes from our mass market clients, given the cost to serve and delinquency and let them paying that bill.

Marcelo Noronha: But indeed, things are starting to improve a lot in SMEs in particular, though we see the delinquency curve dropping, and Bert. There's some improvement; month by month, we see improvements. So our expectation is that we will drive the RAR of the mass market quarter after quarter, and I have to tell you. We don't really disclose this breakdown, but what I can tell you is that all business units are getting a lot of traction right now.

Marcelo Noronha: But indeed things starting to improve a lot in SME.

Marcelo Noronha: Killer.

Marcelo Noronha: We see the delinquency curves droppings huh.

Marcelo Noronha: Third.

Marcelo Noronha: There's there's some improvement in month by month with improvement.

Marcelo Noronha: So I expectation is that.

Marcelo Noronha: We will drive B R E or of the mess I can't quite right after quarter end.

Marcelo Noronha: And I have to tell you.

Marcelo Noronha: We don't really disclose this breakdown.

Marcelo Noronha: I can tell you is that all business units have a lot of traction right now.

Marcelo Noronha: An area that might have small traction or a smaller attraction could be small and mid-sized enterprises, but it's improving. And again, that's an open sea of lower income clients because they have a higher risk, but they are all with a lot of traction. It's not by chance that we are doing this.

Marcelo Noronha: The mine has a small traction or smaller attraction could be small and midsize enterprises, but it's improving.

Marcelo Noronha: And again, that's open C O have a lower income client because they have a higher risk.

Marcelo Noronha: They oh, we have a lot of traction.

Marcelo Noronha: It's not by chance that we are doing this.

Marcelo Noronha: Now we are growing credit in all segments in important lines. So we have the ability to deliver and to deliver more than we are delivering right now. And what I see and what I am living, because I've been going all over Brazil, I've been having breakfast with colleagues at the headquarters, in many locations, in Rio de Janeiro, in Sao Paulo, in Salvador. And it's...

Marcelo Noronha: Now we're growing credit in all segments and important line. So we have the ability to deliver in two to live a more than we're delivering right now.

Marcelo Noronha: Yeah.

Marcelo Noronha: No.

Marcelo Noronha: And what they see and what I am.

Marcelo Noronha: Living one because I've been going all over Brazil, I've been having breakfast with colleagues in the headquarters in many locations in Rio de Janeiro in Sao Paolo in Salvador.

Marcelo Noronha: <unk>.

Marcelo Noronha: And it.

Marcelo Noronha: It.

Marcelo Noronha: I see everyone motivated and excited and moving in the same direction. So we are improving the RAR, the risk-adjusted return for all of these segments. We are going to be delivering in the future quarters. That's my expectation for all business units. And in the mass market, perhaps the biggest challenge is to accelerate credit, maintain NPL, and decline and adjust the footprint.

Marcelo Noronha: I see everyone motivated and excited and moving in the same direction. So we are improving the R. E. R. The risk adjusted return for all of these segments, we are going to be delivering.

Marcelo Noronha: And in the future quarters, that's my expectation for all business units and in the mass market, perhaps the biggest challenge is to accelerate credit maintaining M. P. L declining and adjusting the footprint and the numbers. We showed here quite exactly at that the new vintage.

Marcelo Noronha: Mess My Kid.

Marcelo Noronha: And the numbers we showed here point exactly to that. The new vintage of a mass market, increasing, accelerating with exceptional quality and the footprint adjustment happening. Thank you, Rosman, for the question. Next question from Eduardo Nishio with JML. Good morning, everyone.

Marcelo Noronha: Increasing accelerating with exceptional quality and the footprint adjustment happening. Thank you rosman for the question next question from Eduardo Nishu, Virginia.

Eduardo Nishio: Thank you for taking my question. Yeah, everything is fine, thank you. My question relates to your strategic plan. Part of the recovery that you anticipate comes from improvement in the cycle that affected the mass market, but most of it comes from more structural changes that you are promoting. I would like you to elaborate further on your structural changes and everything else that is happening with your strategic planning. If you could, please, list the main strategic structural changes that you have in mind for the next quarters or maybe years.

Eduardo Nishio: Good morning, everyone and thank you for taking my question my Yeah.

Speaker Change: Yeah everything is fine. Thank you my.

Eduardo Nishio: My question relates to your strategic plan.

Eduardo Nishio: Sure.

Speaker Change: Thank you.

Eduardo Nishio: That's a part of the recovery that you would anticipate comes from improvement in the cycle that impacted the mass market, but most of it comes from more structural changes that you are promoting.

Eduardo Nishio: I would like you to elaborate further on your structural changes and everything else that is happening with your strategic planning if you could list probably the maintenance strategic structural changes that you have in mind for the next quarters or maybe years.

Eduardo Nishio: And also, if you could give me more details about changes in management and cultural changes as well that you are trying to introduce in the bank, especially that cultural aspect, because this has been something so important in the DNA of the bank. How do you do it? How do you do it?

Eduardo Nishio: And also if you could give me more details about changes in management and cultural changes as well that you were trying to introduce in the bank, especially that cultural aspect because this is Ben.

Eduardo Nishio: Some things so importantly in the DNA of the bank.

Eduardo Nishio: How do you.

Eduardo Nishio: How do you.

Marcelo Noronha: What do you see going forward in 2028 after everything has been done? Well, thank you. These are very open questions, and I think we could spend days here just answering everything in more detail. I'll ask Cassie to help me with the answers.

Eduardo Nishio: Anticipating choice in terms of these changes and and what do you see going forward in 'twenty or 'twenty eight after everything has been done well. Thank you laser.

Cassie: Very open questions and I think we could spend days here just answering everything in more details I'll ask Kathy to help me.

Cassie: Now with the answers well number one.

Marcelo Noronha: Well, number one, the delivery of the credit business unit. We unify processes that were separated in our organization. So everything is now... combined. Integrated.

Cassie: That delivery of that credit business unit.

Cassie: We unify processes that were separated in our organization. So everything is now.

Cassie: Combine integrated with.

Marcelo Noronha: The separation of the teams that used to serve the mass market and the wholesale bank. We also made important process changes, first line of defense, second line of defense, with the use of machine learning running in the background of our modeling. And we also introduced some credit policies because you have put in a certain appetite. Okay, you say, I want to give 50% of the company's revenue. So that was one change. The second change was segmentation. That segment of SME is one of the things that we told you that we would launch early this year. It's already in place.

Cassie: We I mean, the separation of the teams that used to serve the the mass market and the wholesale bank. We made also important process changes. The first line of defense second line of defense with the use of machine learning.

Marcelo Noronha: Running in the background of our modeling and we also introduced some credit policies because you put a certain appetite. Okay. You say I want to go with 50% of the company's revenue.

Marcelo Noronha: That was one change the second change was segmentation.

Marcelo Noronha: That segment of SME is one of the things that we told you that we will launch early this year.

Marcelo Noronha: We don't have all the clients already in there because we're still in the process of segmenting clients, but we will also deliver the affluent segment, the wealth segment, in the second half. But we will also... We are also working on restructuring our prime segment for more, you know, for wealthier clients, and that's another important segmentation. In terms of wholesale banking, I told you that we made some process changes on the loan book side.

Marcelo Noronha: It's already in place we don't have all the clients already in there because we are still in the process of segmenting clients, but we will also deliver the affluent segment, though the wealth segment in the second half, but we will also we're also working on.

Marcelo Noronha: Restructuring our prime segments for more you know for wealthier clients and that's another important segmentation in terms of the wholesale banking I I told you that we made some process changes on the loan bauxite, so I'm, saying that.

Marcelo Noronha: So I'm saying that this is something that is already happening, and this is generating results, and in turn, this will improve our numbers with time. We are reviewing the footprint because we are delivering above plan, but we will deliver numbers above the plan with costs under control. And all of these deliveries will allow us to get that additional revenue that we talked about last year. But even today, I said that since the market is growing at a CAGR of 8% a year in terms of the credit volume for the next five years, it will bring an additional $3.3 billion BRL to the Brazilian market in five years.

Marcelo Noronha: This is something that is already happening and this is generating results and in turn this will improve our numbers with time and obviously I think the biggest challenge is in the cost to cost to serve or more mass retail clients well, we havent we are review.

Marcelo Noronha: In the footprint for it because we are delivering above.

Marcelo Noronha: Plan B.

Marcelo Noronha: But we will deliver our numbers above the plan with costs under control and all of these deliveries.

Marcelo Noronha: Will allow us to get that additional revenue that we talked about last year, but even today I said that since the market is growing with a CAGR of 8% a year in terms of the credit volume for the next five years. It will bring an additional 3.3 billion.

Marcelo Noronha: We are also the Brazilian market in five years, and certainly wouldn't want to capture part of that so that when we go forward our revenue level will be much higher and lower return will be higher because you know the bottom line matters, which is the profitability that we will have and casino I think you can add to what I'm, saying.

Marcelo Noronha: And certainly, we want to capture part of that so that when we go forward, our revenue level will be much higher, and our return will be higher because the bottom line matters, which is the profitability that we will have. And, Castellano, I think you can add to what I'm saying because, out of the 10 topics that we listed, we had over 2,600 initiatives, but I am just highlighting some of the main initiatives, and also... There was that movement of time to market that we're doing with the technology area and the very intensive use of Gen-AI. I would also mention these two.

Marcelo Noronha: Because out of the 10 topics that we listed we had over 2600 initiative.

Marcelo Noronha: But I am just highlighting some of the main initiatives.

Castellano: And it also.

Marcelo Noronha: There was that movement of time to market that we were doing with the technology area and the very intensive use.

Castellano: Of Gen AI I would also mention these two.

Marcelo Noronha: Yeah, I'll talk about that management side as well. But there are two important points. Bradesco Espresso is a very important link with this new concept of the new footprint and our cost to serve together with digital. Marcelo also mentioned that during the presentation. It's a very strong digital bank. Bradesco Espresso is... a very positive tool because we can be present in many municipalities.

Castellano: Yeah, I'll talk about that management side as well, but there are two important points bradesco expresso, it's a very important linked with this new concept of the new footprint and print and our cost to serve.

Marcelo Noronha: Together with digital Marcello also mentioned that during the presentation. It's a it's a very strong digital bank Bradesco Expresso is.

Marcelo Noronha: A very positive tone, because we can be present in many municipalities technology Marcelo mentioned that not only in terms of reskilling, but also we are hiring new people. We're hiring people at all levels of technology and all the important processes I became them.

Marcelo Noronha: Technology, Marcelo mentioned that not only in terms of re-skilling but also we are hiring new people, we are hiring people at all levels of technology, and all important processes are becoming more agile, it's becoming more productive, it's a new concept, and this is, across the board, and Culture Management. I think you should also talk a little bit about that and what we are doing in terms of our culture. Regardless of the fact that we do not want to lose our Bradesco way of being, we also want to have new colleagues that can add important values. Here, we have colleagues from three different places. I even think that...

Marcelo Noronha: More our child, it's becoming more productive it's a new concept and theirs is.

Marcelo Noronha: Across the board.

Marcelo Noronha: And culture management I think you should also talk a little bit about that and what we are doing in terms of our culture.

Marcelo Noronha: Regardless of the fact that we do not want to lose our Bradesco way of being we also want to have new colleagues they can add in Portland.

Marcelo Noronha: Here, we have colleagues from three different places.

Marcelo Noronha: I, even think that.

Marcelo Noronha: When we meet in person, I think. We can also discuss things with the fell side. I would say that what we are seeing, just trying to make an executive summary of everything, we are bringing two levels of sea level to the organization, people that are being brought from the market, and this is an important cultural change. The reduction of these layers has brought about an enormous difference in terms of speed.

Marcelo Noronha: When we meet in person I.

Marcelo Noronha: Thank.

Marcelo Noronha: We can also discuss things with the sell side.

Marcelo Noronha: I would say that what we are seeing.

Marcelo Noronha: Just trying to make it an executive summary of everything we are bringing to sea levels to the organization people. There are they bringing brought from the market and this is an important cultural change the rejection of these layers.

Marcelo Noronha: What about an enormous difference in terms of speed as I was saying before I've been going around the country and having breakfast and lunches with different people I'm meeting with different segments of the industry and it is amazing to see that once you shorten the layers.

Marcelo Noronha: As I was saying before, I've been going around the country and having breakfasts and lunches with different people; I'm meeting with different segments of the industry, and it is... amazing to see that once you shorten the layers, communication becomes much faster. Things have become a lot more agile, and our decision-making process, you know, in the bank, if you just start interviewing people from within, people will come and talk to you about it. That's another relevant aspect once we talk about changes to our culture and management. Giovanna is just arriving.

Marcelo Noronha: The communication becomes much faster.

Marcelo Noronha: Things become a lot more agile in our decision making process.

Marcelo Noronha: In the bank. If you just start interviewing people from within people will come and talk to you about it that's another relevant aspect once we talk about changes.

Giovanna: To our culture and manage man.

Marcelo Noronha: <unk> is just arriving show we worked together with Julia I know in that transition and she will work with me as well. So we are working on that new age our plan that I've been telling you that we will deliver it.

Marcelo Noronha: She will work together with Juliano in that transition, and she will work with me as well. So we are working on that new AGR plan that I've been telling you that we will deliver. And we will go even beyond. We eliminated some positions, some layers, and we want to continue to do changes to the hierarchical levels, maybe, better so that throughout the end of this year and next year, we will have a lean year, you know, a more lean company. We do not want to eliminate values because values are important because they support our culture, but that's not all.

Marcelo Noronha: And we will go even beyond we eliminated some positions some layers.

Marcelo Noronha: And we want to continue to do.

Marcelo Noronha: Angels within our organization with.

Marcelo Noronha: Hierarchical levels maybe.

Marcelo Noronha: Better so that throughout the end of this year and next year, we will have a linear you know them.

Marcelo Noronha: A more lean company, we do not want to eliminate the values because the values are important because they support our culture, but that's not all in fact.

Marcelo Noronha: In fact, we want to maintain values. What values? For example, we will stop offering promotions and career promotions. No, this is a place where you can get promoted and improve professionally.

Marcelo Noronha: We want to maintain values what values.

Marcelo Noronha: For example, what would stop offering promotions and.

Marcelo Noronha: And Korea promotions, new work from them. This is a place where you can get promoted and.

Marcelo Noronha: But we are also willing to bring someone from the market in. If we need to have more skills in the organization, this is basically it. Secondly... Our employees, our managers, they carry the banner of Bratisco. Why is it that we would think about ending this?

Marcelo Noronha: Professionally, but were also willing to bring somebody from the market. If we need to have more skills in the organization. This is basically it.

Marcelo Noronha: Secondly.

Speaker Change: For sure.

Marcelo Noronha: Our employees our managers they carry the banner of participating.

Marcelo Noronha: It isn't that we would think about ending this on the contrary, we want to harness the sleep anymore, but we want to have a wider management in our organization with fewer layers.

Marcelo Noronha: On the contrary, we want to harness this even more, but we want to have lighter management in our organization, with fewer layers. We want to have a different outlook, a different perspective, and see the areas that are different differently. Not being standardized, with much faster decision making, with a lot of technology integration, different skills directed at digital, and this is what you're going to see in our organization, with these changes in cultural traits, with these additions that we'll have, that we will, not really, that we have been, the changes that we have been making in the organization.

Marcelo Noronha: I don't have a different outlook a different perspective seal.

Marcelo Noronha: Areas that are different in different places not been standardized with a much faster decision, making with a lot of technology integration it's different skills.

Marcelo Noronha: Directed to change at all and this is what youre going to see in our organization.

Marcelo Noronha: Ladies.

Marcelo Noronha: Changes in cultural trends with east.

Marcelo Noronha: Actions that will have that we will not really that we have been.

Marcelo Noronha: It changes that we have been making in the organization and end up with a span of control that is different that you have no idea nishu, it's so different.

Marcelo Noronha: And with a span of control that is different, you have no idea, Nishio, it's so different. So I think this is it, because we even spoke about this in the prior quarter, about the total volume of revenue available in the Brazilian market. I'm almost sure of that.

Marcelo Noronha: So I think this is it because we even spoke about this in the prior quarter about the total volume of revenue available in the Brazilian market I'm almost sure I.

Marcelo Noronha: I haven't got the number off the top of my head, but please check the previous earnings conference call. And let me take this moment to draw your attention. If you look at my presentation back then and my presentation today, please let me know if there is any difference. What we said back then is what we're doing, and another important thing. There is nothing else in this bank that is not measured. Everything to run the bank or change the bank is measured. Do we have a new project?

Speaker Change: I haven't got the number from the top of my head.

Marcelo Noronha: Please check previous earnings conference call and I want to take this moment to draw your attention. If you look at my presentation back then in my presentation today.

Marcelo Noronha: Please let me know if there is any difference while we said that back then.

Marcelo Noronha: Kidding.

Marcelo Noronha: And another important thing.

Marcelo Noronha: There's nothing else understand that does not measure.

Marcelo Noronha: Everything in run the bank or change the bank is measured.

Speaker Change: We have a new project.

Marcelo Noronha: For example, we are going to expand our middle corporate segment. It will be expanded. This project has been approved. We'll grow the team, another ten platforms around Brazil. What we call a platform is actually having a brand dedicated to this middle corporate segment. But...

Marcelo Noronha: For example, we're going to expand our.

Marcelo Noronha: Little Liberal corporate segment. It will be expanded this project has been approved well grow the team another 10 platforms around Brazil, what we call platform is actually having a branch.

Marcelo Noronha: Dedicated to this middle corporate segment.

Marcelo Noronha: But.

Marcelo Noronha: It all involves measurements, and decisions are made quickly, but all suggestions need to be proven, and it's going to be a cheap branch, not a huge branch, let's call it a platform, as we call it. When you look at total numbers..., but it's registered as a branch at the Central Bank of Brazil. So Nishio, I think that this is kind of an overview. And one last comment: the result of the transformation process will be recorded in the operating results of the bank, and that's fundamental.

Marcelo Noronha: It all involves measurements on the house and decisions are made quickly but.

Speaker Change: Oh, a suggestion from need to be proven and it's going to be a cheap brown to knock off a huge branch.

Marcelo Noronha: Platform as we call it.

Marcelo Noronha: We look at total numbers.

Marcelo Noronha: But it's it's registered as a branch at the Central Bank of Brazil, So and you should think of that.

Speaker Change: Kind of an overview.

Marcelo Noronha: And my last comment is the result of the transformation process. So it will be recorded in the operating results of the bank and that's fundamental so we have to focus on the operating result, see the transformation and the timeline to organize what we've done already and what we will be doing in the future I think Nishu next question.

Marcelo Noronha: So we have to focus on the operating results to see the transformation and the timeline to organize what we've done already and what we will be doing in the future. Thank you, Nishio. Next question from Pedro Leduc with Ita BBA. Cool. Thank you. We can hear you.

Marcelo Noronha: From Pedro Leduc with Eaton with BPH.

Marcelo Noronha: Luke.

Marcelo Noronha: Oh.

Pedro Leduc: Cool. Thank you we can hear you go ahead.

Pedro Leduc: Go ahead. Thank you for the call, and thank you for taking my question. I'd like you to elaborate on the NII dynamic, particularly client NII. The NII in this quarter had a relevant drop, 14% year-on-year, and the NII is still dropping at a similar speed to the past quarters.

Pedro Leduc: Thank you for the call.

Pedro Leduc: And thank you for taking my question.

Pedro Leduc: I wanted to elaborate on the NII dynamics, particularly client NII NII this quarter had a relevant dropped 14% year on year in the NII is still dropping.

Pedro Leduc: In a similar speed to the past two quarters I know Andre you said first you grow the portfolio and then we're going to see a positive impact on NII.

Marcelo Noronha: I know, Andrea, you said first you grow the portfolio, and then we're going to see a positive impact on NII. But thinking about this sequence, it seems to me that the current origination is coming with lower spreads, perhaps because of the line or the mix. My rationale is I see payroll-deductible loans increasing, but with caps, putting pressure on profitability. You also have savings account deposits falling, and the corporate segment being very competitive.

Marcelo Noronha: Thinking about the sequence it seems to me that the current origination is coming with lower grant.

Marcelo Noronha: Because of the line automakers my rationale is I see payroll deductible loans, increasing but with cap putting pressure on profitability. You also have the savings account deposits, Paul I mean corporate segment being very competitive.

Marcelo Noronha: So as an outsider, it doesn't seem that the portfolio construction is not helping to convergence to the guidance. In IEI, historically, I know a lot has changed, but it was a line item that was always farther from the guidance, and I see you're very comfortable with maintaining the guidance, particularly for NII. So I'd like to hear from you. Is my interpretation wrong? All the spreads, more pressure, the more pressure, is it about more mix or more volume?

Marcelo Noronha: And outside of it doesn't seem that the portfolio construction is not the whole thing.

Marcelo Noronha: To converge to the guidance NII historically I know a lot has changed but he was the line item there was always.

Marcelo Noronha: Arthur.

Marcelo Noronha: Further from the guidance and as you very comfortable maintaining the guidance, particularly for NII.

Speaker Change: Nice to hear from you.

Marcelo Noronha: But I guess my interpretation wrong.

Marcelo Noronha: August spreads more pressure demand pressure is it about more make more volume.

Marcelo Noronha: Perhaps a lower AWL will offset a less dynamic NII. It's a long question, but thank you for this question. I guess that... At the very end of your question, you kind of gave us the answer. We look at economic failure.

Marcelo Noronha: Perhaps a lower AWS.

Speaker Change: Uh huh.

Speaker Change: Offset a less dynamic NII.

Speaker Change: It's a long question, but thank you for this question.

Speaker Change: I guess then.

Speaker Change: At the very end of your question you kind of gave us the answer.

Marcelo Noronha: Because.

Speaker Change: We look at economic value.

Marcelo Noronha: So we look at the NII, not the gross NII. So in the NIA, you think that it's starting to grow, and we'll see that, and if you look at the mix of products, you will see that we boosted those higher-risk products. But everyone here is very down-to-earth.

Speaker Change: So we look at the and not yet another growth NII.

Marcelo Noronha: So in NII, you thought that it's starting to grow and we'll see that and if you look at the mix.

Marcelo Noronha: Product.

Marcelo Noronha: You'll see that.

Marcelo Noronha: We boosted sows hydro risk products.

Marcelo Noronha: But everyone hears various onto worth.

Marcelo Noronha: We are not going to have that NPL, that delinquency, in the future. On the contrary, and as I said, and stressed this during my presentation, in February, we gained market share. In March, most likely, this will be disclosed by the Brazilian Central Bank tomorrow, and also, most likely, we also gained market share. You are also right when you say that payrolls, loans, and mortgages have lower margins. That is a fact.

Marcelo Noronha: We are not going to have that npls that delinquency in the future on the contrary and like I said and I stress. This during my presentation in February we gained market share in March most likely this will be disclosed by the Brazilian Central Bank tomorrow unless at the most likely we also gained market share.

Marcelo Noronha: So right when you say that payroll.

Marcelo Noronha: Loans and mortgages have lower margins.

Marcelo Noronha: It is a fact.

Marcelo Noronha: The margin takes longer to come, but we are also offering products with a higher margin. We rule in February and more in March, and this will have a reflection in April, May, June, July, and so on and so forth. As regards the whole thing you talked about the spread, well... That doesn't exist! The spread in the wholesale bank is under pressure. It's always been.

Marcelo Noronha: Arjun takes longer to come but we are also offering products with a higher margin.

Marcelo Noronha: We grew in February and more in March and this will have a reflection in April May June July and so on and so forth.

Marcelo Noronha: As regards the wholesale talked about spreads.

Marcelo Noronha: That doesn't exist.

Marcelo Noronha: With the spread in the home say whole bank is under pressure, it's always been here, we work with our H R.

Marcelo Noronha: Here we work with RAR and Risk Adjusted Returns. So, our regional managers, using their phone, the tablet, all of their monitors, they see exactly the same thing. They see the RAR history of the client. They can simulate what they need to do to negotiate with the client online, in real time.

Marcelo Noronha: Risk adjusted return so our regional managers.

Marcelo Noronha: Using their phone and the tablet ordering monitors they see exactly the same thing.

Marcelo Noronha: They see the R E R. A history of the client they can simulate what they need to do to negotiate with the client online real time.

Marcelo Noronha: So we put pressure on them regarding RAR. They just don't have a deal to add to their portfolio. Today, the market doesn't give you a lot of room to bring those assets into your portfolio. We also have what we call OPCD for the secondary market. So, you see, the margin is not coming only from spread. We don't address this operation by operation.

Marcelo Noronha: So.

Marcelo Noronha: We put pressure on them regarding our eight are they just don't have a deal to add to their portfolio.

Marcelo Noronha: Today, the market doesn't give you a lot of room to bring those to your portfolio.

Marcelo Noronha: We also have.

Marcelo Noronha: That's not what we call a b C D for the secondary market obesity portfolio.

Marcelo Noronha: So you see the bridge and it's not coming only from spread we don't address this operation by operation we address it by client. So when we have an adequate or E R and relationship.

Marcelo Noronha: We address it by client. So when we have an adequate RAR and relationship, the deal goes through, or else they don't have the ability to approve the deal. So there's a rationale here. We implemented this when I was in the wholesale bank, together with Bruno and our colleagues there. So this is not new.

Marcelo Noronha: It goes through or else. They don't have the ability to close the deal. So there is a rationale here.

Marcelo Noronha: Implemented this when I was in the wholesale bank together with Bruno and our colleagues.

Marcelo Noronha: The margin comes from the whole. We also have private payrolls. We are one of the largest banks managing payrolls, which means relationships with large corporations, mid-sized enterprises, and small enterprises. And we have other businesses that we do around the relationship with legal entities. So revenue doesn't come only from the margin. Now, to make up the client NII, we'll grow SMEs because this is added to individuals for us to build up our margin over time. Is the blind item challenging?

Marcelo Noronha: So this is not you the margin comes from the hole. We also have a private payrolls, we own one of the largest banks managing they will assist means relationship with large corp, midsize enterprises small enterprises.

Marcelo Noronha: And we have other businesses that we do around the relationship with legal entities. So revenue doesn't come only from the margin now to makeup the client NII will grow with them easily.

Marcelo Noronha: Nicholas This is added to individuals' for us to build up our margin overtime.

Marcelo Noronha: Is that the line item challenging to do this.

Marcelo Noronha: It is. But rest assured, just wait, because we'll get there. But we are looking at NII, or Net Interest Income. That is what is important. Let's have a balance between what I do and the potential loss with these clients. And this is our handbook for our day-to-day. But, of course, the portfolio needs to come first, and the NRA will come later, and we'll keep looking at the mix over time, and we'll see a more balanced mix, but with delinquency under control, we have to have high-quality assets. Okay, Pedro?

Speaker Change: But rest assured.

Speaker Change: Wait because woke up there.

Marcelo Noronha: But we are looking at NII net interest income that is what is important and perhaps have a balance sheet.

Marcelo Noronha: Between what I do and the potential loss with each client.

Pedro Leduc: This is our handbook for are they kidding.

Pedro Leduc: Of course, there is.

Marcelo Noronha: The portfolio needs to come first and then I will come later and we'll keep looking at the mix over time, and we'll see a more balanced mix.

Marcelo Noronha: But with delinquency under control, we have to have high quality assets. Okay. Pedro So we want to make a mistake kind of complement.

Marcelo Noronha: So we won't make a mistake. If you want to add anything, I just have two very brief comments. Pedro's question was more directed at the product mix, and as Marcela was saying, there is also the segment mix.

Speaker Change: If you want to add anything just I just have two very brief comments Pinterest question was more directed to the product mix and as Marcelo was saying there is also the segment mix once we accelerated SME and individuals' mass market, we bring onboard more margin my second comment is about guide.

Marcelo Noronha: Once we accelerate the SME and individuals' mass market, we bring on board more margin. The second comment is about guidance. When we look at the guidance, the guidance gives us an idea of... You know, profit a year, that's valid, that's what we work with. But in terms of a turnaround history, when we point the guidance towards the end of the year, the beginning of the year is different from the end of the year because you are turning the portfolio, so it's a more classic case. It is more limited, and it turns around, and then it picks up again.

Marcelo Noronha: When we look at the guidance the guidance gives us an idea of.

Marcelo Noronha: Well you know in our profit a year. That's valid this is what we work with but in terms of a turnaround his ray when we point the guidance towards the end of the year. The beginning of the year is different from the end of the year. Because you are turning the portfolio. So it's a more classic case.

Marcelo Noronha: It is more limited than even it turns around and then he picks up again, so it will be different if you compare one and another I mean, it is valid but there are fluctuations in some vulnerable lines you know within a turnaround perspective now Carlos Gummies lobbies next question from Asia.

Marcelo Noronha: So it will be different, you know, if you compare one and another. I mean, it is valid, but there are fluctuations in some possible lines, you know, within a turnaround perspective. Now, Carlos Gomez-Lopez, next question from HSBC. The floor is yours.

Carlos Gomez: We see the floor is yours.

Marcelo Noronha: Okay.

Carlos Gomez: My question, I have two questions. First, funding. There was a drop of almost 13% in checking account year on year. When do you intend to change that in terms of cheap funding? The second question is about Next. We don't have a lot of information about the future of Next or the digital platform.

Carlos Gomez: That was my question I have two questions first is on funding there was a drop of almost 13% on checking account year on year. When do you intend to change that in terms of cheap funding and the second question is about next year. We don't have a lot of information about the future of next or the <unk>.

Carlos Gomez: Chita platform.

Marcelo Noronha: Thank you. Thank you, Carlos. So, you start first, and then I'll talk about what's next.

Speaker Change: Thank you thank you Carlos.

Marcelo Noronha: So.

Speaker Change: You start first and then I'll talk about next Carlos Thanks, It's a pleasure to see you.

Marcelo Noronha: Carlos, thanks. It's a pleasure to see you. Marcelo just said now that one of the important indicators is our cash growth. We are doing some important work with companies and also working with some SMEs that are now coming into our offices. I think that the fair share path is important, and this will strike a balance when it comes to MIGS or with that demand deposit. But we must also remember that we have lots of CDBs, which are some instruments related to demand deposits, and that's not specifically in that same line.

Marcelo Noronha: Marcello just said now that one of the important indicators are is our cash growth. We're doing some important work with company and also working with some Smes that are now coming into our offices I think that the fair share path is important and this will strike a bias.

Marcelo Noronha: When it comes to mix or where that demand deposit. We must also remember that we have lots of C. D Beach, which are some instruments related to demand deposits and that's not not specifically in that same line I mean, you'll have you'll have a remunerated line, but not to that client you own.

Marcelo Noronha: I mean, you have a remunerated line, but not to that client. You only see that when you look at the time deposit line. I mean, remuneration is a bit lower. It's a bit lower in this business, that's why you see this change. But it's not loss, but gain, because the line is not broken down for you to see it more clearly.

Marcelo Noronha: Only see that when you look at the time deposit line I mean remuneration is a bit slower.

Marcelo Noronha: It's a bit lower in this business. That's why you see this.

Marcelo Noronha: This change, but it's not lost but gain because the line is not broken down for you to see it more clearly.

Marcelo Noronha: Uh huh.

Marcelo Noronha: Great.

Marcelo Noronha: Yeah, I think you're right. In terms of the clients, that is it. And again, the more the client helps itself, it looks for different alternatives. And we will keep seeing these changes. I mean, the first quarter is more seasonal, but we understand that this is... Quite normal, and within the context of the year, this will be within the lines of what we often do. Now, to answer your question about next, with next, you know that... Part of the investments are within Bradesco. Digital is totally outside Bradesco.

Speaker Change: Yeah, I think youre right.

Marcelo Noronha: In terms of the clients that is edge and again.

Marcelo Noronha: The more the client helps itself it looks for different alternatives and we will keep we will keep seeing these changes.

Marcelo Noronha: In the first quarter is more seasonal but we are we understand that this is.

Marcelo Noronha: Fighting normal and within the context of the year this will be within the lines of what we often do.

Marcelo Noronha: Now about next.

Marcelo Noronha: Now to answer your question about next with next you know that.

Marcelo Noronha: Part of the investments are within Bradesco digital was totally outside with Bradesco, we have decided that next.

Marcelo Noronha: We have decided that Next... would be another segment for us here with a brand that is known in the market. But when we reviewed our strategy and the plan, we decided not to make that move before we would make all the decisions related to that math segment because we have learnings with NEXT and learnings that come from digital. So we are now in this decision-making process. We have some possible paths, and you will see that in due time.

Marcelo Noronha: Would be another segment for us here with a brand that is known in the market, but when we reviewed our strategy and the plan.

Marcelo Noronha: We decided not to make that move before we would make all the decisions must be related to that math.

Marcelo Noronha: Segment, because we have learnings with nextgen learnings that come from digital so we are now in this.

Marcelo Noronha: Decision, making process, we have some possible paths and you will see that in due time also with this new colleague that is arriving there will certainly help us in this process.

Marcelo Noronha: Also, with this new colleague that is arriving, that will certainly help us in this process of Execution and Decision-Making. Hi, thank you for the presentation. Our question is about COFF. We have already talked a lot about, you know, GNA, et cetera. I would just like to look at the orders.

Marcelo Noronha: Execution in decision, making but if you look at our playbook you will also see some interesting.

Speaker Change: Figures about digital took a look at that because we have some information about digital in our playbook and thank you for your questions. Thank you. The next question comes from Gilead Me Gray spin from J P. Morgan.

Speaker Change: Hi, Thank you for.

Marcelo Noronha: The presentation. Our question is on cost.

Marcelo Noronha: We already talked a lot about G&A.

Marcelo Noronha: G&A et cetera, I would just like to look at orders. This was a controlled I will tell you control quarter and discussing the guidance with you early this year I think there was a caution in terms of the total cost of the guidance because of that my guidance was above inflation and part of the explanation was because you were very cautious about that line.

Marcelo Noronha: This was a controlled, I would say, a controlled quarter. And when I discussed the guidance with you early this year, I think there was caution in terms of the total cost of the guidance. Because of that, my guidance was above inflation, and part of the explanation was because you were very cautious about that line throughout the year. But looking at the run rate for the quarter, if the pace was to be maintained at about 1.5% throughout the year, we would see a drop when compared to 2023.

Marcelo Noronha: Throughout the year, but looking at the run rate for the quarter. If the peso was to maintain a about a 1.5% throughout the year, we would see a drop when compared to 2023. The question is.

Marcelo Noronha: The question is... How could we see this line going forward if the pressure you were anticipating at the beginning of the year is still a base case for the rest of the year? And also, exactly what led you to see this more beneficial performance or behavior of the line? Thank you. Andrei, you start, and then I'll add.

Andrei: How could we see this line going forward if the pressure you are anticipating at the at the beginning of the year is still our base case for the rest of the year.

Andrei: And also exactly what led you to to see this more beneficial performers or behavior up the lines.

Andrei: Thank you Andrea you start and then I'll add my first comment comment is that there was a very good performance in all the lines of the main operating expenses personnel.

Marcelo Noronha: My first comment is that there was a very good performance in all the lines of the main operating expenses, personnel, you know, admin, and other expenses. Marcelo pointed out quite well that personnel and admin expenses grew 3.5% in the first quarter against an inflation rate in the first period of 4.3%, showing that our expenses are very much under control. So we started off controlling our expenses, and this is our objective for the rest of the year.

Marcelo Noronha: Oh, admin and other expenses Marcello pointed out quite well that personnel and admin expenses grew three 5% of the first quarter I guess on inflation in the first period up 4.3 is showing that our expenses are very much under control. So we started this almost so we started off controlling our expenses and this is all.

Marcelo Noronha: Our objective for the rest of their but we have to bear in mind that the strategic plan that has started in.

Marcelo Noronha: But we have to bear in mind that the strategic plan that was started on February 19 had a very small impact in the first quarter. So it's just natural that the impact will grow going forward, an impact that will be felt in technologies, new hirings, contingencies, you know, fiscal contingencies, etc. This will appear throughout the year.

Marcelo Noronha: February 9th February 19 has a very small impact in that first quarter. So it's just natural that the impact will grow going forward and the impact that will be felt in technologies, new hirings contingencies, you know fiscal contingencies et cetera. This will appear throughout the year, but this is.

Marcelo Noronha: But this is what makes us certain that this line will go, you know, within the guidelines. But we will certainly do all we can to lower that number. We have to also recall the collective bargaining agreement. I mean, of course, that... We have our own impressions of the CBA, but the negotiation remains open. I mean, if you look at the line of others and compare it with the same line, it's the same as other companies that have consolidated with us.

Marcelo Noronha: What makes us certain that this line will go.

Marcelo Noronha: Now within the guidance, but we will certainly do all we can to lower that number we have to also recall the collective bargaining agreement I mean of course that we.

Marcelo Noronha: We have our own impressions about the collective bargaining agreement by the negotiation remains open I mean, if you look at the line of others and compare it with the same line is the same as other companies that consolidate with US in this line is going back to its traditional level from previous years without the effects of that.

Marcelo Noronha: And this line is going back to its traditional level from previous years without the effects that we had in the past two years. So everything is under control and normal, move the needle a bit, but everything is being looked at and treated very rigorously. As Marcelo was saying, all the lines should be within the guidance. Some lines are even above guidance, but we will see a balance between one and the other.

Marcelo Noronha: We had in the past few years.

Marcelo Noronha: So everything is under.

Marcelo Noronha: Control and normal I mean, the collective bargaining agreement could probably.

Marcelo Noronha: Move the needle a bit but everything is being looked at and treated very rigorously as Marcelo was saying Aldo lives should be within the guidance some lines or even above guidance, but we will see a balance between one and the other with some will be closer to.

Marcelo Noronha: Some will be closer to the bottom part of the guidance, and others will be closer to the top of the guidance, but we are certainly controlling our expenses and costs but, at the same time, always investing in what needs to be invested in. So thank you, and now we conclude our Q&A session. Questions that couldn't be answered on this occasion can then be sent to our IR department. And before I turn the floor to Marcelo to conclude this presentation, I would just like to say that on our IR website, you will be able to find this presentation and also all of the other materials related to this earnings release presentation. So I just recommend that you take a look at that.

Marcelo Noronha: The bottom part of the guidance and the others would be more than one.

Marcelo Noronha: Closer to the top of the guidance, but we are certainly controlling our expenses and costs.

Marcelo Noronha: But at the same time always investing and what needs to be invested on so thank you and with now we conclude our Q&A session questions that couldn't be answered in this occasion can be then send to our IR department and before I turn the Florida myself too.

Marcelo Noronha: Conclude this presentation I would just like to say that in our IR website, you will be able to find this presentation and also all of the other materials related to this earnings release presentation. So I just recommend that you take a look at that.

Marcelo Noronha: So what are your final remarks? Thank you, thank you, Andrea. Thank you, Cristiano, you know, quarterly earnings release. And we remain at your disposal, Celsoide, all analysts, we are available to give you further information, but before I say farewell, I would just like to say something yesterday. Carlos Alberto Rodrigues Guilherme Coca, a board member since last December when he retired, passed away. He was also vice president of the board.

Marcelo Noronha: So what are your final remarks. Thank you. Thank you and then I think you'll Cassandra. Thank you all of you for your interest and for joining US today in this you.

Marcelo Noronha: You know what.

Marcelo Noronha: Early earnings release, and we remain at your disposal sell side are all analysts we are available to give you further.

Marcelo Noronha: Information, but before I E.

Marcelo Noronha: Say farewell I would just like to say something yesterday.

Marcelo Noronha: Carlos Alberto who dig as Gilead Cockup passed away.

Marcelo Noronha: He was a board member since last December when he retires. He was also a vice president of the board. He he died yesterday, but for several decades. He worked for our organization. That's why I thought it would be important for us to do.

Marcelo Noronha: He died yesterday, but for several decades, he worked for our organization. That's why I thought it would be important for us to express our sorrow for the loss of our colleague who spent many years working with us. But I would like to remember him with joy rather than sadness. Thank you so much for joining us today, and I wish you all a very good month of May. Thank you.

Marcelo Noronha: Express our SOR.

Marcelo Noronha: Oh.

Marcelo Noronha: For the last of our colleague that spent many years working with us.

Marcelo Noronha: But I would like to re remember him with joy rather than sadness. Thank you. So much for joining us today and I wish you all a very good month of me. Thank you.

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