Q4 2024 XP Inc Earnings Call
and Thiago Maffra.
Music
Speaker Change: We're moving everyone. Among third party easy Investor Relations. After XP, Inc. It is a pleasure to be here with you today on behalf of the company I would like to thank you all for dangerous and welcome you to our 2024 earnings call. This year was a record setting our results and today it will be presented by our CEO chagal milestone and our CFO with the months.
Speaker Change: We will both be available for the Q&A session right out there in the presentation. If you want to ask a question you can raise your hand on the zoom to <unk>, we will attend to you on a first come first serve basis. We also have the option of simultaneous translation to Portuguese Theres a button below if you want to turn it on.
Speaker Change: The translation and before we begin our presentation. Please refer to our legal disclaimers on page two on lechwe clarify are forward looking statements and additional information on forward looking statements can also be found on the SEC filings section of the IR website. So now I'll turn it over.
Speaker Change: To juggle Martha would even in Marlborough.
Speaker Change: Thank you Andre.
Speaker Change: Good evening to all I appreciate everyone joining us for our fourth quarter 2024 earnings call.
Speaker Change: It's a pleasure to be here Tonight.
Speaker Change: Explore and discuss our quarterly results as well as our strategy in place to accomplish your goals.
Speaker Change: 'twenty 'twenty four was a positive year for us.
Speaker Change: Our results were aligned with our plan, bringing confidence that our ecosystem is complete and able to navigate through different letters.
Speaker Change: This year, we also dedicated to increase our ability to deliver higher quality service to our clients better segmentation in Nova to <unk> broad, that's saves gene and expansion and all of it.
Speaker Change: Strict cost control R.
Speaker Change: Our business is supported by our mornings tangent and sophisticated tech platform, creating opportunities to grow the secondary trading and as a result, we delivered higher profitability to our shareholders.
Speaker Change: As part of our culture, we celebrate our people commitment highlighting partners with more than 10 years, working and XP <unk>.
Speaker Change: And last month I completed 10 years in X P. Like many other partners.
Speaker Change: So it wasn't a special to see all of the transformation, we had during the last decade and imagine how many new growth opportunities, we still have for the next one.
Speaker Change: Now I will share with you the main highlights we accomplished during the year.
Speaker Change: Bearing with client assets that we achieve at one point 22, 3 million posting a 9% growth year over year.
Speaker Change: We also reaching $18 2000 advisors, representing 5% growth year over year.
And client base achieve at $4 7 million with 3% growth year over year.
Speaker Change: In 2024 gross revenues boasted 18 billion, we have a solid 15% growth year over year.
Speaker Change: We also delivered solid <unk> growth of 26% year over year, reaching five being in Reais.
Speaker Change: And happy to announce that we achieved the highest quarterly adjusted net income since our IPO posting $1 2 billion in fourth quarter 2004, and a total of $4 5 billion for the full year, which represented 17% ex <unk>.
Speaker Change: Pension year over year.
Speaker Change: On the balance sheet and profitability, we achieve at 28 seven <unk> in 2024.
376 bps expansion versus 2023, and our our OE market, 23% 163 bps expansion.
Speaker Change: These Rachel and was 17, 7% a comfortable level when considering the payment of truth be known rising Juvonen, our secured loan book growth and effects of higher interest rate curve in the end of the year, we will bring more details on you stopped doing that.
Speaker Change: Dentation.
Speaker Change: Regarding the adjusted diluted EPS, we posted 16% growth during the year.
Speaker Change: And looking ahead EPS should grow faster than net income when we take into consideration the share buyback program, we opened last year.
Speaker Change: Or set of results confirm that we are on the right direction to deliver our 2026 guidance.
Speaker Change: We will see more details on the next slides.
Speaker Change: Let's see how our business evolving since we presented our guidance in December 2023.
Speaker Change: We'll go deeper in each pillar on the next slides.
Speaker Change: Since our total revenues, reaching 18 billion during the year, representing 15% growth to reach the top of the guidance isn't necessarily post 'twenty, 2% CAGR and to reach the bottom isn't necessary to pulse.
Speaker Change: 12% CAGR.
Speaker Change: When do we take EBT margin equal duration, we posted 256 bps expansion, reaching 29% in the year. It cooperates that our plan is on track to achieve our target range of 30% to 34% in 2026.
Speaker Change: Now on the right hand of the slide there's a comparison from final year 2024 with.
Speaker Change: <unk> acquired 23, which was the reference that we set our targets for 2026.
Speaker Change: Analyzing the three pillars that comprehend total gross revenues, we see that core investments and new verticals are we seeing the growth range and corporate and SMB is above.
Speaker Change: As a conclusion gross revenues presents CAGR of 17%.
Speaker Change: The same ags is related to EBT margin wafer solid expansion during the period of 283 bps at 29% what reinforce our confidence to achieve our goals.
Moving to the next slide.
Speaker Change: Not only retailer investments during 'twenty 'twenty four the number one question through XP wasn't that new money.
Speaker Change: And we have been addressing the question demonstrating our capacity in delivering around 20 billion per quarter in retail <unk>.
Speaker Change: This quarter, we posted the 20 billion in retail with 67% growth year over year, despite the challenging market environment.
Speaker Change: Comparing total net new money when corporate is included we posted 26 billion, representing 37% growth year over year and when we compare the full year, we presented 103 billion reais in net new money with a 45% growth.
Speaker Change: Considering only retail excluding more dollars acquisition it was a 33% growth year over year with 81 billion Reais.
Speaker Change: Our target remains the same for 2025 net new money around 20 billion per quarter in retail.
Speaker Change: We understand that are truly ferrying shows set us apart from peers and will contribute sure continuous growth for the next years.
Speaker Change: Moving to the next slide we will go deeper in our main levers starting with.
Speaker Change: Our complete brothers platform offering sophisticated instruments to our clients according to their objectives I.
Speaker Change: I'm happy to share our current fixed income capacity XP is a fix it income power housing in Brazil.
Speaker Change: The largest market maker for all fixed income instruments.
Speaker Change: It became a relevant growth engine in our ecosystem. It was built not so long ago.
Speaker Change: Actually we doubled AUC size in the last three years.
Speaker Change: It is a big question if fixed income will perform as last year, but as you can see in the slide traded volume to client assets. Rachel is this steady during the years.
Speaker Change: <unk> kept growing at a fast pace and as a result, <unk> income daily average trading volume skyrocket, reaching 40000 trades in 2024.
Speaker Change: To achieve just service level, we have to consider the powerful combination of the largest well trained sales team in the country.
Speaker Change: <unk> five and a lot of what you've product offering and risk management, a currency moving to the next slide we see our new distribution channel model.
Speaker Change: <unk> 2020, one we built a multichannel distribution channel in two main categories.
Speaker Change: The first one <unk>, which comprehensive ifa's wealth managers and our Ace and the second one did you see that contemplates internal advisors self direct model and private bank.
Speaker Change: This categories have demonstrated to be complementary addressing client needs and support our commercial trust.
Speaker Change: <unk> continues in the AUC growth.
Speaker Change: Important to highlight that the new distribution channels, we launched during the last years already present, 60% of total net new money.
Speaker Change: As you can see on the right hand of the slide.
Speaker Change: Our proprietary tools provide more intelligence to support advisers with daily cheap we do this by providing data so advisers can manage clients portfolios.
Speaker Change: According to their objectives, and assimilate new strategies and performance.
Speaker Change: On the back of New Technology and service model, we have our IFA channel ready Trust literary even more in 2025, becoming at D or introduce a new concept to manage clients' portfolios improving loyalty and satisfaction.
Speaker Change: The idea is to just tools and Brett.
Speaker Change: It's very important and one of the many examples that makes just clear is when we see that advisors, who became a giren tour, our new commercial behavior increased their daily achieved by 11 times.
Speaker Change: Just shows a powerful combination of tools and a new mindset in relationship with for our clients.
Speaker Change: On the next slide.
Speaker Change: We developed a segmentation with aggregate value proposition.
Speaker Change: As we can see in the slide we have from digital to private.
Speaker Change: Other part of our better understanding of just new segmentation is bathed in five different nations.
Speaker Change: Number one.
Speaker Change: Focusing what clients are looking for in the relationship with XP.
Speaker Change: Our own transactions in banking for additional clients to integrated solutions for private clients.
Speaker Change: True <unk>.
Speaker Change: Advisory model with three different approach objective basic financial planning and wealth planning.
Speaker Change: Number three investment options with proper pricing sophistication and access the changing on the client segment.
Speaker Change: Number four banking experience.
Speaker Change: So with differentiated pricing and products such as different credit cards matching our clients' expectations.
Speaker Change: And less client support with increasingly higher personalization and benefits for.
Speaker Change: For example, faster S L ace and parts patient in events and experiences.
Speaker Change: Additionally, we are also preparing new initiatives to launch during the year with just the rationale one of them. It's a new creative car experience that we expect will result in higher cross sell and share of wallet.
Speaker Change: We already saw the newest segmentation.
Speaker Change: <unk> should translate into better results.
Speaker Change: And for many examples is our private bank.
Speaker Change: She has performed much better in terms of inflows and client satisfaction than in the previous years. We are excited with the last month's performance and expecting a solid 2025 now.
Speaker Change: Now moving to the next slide we have financial planning as we saw before financial planning is an important pillar in our strategy.
Speaker Change: We are the only institution serving clients with a complete financial planning program two clients with 300, K and up not only client base satisfaction increases, but also their loyalty.
Speaker Change: As first results, we can see on the right hand of the slide that kinds with financial planning program increased truth times insurance conversion inquiries retirement plans call version from 30% to 41% and last but not least inquiries or client net new money.
Speaker Change: 43%.
Speaker Change: And we are just in the beginning March will be done in the next few years.
Speaker Change: Moving onto the next slide we will see more details in retail initiatives.
Speaker Change: Now, let's move to our cross selling initiatives you can see that credit card grew 11% year over year, marking $13 1 billion in PPV during fourth quarter 24 when.
Speaker Change: When we compare the full year branded card grew 17%.
Speaker Change: When we look at your total penetration, we still see a good opportunity to increase our credit card client base. Since we have only 29% penetration out off their legible clients and the larger banks are running around 50%.
Speaker Change: We are excited about our new launches during the year and we expect the card revenue to grow around 20% license.
Speaker Change: Life insurance written premium presented 37% growth year over year in the fourth quarter and 44% growth for the full year of 2024.
Speaker Change: Just as the other growth Avenue for the next years can you sort of penetration is about 2% and other players present closer to 17% penetration of <unk> brothers.
Speaker Change: When we compare life insurance revenues it grew 27% in their year, which means that we are starting to reap the benefits from our own insurance company.
Speaker Change: Just because it takes three years on average to see the positive impact in this business.
Speaker Change: The first two years or more concentrated commissions and provisions.
Speaker Change: And for 2025, we expect an even higher revenue growth base than the one we signed 2024, which was 41%.
Speaker Change: Oh retirement plans, our client assets keep growing double juice, forcing 10% year over year and fourth quarter and market 81 being an expert.
Speaker Change: <unk> has 5% market share and the market leader, 27%.
Speaker Change: As I said in recent quarters, we are launching new initiatives S. Cashback sales force expansion to keep gaining relevance in use offering during the next years.
Speaker Change: S keep seeing more inflows, we believe we could grow with diamond plans revenue by a double digit rate in 'twenty to 'twenty five.
Speaker Change: Retail credit NII posted 79% growth year over year, marking 81 million reais in revenues just quieter.
Speaker Change: <unk> lending aegis concept is backend with client investments as a collateral or ECL to loans is lower than 1%, which represents one of the lowest levels in the Brazilian industry, we expect <unk> revenue to grow around mid teens for the year on a constant.
Speaker Change: Other than your brothers compounded by effects global investments, each dot com and <unk>.
Speaker Change: They presented 103% growth year over year with revenues, marking $213 million this quarter.
Speaker Change: It demonstrates how many opportunities we still have to capture it through cross sell in our retail client base not long ago. It was close to zero and looking ahead just concept should cross the 1 billion Mark for a year.
Speaker Change: And moving to corporate and SMB as it would have been talking about are complete ecosystem wholesale.
Speaker Change: The important part of our growth in jeans 'twenty 'twenty four was a record setting year for this segment.
Speaker Change: Now, let's see how it's performing on different divisions.
Speaker Change: Starting with <unk>. It was a strong year posting 31% growth in volumes compared to fourth quarter 'twenty, three marking nine 3 billion, coupled with market share gains achieving 13%.
Speaker Change: As a result.
Speaker Change: We were top ranking in GCN agribusiness credit notes and real estate funds.
Speaker Change: It is possible to gain even further market share since XP is the largest investment platform in Brazil with them. This is safe when they're trading.
Speaker Change: In corporate credit secondary trading.
Speaker Change: <unk> represents more than 50% of the local market.
Speaker Change: Regarding XP institutional broker dealer.
Speaker Change: Some other highlights.
Speaker Change: Giving our distribution power and quality in execution, we are gaining market share continuously during the last years.
Speaker Change: In the end of 'twenty 'twenty, four XP posted 16% market share.
Speaker Change: Which is getting closer and closer to the market leader.
Speaker Change: Other relevant growth Avenue is corporate securities.
Speaker Change: Two years ago, it was a completely different story.
Speaker Change: Now our capacity Jewel region, Nate warehouse and distribute corporate credit is in a new level.
Speaker Change: XP as a relevant player and more important than only sites is the benefit of our unique loop to recycle our expanded loan book to our retail and institutional clients or turnover on it is two or three times per quarter.
Speaker Change: Walter or corporate Securities book increase at 9 billion, mainly high graded names, marking 32 billion.
Speaker Change: It means that we just reviewed that a large portion of it is booked last quarter.
Speaker Change: And we also originated a larger one.
Speaker Change: Our competitiveness is supported by relevance as the largest corporate cred broker in the country on the Ariva chiefs, we keep evolving our offering while increasing penetration youll see the repurchase.
Speaker Change: And just was a monitor required that we kept our fourth ranking position Colbert true bounce.
Speaker Change: Years ago.
Speaker Change: As we have presented less barter experian, neither interest rates swaps.
Speaker Change: Through differential offer ecosystem on FX X B also sustain at fifth things ranking position from <unk> four years ago. When we started when we look to reassure service and corporate total revenues posted 45% growth and learn institutional concept.
Is included just three business grew 16% year over year, we are confident that our strengths, we will excel the challenging scenario, marking another solid growth in 2025.
Speaker Change: Moving to the next slide we will see xb growth potential.
Speaker Change: We acknowledge that our business evolve it in a complete ecosystem and more and more we have received questions regarding our growth potential there.
Speaker Change: Therefore, I would like to share with you our rationale that supports our plan for the year.
Speaker Change: It is important to bear in mind that the <unk> business model benefits from our natural growth from total AUC.
Speaker Change: Today as we speak roughly 65% of total assets are all located in fixed income directly or through funds, which cohoba rates to expect growth close to selic rate largest client assets.
Speaker Change: Additionally.
Speaker Change: We incorporated net new money.
Speaker Change: Then a combination of both translates to a potential <unk> growth in AUC and consequently should support revenues growth.
Speaker Change: Regarding new verticals as I presented earlier, we are confident that we are at the very beginning of the potential cross sell penetration.
Speaker Change: During the year, we grew 32% and we expect to keep growing at just fast space in the next years.
Speaker Change: Another concept, which supports our growth is relate to float for our claims by design the performance will be at Selic rate base point.
Speaker Change: Pointing again to a double gesture growth.
Speaker Change: Next pillar is the issuer Serbs folks on GCM. It is true that in 'twenty 'twenty four Brazilian industry had the all time high G sand volumes and it's too soon to a firm that's not going to be also a solid year for <unk> 2020 five.
Speaker Change: Just in case, if the total just sample volumes for 2025 materialize in lower levels than last year. Our plan is huge or expand our market share and benefit from a new level of Brazilian industry.
Speaker Change: Which is way higher than a year ago, our distribution power is the most important differential to purchase space in many issuance mandate.
Speaker Change: Coupled with that is sort of lower cost of capital, which Victor will present more details ahead. Finally corporate revenues go hand in hand with issuers Serbs.
Speaker Change: Revising their Riva chiefs and graduate to our clients.
Speaker Change: XP is becoming more relevant in wholesale business C store, our recycling mode results, the higher distribution capacity to our retail and institutional channels. So even considering institutional revenues with lower base as part of this call said, both should both <unk> roof.
Speaker Change: Just as a reminder, we already expected a softer primary offerings volume in Japan for the first quarter 25, due to the sizzle manage but just should be offset by a higher achieved in the corporate bonds secondary market.
Speaker Change: But compounding I'll just factors that I just mentioned the end game should be total revenues growing more than 10% during 2025.
Speaker Change: Now I'll hand, it over to Victor so he can cause this quarter financials. Thank you.
Victor: Thanks, Tamara for them and good evening, everyone. It's a pleasure to be here a few let's start if gross revenue.
Victor: Total gross revenue posted 15% growth in 2024.
Speaker Change: 4% growth quarter over quarter retail fixed income incorporates your service where are the highlights of the quarter.
Speaker Change: The strong performance in retail fixed income reflects our growing ability to deliver featured income product and enhance our market making capacity.
Speaker Change: In parallel corporates Nishu services benefited from our warehousing strategy, which aims to meet client demand in the first quarter of 2025, while mitigating the expected weaker seasonality when we compare the gross revenue breakdown on the right hand side of this slide in 2020 for retail <unk> seven.
Speaker Change: 5% of total revenues and incorporating issue services gaming space against institutional revenues.
Speaker Change: Let's move to the next slides if more of that day it was under different segments right.
Speaker Change: Retail revenue posted 11 billion and 791 million highs a 14% growth in 2024 market 3 billion and 506 to 90 million highs in the fourth quarter, 24, I'm, presenting 2% growth quarter over quarter.
Speaker Change: As expected the income was the highlight in the year and in the quarter, achieving 3 billion and 447 million highs. The full year is 49% growth in 908 5 million highs in the quarter.
Speaker Change: <unk>, 5% growth quarter over quarter.
Speaker Change: Important to highlight as Moffett I mentioned in an earlier fixed income is a relevant component of our ecosystem and the resorts and retail are completely connected before a distribution capacity and our relevance in secondary trading.
Also would like to highlight those new vertical products presented more than 30% growth in the year, which means we are on track for our plan presented in our Investor day in 2023.
Speaker Change: Moving onto the next slide corporate issue services became important contributor in your ecosystem posted 2.289 billion highs marking for a 5% growth in the year in the quarter posted 590, 90 million highs, which represents 9% growth quarter over quarter Mark.
Speaker Change: King a sound for a 5% growth in the year history services delivered solid results again in the back of DCM activity, achieving 1 billion and 324 million highs with four 6% growth during the year and reshape 337 million highs in the quarter, a 5% growth quite a bit over.
Speaker Change: Acquired on the back of a stronger quieter for issuer services corporate division was able to capture cross selling opportunities mainly if derivatives.
Speaker Change: Posted 260 million highs in the quarter with 14% growth quarter over quarter looking to the full weird it's represented.
Speaker Change: 965 million highs.
Speaker Change: For a 5% growth year over year, we have been talking about our warehousing strategy and we recycle mode for some quarters to provide you the clear view of what we're most engine we have in the fixed income arena.
Speaker Change: And then can you starts before origination investment banking are locating them part of our issuance in your book and the offering newer retail institutional clients.
Speaker Change: This was another quarter in which we are not only distributed most of the previous quieter book, but also viewed on new portfolio, if competitive products to meet client demand in the first quarter of 2025.
Speaker Change: Mitigating expected seasonal impact does approach mirrors the strategy was acute in the second quarter of 2020 for enhancing our competitiveness by offering high return products compared to traditional time to pause and Texas lymph nodes from large banks.
Speaker Change: Our securities books achieved 32 billion highs, representing 4% growth, where I took over required.
Speaker Change: Moving on to the next slides, we will explore our SG&A only efficiency ratios. We believe are competitive edge is driven by our ability to continually invest in our core business new technologies expansion of our advisor network and product development, while maintaining strict cost and expense control.
Kirkland Bathurst: Kirkland Bathurst, we were born digital reach position us to sustain growth, while improving efficiency. As a result, we grew 15% in total revenues and 10% in SG&A. During the year total expenses posted 5 billion. A 90 127 million highs just a reminder, we incur.
Speaker Change: Operator, Banca model in the second semester of 'twenty, three creating a new baseline for the full year of 2024, so when we compare our FERC with 24 and <unk> 23 Delta Gen. Eight grew only 2% at the same time, we also launched several new products introduced at our financial.
Kirkland Bathurst: Planning platform and higher closer to 800, New Inferno advisors.
Kirkland Bathurst: Looking to 2025, we have new rounds of investments to enhance our platform improving our banking product offerings is better segmentation and the full year carry of the new internal advisors higher in 2024 moving to efficiency ratio on the next slide.
Kirkland Bathurst: As you can see on the right hand of the slide we improve the efficiency ratio in 157 basis points during the year, achieving 34, 7%. We also improved this ratio in seven to eight basis points in the quarter.
Kirkland Bathurst: As mentioned in the previous line our goal for the year, showing Hampshire efficiency, while continuing to invest in strategic areas, we expect our efficiency ratio to improve throughout the year that's valve into EBIT now.
Kirkland Bathurst: As a result of our prior to this threat is to provide new and innovative solutions together, if our strict cost control drove an unprecedented EBIT and EBIT margin expansion for the year along with these actions. We also heard organize our corporate structure, the decreasing maturity our cost of capital and funding benefiting both we'll see.
Kirkland Bathurst: In retail banking business and also better position XP to compete in those markets.
Kirkland Bathurst: Our EBT responded those decisions during the year, presenting 26% growth and achieving four are beating on 907 million highs in.
In the quarter EBITDA totaled 1 billion and 280 to 90 million highs posting 6% growth quarter over quarter and 30% growth.
Kirkland Bathurst: Comparing to the <unk> 23.
Kirkland Bathurst: Our EBIT margin markets 29, 1% for the year posting a strong increase of 263 basis points in the quarter EBT margin was 28, 7% six six basis points higher quarter over quarter earned.
Kirkland Bathurst: 430 basis points expansion compared to the FERC <unk> 23 for our 2025, our efforts will be to expand our ecosystem captured the benefits of a larger business and target our commit them into 2025th seeks to deliver EBIT margin between 30 and 34% on the next slide we have.
Kirkland Bathurst: <unk> seen the adjusted net income 2024 was an ear, if more ups and downs than average even for Brazil remember that in the beginning of the year macro expectations were different from the <unk> 24, and the way different from the last quarter of the year. We did why do we sad and deliver results.
Kirkland Bathurst: For our 2026 guidance released in December 2023, and adjusted net income in the year attributed for a beat them in 504 million highs by 17% growth year over year and in the quieter than it was when we need them and 200, and then you didn't highs excluding the one off impact.
Kirkland Bathurst: <unk>, 2% growth quarter over quarter as we talked during the last require others. It's important to remember that our estimates on normal either the chart was around 18 and it was the case ceasing the quieter markets 17, 9% ending the year of 18, 7% we expect the effective.
Kirkland Bathurst: X rate to remain around 18, let's move onto the next slide to talk about capital management. As we had commented last quarter. We started to provide full view on capital and risk weighted asset figures.
Kirkland Bathurst: Looking at our abuse ratio it stood at 17, 7% at the end of 2024 as a reminder, we distributed to beat and highs and dividends and have an ongoing share buyback program.
Kirkland Bathurst: As we previously highlighted during over volatile fixed income reached an all time high driven by our investments in secret diary trading technology.
Kirkland Bathurst: We remain highly optimistic about the strength, which gave us the confidence to expand our books by 19 billion highs of high quality Securities.
Kirkland Bathurst: This strategy allowed us to capitalize on the widening credit spreads.
Kirkland Bathurst: The end of the year, enabling us to warehouse those assets at a more competitive level.
Trinity: Trinity It's important to note that half of the volume was related to tax exempt nodes from quite a sovereign banks supported by the launch of our new products in Brazil, The development credits notes.
Trinity: Similar to the second quarter, we expected to sell those assets in the first quarter of 2075, helping to offset the seasonally weaker DCM activity during that period, if that in mind we are.
Speaker Change: Confidence if our capital level and there are no changes to our guidance, we continue to target RBC ratio between 16, and 19% itself soon parted to highlight that <unk> holds a higher proportion of CET, one capital at 16% way above local peers. Additionally, we expected Inc.
Speaker Change: Elimination of the new 490, <unk> seeks regulations thrown the Brazilian central bank to have a postings backed <unk> ratio over 2025 on the right hand side of the slide we answer again presented R. R. W. H, a total assets ratio at three <unk>.
Speaker Change: We are observing shifting to break it out between our market <unk> was driving by the increasingly our warehouses books since the third quarter crack spreads in the trading book have been accounted for as markets risks. Despite this our business maintains a comfortable average daily far reaching 16 basis points over equity.
Speaker Change: Our very true media highs in peso terms.
Speaker Change: <unk> kept our strategy results more conservative views ratio, while supporting higher profitability and returns to shareholders.
Speaker Change: As we are going to see in the next slide this slide summarizes our capital distributions for the past three years, reaching close should been beating highs in dividends and buybacks. This year. Our total payout ratio was 74% if three 6 billion highest kept our return.
Speaker Change: Looking to the next scope off for years remaining thing our goal to deliver more than 50% payout ratio.
Speaker Change: Now, let's see Europe, EPS and Iot.
Speaker Change: Our earnings per share evolution continues to post a solid growth and achieving a ties and 28 cents, a 16% increase year over year.
Speaker Change: Same trend that we see neuro T narrowing our <unk> achieved a 29, 2% in the quarter representing <unk>.
Speaker Change: Seven eight basis points higher quarter over required them on are we posted 23, 4%.
Speaker Change: <unk> basis points higher quarter over quarter.
Speaker Change: During the year, our Ot market 28, 7% a three.
Speaker Change: 376 basis points higher year over year and achieved a 23% is 164 basis points higher than last year.
Speaker Change: And now moving to my all that stopped the new corporate structure.
Speaker Change: We mentioned last quarter that we conclude the corporate restructuring, Brazil, where the bank became the parent company as a result.
Speaker Change: As we can see the slide the cost of capital is 35% lower than before since we issued a tier one and T. Two during the year, we could only capture a part of these benefits in 2024, and we will only see the fully loaded impacts of lower cost of capital and also my true low cost of funding in 2025.
Speaker Change: Now moving back Schmutzler him. So he can do his final remarks, and then we go to the Q&A thinks of it too.
Speaker Change: So before moving to Q&A I would like to reinforce port Baltics.
Speaker Change: Our all weather ecosystem, showing that our business go way beyond <unk> 'twenty 'twenty four was a challenging year, but we presented solid results there.
Speaker Change: Strachey that our growth strategy is well positioned to deliver our 2026 guidance.
Speaker Change: <unk>.
Speaker Change: Our retail net new money during the year was 81 billion reaffirming that our target to increase.
Plenty being them per quarter is on track also for 2025.
Speaker Change: Third we understand that our troops for Angels starring tact.
Speaker Change: We are continuously evolving our brother platform, our multichannel distribution, our new segmentation in our value added service supported mainly by financial planning.
Speaker Change: <unk> juice.
Speaker Change: That is a part of other players for the long run.
Speaker Change: And lastly, our capital discipline for Insulates inter conservative approach more efficient.
Speaker Change: And with higher return to our shareholders. During the last three years XP distributed dividends and executed share buybacks programs close to 10 billion Reais.
Speaker Change: And we will keep working to increase our profitability during 2025, and then next years.
Speaker Change: Now under it but easy we'll start our Q&A session.
Speaker Change: Thank you we're gonna start so the Q&A the first question's from juggled, but she's the UBS juggle you May proceed.
Speaker Change: Hi, guys hear me.
Speaker Change: Yes.
Speaker Change: Okay Ah congrats on the results.
Speaker Change: Two questions. The first one on the capital or the gas ratio.
Speaker Change: This quarter, we saw a big increase in the risk weighted assets.
Speaker Change: Not too long or around 12% Q over Q, mainly on market risk.
Speaker Change: Can you comment about this movement and the second one about the internal advisors.
Speaker Change: You might show a mentioned in laughter into in the first phases of the.
Speaker Change: The press release that are they representative represented about 60% of all the net new money of the year and they are about 50% to only of your sales force can you comment on why are those guys are so much more.
Speaker Change: Efficiency than the overall sales force.
Speaker Change: And by the way congrats for the beginning of the press release of the patient you wrote and I think it was very very good.
Speaker Change: Thank you Chuck for your question.
So I will start with the second part of your question and then the door we will.
Speaker Change: Take the first one and good evening, you again to everyone here.
Speaker Change: So the 60% of net new money is not only from internal advisors mud internal advisors, we remember that we have three.
Speaker Change: <unk> channels today, we have internal advisors.
Speaker Change: I have faith.
Speaker Change: And they are a model that's basically the wealth management and consultants. Okay. So when we talk about the 60% is the.
Speaker Change: What we called Love serves channel here, Okay, and they'd be juicy. So the two together combined these 60% so but about your question about the level for the <unk>, yes, when we compare <unk> advisors.
Speaker Change: Versus the Isa's, it's very different okay. The level for the future of the internal advisors. It's much higher we have some hypothesis here.
Speaker Change: But the main one I would say that's the.
Speaker Change: The way we manage the sales team here, we have all the data all of the next level of.
Speaker Change: <unk>, so we control the sales process.
Speaker Change: In a much more.
Speaker Change: They're way than than the de Faye offices, okay, but.
Speaker Change: All of the tools all the intelligence to all the tech knowledge everything that we developed for the entire noted advisors. We also provide for their face okay. So everyone.
Speaker Change: Here at <unk> know that knows very well that for me.
Speaker Change: The channel that they will focus more in 2025 is the inherent in the eye of face they'd be to be channel because they believe we have a hidden potential here to unlock value it's easier because it's basically how we get all the twos and all of the techniques.
This sales process that we have developed for the internal advisors and how we scale that for the IFA network. So that's my main goal when we talk about channels for 2025 and I believe we can help the day phase even further to increase the privilege huge.
Thank you Omar and thank you for your question Ciao.
Speaker Change: I'm just remembering here.
Speaker Change: Since the third quarter of the year Grad spread risk is allocated at market risk by the new Central Bank regulation. So when do we encourage our book in eight bit and highs and off corporate secured some quasi sovereign government banks, we added the risk at the mall.
Speaker Change: <unk> not at the crowd there <unk> ever fees book it in the trading book.
Speaker Change: Clear thanks for the answers.
Speaker Change: Okay. Next question is from Eduardo Hoffmann from BTG.
Speaker Change: Eduardo you May proceed.
Eduardo Hoffmann: Hi, everyone. Congrats on the quarter I have a question regarding competition with the banks and regulation I think that earlier last year, we saw the regulator adjusting write the rules on instruments with tax benefits such as the <unk> and <unk>.
Eduardo Hoffmann: Traditionally given all of the large banks and advantage right.
Eduardo Hoffmann: I think if you think back to their ability to supply the market and we saw I think an improvement on the fixed income market outside these banking instruments I think and this naturally I think helps you right.
Eduardo Hoffmann: But at the end of the year, we saw kind of a big reacceleration in the issuance of these banking instruments with tax benefits. So I wanted to know if you can explain what happened you know and additionally, we have been seeing some reports the press and I were talking about a potential relaxation of this.
Eduardo Hoffmann: Rules. So if you could share your thoughts on this if you think it how it happens or not and if it does you know how that kind of.
Eduardo Hoffmann: Might impact your business. Thanks.
Osman: Hi Osman.
Eduardo Hoffmann: No no no.
Eduardo Hoffmann: No.
Speaker Change: So I will start and then you can complement men's health care needs.
Eduardo Hoffmann: So.
Eduardo Hoffmann: To be honest.
Eduardo Hoffmann: The scenario with high interest rate, it's a it's very clear for everyone that it's it helps the banks a little bit on the <unk> side.
Eduardo Hoffmann: But in.
Eduardo Hoffmann: And then I would say, especially in 'twenty 'twenty four.
Eduardo Hoffmann: Competing against if we go back one year or a year and a half it was very hard for us to compete against the <unk> and and and so on because we didn't have.
Eduardo Hoffmann: I would say the DAU amount of juice.
Eduardo Hoffmann: East remains that we need and not even the right price or the same price as the banks, okay, but we have been working very hard to find ways to replicate to do partnerships to warehouse chew do revolving lines to do repo.
Eduardo Hoffmann: So I would say that we have developed.
Eduardo Hoffmann: Waste that can knowledge and and instruments.
Eduardo Hoffmann: Jump to compete against the banks so I.
Speaker Change: I would say that's not a 100% the same but today, it's very close it was a big problem. If we go back to 2023.
Speaker Change: It's not that big a when we look today, so I don't think that any changing regulation.
Speaker Change: In relation with it have a big impact for US right now and again, we expect this year I would say that the 20 billion that we we are seeing here today, we see more as a floor.
Then as like a target that shouldn't be the floor and we shouldnt delivery like higher net new money during the year.
Speaker Change: Okay.
Speaker Change: No great Martha Thanks, a lot.
Speaker Change: Okay.
Speaker Change: <unk>.
Speaker Change: So let me respond.
Speaker Change: J P Morgan.
Speaker Change: But I mean, you may proceed.
Speaker Change: Thank you I'm offering team congrats on the results two questions on our side the first one actually on the balance sheet.
Speaker Change: We saw half a billion mark to market on the equity side, if I imagine it's related to securities on the fixed income warehousing.
Speaker Change: If you could just put a little bit more color on that it was surprising to us we understood in the past that there was a hedge whenever you you're basically warehouses security. We fought you basically do a hedge against the inflation linked bonds.
Speaker Change: So we're basically exposed only to the corporate credit risk.
Speaker Change: But by the comments, we understood that the market to market impact here was the <unk> the the real rates in select are moving up.
Speaker Change: If we kind of explore just a little bit the dynamics of this warehousing exposure to a macro dynamics and if we should expect a reversal of this market to market in the first quarter.
Speaker Change: And then my second question is just related on capital.
Speaker Change: Youll probably.
When you look at return on tangible equity.
Speaker Change: It's running basically at 30% rate and the risk weighted assets is growing at 35.
Speaker Change: So basically the conclusion the conclusion here, we reaches basically youre not generating organic capital in this pace of growth of <unk>.
Speaker Change: And when we tried to do the math I think there is a guidance of more than 50% payout for the next two years.
Speaker Change: It seems you're going to fall below the 16% range that you had before and at the same time there was a in the final remarks of the slide you'll see tier one numbers was not clear. It was if you're we're revising the targets or not but just if you can help us understand the math and the moving parts behind the capital because to us.
Speaker Change: We couldn't match kind of the payout that you are guiding to the capital generation. We are seeing today. Thank you.
Speaker Change: Okay. Thank you for our squad question you know what I mean, starting if the OCI that is not that does not conform their warehouses books. Those are our balance sheet had you sold just trying to give some color here. That's M. Tam of government bonds. So that goes against equity where the bones are hedging saverio asked.
Speaker Change: And liabilities that are booked at that amortize it costs and so basically we have a distortion on the neuro side since the one component is going to actually own. The other one is not.
Speaker Change: To give you. A example, real example here imagining that we haven't inflates inflation linked loan book it at amortized cost and the hedge is against them and then Bill and then B as available for sale going through OCI, Our P&L was zero, but the first one is not going to that.
Speaker Change: The second one is going to that should we.
Speaker Change: We will take advantage of the new Central Bank regulation, the 496 six.
Speaker Change: And that starts to starts lives.
Speaker Change: In 2025, and we will harmonize those booking models for our hedges in and balance sheet and should eliminate these effects for the future.
Speaker Change: No issue towards career.
Speaker Change: Yes Super important so actually you have unrealized gains in the held to maturity of capability as well.
Speaker Change: Exactly at the amortize it costs now and my loan portfolio.
Speaker Change: Emissions that I had against market and then you'll go.
Speaker Change: No that's clear that's important and Super clear dance.
Speaker Change: Okay great.
And from going to the <unk> question it.
Speaker Change: It is important to reiterate that our IWA growth has been driving primarily by the expansion of the wholesale banking franchise.
Speaker Change: Which is relatively new.
Speaker Change: We are gaining market share on delivery higher hard twice roe's than our peers and most of all safe banking business as derivatives, the market, making warehouses and you choose.
Speaker Change: Choose what business lines, you first starting if dragging our capital then realized gains overtime. So as we are scaling the business is natural bad dairy waa grows, but if you compare the world's ausberry WH, if the growth of the the business inside corporate and corporate banking.
Speaker Change: Growing our revenue.
Speaker Change: Mr than the than the risk and also our bank will reach maturity at some point in the future and the pace of evolution of <unk>, we will be more more normalized the growth of the revenue.
Speaker Change: And just to complement Victor here, because you mentioned that if we weren't changing the guidance for payouts and and for the next year know, who we are very comfortable that we are going through to pay more than 50% junior in the next one.
Speaker Change: Okay, and just to confirm the capital ratio is still is 16% to 19% rate the target.
Speaker Change: Yes. It is.
Speaker Change: Okay.
Speaker Change: That's clear thank you.
Speaker Change: Okay.
Speaker Change: Next question is from Michael Stablish rolled in the city.
Speaker Change: You May proceed.
Speaker Change: Hi, good evening, everybody. Thanks for taking my questions and congrats on the good year challenges here and there you devote the good results.
Speaker Change: But before I make my question just a follow up on the on the first question about the phase in that internal advisors. Martha you mean, when you say that your main goal in 2025 is to focus on Ifa's, you mean that the idea is to replicate.
Speaker Change: To all the tools and techniques that you applied for.
Speaker Change: Our debt to apply it on on our internal advisors and gaining productivity Amy to have the same productivity and I have faith that the the the idea here.
Speaker Change: Trying to understand better what you mean, when you say that the main goal is to <unk> and using the techniques and tools from our internal advisors my.
Speaker Change: My second question is about the take rates so going back to your your business you were clear in saying that you should expect net new money out to 'twenty two anti beaten our bulk water in 2025. So it's a it's part of the equation. So if you could share with us that are what's the take rate implied in your expectations for 'twenty.
<unk> 25.
Speaker Change: I believe that the <unk> city income gain share gain.
Speaker Change: <unk> share it puts more pressure on the take rate so how how the company thinks about take rates, that's what they expect in 'twenty or 'twenty five.
Speaker Change: Do you think that is 131 33 is the.
Speaker Change: <unk> is the best guess, we can we can have.
Speaker Change: Thank you.
Speaker Change: Yes, thanks for the question.
Speaker Change: Starting from the first question.
Speaker Change: Just to make it clear when I say my main goal when we are talking about channels, okay, because I have other goals here.
Speaker Change: But when we talk about the three channels. The main one that they will put more in for a.
Speaker Change: <unk>, it's maybe Youtube channel Okay.
Speaker Change: N y because if we roll back to 'twenty or 'twenty one.
Speaker Change: One of my goals when we talk about channels was to diversify the channels. So backing 2021 I would say that the day and I don't have the precise number here to be honest, but I would guess there if it was about like 80% okay.
Speaker Change: For last year and today, it's 40, okay, but so.
I spent a lot of time working side by side with.
Internal people here with the leaders to develop the beat Juicy channel and also to develop the corporate channel. Okay. So I would say that just two channels. They are in very good shape today, okay growing we have the right leaders, they're performing well.
The returns are very good and now it's time to put more effort in how we increase the print achieve chi and how we deploy the same techniques the same technology.
Speaker Change: Say the same sales management tools.
Speaker Change: Tools, we have on the IFA channel. So it was exactly your question, but again just to make it clear. It is not my one goal for for 2020 five is talking about channels, okay not about every everything index.
Speaker Change: And for the second question.
Speaker Change: If we look at the.
Speaker Change: The take rate for the past three years, it's around $1 28, okay.
The guys here. They can help me, but it was 128 $1 28, and probably one 129 junior year. Okay. So it has been flattish for the past three years are when we say that year, we are going to delivery more than 10% growth on topline and.
Speaker Change: And 10% for me is concerned what you hear we should deliver anymore. Okay.
Speaker Change: Considering the same take rate, we don't we are not.
Speaker Change: Projecting higher take rates for the near future.
Speaker Change: Yes, we believe we are like a closed should be end of this cycle because of the changing mix because if we look at it let's three years because of the high Selic rates will let children and so on all day, you see moving from higher airway products to fixed income brothers.
Speaker Change: Much lower our way we believe we are at the end of June cycle. We don't know if we're there yet or not okay, but where kohl's Sudan, but we are not projecting that on the internal budget or one day the numbers that we're showing here. So we are expecting.
Speaker Change: Take rate for 2025.
Speaker Change: Alright Super clear guys. Thank you.
Speaker Change: Okay next question is from.
Speaker Change: From Tito law BARDA Goldman Sachs you May proceed.
Hi, Thanks, Good evening Moffa Victor Thanks for the call and taking my question. Two questions also if I may you know thanks for the revenue guidance on 2025.
Speaker Change: And my phrase you mentioned and you think its conservative but just yeah.
Speaker Change: It doesn't need to be a little bit higher to get to that 2026 guidance. So just to think about where the upside to that 10% could come from I mean, you mentioned, maybe getting close to the end of the cycle on the mix shift I mean, I guess do you need to see equities do better do you think theres enough.
Both and just like the fixed income and the new verticals, particularly given that the base is going to be higher in 'twenty five to get to the growth in 2026.
Speaker Change: But just to think about you know where upside to that 10% growth when and where could that come from and do you need it to deliver on the guidance and then the second question I guess on expenses right I mean expenses growing around 10% you're still guiding for some margin expansion is that 10% growth sort of the right.
Speaker Change: Will a growth how much flexibility do you have there is is there any other cost cutting that you can do to keep the growth a bit lower or just how should we think about expense growth for this year.
Speaker Change: Thank you.
Speaker Change: The first question.
Speaker Change: The way we have been presenting the company the way we manage the company on the three verticals investments cross sell in the wholesale bank. If we look what we did last year and again, it's important to remember where.
Speaker Change: Where we came from backing 2023, when we did our guidance and when we do our internal budget effects of BRL suppose jugal <unk>, four and a half interest rates going through eight and a half nine So act, which is the bovis was suppose true.
Speaker Change: Go to 150 and the environment in 'twenty 'twenty four was completely different okay, and how we manage to deliver a I would say 100% of.
Speaker Change: Our internal budget and the guidance we gave.
Speaker Change: Because we have we werent prepared for this environment, Okay, we're not expecting a better environment and we are again prepared for a tough environment for 2025. So we are not projecting a better macro environment and we are working on only with levers that we control here. So.
Speaker Change: And if we looked at three vertical then they mention investments grew 13% last year.
Remember our business here do you see gross flows to selic rate because today, 65% of the total you see it's in.
Speaker Change: Fixed income Lincoln somehow Choo Choo selic rate, okay, and so if we expect the selic rate of 14 15, four days a year, we should grow our <unk>.
Speaker Change: You see close to that number on top of that we have another 80 to 100 plus billion highs hearing that new money. So another 8% to 10% growth in AUC. So when.
Speaker Change: When we look here, it's it's hard to not do a math that we don't deliver another 13% here growth.
Speaker Change: In the core investments as we did in 2024.
Speaker Change: Moving through cross selling initiatives, we delivered 32% we mention some I would say not guidance, but some projections here for some of the business lines credit card issuer.
Speaker Change: Insurance and so on on the presentation. So.
Speaker Change: In our internal projections.
Speaker Change: Almost impossible to not delivered at the same numbers, we delivering in 2024, okay and when we go through wholesale bank, we're growing 45% when we take out the institutional business. That's more mature okay. So again, we arent, we arent continues to grow juicy or not.
Speaker Change: Sure. If you had the same level, but closed should use level. So when you do the math.
Speaker Change: Remember to achieve the guidance, we have to grow a CAGR or the bottom of 12% and for the top of the range 21, 22%. Okay. So.
Speaker Change: We delivered 17 last year and we are on the same base for easier okay. So.
Speaker Change: For us we are on track to deliver the guidance we don't see.
Speaker Change: Anything to change the guidance your true to say that we are not going to to reach the east side. The guidance. It can be immediately can be on the thoughts or it can be more closer to bottom, but it depends a little bit.
Speaker Change: How it goes through the next two years, but we are very confident that we are today.
Speaker Change: The middle end up okay off their guidance.
Okay.
Speaker Change: Thank you for your question.
Speaker Change: I will take the one about expenses.
Speaker Change: First I would like to give you a color on how we manage experts in the company.
Speaker Change: We have ever seen you have very low late and so efficiency ratio management as a daily task for the company, we project ever business line revenue expense cost at Everest Forever segment.
Speaker Change: That we have at the company are what we are committed is to keep improving the efficiency ratio over the year. So if the revenue is larger we have space to invest more in your areas that are strategically for the company. If the revenue is growing near the bottom of our themed <unk>.
Speaker Change: <unk>.
Speaker Change: Our indication that we gave here we will manage the expense two feet and deliver them.
Speaker Change: Our efficiency ratio improvement over the year.
Speaker Change: Net no very clear thanks, Victor Thanks smartphone.
Speaker Change: Yeah.
Antonio: Okay. Next question is from Antonio What Bank of America, Tony You May proceed.
Speaker Change: Hey, guys. Thank you for your time.
Antonio: So I have two questions. If I may one of course in the Florida.
Antonio: You could help us to understand the head count. So we see an increase of about 200 on Q on Q and had gotten but so to advisors are all into hundreds so that means a great airports conversion voluntarily advisors and also following up on that guidance.
Antonio: Ill.
Antonio: And Paul's internal adviser.
Antonio: Yes.
Antonio: You're welcome.
Antonio: Also the VA.
Antonio: Over the quarters. So this for us on head count in each of <unk> and also a second one or more strategic one on new products.
Antonio: Note that a relevant part of the guidance for 2025.
Steve: Thanks, Steve.
Steve: <unk> is related to deployment of banking broad ocean profiling oral solids in cards.
Steve: I would like you to explore a little bit the challenges of doing so are you doing that maybe of your ISP already distributed the Bravo.
Steve: Not necessarily from XP.
Steve: This would be great. Thank you.
Steve: Okay.
Steve: Thank you for the question Antonio So the first part of your first question.
Steve: About the the the number of people that head count Okay. We have been deploying I would say.
Steve: About 52, it depends it varies a lot month to month, but I would say 50 to 80.
Steve: And paranoia advisors for months, Okay. So I would say for.
Steve: 2025, arguably strength are around 500 600 internal advisors. Okay. So the 10000 advisors internal advisors.
Steve: It was more an aspirational goal then they're nice streets you plan. So we are AG I would say 500 600, <unk>, we can accelerate or do you see.
Not necessarily rate depending.
Steve: Depending on the environment on the Kpis, we have all.
All the Kpis for all the cohorts each day are doing well, we go faster and if not are we.
Darrin: <unk> and some things in and before we move on but that's that's the number okay. So out of the 200 I would say 100, and something 150 or 130, they are internal advisors and other people Darrin.
Steve: Our around the company okay.
Speaker Change: Uh huh.
Speaker Change: You mentioned, there was something else about the decreasing number of total advisors. Yes. Remember then they mention that the main.
Difference of performance flowing through and those advisors and I F phase was a sales management techniques tools and and so on okay that we use but for me. The second one it's a I would say the quality of the advisors. Okay. So.
Speaker Change: Have expanded.
Speaker Change: Really fast in the past and now and we have what we call here.
Speaker Change: Our curve a b C. Okay. So the best ones. There. A then we have the D b each year and so on and we have been very focused on having only the best ones. Okay. So we are intentionally decreasing the number of phases. Some case, okay and.
Speaker Change: The second point and that more folks on on Ifa's, okay, not we hadn't we'd do the same.
Speaker Change:
Speaker Change: <unk> methodologies for internal advisors, but that's our daily business here.
Speaker Change: But we are also very focused on doing that on the face and the second one.
Speaker Change: Talking about a face remember that there was a changing regulation I would say mid year.
Speaker Change: Year last year, okay that the IFA nowadays can be employees, okay. They can they can be under legal.
Speaker Change: Agreements Ah in Brazil, they could not.
Speaker Change: B employees in the past they had to be a phase in partners, but <unk> change we are starting to see some of the IFA offices are changing I face from the independent Mondo to the employee model, okay, especially.
Speaker Change: Uh huh.
Speaker Change: People that are not actually a phased there like our guys that work at desks their coffee and some wonder.
Speaker Change: Tasks, even disguising the best day, where most part of them I have faith and even some advisors in some of the IFA offices, there and becoming employees. Okay. We have a I.
Speaker Change: I would say one big one that all day at phase they become your employees are in the last two quarters. So that that's why you see the number of Ifa's crazy folks on quite a show of face and they changing from IFA tree in place.
Speaker Change: And.
Speaker Change: And about the what was the second part.
Speaker Change: Okay.
The cross sell products if the.
Speaker Change: When they produce outside of XP right.
Speaker Change: There are some ways of Ah.
Speaker Change: Try to meet gave that that.
Speaker Change: The first one imaging and they are phased much smaller than XP, okay, and when we launch a product and we do the partnerships with the players to be a marketplace. We have much better agreement with juice companies.
Speaker Change: And their phase isolated so for example insurance life insurance when we started as you mention a lot of face they already late life insurance.
Speaker Change: Actually whole life insurance with all the players that you guys know very well that are global.
Speaker Change: But today all of them they do with US all of them. Okay for some reasons first one we have better agreements than they had before so they make more money doing to us than directly with <unk> partners second one we have better experience because remember.
Speaker Change: Imagine that your.
Speaker Change: And XP Klein two years ago, and you buy a whole life insurance you had to go to the insurance company opening an account wire money to displace you could not see your life life insurance policy integrated in your financial planning in next be at.
Speaker Change: So it was a mess they experience for the client the final client was a mess that third one imagine that you are and then I have Fei you have true up and a new system you have to go through.
Speaker Change: <unk> insurance companies you have to go there in put all the data everything.
Speaker Change: And to get a quote okay, Dan you'll get back just quote and you'll have to go through a lot of different systems now we have one marketplace and XP. Okay. We have our own insurance company, but we have other players are a concept here is always to be.
Speaker Change: And on the open platform.
Speaker Change: No matter for each brought it and you can do everything what.
Speaker Change: What we called here the hubs that's the two four day, if phase III sell everything truly investments true to life insurance. You go there you do one quotation you do everything through the system and everything is integrated.
Speaker Change: For our book, the IFA and for the customer, Okay, and the fourth one.
Speaker Change: Today, we have agreement.
Speaker Change: Our exclusive agreements with four investments with 90 plus percent of the assay offices and we have almost the same thing for all of the other products. Okay. When we do an investment in equities or when we do a prepayment agreement refund IFA.
We have exclusivity for a.
Speaker Change: Today for all the products okay. So.
Speaker Change: Of course for some for others that we don't have.
Speaker Change: And not asking them to do refer because we don't have or of course, we we have completely G friend.
Speaker Change: Uh huh.
Speaker Change:
Speaker Change: Financials for it down we will have to discuss but again remember that first point, usually we have better agreements, we have better experience and we have exclusive agreements. So.
Speaker Change: It's very hard for them to do outside just to give you an example.
Speaker Change: In three months that we start consortium.
Speaker Change: We did like a more than a billion rising in premium.
Speaker Change: In two months three months, okay. So it's growing really fast.
Speaker Change: That's super clear. Thank you for the comprehensive answer.
Speaker Change: Okay. Your next question is from Nihon Argo Wala HSBC Knee-high you May proceed.
Speaker Change: Hi, Thank you for taking my question just a very quick one you mentioned about a change in the credit card proposition because.
Speaker Change: Could you just elaborate a bit on that what are you changing for the play they've got any new features you are adding I believe because it got me to focus on your captive client base and not go open market. Thank you so much.
Speaker Change: Thank you for your question backwards, we are not going to open markets. Okay. So we have folks on our current cost.
Speaker Change: Customers here, so don't worry.
Speaker Change: The first part of your question.
Speaker Change: If you get the brothers, we have today, where we have basically true what we called a one that's basically for Ah.
Speaker Change: The small clients, okay with a clean credit and we have what we call the XP finish okay.
Speaker Change: The one with <unk>.
Speaker Change: Invest back of 1% and so on now what we're doing remember if you.
Speaker Change: You go back to the presentation. There is one slide that we talk about segmentation I know that it's very.
Speaker Change: Hum.
Speaker Change: <unk> for banks, but as we are born.
Speaker Change: More on affluent customers, we didn't have retail clients and private banking clients. Okay in the past.
We use should do the same value proposition from the middle to declines on the borrow and should declines from the top okay. We start to change that two years ago and today, we are much more mature we can deliver different products different pricing G friend.
Speaker Change: And sell a different service.
Speaker Change: We have different financial planning and wealth management and so on a four four <unk>.
Speaker Change: <unk> segments and when we go through cards is the same thing Judy here in 2025, I would say Oh.
Speaker Change: Early second quarter, we are going to release, some new cards, okay folks on Ah <unk>.
Speaker Change: I would say the unique clients.
Speaker Change: We've called XP unique year clients with more than 3 million Reais.
Speaker Change: <unk> in AUC and also on the other card for our private bank clients, Okay. So with different value proposition Ah <unk> invest back cheaper and Vantiv feeds so.
Speaker Change: More suitable card for this clients, Okay, and we believe is going to be.
Speaker Change: <unk>.
Speaker Change: A notch.
Speaker Change: Above the market something that's really new that there's no equal.
Speaker Change: Value proposition, especially for the for the private bank clients.
Speaker Change: In Brazil.
Speaker Change: And that's a debate that does it what would that require additional investments at the V C opex or capex, increasing because of these changes.
Speaker Change: Any more detail than that.
Speaker Change: Nothing nothing mature of course, they will have as they have more benefits they will have a little bit higher Cogs Budd.
Speaker Change: When we modeled that.
Speaker Change: The revenue expansion.
Speaker Change: The hiring third change that we have a better.
Cashback from visa and so on.
Speaker Change: You should not see anything meaningful.
Mark: Okay. Thank you so much mark.
Speaker Change: Okay. Next question is from a set of XI Bradesco BBB.
Mark: <unk> you May proceed.
Mark: Yeah.
Speaker Change: Hi, everyone. Thanks for the opportunity. So my question is regarding the expenses.
Speaker Change: So you guys said about <unk> to.
Speaker Change: To gain efficiencies. So the goal is to gain efficiency in the next year or the next part is I don't know, but it puts us in the last quarter. We said we saw a huge increase is on the line of the bonuses sold.
Speaker Change: Those are the multiple bonuses was very huge comparing the last especially in the last two years. So it's a how can we predict that so expenses.
Speaker Change: <unk> expenses, where you will have to predict that so margins EBITDA margins gaining.
Speaker Change: Growing year by year end.
Quarter over quarter to quarter.
Speaker Change: Quarter by quarter or.
Speaker Change: Annually and another question is regarding provisions in the last quarter was so on inquiries on provisions again.
Speaker Change: So to be clear. This is the level that is recurrence or all of the hundreds of million Hey is this the level that could be recurring for the next quarters.
Speaker Change: I will take this.
Speaker Change: And you'll hear me yes.
Speaker Change: Yes.
Speaker Change: Okay I will take the second part of the question or the second question about the provisions.
Speaker Change: Remember that in the best quarters, Q2 and Q3.
Speaker Change: We mentioned that the level.
<unk> was not very correct because back there.
Speaker Change: Had some.
Speaker Change: Other positive impacts on the same line. It was in Q2 and Q3, something about 40 to 50 million rise and we said that the correct level should be around 90.
Speaker Change: <unk> required okay. So that was the speech in the in the last quarters I would say that as we are growing the business and the loan book a little bit we should be closer to 100 110.
Speaker Change: In in the next quarters Q1 Q2.
Speaker Change: And so on for them for 20 to 25, so not a big increase.
Speaker Change: Rone 92 to 100 110, but is more inquiries as the loan book is growing.
Okay.
Speaker Change: Taking the expense questions I think that you should also look at compensation ratio.
Speaker Change: In both compensation and efficiency ratio are at an all time low.
Speaker Change: And they should keep gaining margin over the year, we may have one quarter or another quarter.
Speaker Change: Slightly higher numbers.
Speaker Change: The third quarter for example, where we have our.
Speaker Change: And while we haven't it may have a bit more but over the year, we should deliver again in both of those are those indicators and about the expense.
Speaker Change: Compensation expenses in there for a quieter as Moffett assays, we reached a 100% of our internal budget and basically that is a performance metric that we have we have an S curve and remuneration and when we reach our goals we need we pay more our team on their part is basically that is it.
Speaker Change: Okay, Okay, great. Thanks for your answer and.
Speaker Change: Thank you.
Daniele: The next question is from Daniele Vos Safra then yeah.
Speaker Change: You May proceed.
Speaker Change: Okay.
Speaker Change: Hi, everyone and good night and thank you further questions two on my end here.
Speaker Change: On the waterfalls light that you showed us.
The contribution by segment so to reach the 10%.
Speaker Change: In 2005, two points caught my attention.
Speaker Change: First the DCM contraction that you expect for the market this might be directly linked.
Speaker Change: Linked to your market share gains could you share with us what is your assumption for the system system construction.
Speaker Change: In issuances and second the growth above 10% in corporate and institutional.
Speaker Change: Given the institutional business in Brazil.
Speaker Change: As been struggling to grow and funds, we're not seeing so so many good I'm.
Speaker Change: Good good.
Speaker Change: Sections for net new money is still in the France.
Speaker Change: What is the breakdown that you're assuming between these two segments are you expecting any any growth to institutional business in 2025. Thank you.
Speaker Change: Oh, Hi, Vasu. Thank you. Thank you for your question starting if the DCM activity.
Speaker Change: Too soon to say that the same activity will be lower over the year.
Speaker Change: We were seeing the pipeline a bit weaker for the first quarter as it is expected you have summer vacation Carnival and then you go and if you look at our presentation. When we gave the color that we are a house at age 90 billion highs in corporate assets in Texas and why the sovereign government banks two half brothers.
Speaker Change: Sure for sure our clients even though.
Speaker Change: Our our primary offering wasn't BT weaker so we expect fixed income to keep performing very well during the quarter.
Speaker Change:
Speaker Change: Oh, Okay, perfect and institutional growth as market <unk> is a more mature line.
Speaker Change: It is more trailing if I bovis performs on the size of the industry of funds.
Speaker Change: So there's no surprise here if it's another tough year for institutional investors, probably these revenue lines will behave the same as last year. What we are seeing that may <unk> may take a catch for the next question also is when we analyze our clients portfolios, we see that the movement that we call <unk>.
Speaker Change: <unk> should be near to them and for this level of interest rate. So basically what that means we suffered a lot over 2022, 23 and 'twenty four if mix of change in mix of products basically clients moving from equity funds hedge funds extra trading.
Speaker Change: So fixed income.
Speaker Change: Is decent made a compression you are take rates for investments that we compensate by the growth in the fixed income platform.
Speaker Change: But now those lines should be stable or a bit lower and if the markets improve a bit recovering over the year and also the fixed income funds the funds platform big roesel equal or something so we keep confident that where you keep delivering results in both of those lines.
Speaker Change: And if you look at the corporate business line basically.
Speaker Change: One of the main projects that we have with the corporate business line is cross sell products with tissue surfaces and when you go to our DCM capacities. We are top three in the hunting, but we are top one in Texas, <unk> corporate bonds and those bones, they are issuing inflation and the companys hedge the.
On the inflation exposure against our market, making desk so.
Speaker Change: We expect that.
Speaker Change: Those Texas and corporate bonds keep a more sustainable base off of emissions over over the year and the corporates should keep tracking day issue services revenue and we expect both of them should be flattish over 2075.
Speaker Change: If corporate debt the only projects not only inflation link it should outperform.
Speaker Change: Are you have you have energy you'll have foreign exchange.
Speaker Change: Are there kind of derivatives and so.
Speaker Change: So it should keep the grow the growing base of 2025 to each other to enforce sorry.
Speaker Change: No. Thank you that's very helpful.
The next question is from Hanako Maloney Autonomous nothing you May proceed.
Hanako Maloney: Hi, everyone. Thank you for taking the question I wanted to go back to the slide where we're showing the growth our revenue drivers right. Then specifically here on the DCM so going back to your last answer you're saying you expect volumes.
Hanako Maloney: Ah the Sam steel flat, but you still had a bar there showing like lower lithium volumes. So I'm still trying to figure out here, what's what's the assumption there or.
Hanako Maloney: Or if you're also assuming that youre going to have lower fixed income take rates on the Oh this market this year.
Hanako Maloney: And then if you move to the next bar that you said like compensating that for higher market share gains are how much market share gangs, you're embedding on this on this assumption here and what gives you conviction that youre going to keep gaining market share in a more competitive market. Thank you.
Hanako Maloney: Yeah.
Speaker Change: I will take the first part here in Victor can complement myself here.
Speaker Change: But I would say that the point here is.
Speaker Change: When we talk about the 10%.
Speaker Change: More than 10% there as I mentioned in my view here is more of like a floor on.
Speaker Change: Then the target okay.
Speaker Change: If we take in consideration that the GCM volumes theory going to decrease of.
Speaker Change: Of course, there is some impact on the on the year Okay.
Speaker Change: They're not as relevant because the intimation.
Speaker Change: We have a whole ecosystem around fixed income and in the company, we have 50% market share.
Speaker Change: In the secondary market of Ah Ah corporate bonds. Okay. Today, we have.
Speaker Change: Our volume.
Speaker Change: Trading volume from <unk>.
Speaker Change: Retail clients institutional clients, that's much much higher than three years ago, but so in our view, even though we have a lower primary market that again for us it's too soon to say that the the primary market, especially for us.
Speaker Change: Remember that we we are different from from the banks, we don't compete in all the business lines with them we are.
Speaker Change: Much more.
Speaker Change: Strong in projects that are related to retail that are tax exempt. So that's why we believe if the market shrink we will have more market share okay. Because the type of products that we are the the main issuers.
Speaker Change: And that we have a powerhouse to distribute they will not decrease on the same.
Speaker Change: Base or our percentage as the market. So and we are developing a lot of new business line here on capital markets.
Speaker Change: Yes.
Speaker Change: Determination.
Speaker Change: When we look at corporate we grew when we take out the institutional business, 45% last year 45, Okay. So we are not going to.
Speaker Change: Decreased to zero or decrease should then percentages year. If it's not 45, it's 30 35 40, okay. So because this business they're very new.
Speaker Change: Just started many of them okay. When we look energy we started the the <unk>.
Speaker Change: The business two years ago. So we are at the very beginning when we look some kinds of derivative. We just started when we look our fixed income for election in America. We just started okay. So we have a lot of new business lines on corporate that gives us a lot of.
Speaker Change: Assurance that we're going to delivery numbers close or around what we delivered last year, despite a lower GCM.
Speaker Change: If it happens again.
Speaker Change: The Q1, it's not a proxy for the year, Okay. Because every year Q1, it's a.
Speaker Change: Lower level of <unk> for the best three years.
Speaker Change: We already predicted that and that's why we one of the reasons why we increased the the books as Victor mentioned, because we knew that now we need broadest yourself okay in.
Speaker Change: In Q1, and the secondary market and all these other corporate projects they will more than compensate the lower level of Brian marriage, you see them in Q1. So we are very comfortable that.
Speaker Change: We are delivering the same level when you look I'll just brothers combined GCM corporate credit and so on we are being able in Q1 should deliver the same level of revenues alright.
Speaker Change: And AR growth.
Speaker Change: Yeah.
Speaker Change: Got it I don't know if there is going to do a follow up.
Oh I think the last points here are that is important to mention is the corporate restructuring that we just finished <unk> and for our children are basically and we started that in 2020 for it because the entirety of the year to conclude to conclude the process.
And the last approval from the Brazilian Central Bank was 19 of November. So basically we didn't have one single quarter of the fully loaded benefits of this new structuring the company. So over the year of 2025, our bank has a considerable more competitive capital.
Speaker Change: Funding prices, which will allow us to compete for business that we couldnt before also helping to explain our confidence in the gaining of market share.
Speaker Change: Perfect. That's that's well understood on the on the market share and here on our side should we assume that our fixed income take rates will come down this year.
Speaker Change: Yeah.
Speaker Change: In our view not but.
Speaker Change: Why do we believe is going on.
Speaker Change: These being.
Speaker Change: Going up I think part of that was also due to mark to market. So I have some concerns if that will continue at the same level or as the market comes down with it.
Speaker Change: We'll also see some some compression there.
Speaker Change:
Speaker Change: The part of the the Mark to market.
Speaker Change: Last year. It was a very small part of the the whole fixed income business very very low so we.
Speaker Change: We don't have any directional or proprietary positions on credit spreads. So that's another business. So.
No need to.
Speaker Change: To project, a lower take rate because of that.
Speaker Change: Okay. Thanks, that's understood very helpful. Thanks, guys.
Speaker Change: Yeah.
Speaker Change: Okay. Thank you all for your participation here too there was a long call one hour only in Q&A. So.
Speaker Change: We're going to be more than happy to answer further questions to the IR team.
Speaker Change: Management is always available to see you in the next quarter.
Speaker Change: Thank you.