Q1 2025 Banco Bradesco SA Earnings Call
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Speaker Change: So we'll follow up phone calls about principal Dallas when he spoke driver Mos.
Speaker Change: I know you could actually be a lot of people trying to scope romantic comedy about noon.
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Speaker Change: With respect to hold or she actually done that Oh man Thanos.
Speaker Change: Thank you I've got me to give them the same way it is.
Speaker Change: Yes Claude.
Claude: So what I'll do is give them banquet meals.
Claude: Be logging into his seat I bought them, we should be allowed to decision based on a question that we answered that.
Claude: Nokia will get that right.
Claude: Got it.
Claude: The main thing.
Claude: Zero.
Claude: Yeah. The only thing you have seen this momentum.
Claude: But I'm wondering if you can set up a call today.
Claude: To your point exactly on a once in a hot and warm fourth quarters. One through three you will fall out and then you go through your lab.
Claude: His favorite personal phones, you've used to read in it that Bush turnpike drink. The Bush once said she wants it.
Claude: And well go.
Claude: Sugarcane look pretty middle we'd get talked before ive been actually painless unless some margin.
Claude: You all did I Miss that monitoring for you know set a leak at the time being.
Claude: I've also got hit.
Claude: You'd like to use you might as you went through.
Claude: Five.
Claude: You ruined hill bushels of what's pushing.
Claude: Yeah.
Claude: Yep.
Claude: Yeah.
Claude: Okay Samantha.
Claude: Got you.
Claude: Yeah, Yeah, I shouldn't have put themselves on that and this is good I think it was like even if you're making the finishing mills for how long.
Claude: Terry.
Claude: Yeah, Hello, So God, though are the this is block machine coffee that he crashed.
Those fees go down, but the fish pontoon boyfriend, Chris you may have to how long do you hold.
Claude: Okay.
Claude: Our capital thoughtfully those rents when log and I've got a mic, but can't imagine, but he wasn't actually what was the mindset.
Claude: Yes.
Chris Smith: We spoke with you thought gosh, yeah, Chris Smith, and arguing point per bushel chef Jose you see I've got a short distance divestitures that you've already done so.
Claude: Yes.
Claude: Poke my audio listening to them.
Claude: I got the same philosophy.
Claude: Thank God.
Claude: The second.
Claude: Staying pretty match thing Christian Mezger, you once said you betcha.
Speaker Change: 8 million when that could actually cause that can be life and bill has been at any point.
Claude: Thank you.
Claude: You won't get anything, but it's just a month ago I can't have come down so much a bulk sale of having a scorecard on the parking and also got it on my side and put them back on something radical most of them. You can have the already should have somebody should we still see what's important not only to customers, but if you're supposed to have one point to allow a handful.
Claude: Thank God reduction second beyond seven.
Claude: Seven.
Claude: And I do not think that I can't think what she she had gone up.
Claude: Ottawa is you've got to.
Claude: Oh, sorry.
Claude: And Lockwood if anyone has one.
Claude: Todd will stop me if it is.
Claude: Yeah.
Claude: Okay.
Claude: It's unfortunate, but we're not getting more math.
Claude: You got to listen I would go ahead and stuff that you are seeing out of Cushing up though he would be satisfied. They just went up a little part of me says going forward.
Claude: I'm afraid that you're hinting at him before he went to my audio stammer, what am I going to do all my voice trigger and Lula.
Claude: I don't think we're losing about keypad, though.
Claude: The NASCAR theoretically could add two more is it almost that I saw.
Claude: Imports as Siggi mentioned, we have traction in all of the business.
Claude: Most of the business you wouldn't think of that and it's been out.
Claude: I love it it if it's about many things that I guess being booked and so she told me that was.
Claude: But the machine learning, how do we happened to be a lot anymore.
Claude: Im battling a largest police.
Claude: Pardon me all the seam awards wildly with me, leaving to go out to most of them.
Claude: I think we're in a much more debt out of the pool risk maybe in secret of course.
Claude: Can you talk about that yeah, I think that was most of them with you.
Claude: Okay got it.
Claude: See you slipped in theory, that's a hell of a film and seem to me that a little under that in our business.
Claude: Hedge the unit just thinking hasn't changed.
Claude: Okay.
Claude: Oh no no what have you ever thought about don't put up and I have all my life.
Claude: When they are saying they were supposed to me that'd be terrific.
Claude: But I'll see if anybody NATO have gone away.
Claude: You can have the only risk from somebody else.
Claude: Yeah.
Claude: He might do reading more into Chris Smith, Inc.
Claude: Laughter values.
Claude: So at this point.
Claude: Yes.
Claude: Sometimes those individuals get into Florida.
Claude: 2% multifamily.
Claude: Civil.
Claude: Well a lot of the epic Y O y.
Claude: Elisa.
Claude: It's like I did I ask to Facebook.
Claude: 100 <unk>.
Claude: Collateralize it won't be the real estate finance.
Claude: You just have to look at our L. T S. Nielsen about 61% is not going to find it in the email publication.
Claude: It's nice to see.
Claude: We continue to grow payroll deductible loans do you have for payroll deductible loans among the private banks, we have the highest share fortune country right.
Claude: Okay.
Claude: Happy new work opportunities for personal loans, we have good ratings, we found interesting teach them one by one and we have been growing with a lot of calls.
Claude: And I do this.
Speaker Change: Is it F G T. Yes of course.
Claude: Gary.
Claude: Oh, that's a growing segment.
Claude: This is why we see yeah.
Claude: And do you open when I get to we have been a lot of concern that everybody.
Claude: Hello.
Claude: Hello, and stands for C. D. C. We also posted a call at any point in liquid collateral.
Speaker Change: Collateralized by default I spoke about micro and SME.
Speaker Change: I suppose thing yeah treatments at the Santa Claus QUADRA unemployed and almost 30% year on year and what has driven that.
Speaker Change: Before the company's working capital volatility this is growth, which is fully collateralized by.
Speaker Change: Our receivables and you're speaking about have children.
Speaker Change: F G I.
Speaker Change: A lot of traction as I mentioned in the past quite gotcha.
Speaker Change: In Florida alone T D C and foreign trade financing.
Speaker Change: We have very strict.
Speaker Change: What we are doing we have Cooper.
Speaker Change: Great.
Speaker Change: With an adequate the R E R.
Speaker Change: Our clients and for how long.
Speaker Change: Nancy.
Speaker Change: And of course, so she can drive this distribution capability combined with good models, Paul let's see.
Speaker Change: This is what makes it.
Speaker Change: It would not be a fair.
Speaker Change: Totally agree to stay put didn't have the same client base.
Speaker Change: High penetration in all client segments in our commercial capability to make that this is happening not just with our army of mandatory and each one of those segments and they've been working really well, let's see behind key instrument, but it wasn't counting on all that data.
Speaker Change: More channels and better and better at C O M supporting clients Sideboards Yahoo.
Speaker Change: Based on that point.
Speaker Change: All right.
Speaker Change: Just income.
Speaker Change: Got it.
Speaker Change: 10% year on year.
Speaker Change: And with a positive combination of if you can.
Speaker Change: That's that's countries you.
Kinsey: Kinsey here, 3% it is absolutely stable.
And flipped it.
Kinsey: We had an MAA manifestations of $9 6 billion growing three 2% year over year.
Kinsey: And we also had a good month wellness you can.
Kinsey: In our market.
Kinsey: The main driver here, what you see.
Kinsey: And I was telling some colleagues and in turn our presentation last night.
Kinsey: Until then I'll ask them in L. N genius to like really well, we had the volatility in Brazil in the last six months.
Kinsey: This gives us an opportunity.
Kinsey: Makes sense.
Kinsey: So I cannot just trying to get that from January to March but also looking at the floor right.
Kinsey: And my second focusing on the first quarter I haven't changed to 25, but.
Kinsey: We had hired so many people with a lot of traction in India, Let's say, you're a bank and that creates a lot of business for our clients desk and Oh.
Kinsey: That is true.
Kinsey: Yep.
Kinsey: And then for trading they are trading the more activity or treasury activity, we have with our wholesale bank. The more successful the trading is and there was a third line item, which was smaller and that is developing what's good. What's your name origination is the energy trading desk.
Kinsey: Not as material as trading on a L M for us, but still we have that energy task.
Kinsey: And.
Kinsey: Claims, they're not yet at $16 8 billion in 2000, 15.5% a year on year and I am increasing two eight points stakes from eight four and more than this important growth in my view is the sustained growth of all of that.
Kinsey: The client NII.
Kinsey: After quarter end with quality.
Kinsey: Are we alone book and vehicle in explained at Moore and also <unk>.
Kinsey: NII.
Kinsey: Net of provisions that grew 36% a year on year, 5% quite yet on QUADRA and again, we'll look at the Bar chart, and we see consistent growth in.
Kinsey: And that's all cleaned NII net of provisions because this has a bearing on our bottom line.
Kinsey: Quality of our portfolio is.
Kinsey: It is not debatable when we have an over 90 day delinquencies totally under control we have the share of the loan portfolio by stages already with resolution four 966.
Kinsey: So we have some regulatory additional regulatory topics imposed to bind the Brazilian central Bank.
Kinsey: But the way we see this.
Kinsey: 92% of our portfolio is in stages, one and two.
Kinsey: And so many ways.
Kinsey: A higher proportion and in this stage III portfolio, 35% up to date.
Kinsey: So they are.
Kinsey: They are a pain.
Kinsey: And also in terms of collateralized portfolio, we'd have 54% to 57%.
Kinsey: Percentage with guarantees.
Kinsey: Yeah.
Kinsey: But when do we focus more on the loan origination. This number is even more important for us.
Kinsey: Another important element to highlight here in this quarter is exactly the restructured or renegotiated portfolio.
Kinsey: Whatever you prefer to call it like.
Kinsey: This is a legal obligation by resolution of a 966 restructured portfolio problematic as it secured operation. So regarding resolution four seeks a four 966, it's important to tell our investors buy side and sell side that this has.
Kinsey: There was also has its own characteristics and it forces market players to treat certain elements in a certain way. This is indeed complete publication in our explanatory notes.
Kinsey: Explain each one of these concepts and our team is available to you to discuss these items whenever you feel like it so.
Kinsey: But I would like to stress to you is that India 'twenty 'twenty four we had a total portfolio of 39 billion.
Kinsey: We were just the $4 5 billion and we get to the total portfolio in this temporary so we would just footprint.
Kinsey: In 2025.
Kinsey: One quarter in Q1 25.
Kinsey: He just said about 3 billion two thirds of what we reduced to one 'twenty 'twenty four and so we are trending towards an even smaller portfolio considering these criteria.
Kinsey: Another growth driver of our result.
Kinsey: Is this.
Kinsey: Our fee income our fee.
Kinsey: Commission income as you can see I'm not going to address each one of the topics, but we grew practically in all of the items, we have high activity, even in and card income.
Kinsey: It is growing here in the best portfolio of Middle income high income.
Kinsey: But we have two topics, which I would like to underscore.
Kinsey: Consistent gross about consortium business and also asset management and capital markets I beat investment banking grew year over year, 76%.
Kinsey: And we continue to have a robust pipeline.
Kinsey: So we're continuing to get this business more attraction to do business and our wholesale bank combining all wholesale segments with our IV. Both in terms of fixed income and M&A and repo operations.
Kinsey: So this is another driver.
Kinsey: Revenue.
Kinsey: That brings us Nathan.
Kinsey: And it is boosted by our commercial activity and our relationship with our clients.
Kinsey: Operating expenses.
Kinsey: So that's off the fence growth of year over year.
Kinsey: A reduction of eight 6% quarter on quarter and I'll speak about this we reviewed our footprint. So we have been reviewing our footprint with a lot of discipline and organisation that you'd be numbers that are higher than what we had planned.
Kinsey: We had a thousand four hundreds of close to 1400.
Kinsey: Branches close.
Kinsey: Okay.
Kinsey: So I have been mentioning this to your quote unquote huh.
Speaker Change: Oh, we have to include CLO in L. A par.
Kinsey: Quite a CLO is an alibi.
Kinsey: I'm talking about the other part C. L O L O L L O and CLO itself.
Kinsey: The growth of our revenue is at 20%, but we.
Kinsey: Integrate everything in our balance sheet.
Kinsey: Uh huh.
Kinsey: And when we look at personnel and administrative expenses looked at the growth year on year, so lower than inflation.
Kinsey: I have a lot of control here.
Kinsey: But it is also important to highlight that this is not not bad its good we have a transformation process underway at cielo, we have been investing in live hello into other companies as well they've been bringing revenue and it sounds to us. It's accelerated distribution is good all the insurance group.
Kinsey: It continues to bring those on.
Kinsey: They have a smaller set of employees.
Kinsey: But the insurance group.
Kinsey: Or because they're also investing in growth just as a related companies here, we also drew and technology.
Kinsey: You know I tried that business unit.
Kinsey: C O M D.
Kinsey: You know our data analytics department.
Kinsey: N D.
Kinsey: Enterprise segment in the principal segment in our corporate segment, which is our middle market. So we continue to invest but expenses under control.
Kinsey: Got it.
Kinsey: No. The insurance group, we also see a lot of traction I'd like to highlight two Dreyfus. They are at a very high 22, 4% in disgrace here over here 25 points, 3%, reaching.
Kinsey: <unk> 30 billion in revenue from insurance premiums pension contributions and capitalization bonds. So as you can see here our technical provisions right now for 114 belly and growing a bit more than 11% year over ear and two main drivers.
Kinsey: Here good management in each one of the pillars, a very good combined ratio in each business line and commercial capability using external channels and internal channels, increasing our penetration in their customer base and bringing rad for new growth.
Kinsey: From the insurance group and now talking about capital ratios.
Kinsey: The pay so ratio.
Kinsey: It has grown.
Kinsey: Dean for sand and we see that J C P.
Kinsey: Well be distributed throughout the year our guidance for 2025 as we look at the guidance I mean, we have an annual guidance.
Kinsey: So that's for a whole ear of 2025, however, we are trending to.
Kinsey: Words, Missouri.
Kinsey: This guidance at the end of their spirits invitation I'll make a few comments about this again and so let me now move on to our final slides talking about ours Tredici first bradesco principle, we launched they're sitting.
Kinsey: It should have in October of last year with three offices, we wanted to reach 50000 customers and we have done. So we now have approximately 50000 clients. We will now open for a day five new offices this ear expanding surface.
Kinsey: And the managed model for the metal market and corporations with more than 10 different platforms for the middle market that has helped us grow our assets and our relationships with small and medium sized enterprises. We are leaders in this segment.
Kinsey: And we continue to grow with.
Kinsey: Secured loans with a very safe flow and portfolio and we continue and our cultural evolution with so broad that school.
Kinsey: More than 1400 people have been hired in tech and there are two more elements I'd like to speak about productivity intact, we've been able to reduce delivery lead time by 32% and this delivery I mean in terms of application.
Kinsey: As we've grown more than 53% and terms of business development hours not only because we have a great or a team, but also because we've improved productivity and now everyone is making intensive use of chat AI, including co pilot very much connected to.
Kinsey: Our tech modernization initiative.
Kinsey: We have enterprise agility with our rate tax squads throughout all levels up the organization and al Richey Fowler pretty sorry, using her H N AI using our journey I, we call B our attack.
Kinsey: So what I'm, saying is be edge AI that is already serving 768000 customers very soon all of our customers will be able to use our new beer, but we have our corporate be it for employees, which reads.
Kinsey: And rates, our stories and that has improved our productivity significantly we've had a 46% efficiency gain and our developments. So we are using <unk> and AI intensely to build our path towards using multi age ins.
Kinsey: So we set up a squad with eight or it hadn't employees a developer or someone from project and you will have one specific journey I for each pillar. So all of this squad will be using chat and AI to improve our productivity significantly.
Kinsey: So we can certainly provide more color on this if you have any questions, but I'd like to speak about all of these deliveries yesterday, we disclosed two very important points first we've promoted two of our colleagues to be directors and or illegal.
Kinsey: <unk> after their new who's been with us for a long time in the company. He's a very promising young attorney who will now take on all their take Asian activities and our legal department. The other new director as a colleague who has a strong relationship with our customers in wealth.
Kinsey: Banking and he is modest you'll hear not too will be or have no legal director also separating global prey.
Kinsey: And eat all other business lines for example, the investment bank needs a lot of support and writing contracts and we have another executive director, who will join us to be part of the legal team, bringing his vast 35 ear experience.
Kinsey: And one of the best law firms and in Brazil, being how are you doing that to his name is truly a partner he will join the bank. He will start working with US as of July. The first we feel proud of this new team, leading our legal department of course with all other call.
Kinsey: <unk> and our legal team at Bradesco now, let me move onto my conclusion.
Kinsey: Let me tell you.
Kinsey: Our gross.
Kinsey: Our net income growth is based on revenue and that will continue so revenue from different business lines and control the expenses our loan book is under control.
Kinsey: Our view based on our a R. Locking at every vintage. So we continue to work very closely and our loan book because the quality of our assets is not negotiable I always tell our team that quality of.
Kinsey: Our assets is something we cannot negotiate so that is why we have continued in this past step by step.
Kinsey: And a good track and as you've seen our transformation plan is now being executed.
Kinsey: Acceleration in theory, well timed so thank you for being with US Let me now invite casiano scarpelli and undertake out of value. So that we can answer your question, but I still have a few brief comments before I give you the floor if I if I may I mentioned our guidance.
Kinsey: And now what happens with our annual guidance you've seen our extended loan book, we have delivered above the guidance.
Kinsey: Yeah, and I I noticed provisions also has a great number. So you can project our trade shack Terry and their next corridors. So we're delivering above guidance. These numbers will trend towards the guidance, but one thing is for us to be at the top of that.
Kinsey: That's the other thing is for us to be above the guidance. So if you look at these three lines were above the guidance. So that's the first thing we see but so why don't you review the guidance well because we are still within the range is disclosed in the guidance. However, if it's NAV.
Kinsey: This area, we will be willing to review the guidance in the second half of the year, the second comment I'd like to make.
Kinsey: I had a conversation with journalists and I got an interesting question from age or analyst.
Kinsey: And if we believe we will have growth of eight or 10% quarter on quarter I answered to note. We continue to back on slow consistent gross step by step we have not changed our speech we have a plan we have not interrupted our investments we continue.
Kinsey: To follow our plan with a lot of discipline, but my view is that right. Now we are at the top of the basic interest rate the salt Lake raised pretty sure.
Kinsey: So.
Kinsey: The margin and the NII as they are more.
Kinsey: Under stress when you were at the top of the guidance.
Kinsey: So what we expect.
Kinsey: That there will be a challenge in terms of NII, but my view for this year is much more favorable if you want to look at the midpoint of the guidance we are trending towards the top of the guidance.
Kinsey: From the middle to the top of the guidance.
Kinsey: I believe we will deliver a resolve.
Kinsey: Bob.
Kinsey: This one guy so I do feel up 10 minutes will take about an hour per for a minute.
Kinsey: Although we see a slower growth in the second half of the year. This is what our economists have.
Kinsey: <unk> told us.
Kinsey: But we still feel optimistic in terms of growth because we see lots of opportunities to continue to grow and individual loans payroll deductible loans and re grading company customers that we can continue to grow law with collateral such as receivables.
Kinsey: I see T O. So that will help us grow our NII.
Kinsey: As we look at it from a surface and commission income.
Kinsey: What are the founders and what is driving the growth well be at the mid point of June or we may see a charge for instant transfers or P. I Act like we feel we are in a very comfortable position also we will be launching a new cash model and when I look.
Kinsey: At the bright side, our gross I can see payments growing healthily as the main driver and revenue from surface and a few related companies you know such as the kind of exploration and but also payments will bring us more.
Kinsey: Commercial traction and rats.
Kinsey: The third point I'd like to mention is the investment Bank I said, we have a robust pipeline.
Kinsey: And I believe we will also deliver a good performance this year and the insurance group I've already mentioned so all in all what drives our optimism is the law and book a very secure and book good credit lines higher intermediation.
Kinsey: March.
Kinsey: And more revenue from the insurance group, that's just going to help us close a good year in 2025 that would say it on track.
Marcello: Thank you Marcello. Thank you Claus C. I know good morning every one.
Marcello: Let me tell you the CEO of our insurance group is also with US he is online where.
Marcello: You can ask your question or gives you raise a whole book incentives earthquake.
Marcello: In writing Oh, using search they watch that number there is one on screen now or you can send US. Your question do you think this email it right then.
Marcello: I'm going to talk about you still go back first question from Thiago Batista with UBS Thiago.
Marcello: Yeah.
Thiago Batista: Hi, how are you doing good morning, congratulations on the results I think it was very strong across the board and my question is about the oil I mean, that's the bank note on you mentioned in I O.
Marcello: <unk> 14, 24% and you said they should naturally.
Thiago Batista: I'm for a much more robust we've time for the bank.
Thiago Batista: At the beginning.
Thiago Batista: So three years ago, you had said the initial metric was to achieve their cost of capital right now.
Thiago Batista: You said you want to fly even higher.
Thiago Batista: My question is when you look at it by segments with TD insurance group and AOI of 20%, which means that the banking operation because it was done close to 10 it was slightly under 10.
So what's.
Thiago Batista: What do you still have to normalize all the main segments eze to retail or wholesale I for me I mean, one of the big boxes, but you'll house.
Where you still see some room to bring deal owing to a higher level well, let's just one or two answer but.
Speaker Change: I'll start I'll go and thank you for the question, it's a pleasure to have you on board.
Speaker Change: Well, it's basically mass retail this costa to Sue if it's something we've been corrected.
Over time.
Speaker Change: I'll hit the water.
Speaker Change: This will bring us a different level of return for example, the wholesale bank.
Speaker Change: Uh huh.
Speaker Change: Level of I R is high end.
Speaker Change: Oh claims segments and then we have an ideal I'm not talking about I b or global markets because that requires much less capital.
Speaker Change: Global private bank is a high Thirty's forty's is pretty.
Speaker Change: For the high income segment the same the principal clients I mean, they are impressive in terms of our level of return may happen and that applies to Brian.
Speaker Change: Well.
Speaker Change: With our families.
Speaker Change: We rebuilt the trend and it's increasing.
Speaker Change: That's what we are working on and of course, we are.
Speaker Change: Investing to gain productivity because they may send us your I know you can complement no. That's exactly it these are the levers or the activities one of them and of course, the effect of our cost.
Speaker Change: As you know master retail this is what's going to give us the final leap to improve our Roe.
Speaker Change: Well, we think about the question next question from Danielle <unk> with Safra.
Speaker Change: Danielle.
Danielle: Good morning, I'm, saying no Dania casino congratulations on the excellent results, it's clear that the bank has traction the good indicators.
Speaker Change: To take this moment with you here a bit.
Speaker Change: About well, we didn't read in Louisiana, which is the pied unpriced vantiv payroll deductible loan a lot of people are discussing projects like too could you take him days market because it has a big a big market share of about 15% in the traditional payroll deductible loan.
Speaker Change: So what will be the position of the bank.
Speaker Change: We do have predictability up everything.
Speaker Change: How are you planning to operate in this segment taught out before thank you for the question well I'm not going to give you some.
Speaker Change: My own perspective.
Speaker Change: Let's go over there.
Speaker Change: Sorry, Danielle.
Speaker Change: I called you Thiago again, I'm, sorry to now its a pleasure to have you anyway.
Speaker Change: Here are some.
Speaker Change: Point.
Speaker Change: You got it.
Speaker Change: Number one we believe that peer lines with great opportunity for Bradesco.
Speaker Change: You'll see we have 14, 3% market share.
Speaker Change: Of payroll deductible loan spread into Seattle in the public setting at different levels of government I N S asphalt and private but what prevents deductible wounds that sure.
Speaker Change: Laura I will also share our share is much lower.
Speaker Change: And private to payroll deductible loans pick up small space, just about 6% off the whole 14th country per se.
Speaker Change: Among the private deductible alone.
Speaker Change: Have the big gas instead of a champion he checked so we owned with fans assigned to hear it.
Speaker Change: A lot of growth coming from there okay.
Speaker Change: That's the question should be why isn't that.
Speaker Change: Private thing so perhaps the mainstream banks incumbents have not yet presented a great origination here.
Speaker Change: Some important variables here number one.
Speaker Change: The client base that already had a payroll deductible.
Speaker Change: Increased.
Speaker Change: Yeah.
Speaker Change: In 16, and 21 of April according to that the prep until then the Wilson origination of 8 billion most of it.
Speaker Change: So.
Speaker Change: From our standpoint, what we did was show me what.
Speaker Change: We had initially defensive and will try to answer them.
Speaker Change: Right.
Speaker Change: People are are the favorite wagon ization.
Speaker Change: My age have operated.
Speaker Change: So were their agreements in for a little more of a kind all but using a new tunnel.
Speaker Change: And.
Speaker Change: I don't know.
Speaker Change: Oh this is the answer.
Speaker Change: Got.
Speaker Change: Did not see.
Speaker Change: I mean, what does that did not see these clients did not look at these clients that already had a payroll deductible loan for myself I suppose you had an agreement with me.
Speaker Change: But let's go ahead and agreement with your company and then you apply for a loan and perhaps an organization also at this alone together.
Speaker Change: But when bad things increases.
Speaker Change: No more months and so this is toby.
Chris Smith: Hey, Chris It was a clean room and that's why some organizations, even smaller organizations, which are more focused.
Speaker Change: Have offered up slightly higher price with smaller ticket thing.
Speaker Change: Yesterday, there was another meeting of the working group with a thought that perhaps the federal identification of things regarding points ability of these loans.
Speaker Change: This is an organization that is.
Speaker Change: And of course.
Speaker Change: When we start we.
Speaker Change: We will now move to a more aggressive active strategy rather than one off then.
Speaker Change: Then the defensive strategy regarding our client base and we got into market because we see a good to great effect limitation habits, starting in June or July when everything is going well oiled.
Speaker Change: And I would like to add.
Speaker Change: One element of Daniel did I think I should remind you.
Speaker Change: We can continue to have room to grow.
Speaker Change: And how blurred because once you get payroll deductible loan I N S.
Speaker Change: Deductible on when needed.
Speaker Change: Oh I love delinquency of these two line items in a much lower delinquency level I'm going to give you a general number okay.
Speaker Change: Market number one.
Speaker Change: That's really not in place yet.
Speaker Change: The open 19 T N P O is probably too Bob.
Speaker Change: In the case of private.
Speaker Change: They will go taxable ones on Washington That'd.
Speaker Change: Let me kind of to have our delinquencies more than double that.
Speaker Change: So why don't I spoke with.
Speaker Change: Approval is not just of individual well.
Speaker Change: Taking into account the MTA vigil, and and the company that pays the salary of the agenda.
Speaker Change: Looking for milestones.
Speaker Change: But in the market and this is not getting information is there.
Speaker Change: Existing private deductible.
Speaker Change: I don't see that seems a large bank.
Speaker Change: I think that the large banks have also a very low delinquency levels.
Speaker Change: But I guess it hasn't delinquency rate that is higher and close to 9%. So here, we'll have to wait with good month or looking at the individual in the company. They work for Carnival ship them. So these are available on the table. So that we can have the right pricing okay.
Speaker Change: We will be fighting for our market share. Okay. Thank you very much sir.
Speaker Change: Russell.
Russell: Let me ask a question.
Speaker Change: Friends of Bank of America My view.
Speaker Change: Oh boy.
Speaker Change: Good morning.
Speaker Change: Hum.
Speaker Change: Sure.
Speaker Change: On the earnings.
Speaker Change: Now I'd like to hear a bit more from you about the insurance group.
Speaker Change: I believe the market.
Speaker Change: Yeah appreciate the value of the insurance company growing 25.
Speaker Change: Iran ear and accounting for almost 40%.
Speaker Change: And net income.
Speaker Change: We even seen lots of improvements in maintenance and the level of claims has I call. It the claim ratio.
Speaker Change: And if so.
Speaker Change: Nice to hear from you whether I believe.
Speaker Change: At the same level of growth at the same level of claim rate.
Speaker Change: So I mean to what extent are these results are sustainable.
Speaker Change: Yeah.
Speaker Change: Super clear, but when we look at the insurance earnings two thirds, okay for production on one third came from the financials.
Speaker Change: But production has a bigger weight and that provides us more confidence that this system.
Speaker Change: So also you spoke about the improvement in the claim rate. So of course, you have some seasonal effects in a bit of volatility, but its trending down because of in fact, assortments, we've been making for a number of years doing the claim rate and we're now harvesting the benefit.
Speaker Change: If this initiative.
Speaker Change: Passionately and health insurers, so we trend toward a lower claim rate actually the first quarter was not even so are favorable then we do have noise along the path, but there is a very good trend down the claim rate and because we have a lot of trade.
Action in sales again, that's good for the insurance group because that will drive sales that will drive the premium and bringing the claim rate down. So that's the improvement we exited baked woes and production and also in the financial portion.
Speaker Change: With a higher basic interest rate. So we believe the performance will remain consistent as we can see the euro 2.6% above the first grid or left ear. After many years of improvement we continue to improve so ensuring yourself one of the lines that ourselves.
Speaker Change: <unk> highlighted we want to be closer to the top of the guidance at least above the mid point.
Speaker Change: Let me add we've and also we've fine is here and he can also add.
Speaker Change: If he wants but here we see also a restaurant.
Speaker Change: The associations, we now have with hospitals to improve the efficiency of our health insurance, we're growing our network of health care providers and that also helps us control the claim rate.
Speaker Change: Cost so they are a combination of the figure you gave it.
Speaker Change: Excellent earnings and our concern in each one of the verticals.
Speaker Change: So we went to site.
Speaker Change: Work to improve our operation and there are very strong.
Speaker Change: Sure I mean, if you're in now.
Speaker Change: We do see a room for more improvement also looked at their penetration of insurance and deeper ciliary GDP, we have a lot of room for growth and I do believe we can have a higher penetration of insurance broad enough and of course, we will.
Speaker Change: It's hard to improve this rate of insurance.
Speaker Change: And to all our colleagues are working towards the same God now Eva do you do you want to add to the sensor. Thank you Marcelo no I believe I'm drafts provided a very thorough answer to until now.
Speaker Change: Yeah.
Speaker Change: If somebody has any further questions I shall be if L O J.
Speaker Change: I learned from you, but I thought the whole available anyway.
Speaker Change: Churn comes from Gustavo Schroeder from the Citi Bank.
Speaker Change: Good morning, good morning, Tommy.
Speaker Change: Were you Congratulation Sunday earnings City is very good.
Speaker Change: To be Frank.
Speaker Change: Friction.
Speaker Change: At the bank currently has.
Speaker Change: Now Marcelo what is the level of comfort that you feel in terms of more zero in.
Speaker Change: And your la portfolio.
Speaker Change: We can see the bank clearly has this capacity to manage risk.
Speaker Change: And as you mentioned I didn't catch it.
Speaker Change: Delinquency is slower.
Speaker Change: All it is the law is a mantra for you as you said, but I'm also looking at the country's economy and inflation.
Speaker Change: A high interest rate so what do you expect in the next 12 months.
Speaker Change: Looking outside the bags borders because that may lead to a slower growth and ended up banks et cetera. So how do you view. These aspects. So that we can also feel confident that the macroeconomic factors.
Speaker Change: Go to a game.
Speaker Change: Well done.
Speaker Change: Thank you Gustavo for your question I'll be very candidate.
Speaker Change: No and portfolio growth.
Speaker Change: That our risk appetite remains moderate.
Speaker Change: Quality metrics.
Speaker Change: Yeah last quarter of last year, we said that one.
Speaker Change: One thing its risk appetite and the other thing.
Speaker Change: Volatile or choppy credit policy of Chaucer's two minutes off on them. So if you look at the concentration of law and so it is down.
Speaker Change: And they all go away in the large customers.
Speaker Change: So the concentration has fallen away.
Speaker Change: So, although we have a mantra risk appetite.
Speaker Change: Great opportunities because we have a large customer base because of our penetration in capacity, but we want to grow in secured loans in the market.
Speaker Change: In payroll deductible loans, we have 14% market share. So we have an opportunity to continue to grow regardless of macroeconomic factors.
Speaker Change: So private payroll deductible loans are also an opportunity in Asia, but in it was hard to make payroll deductible allowance.
Speaker Change: Lots of opportunity.
Speaker Change: Let me remind you our thought is about 100 billion in payroll deductible loan volume.
Speaker Change: Take care.
Speaker Change: Troy.
Speaker Change: Working with a great business, it's always customers with good credit rating I mean does that statement on the economy either castle three day, where agriculture. When you look at the different state for example, corn corn prices land right.
Speaker Change: Right now down closer to 50, but farmers are well compensated.
Speaker Change: Yes.
Speaker Change: So we do see issue, but not now.
Speaker Change: Any problems in terms of diesel prices now.
Speaker Change: This is mark has can bring us a lot of opportunity to grow and to grow our relationship with them.
Speaker Change: Current customer data.
Speaker Change: Schrum Danske Bank, we are in now the two teams are now working together were reviewing the guidance where it is here.
Speaker Change: And in terms of small companies go staff are in fact, I've shown you a ranking.
Speaker Change: This information is open to the public so I'm looking at F. G O Anthro and why don't you check their ranking of a financial institution you won't see Bradesco currently has a lot of traction so we keep a close eye on.
Speaker Change: And we're working with receivables.
Speaker Change: Gee I in terms of collateral and the same thing we want to grow agricultural laws, but always with collateral. So what do I see I see is that we have a great potential ahead of us.
Speaker Change: Yes.
Speaker Change: The economy grows slower and that may happen in the second half that the linear so a few demands will be lower but in these specific lines that I've mentioned I have great confidence that this is a race track for us to deliver.
Speaker Change: Good margins and good economy.
Speaker Change: In the second half of the year.
Speaker Change: Without having any interrupt wishy washy. So that's why I say the drivers or is it really mainline so always secured more oil.
Speaker Change: The right collateral and all the activities that will be related to that and he asks for example, these are the fees generated by our robust pipeline, which we've had even in the first quarter.
Speaker Change: So I thought we should do.
Speaker Change: Feel.
Speaker Change: Very good Oh man, if I don't you have a look at the F T O.
Speaker Change: Last year F T O plus she I these to collect draw lines state guaranteed lines.
Speaker Change: We've had an origination.
Bailey: 89 Bailey.
Speaker Change: That that's what a market don't last T O.
Speaker Change: These are the numbers that you should watch.
Speaker Change: And and monitor and then you will understand what I say and possibly feel the same level of comfort as I feel looking after the quality of our loan book, which again, it's not negotiating for US. So thank you Gustavo further question good to see you or something.
Pedro Leduc: Next question from Pedro Leduc with it too.
Pedro Leduc: Thank you good morning, Congrats on there is the webinar. Thank.
Pedro Leduc: Thank you.
Speaker Change: My question is about.
L. L P threes from U L. L bean in the quarter increased at the same level of the quote about 2% equate to answer your question on the quarter with a very stable cost of credit to your question is that the pace of the L L bean or call.
Speaker Change: When we compare to NPL formation was much smaller, but it's not easy to get this conclusion, so I'd like to harp on this but it doesn't change some things changed.
Speaker Change: <unk> the NPL formation was not in the release 15 to 19 in the P&L is no longer in the relief. So I'd like you to elaborate and to help us consolidate this because these patients life changes.
Speaker Change: Does that make any sense to look at the NPL formation. The way we used to because 15 to 90 day changed and perhaps that's why you're not communicate index, but I just want to understand the pace of loan loss provision versus N. P. O for me shouldn't stage, three but theres more relevant what should we be looking out looking forward.
Speaker Change: Thank you for the question and I'll ask my colleagues to answer that but I'd like to stress one thing that you mentioned, which is important.
Speaker Change: Indeed, we will not going to mention NPL creation in the 15th.
Speaker Change: <unk> 15 for 90 day in appeal, but we did include it in the presentation.
Speaker Change: Bill for Nation O N P L creation.
Speaker Change: You're saying.
Speaker Change: Well it went from 190 to 92.
Speaker Change: And our 15 to 90 day until which was three 4% last quarter continued flight trade went forward with central and a year ago I think it was a little over 4% four points down to three 4%.
Speaker Change: Indeed, it doesn't have a lot of things that make a lot of sense. So I'll, let casino and a great complement to the answer which is exactly what you said might stand alone.
We're losing 496 do you think we will have to adapt and we look at this new concept stage three is a very important.
Speaker Change: I liked it and dress explanation of stage three years and he will make sense, but stage three is our main topic.
Speaker Change: Attention to ourselves.
Speaker Change: And there's not much compatibility with 109 against 98 in the last quarter that shows the robustness.
Speaker Change: Our book E. W. Oh boy the legacy model can no longer be done.
Speaker Change: So a new way of looking at our loan book. So we have to look at stage three state Street quality.
Speaker Change: Theater.
Speaker Change: Oh.
Speaker Change: L T compared to the portfolio, which has remained stable at around 3% so that attests to our.
Speaker Change: Our ability to grants alone.
Speaker Change: Travel coming from day, one I had something who you.
Speaker Change: You'll see people think of that.
Speaker Change: And to complete publication.
Speaker Change: He is a table.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Well they reconcile what's worst case just 123. What is included what was excluded and I think that this REIT conciliation is crucial for me and I think that you should monitor that from now on it okay.
Speaker Change: So what was done well with 49 66 regarding write offs.
Speaker Change: Yeah.
Speaker Change: Oh God.
Speaker Change: Because we can have a more or less than 10 minutes.
Speaker Change: My bad we can change overnight, we don't lose portfolio, because we are no longer writing it off which did not happen to us by the way.
Pedro Leduc: Okay Pedro we kept exactly the same concept we had.
Pedro Leduc: We're trying to fix the 82 same write off area. So you can compare apples to apples in France. Okay.
Speaker Change: Change in the accounting rule came in terms of quality of assets is that until Q4.
Speaker Change: Looked at the operations and he has more than 90 days over 90 day NPL, that's what we announced before.
Speaker Change: 98% coverage in Q4 provision compared to the over 90 of provision.
Speaker Change: Before nine six things we changed.
Speaker Change: Page three stage three is a broader look and has almost doubled.
Speaker Change: <unk>.
Speaker Change: The value of the operation skeptical mushrooms classified as more problematic. So we have over 90.
Speaker Change: And the problematic ones over 90 increases any more of a Q1 problematic ones and dropping.
Speaker Change: Amerigas had strong.
Speaker Change: What in the economic financial analysis reports P. J T and we have a table of stage three moves and we see what was included some stages one two or three that you it operations and what was originated.
Speaker Change: Because the total for the provision in the numerator, we get to 109% coverage. So in the broader concept of quality of assets. We had 100 of 9% provision in Q1 25, which.
Speaker Change: It seems more than adequate and if we get expected L. O P 8 billion.
Speaker Change: Give or take.
Speaker Change: We'll get to this 100 day nine coverage and that's how we have to look at that.
Speaker Change: It's good to me that's kind of the same node because it seems that the last year.
Speaker Change: We made these movements.
Speaker Change: Unclear so long.
Speaker Change: Log them all of them.
Speaker Change: And divided by states and that's what we should look at it.
Speaker Change: And during the presentation in the explanatory notes, we have one of the criteria used with a resolution four 916, thank god.
Speaker Change: M details. So thank you for the question Pedro The next question comes from Jorge Kuri from Morgan Stanley.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: Everyone. Thanks for a good morning.
Speaker Change: In the presentation.
Speaker Change: Congrats on the numbers.
Speaker Change: Can you hear me yes.
Speaker Change: Yeah. Thank you so I wanted to explore part of the answer.
Speaker Change: Dave.
Speaker Change: Beginning of the presentation.
Speaker Change: Why you don't think you can get closer to the top end of the guidance, which was basically on the market and I believe you said that.
Speaker Change: With rates now, peaking do you think about the next few quarters are going to be more challenging so.
Speaker Change: Could you maybe elaborate on what that means exactly in terms of numbers.
Speaker Change: You were expecting.
Speaker Change: As a result of market NII for the next couple of quarters.
Speaker Change: Cause if it is just.
Speaker Change: A bit.
Speaker Change: Smaller than the.
Speaker Change: The first quarter, which was 462 million, it's just really hard to see how your net income you still are going to continue to grow from the first quarter number.
Speaker Change: Yeah.
Speaker Change: Because of operating leverage of test that are you know much better seasonality as we move forward and then that gets you to 20.
Speaker Change: 24, 25 billion and net income, which is not far from that 26 billion, which I believe is the upper part of the guidance. So maybe drill down a little bit about if you will thank you. Okay. Thank you Alessandro.
Speaker Change: Okay.
Speaker Change: Okay, let's talk about Michael.
Speaker Change: Ankle Supreme Court.
Speaker Change: What kind of Baidu.
Speaker Change: The work that we'll do it all the treasury.
Speaker Change: Okay.
Speaker Change: Work boots gone Mad dog.
Speaker Change: But the opportunity is.
Speaker Change: In this case, what I often hear when they're unemployed.
Speaker Change: A L M.
Speaker Change: On the left.
Speaker Change: I see so we could just unbelievable.
Speaker Change: Okay.
Speaker Change: Amy.
Speaker Change: All right.
Speaker Change: So you've been quite Emilio.
Speaker Change: I Love your thoughts.
Speaker Change: Q2 largest being commentary on it.
Speaker Change: Interest.
Speaker Change: Yeah.
Speaker Change: In one of our scale.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: We really have a strategy there.
Speaker Change: So about five years or so.
Speaker Change: Got Mad men, one one per month.
Speaker Change: It's really kind of a main show me bottoms up with the trade wars.
Speaker Change: No.
Speaker Change: Got softer than that.
Speaker Change: Thanks Ya Man Valley are being protested.
Speaker Change: My body well protected you brought this oh Gee.
Speaker Change: Yes.
Speaker Change: It's got to create.
Speaker Change: Value in Hollywood.
Speaker Change: And that's why I was trying to answer.
Speaker Change: We're doing very well and looking at what kind of I mean.
Speaker Change: At the middle of my mandate as far as them or somebody else so muscle thing.
Speaker Change: It is now.
Speaker Change: And I said, well always tells me about the rain was falling because they know cooling water.
Speaker Change: And we'll take it.
Speaker Change: I see.
Speaker Change: We'll have to look at what you saw.
Speaker Change: But that's kind of a monthly unlawful.
Speaker Change: I'll just close it down incremental drag.
Speaker Change: It does.
Speaker Change: Barry.
Speaker Change: Okay.
Speaker Change: For the last year.
Speaker Change: Along those lines.
Speaker Change: And you're correct it will make any comments to together and we'll communicate them.
Speaker Change: Things have been pushed to the handling of.
Speaker Change: Income.
Speaker Change: Uh huh.
Speaker Change: You have almost no real loss.
Speaker Change: The loss of interest range between 19 million to only 3% below the market.
Speaker Change: And that's real money.
Speaker Change: Increased.
Speaker Change: The pleasure Neil.
Speaker Change: They don't even went up.
Speaker Change: And you put them all stick on kind of a thing I, probably don't mind, we understand that if all the stakeholders.
Speaker Change: That's almost a little bit if it moves with a liquid not crazy.
Speaker Change: We got involved very much providing most of the people rings.
Speaker Change: And so those items have already kind of mid <unk>.
Speaker Change: Everyone is familiar with.
Speaker Change: And with that what are you kind of like Oh things.
Speaker Change: Let's say an awful lot of income in the guidance.
Speaker Change: Okay.
Speaker Change: Oh, I was hoping that you might.
Speaker Change: What is what Fastweb cut genocide.
Speaker Change: We are more optimistic.
Speaker Change: Oh, Glenn Lucky yet.
Speaker Change: Yeah.
Speaker Change: 14% full year rate to be in the middle of that guidance.
Speaker Change: Yes, when I got here thanks.
Speaker Change: Thanks, John The next question plus I'll say hope available.
Speaker Change: The next question comes from Jasmine Jasmine, good marine hooked up on <unk> can run eventually.
Speaker Change: So the bottom line.
Speaker Change: Hello, Yeah, you have to have one thank you.
Speaker Change: So but I saw is about at this point would you have to agree to diet to Nashville, likely if allowed to translate cloud process or the inkjet, but I'm sorry, if I hear you now.
Speaker Change: I'm sorry.
Speaker Change: He will happen Scott.
Speaker Change: Got it.
Speaker Change: Wanted to match the saw sometimes by just contributes to that because I wanted to ask have you already have <unk>.
Speaker Change: So what are the measures.
Speaker Change: But I do want to be able to tap into my vision and actually filed the wagon.
Speaker Change: What do you have that you saw.
Speaker Change: Can you train your uncle Sam.
Lisa: Thank you Lisa.
Speaker Change: Okay. Thanks.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Or is it kind of made it.
Speaker Change: Yeah.
Speaker Change: And then final question with all the state you have a better reaction to that.
Speaker Change: The large book because my throat.
Speaker Change: Yes.
Speaker Change: Or maybe you were talking about lower income customers that are far more active again.
Speaker Change: Is it funding I mean can you help us understand their sleep that drove Q4 into Q1.
Speaker Change: Thank you rosman for their question.
Speaker Change: No. These are not customers that have become more active no. This is our penetration into the customer base without that we wouldn't have it so much traction even though we could have new investment grew and new processes. I mean, if you don't even have the rate.
Speaker Change: Lateral of origin nation, if you don't have a good penetration level in that customer base.
Speaker Change: Difficult yourself for US you know, we see gross himself.
Speaker Change: That.
Speaker Change: That is the plan, we have growing with quality.
Speaker Change: While growing where quality and our credit lines.
Speaker Change: Our credit model.
Speaker Change: You have our credit policy.
Speaker Change: Whether you're talking about automated loan approvals or otherwise I mean, we have our criteria to make long term decisions.
Speaker Change: So when we prepared our budget for 2025.
Speaker Change: That was back in October or November of 'twenty 'twenty four.
Speaker Change: By then.
Speaker Change: At 2025, we prepared the guidance, we had a discussion about it.
Speaker Change: On the Brazilian market. We also had a discussion about changes in the U S market.
Speaker Change: Your interest rates.
Speaker Change: In.
Speaker Change: The market NII right.
Speaker Change: It has been a bit.
Speaker Change: But so then you hit it.
Speaker Change: In October and November last year, we made the decision not to.
Speaker Change: Our transformation.
Speaker Change: Because we believe is a short term and also windows.
Speaker Change: And yes, we had a few good prices.
Speaker Change: Project activity gain with our it takes knowledge squads, we expected that.
Speaker Change: It was better.
Speaker Change: So these deliveries are extremely relevant because sometimes you just got a new application.
Speaker Change: Right.
Speaker Change: We continue to have developments and then even talked very viewing or a K P. I.
Speaker Change: So that we can monitor and watch.
Speaker Change: Business very closely.
Speaker Change: We have reviewed our legacy systems.
Speaker Change: Sweat provides an experience to customers, which was not the best.
Speaker Change: As we modernize that.
Speaker Change: Benefits were afraid there.
Speaker Change: Bill.
Speaker Change: But again I mean, we realize that we have a lot of traction we have a high degree.
Speaker Change: Penetration in different.
Speaker Change: Based in Japan.
Speaker Change: Yeah.
Speaker Change: You see a potential for growth in secured loans as loans that are fully collateralized.
Randy: Oh, Randy and I'll repeat now please help a lot the collateral provided by Apple G. I N F. G. O. This is public information.
Speaker Change: You won't see last failure.
Speaker Change: And both of these mines.
Speaker Change: I mentioned that.
Yeah.
Speaker Change: <unk> ranked second shaft.
Speaker Change: Yes.
Speaker Change: Chair of approximately 18% 18.3 point.
Speaker Change: Four of her own alpha of an overall origination I E.
Speaker Change: Billy and be around.
Speaker Change: So I suggest you will check two lines F. G. I N F. G O because you will see that we have a lot of traction.
Speaker Change: In our bread desk, what I expressed or I didn't mention it today.
Speaker Change: Bradesco Expresso has almost 300 islands.
Speaker Change: Different from the traditional.
Speaker Change: Oh.
Speaker Change: Now we have the islands and the Alaska project activity, it's much higher than they used to.
Speaker Change: Platforms wave to leverage the growth of more than 100 per cent compared to the traditional channel and all of them and you can see that in our press release.
Speaker Change: What is good is that we continue to have a lot of traction in the low end.
Speaker Change: We had a more of a defensive position in terms of gross but we could see.
Speaker Change: We have a big potential.
And we will go for it with the right right with the right collateral first both individual small companies, but another very good one that.
Speaker Change: But you see nine casual that this is because we made the right investment.
Speaker Change: It's a one off.
Speaker Change: But virtually nationally.
Speaker Change: We did.
Speaker Change: At our Investor can interbank team itself and then what happened then pipeline grew.
The fish and all I say fee income growth.
Speaker Change: More than 70% year over year rate.
Speaker Change: And into first quarter. So, yes, we had a few good surprise.
Speaker Change: On the hard work.
Speaker Change: It's been we've been doing right Andre.
Speaker Change: I'm not sure you would like to add yeah, well I agree with you, but it's always about people. It's always about a routine look at the level of engagement. That's really important you know look at the new model before a culture that can engage our leaders that can engage our it.
Speaker Change: Yes.
Speaker Change: And the determination.
Speaker Change: Our sales force.
Speaker Change: Now in this transformation I mean, we've had for a great balance sheet.
Speaker Change: Yeah. So we have to continue on this path because we truly believe in the value of our franchise.
Speaker Change: So far our brand, yes, that's important I agree with what I see I know that the level of engagement I have recently last week I went to Miami and.
Speaker Change: And we have a transformation initiative in the B C.
Speaker Change: Much connected to our private bank.
Speaker Change: Civil segment, because that's all part of our value proposition for it then we'll high worth.
Speaker Change: Visuals offshore and we now have.
Speaker Change: T a social.
Speaker Change: We had a town hall, where we could see a high level of engagement everyone working on this transformation initiative.
Speaker Change: I also went to first time buyers.
Speaker Change: I suppose costumers I went to buy land.
Speaker Change: Two he bet, our agriculture trade show and I could see a very high level of engagement I have to thank you because I can see our leaders are highly engaged.
Speaker Change: And our teams through like Brazil, right that's right.
Speaker Change: In all segments and technology support.
Speaker Change: Very high level of engagement for us and that's why we make that happen.
Speaker Change: This is a great moment for their organization everyone knows what we do.
Speaker Change: Where are we want to go and there is a strong belief.
Speaker Change: Yeah.
Speaker Change: While we are delivering more earnings. Thank you. Thank you for the question. Thank you Rasmus van Voorhees.
Speaker Change: As a student comes from antique in Nevada from Santander.
Speaker Change: Hello, Good morning, everyone not only got congratulations on the earnings. Thank you.
Speaker Change: My question is about capital in the last few months, we've received a number of questions about Bradesco capital I'm sure. You've also received questions about.
Speaker Change: Actually two questions the quality.
Speaker Change: Of coming to equity to the quality of the capital where the other question from investors is that in a new moment of growth, maybe bradesco will be more fragile in terms of capital compared to other competitors.
Speaker Change: From everything we heard we could see that in the first quarter Bradesco is at a higher level of income with quality and that we should continue in the second and third quarter, maybe not with an expansion, but with step out of that.
Speaker Change: But then in the second half of the year, we may have tailwind and then so maybe Bret does go well have another lever.
Speaker Change: In terms of quality and income at all but now do you have the right capital structure.
Speaker Change: Too faced a growing demand that may happen in 'twenty or 'twenty six and in Brazil.
Speaker Change: So I'd like to hear from you because this has been a frequent question from investors right now of course looking at the great results that you are presenting there is concerned it's not so so pricing, but I'd like to hear a bit more from you. Thank you. Thank you for that question I think casiano Ken.
Speaker Change: Answering your question, but let me tell you I would love to have a problem.
Speaker Change: Having to face such a relevant growth because the fact is that we feel very comfortable looking at the plans. We have in terms of capital structure, but we're growing our rather news so quickly but all of that.
Speaker Change: We have a question about the capital structure, which which we don't really.
Speaker Change: Well, we started a project last year with a firm belief and we cannot forget about the project you know when we were in 2024 and looking at 20 to 25.
Speaker Change: We would.
Speaker Change: We have a better cost of capital and this is very relevant and it makes us feel optimistic to continue following our it landscape.
Speaker Change: So the plan has four years for it.
Speaker Change: And the level of capital is at the level, we plan that's been avoided.
Speaker Change: Look at the level of Bradesco capital historically.
Speaker Change: Is that a level you know working.
Speaker Change: With the dividends paying out dividends to our investors as we've historically done so there's no deviation from our plan. So in 2025 and 26 Napa, we want to continue to be very close to this new market and be even.
Speaker Change: Try a girl.
Speaker Change: And attractive for our customers our customers have not left us.
Speaker Change: We continue to work with our bankers sure Budd.
Speaker Change: So we feel very comfortable when we think about 'twenty 'twenty six and we all hope you are right. So that Brazil will truly grow macro economically in 2026, and we feel we have a comfortable level of capital as Marcelo said this could be a good problem right, but our capital will continue to grow yes. He also.
Speaker Change: Cut that tax credit.
Speaker Change: So of course, if we have a higher income if that helps at everything because our main capital come from than net income.
Speaker Change: I wanted to come to us or maybe a specific capital call, but we don't see that in the horizon right now in terms of take for granted the higher NII than the more we can use our tax credit and we'll continue to do that that's also included in our four year plan.
Speaker Change: Thank you enough Adam let me also add.
Speaker Change: So we are talking about a growing capital in the first quarter. When many questioned whether we could do that in the main source of this growth was something that income.
Speaker Change: So in in 'twenty 'twenty six we may have a higher number but also in 2025.
Speaker Change: Huey to follow our plan step by step and generating more net income. So that's going to help us we will continue to pay out our dividend and the level of capital shall remain stable until year end, we are not really concerned about about that thank you. Thank you enough.
Speaker Change: Our next question from Nishu with Shanghai.
Speaker Change: Good morning, everyone.
Speaker Change: Congratulations.
Speaker Change: My question is more linked to retail.
Speaker Change: According to you this is still the detractor of profitability.
Speaker Change: So.
Speaker Change: How are you executing the strategy.
Speaker Change: Find the brand since then the timing for launch.
Speaker Change: I have basically four verticals to work with classic Mac N cheese you.
Speaker Change: And the.
Speaker Change: So if you could talk about whats your expectations regarding profitability grow.
Speaker Change: Andrew.
Speaker Change: For my son's yourself with this.
Speaker Change: Focus on digital transformation in much detail if you could comment on the size of you that's why it's up.
Speaker Change: Beginning of the year, you said that you intended to reduce points of service by 1000 to USD 222 in Q1 alone.
Speaker Change: So perhaps you could speak a little about that linked to cost and the size of your work for him.
Speaker Change: It hadn't counted them because in terms of head count head count has not changed a lot. So if you can.
Speaker Change: Speak about these two perspectives.
Speaker Change: Network costs and mass retail think of her Mcdonald Oh, let's get Kirsty I know to try to answer them, but I havent got before that to Nishu. Thank you for the question. Thank you for joining us in this call.
Speaker Change: And so Paulo, a democracy you spoke about different brand mix and you're talking about next in D. C. L.
Speaker Change: So this well this is something that was absorbed it does not exist as a business unit and they are longer so it.
Speaker Change: It was a dog, but geez you visually is there a separate E on it it continues to operate.
Speaker Change: But oh sorry.
Speaker Change: Well I'll speak later about the movement from that.
Speaker Change: Overtime and casino.
Speaker Change: You can comment on on retail mass retail. Thank you and you feel good to see you here.
Speaker Change: Well I think an important part.
Speaker Change: Throughout the year, it will be bringing a new value proposition for the mass retail that's a value proposition.
Speaker Change: We'll touch at least three brands that you mentioned so this will be important in the future Michelle and I will be communicating this value preposition to the market and we'll be speaking to you about this it will be an interesting one.
Speaker Change: So I think that that is the take home message. This is clear to us and this is added to our cost.
Speaker Change: Which is one of the main points of action in retail.
Speaker Change: The cost.
Speaker Change: To serve these 30 million clients are they're good clients they will have to adapt them to the best coffee.
So this will entail some adjustment on the other hand, the trend adjustment linked to the adjusting the third plant is fully linked to the way in which we work through the mass retail.
Speaker Change: A more digital way in a user friendly way in almost a tailor made.
Speaker Change: Wait to start.
Speaker Change: This is our vocation, we have a reduction of the footprint, but this is going to be done carefully.
Speaker Change: And cautiously.
Speaker Change: Testing possible attrition, because we'll spread all over the continental country that Brazil is so we cannot lose our presence. There. So this is important we are growing clients, even closing 1400 branches because we have for disco espresso that is very strong in the frontline 35 hours.
Speaker Change: Officers up.
Speaker Change: That's about 30 almost 30.
Speaker Change: Almost a 39000 to banking correspondence so I have to make all these connections for this little expresso deduction of the food chain, bringing clients to a new value proposition and digital retail.
Speaker Change: With this we will rebuild that profitability.
Speaker Change: Because oh.
Speaker Change: This is the the trend to a segment in the center of our I O N E.
Speaker Change: So that's why it is important to move into direction.
Speaker Change: And regarding cost it is important to look at the efficiency ratio I mean, its efficiency ratio was 49 seven in Q1. This year, we shouldn't expect significant change from that level, because there's a lot of investments to be made in the transformation plan.
Speaker Change: Jim or significant reduction in the efficiency ratio starting in 2026.
Speaker Change: Moving towards 40% of which is our ambition by 2028, so the impact will happen starting in 2020.
Nishu: Thank you Nishu.
Speaker Change: Nishu.
Speaker Change: Next question from.
Speaker Change: You referred nineties with JP Morgan.
Speaker Change: Thank you Andrea well congratulations to all of you.
Speaker Change: Oh, Yeah, no regulations on the earnings because it would really shrunk.
Speaker Change: I'd like to explore a point did you kind of touched on it literally I'm talking about and I am saying.
Speaker Change: It increased 20 bps and that was a very good feel for it.
Speaker Change: I think that the message is that it should continue to trend I'd like them to send you would've manganate you didn't that you're seeing because it just you.
Speaker Change: You had some help from fundings.
Speaker Change: It helps but I knew.
Speaker Change: Got it.
Speaker Change: This should be helping in the coming quarters.
Speaker Change: And my question is about the money.
Speaker Change: He said it over and over that's the bank is growing.
Speaker Change: Risk appetite, but Halloween.
Speaker Change: For Alliance F. G O F G I pro ma'am.
Speaker Change: And that's I understand it should this margin remain at the same level. We saw in this quarter when will it expand a little laugh or perhaps a little more just wanted to think about the spread.
Speaker Change: N I M.
Anthony: You can start Anthony.
Anthony: I think that there are two points to highlight here as opposed to the funding NII.
Anthony: In terms of a positive contribution from funding NII in Q1 will increase overtime.
Anthony: How long 2025. This is a cumulative process of efficiency gains and managing clients recently and this is underway and the bank at an accelerated pace. So this should contribute even more in the coming quarters as the benefit is not done.
Speaker Change: There will be additional benefit to be captured and we are seeing and that is happening with Q2 and the expectation is that it will continue throughout the year second point, bringing the focus at a macro economy. When we have a monetary tightening normally there is increased interest.
Speaker Change: Not that the banks the aim to increase the spend so we'll look at the R. E. R off the operations of the bank a one off.
Speaker Change: Have.
Speaker Change: And I know the provisions and the spreads tend to widen when we have moments of monetary tightening and this is what's happening in the Brazilian economy. This will be another driver that will help us increase.
Speaker Change: $8 six received.
Speaker Change: Towards the end up here I don't want to give you a specific target, but what I can tell you that there is an upward trend.
Speaker Change: Right.
Speaker Change: Okay.
Speaker Change: <unk> added to what you said thank you for the question, Yes, we have.
Speaker Change: Okay.
Speaker Change: Our cost of funding and it was the lowest that we saw in recent years and this is.
Speaker Change: And under I mentioned, the biggest driver came from the growth.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: And from the growth of our relationship with micro small and medium sized enterprises, because here, we have better margins.
Speaker Change: A better NII it got there.
Speaker Change: He refused.
Speaker Change: The loan book of the wholesale bank.
Speaker Change: So if you look at the complete publication does the T. G M. A line item year over year first quarter 'twenty five the first quarter 'twenty five 7 billion with dropping T V. M M Securities actually Ttm's other securities.
Speaker Change: So I'm convinced of what we're doing with individuals and micro and SME is that's where the biggest opportunities lie.
Speaker Change: Wonder if they'll colleagues asked about growth drivers.
Speaker Change: Got it.
Speaker Change: And what I see.
Speaker Change: You too.
Speaker Change: Is that will continue to grow.
Speaker Change: Mainly our NII.
Speaker Change: Deanna Yummy Lana.
Speaker Change: Growing heavily so look at the bar chart that I showed.
Speaker Change: It's piling up.
Speaker Change: We are offering along with guarantees.
Speaker Change: Our lives.
Speaker Change: Longer maturities with a very high R E R and very low losses, so we see it.
Speaker Change: And I grew up in NII net of provisions also growing.
Speaker Change: That this is the main point explain.
Speaker Change: That's just a fan and I am, but I would like to stress.
Speaker Change: Thank you. The next question comes from Carlos Gomez Lopez from HSBC Carlos.
Speaker Change: Nice to meet you think can be.
Speaker Change: And congratulations to all four sample there.
Speaker Change: Because we actually.
Speaker Change: So two specific questions. One is long term in terms of credit cost in the corporate sector in there and then.
Speaker Change: That's correct.
Speaker Change: We have had record low.
Speaker Change: Cost of credit I would say seats coffee.
Speaker Change: He has never quite increase at some point the anguish guiding for higher provision from that but they haven't quite materially.
Speaker Change: Even with these higher interest rates, we should continue to have this benign scenario of credit costs in the corporate segment in the coming years and my second question refers to insurance again following up on Mario's wisdom and healthy right now housekeeping to 900 million this quarter that's about <unk>.
Speaker Change: Thanks, so much.
Speaker Change: Because typically what has changed there and how sustainable is that for the coming quarters and yes. Thank you.
Speaker Change: Oh I see.
Speaker Change: Would you like to start.
Carlos: Carlos I will begin to answer your second question about healthcare insurance.
Speaker Change: What we've noted as Marcelo mentioned, it's a lower claim rate.
Speaker Change: But that lower claim rate as the consequence of many years of investment.
Speaker Change: And after the Covid pandemic, we see a more normal curve in terms of the claim rate.
Speaker Change: Two factors are helping us push down the claim rate in the health insurance product and we expect that to continue.
Speaker Change: That's very relevant also as Marcelo mentioned in health care, we have our strategy.
Speaker Change: In terms of Atlantic outdoor and that will bring to ban if it's in the mid term or the long term, but the new hospital.
Speaker Change: We've had incredible benefits the high level of occupation and they already bring benefit to our earnings.
Speaker Change: That's a promising kind of investment maybe not now.
Speaker Change: But more in the mid and long term.
Speaker Change: So that is a very healthy movement.
Speaker Change: Oh look Carlos.
Speaker Change: About the cost of risk you're right.
Speaker Change: Margins are tight.
Speaker Change: We had fun stepping out.
Speaker Change: Yeah.
Speaker Change: Variable income and even more time market.
Speaker Change: There is they are moving to fixed income securities.
Speaker Change: And that's what we see but so regardless of the corn for grading spike, especially companies that have a higher credit rating there being able to obtain funding much at a much lower cost.
Speaker Change: And at the moment so.
Speaker Change: This is a very favorable moment.
Speaker Change: So that's why I spoke about our origination strategy I'm looking at lower cap with a small share.
Speaker Change: Then I can work on the secondary market.
Speaker Change: Over at the calendar and there is a big demand. So while we have high interest rates and a weaker capital market with more volatility and without new money.
Speaker Change: Coming into Brazilian fine.
Speaker Change: Funds in beer out.
Speaker Change: Variable income securities, but we'll continue to see the same circumstances, maybe further on maybe closer to year end 2025.
Speaker Change: When the Monetary Committee begins to plan for 2020, so that's fine.
Speaker Change: The interest rate would be around 15% and $14 75.
Speaker Change: Where is the center of the inflation what is the inflation target an amazing E. Our inflation very close to the inflation target right.
Speaker Change: That's what we expect as you see interest rates coming down you see more expectation and variable income market and the equity market and that would be later on in 2026.
Speaker Change: The beginning of 2027 and that's when we expect to see a change maybe you'd like to add yes, I'd like to add too.
Speaker Change: Carbon.
Speaker Change: Bank granted for large corporations and the capital market as a funding source for these large companies.
Speaker Change: Because the margins are lower than you can see a higher demand for launch by large corporations and at the same time. This helps improve the quality of our alone because large corporation they have different sources of funding.
Speaker Change: Today, we see a high level of liquidity for large corporations. So that helps us keep delinquency down as the economy grows slower there that would be a risk to be closely monitored and Quaker the interest rate begins to fall the better would be the outlook.
Speaker Change: Right and it is important to remember that if you look at the largest Brazilian companies, Brazil has more than 400 companies in the open market listed in the stock exchange most of them have the right level of flat French of course with a high cost of funding.
Speaker Change: That is pressure for the EBITDA margin to pay for it the debt or for liability management. However.
Speaker Change: Oh, no that looking at this group of large corporation.
Speaker Change: In a more complicated situation, but that's not true for most of the large briskly and corporations.
Speaker Change: Looking at bad I expect we will not have any surprises in terms of debt.
Speaker Change: Because that's more concentrated in the middle market and in specific industries, not I'm not really in large corporations, yes, that's what I was going to say thank you. Thank you Carlos.
Bernardo Gutman: Our next question comes from Bernardo Gutman from XP Bernardo Hello, Good afternoon Andre.
Bernardo Gutman: Thank you for taking my questions congratulations on your delivery.
Bernardo Gutman: Looking at the NII improvement that would come from higher efficiency and the bank's funding strategy I'd like to hear more about your funding strategy in retail do you expect to continue to improve what about the marginal cost of funding considering the current level of the interest rate.
Speaker Change: And the concern about liabilities, we see a few banks that are more aggressive more active began in there so we'd like to hear more from you about.
Bernardo Gutman: Thank you Bernardo.
Bernardo Gutman: What I, usually say is that here, we are always looking at liquidity management trying to reach that.
Bernardo Gutman: Beth.
Beth: Level of cash.
Beth: And so you see we now have 136% and so that.
Beth: It has helped us reduce our cost of funding.
Beth: And here are two levers are important.
Beth: Our customers are closer to us we have more principality and their relationship not only in low income, but it also may they can command high income customers and so that helps us keep the cost of funding down in the second lever, which is also relevant to how we compensate customer.
Beth: When they bring.
Beth: Deposits when they break demand deposits.
Beth: We have improved the way we compensate this customers and that has been very helpful. Now when Marcelo spoke about the whole ear. This is something that we are doing in our cash management and the metro market that has made us be com.
Beth: It just made this gain in terms of Principality. So now we no longer need higher cost funding.
Beth: So when I have a plan and I can execute the plan engaging our resolve and keeping a balance in terms of the lower funding cost from small companies and even from lower income individuals that certainly helps us reach optimum cost.
Beth: Sunday well this last forever well I don't believe anything go lives forever. However, we still have a plan, which we are executing step by step the more principality will happen or a customer base that the easier it will be for us to keep this balance and this year I believe.
Beth: We will be able to maintain the optimum level of cash and funding.
Beth: We have increased our origination also at DRAM and.
Beth: And the asset management.
Beth: Our brand has grown very healthily and this last year and in our brand and the asset management.
Beth: And that's because of our strategy right.
Beth: And so we trend towards the optimum level of cash and the liability level is possibly the lowest in the last few years because of their strategy and at the same time, we are harvesting benefits from a few investments we see there is a demand on the market.
Bernardo Gutman: We have maybe our lowest historical cost. So thank you Bernardo. Thank you for the question.
Beth: Thank you.
Bernardo Gutman: Next question from him out the Maloney with autonomous.
Beth: Okay.
Beth: Got it.
Speaker Change: Hello, Good afternoon, congratulations on the results and thank you for taking my question.
Speaker Change: I would like to focus on client NII and.
Speaker Change: And the focus on this message of being conservative at the same time, you're carrying more than the industry and with a reasonably high yield I know you spoke a lot about.
Speaker Change:
Speaker Change: Loans with guarantees that payroll deductible loan, but that is the segment, which was the most competitive.
Speaker Change: So you can see is crumbling license, perhaps you found our niche which is being underserved by the other banks and that's the way you're drilling.
Speaker Change: At the beginning you said that these are not new clients, you're just using your Netflix and looking forward can you continue to grow with our correct me.
Speaker Change: Or would you need to get into more risky lines to continue to expand your N I M thinking.
Renato: Thank you Renato.
Speaker Change: But I can answer that quite objectively.
Renato: Hello.
Renato: In personal loans.
Renato: We had some movement.
Renato: Interesting for example, with higher net worth clients.
Renato: They normally get personal loans, but with lower rates.
Renato: Because if I offer conventional rates I will do an adverse selection and these higher higher income clients and they have their payroll with us and they asked for a loan that they have a good credit rating. So that's number one.
Renato: Regarding payroll deductible in spite of that personal loan line item and I mentioned that in the presentation you might remember that.
Renato: Part of that is alone which is guaranteed by F. G. T. S. If I included that in favor of deductible alone instead of singing up.
Renato: 5 billion increase year over year, perhaps we would see an increase of 10 to 11 building B a rally.
Renato: Considering F T T S N. The other set of payroll deductible loans, which means that we are quite small traction.
Renato: In the I N S F.
Renato: Deductible alone.
Renato: And we also have a great penetration, we are big payers of I N. S. S. We have a high capability of distribution.
Speaker Change: So there's distribution, which is owned by competitors not just digitally.
Renato: But also using external distribution.
Renato: We access that but the bulk of our distribution is done through Oh channel Huh.
Renato: Digital channels other channels that we use the Atms themselves.
Renato: And also in our it service units points. That's my service so have a great distribution off payroll deductible loans.
Renato: So I don't see I don't see the bank entering into riskier lines, because that's great opportunities and I mentioned, the micro and small and mid sized enterprises.
Renato: One look at the last year.
Renato: Okay.
Renato: Got it.
Renato: The set up of origination Oh aligns F. T O F. Jive was about 89 billion to BRL continues to have traction.
Renato: Penetration here, but in order to have penetration to have to have a client base and you'll have to have an ability to deliver and we do have that this is already showing so high.
Renato: I don't see riskier aligns in the horizon.
Renato: I might have a more personal loans in the prime segment.
Renato: Yes, it's possible as long as the pricing is adequate.
Renato: If we have the right risk adjusted return.
Renato: And this is all what I get this is the way to go and I stress what I've said before this is an important.
Renato: Our focus for us it is the quality of our assets, we don't it kept that up.
Renato: We prefer to advance more slowly towards the future than a.
Renato: Moving into the future too quickly and and making mistakes.
Renato: It's all about the phone Goldman Sachs Stifel.
Renato: We cannot hear you.
Renato: Yes, sorry about that thank you.
Renato: Marcelo.
Renato: Paul.
Speaker Change: Taking my question and congratulations on the strong results on the stock reaction.
Renato: Just one final question I guess on my end.
Speaker Change: John Deere contributed 17 billion.
Speaker Change: To your loan book did that contribute at all to the earnings, particularly I guess on the client NII. Just did you see any benefit from that and just to think going forward.
Speaker Change: Have you seen any contribution from John Deere in terms of the business.
Speaker Change: Tangible improvements in profitability just to quantify if that had any impact in the quarter and expectations for the year. Thank you.
Speaker Change:
Speaker Change: Well it is.
Speaker Change: John Deere was so much more important to strategically.
Speaker Change: With a stronger.
Speaker Change: Sure seemed agribusiness, there's $17 3 billion that was added to our portfolio at the very end of Q1 is.
Speaker Change: It's broken down to individuals and legal entities without that our portfolio would have grown 11% in Q1 'twenty five year on year.
Speaker Change: The contribution to the net income is very close to zero, it's actually immaterial and that's why I wouldn't highlight that if you consider that we have a cash outlay.
Speaker Change: Uh huh.
Speaker Change: Well the cash funding not being remunerated that was sobering loss that contribution becomes even less important to our net income for that criterion.
Speaker Change: There's some winter drove we shouldn't be thinking so much about John Deere, John Deere will come much later and this is the momentum when we are discussing just try to do including Jamba and our operation and how we can work better together to better serve the agribusiness industry, which is very strategic with our good outflow.
Speaker Change: And an industry that is very resilient to the macroeconomic scenario. So this strategy is much more important right now than any contribution to the net income of one client NII or any other line item.
Speaker Change: Thank you.
Speaker Change: I can't though.
Speaker Change: We are now closing.
Speaker Change: Q&A session I want to thank you well first off all our country build with your classes juniors or sports that store I give the floor back to them or Osama, let me tell you.
Speaker Change: We did not have time to address will be answered by our I R. I V.
Speaker Change: And the press release is available on our website at Marcelo Your final comments. Thank you Andrea and thank you I got it.
Speaker Change: I want to thank you all who have joined US this morning.
Speaker Change: Dale.
Speaker Change: Okay.
Speaker Change: The first quarter of 'twenty or 'twenty.
Speaker Change: I'm sorry, Tim we will continue to work hard.
Speaker Change: To deliver more and better during the year and I. Thank you all for your time have a great day. Thank you all.
Speaker Change: Yeah.
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