Beatriz Bomfim de Abreu

Beatriz Bomfim de Abreu from Goldman Sachs asked about the drivers behind the quarterly contraction in total deposits, including CDs, and questioned if the current 90% of CDI remuneration represents a floor to prevent further outflows.

Answer

Executive Artur Schunck attributed the deposit movement to seasonality and active funding management. He emphasized the successful shift to in-house CD distribution (now 85% of total) to lower costs. While the company aims to reduce the APY further, he noted it must be balanced against the need to maintain sufficient deposit levels to avoid resorting to more expensive funding alternatives.

Beatriz Bomfim de Abreu inquired about the quarterly contraction in total deposits, noting that both checking accounts and CDs declined. She asked for the drivers behind this decrease and whether the current 90% of CDI remuneration represents a floor to prevent significant outflows.

Answer

Executive Artur Schunck attributed the deposit movement to seasonality and the active management of all funding lines. He highlighted the company's success in reducing the average cost of funding and shifting distribution in-house (85% vs. 74% YoY). While the company is working to lower the 90% of CDI cost further, he noted they must balance this goal against the risk of losing deposit volume to more expensive funding lines.

Beatriz Abreu of Goldman Sachs inquired about the drivers of the strong 2025 EPS guidance, specifically the impact of buybacks, and asked for expectations on TPV growth and transaction yield trends for the upcoming year.

Answer

Executive Ricardo da Silva clarified that the 2025 EPS guidance does not assume any further share buybacks, using the share count as of year-end 2024. He projected that TPV would continue to grow faster than the industry, which is estimated to grow 9-11%. While acknowledging that mix changes could lower transaction yields, he reiterated that the company's primary focus is on gross profit, which captures offsetting benefits like lower funding costs.

Beatriz Bomfim de Abreu asked for more detail on asset quality trends, particularly in the mortgage portfolio, and inquired about future technology transformation expenses following the mainframe migration to the cloud.

Answer

Cristian Vicuna, Head of Strategy and IR, responded that asset quality is stabilizing, with positive trends in consumer and commercial loans. He noted that while the mortgage portfolio is still deteriorating, the pace is slowing, with a plateau expected in the second half of the year. On expenses, he confirmed that while other platform updates are planned, none are as significant as the Gravity project, and the bank is confident in maintaining its efficiency ratio of around 35%.

Beatriz Bomfim de Abreu asked if the Bansa deconsolidation explained the significant drop in the corporate CIB loan book and questioned the bank's confidence in maintaining its 1.3% cost of risk guidance given the quarterly increase in NPLs.

Answer

CFO Emiliano Muratore clarified that the Bansa deconsolidation affected the middle-market segment, not CIB, and the CIB decline was due to the non-renewal of a few large loans. He reaffirmed the 1.3% cost of risk guidance for the year, stating the current level is sustainable and will absorb the upcoming one-off provision. Cristian Vicuna, Chief of Strategic Planning and Investor Relations, added that mild improvements in the job market provide further confidence in this outlook.

Beatriz Bomfim de Abreu from Goldman Sachs asked for the rationale behind raising the net interest margin (NIM) guidance to around 4.7%, despite expecting lower policy rates. She also sought details on the bank's current loan growth expectations by segment.

Answer

Executive Pablo Ricci attributed the stronger NIM guidance to a robust first quarter, an expected improvement in the loan mix towards higher-spread retail products, and the continued benefit of lower funding costs. Executive Rodrigo Aravena noted that while macro uncertainty persists, the bank's baseline scenario supports this view. Regarding loan growth, Pablo Ricci stated expectations are for growth slightly above the industry's 4%, driven primarily by consumer and mortgage loans, with commercial loan growth likely to be slower than previously anticipated.

Beatriz Bomfim de Abreu asked for clarification on the timing of Performance-Related Earnings (PRE) from the Aguas Pacifico sale, inquired about other potential exits from Infrastructure Fund III, and questioned the trend of redemptions in public equities and credit strategies.

Answer

CEO Alex Saigh clarified that the PRE from the Aguas Pacifico sale was fully accounted for in Q4 2024, as the deal was signed in that quarter, even though it closed in Q1 2025. He confirmed that other assets in Infrastructure Fund III are being considered for monetization. Regarding redemptions, Saigh explained that a significant Q4 credit redemption was a mechanical process for a specific SMA and the funds were recommitted in early 2025, stating that overall redemption trends are insignificant.

Beatriz Bomfim de Abreu inquired about the Fee Related Earnings (FRE) margin expectations for 2025, including the potential for expansion from synergies and the likely trajectory in Q1. She also asked for clarification on the expected Q4 tax rate and the path to a 10% rate in 2025.

Answer

CEO Alex Saigh explained that Q3 margins were temporarily lower due to absorbing recent acquisitions but expects them to return to the 'upper 50s' for the full year 2025, starting in the 'mid-50s' in Q1. CFO Ana Russo added that the full-year 2024 tax rate is expected to be 6-8%, with quarterly fluctuations based on jurisdictional income mix, and confirmed the rate will trend towards 10% in 2025.

Beatriz Bomfim de Abreu inquired about the specifics of the gross profit loss in Brazil from a top merchant and whether other merchants might follow. She also asked about the 16% sequential drop in G&A expenses and if that level is sustainable given planned investments.

Answer

Executive Pedro Arnt explained the Brazil issue was a unique regulatory situation where a merchant obtained a payment license, forcing a direct connection to acquirers, and should not be extrapolated. He noted the new orchestration product is already helping to recoup volumes with that merchant. Executive Mark Ortiz added that the G&A decrease resulted from disciplined cost controls after a weak Q1, but he expects costs to rise slightly as investments in product and IT continue.

Beatriz Bomfim de Abreu requested the specific amount of retroactive fees recognized in the quarter and inquired about the expected timeline for future retroactive fees from other flagship funds currently fundraising. She also followed up on the Lacan acquisition, asking about the fundraising timeline for its fourth vintage and the AUM of its previous vintages.

Answer

Private Equity Chairman and Head of IR Bruno Zaremba reported BRL 3.0 million in retroactive fees for the quarter, with more expected from VCP IV and VICC closings through early 2025. He also noted SPS IV's first close is expected in Q4. CEO Alessandro Horta detailed that Lacan's first three funds total BRL 1.5 billion in AUM. Bruno Zaremba added that the fourth vintage, currently fundraising, targets BRL 800 million and will leverage Vinci's distribution platform.