Carlos Gomez-Lopez

Carlos Gomez-Lopez from HSBC Holdings plc inquired about the factors contributing to Itaú Unibanco's 50% market share in real estate financing among private banks and the future outlook for this market. He also asked if Itaú, as a major consumer of IT services, has observed any changes in pricing from software and IT providers in recent months due to the impact of AI.

Answer

Milton Maluhy Filho, CEO of Itaú Unibanco, attributed the bank's strong real estate financing market share to its substantial savings account deposits (largest among private banks), which provide a competitive funding structure and liquidity. He also highlighted Itaú's investment in the mortgage client journey and its long-term view of real estate as a key relationship product. Regarding IT service pricing, Maluhy Filho noted market volatility but stated that Itaú, as a large client with long-term contracts and relationships with providers, has not experienced significant additional pressure on costs, maintaining competitive pricing through strategic negotiations.

Carlos Gomes Lopes from HSBC asked about Itaú Unibanco's significant 50% market share in real estate financing among private banks, seeking reasons for this dominance and the market's future direction. He also inquired if the bank, as a major consumer of IT services, has observed any changes in pricing from software and IT providers due to the rise of AI.

Answer

Milton Maluhy Filho, CEO of Itaú Unibanco, attributed the bank's mortgage market leadership to its substantial savings account deposits (largest among private banks), which provide a competitive funding structure. He also highlighted investments in the client journey and a long-term view of real estate as a key product. Regarding IT pricing, he noted that while the tech market is volatile, Itaú has secured competitive long-term contracts and relationships with providers, leveraging its scale. He stated that they are not seeing a huge amount of price increases, and current prices are not adding significant pressure to costs.

Carlos Gomez-Lopez from HSBC asked if the current low corporate spreads in the Brazilian market make economic sense and if they are expected to increase. He also inquired about the drivers of the strong 17% growth in the mortgage portfolio.

Answer

CFO & Member of Executive Committee Gabriel Amado de Moura acknowledged that DCM spreads are tight but noted they are supported by strong market demand for credit instruments. For mortgages, he attributed the growth to strong client demand in more affluent segments and Itaú's competitive edge from its large volume of savings accounts, which provides a favorable funding base, allowing for disciplined but competitive pricing.

Carlos Gomez-Lopez from HSBC asked if the new loan classification by stages would alter market behavior and product profitability, and also inquired about any potential changes to taxation on IOC or foreign subsidiaries.

Answer

CEO Milton Maluhy Filho stated that the new disclosure simply reflects how Itaú has always managed its book based on expected loss, so he does not anticipate it changing their strategy. On taxes, he noted that current discussions in Congress are focused on personal income tax and that there are no active proposals regarding IOC or a corporate tax hike for banks at this time.

Carlos Gomez-Lopez from HSBC asked why the bank's results didn't reflect more upside from 2024's stronger-than-expected GDP growth and inquired about the reasons for the higher effective tax rate guidance in 2025.

Answer

CEO Milton Maluhy Filho explained that the bank captures economic activity changes 'online' through its vast client network, adapting dynamically regardless of initial forecasts. Regarding the higher tax rate, he cited a combination of factors: the limited benefit of Interest on Capital (IOC) as profits grow, the mix of profitability across differently taxed business units, and upcoming regulatory changes.

Carlos Gomez-Lopez asked about the current primary focus of regulatory uncertainty and discussions with the Brazilian government, mentioning topics like DTA treatment, credit cards, and interest on capital (IOC).

Answer

CEO Milton Maluhy Filho identified the DTA treatment related to new tax rules as the most prominent recent discussion. He noted that credit card regulation is an ongoing topic but is currently quieter, and there are no active discussions regarding IOC or capital gains reform. He also mentioned a clear signal from the government that it does not intend to hike the social contribution tax (CSLL) for banks.

Carlos Gomez-Lopez asked about Patria's expected share count for the next two to three years and the anticipated dilution for shareholders. He also questioned the expected evolution of distributable earnings per share (DEPS) in the coming years, noting its relatively flat performance in previous years, and inquired about the expected tax rate.

Answer

Alexandre Saigh (CEO, Patria) provided a share count guidance of 158-160 million shares for 2025-2027. He outlined FRE guidance of $225-$245 million for 2026 and $260-$290 million for 2027, along with a three-year performance-related earnings (PRE) guidance of $120-$140 million, explaining that specific DEPS guidance is not provided due to PRE's unpredictable nature. Ana Russo (CFO, Patria) and Saigh clarified that the annual tax rate is expected to average around 10% in the future, noting that the lower 2025 rate was influenced by a non-recurring UK tax credit and performance fees from tax-favorable jurisdictions.

Carlos Gomez-Lopez asked if Patria expects its effective tax rate, currently around 5%, to remain at those levels in the future.

Answer

Alexandre Saigh, CEO of Patria, stated that the company's guidance for the annual tax rate is approximately 10%. Ana Russo, CFO of Patria, added that the lower 2025 rate was influenced by a non-recurring tax credit in the U.K. and the size/jurisdiction of performance fees, and expects the rate to gradually increase towards 10% over the next three years.

Carlos Gomez Lopez inquired about the unexpected factors contributing to Banco Macro's third-quarter loss and sought projections for loan growth and returns in 2026, including details on any non-recurring expenses.

Answer

CFO Jorge Scarinci attributed the loss to higher loan loss provisions, unexpected expenses, margin compression from interest rate volatility, and bond portfolio performance. He projected 35% real loan growth and 25% real deposit growth for 2026, with ROE in the low teens. Scarinci clarified that additional expenses were primarily due to early retirement plans.

Carlos Gomez Lopez inquired about the unexpected loss in Q3 2025, asking if there were special, unforecasted charges, and sought projections for 2026 loan growth and achievable returns. He also requested more details on the nature of the extra expenses.

Answer

CFO Jorge Scarinci attributed the Q3 loss to higher loan loss provisions, unexpected additional expenses (early retirement plans), margin compression from interest rate volatility, and bond portfolio performance. For 2026, he forecasted 35% real loan growth, 25% real deposit growth, and a low teens ROE. He clarified that the extra expenses were primarily related to early retirement plans.

Asked about the bank's strategy for its public securities portfolio, specifically its desired positioning in terms of currency, indexation, and accounting classification.

Answer

The bank is comfortable with its high exposure to inflation-linked bonds, viewing it as the best way to hedge its equity. They are making some portfolio changes to support the forecasted loan growth. The CEO, who was on the call for the first time, was unavailable to be introduced as he had stepped away.

Carlos Gomez-Lopez of HSBC asked about the strategic positioning of Banco Macro's public securities portfolio, focusing on preferences for currency, indexation (such as inflation-linkers), and accounting classifications (e.g., available for sale, trading).

Answer

Jorge Francisco Scarinci, Finance & Investor Relations Manager, explained that the bank is comfortable with its high exposure to inflation-linked bonds as a hedge for its equity. He noted they are working on some portfolio changes related to reserve requirements to free up capacity to fuel the forecasted loan growth, while aiming to maintain a similar level of available-for-sale securities.

Carlos Lopez asked about Grupo Financiero Galicia's macroeconomic assumptions for GDP growth, inflation, and currency for the end of next year. He also inquired about the bank's comfort level with its peso loan-to-deposit ratio (LDR) and whether it would restrict loan growth, as well as trends in dollarization of loans and deposits, and customer dollar purchase levels.

Answer

Pablo Eduardo Firvida (CFO, Grupo Financiero Galicia) provided macroeconomic assumptions: 4% GDP growth (this year), 3.7% (next year); 30% inflation (this year), 18% (next year); and FX 1410 (this year-end), 1610 (next year-end). Gonzalo Fernández Covaro (CFO, Grupo Financiero Galicia) stated comfort with the 99-100% peso LDR, not seeing it as a constraint due to expected deposit growth and other funding means. He confirmed continued high demand for dollar lending, especially for commercial projects, and noted that customer dollar purchases had decreased significantly post-election to early-year levels (around $15 million per day from $50 million).

Carlos Lopez asked about Grupo Financiero Galicia's macroeconomic assumptions for the end of next year, including inflation, interest rates, and currency. He also inquired about the peso loan-to-deposit ratio (LDR) being around 100% and if there's an absolute limit beyond which the bank would restrict loan growth. Follow-up questions concerned further dollarization of assets, any reduction in demand for dollars, actual dollar sales back to pesos, and the current levels of customer dollar purchases compared to earlier quarters.

Answer

Pablo Eduardo Firvida (CFO, Grupo Financiero Galicia) provided macroeconomic assumptions: GDP growth of 4% (2025) and 3.7% (2026), inflation of 30% (end 2025) and 18% (end 2026), and FX rates of ARS 1410 (end 2025) and ARS 1610 (end 2026). Gonzalo Fernández Covaro (CFO, Grupo Financiero Galicia) stated comfort with the LDR at 99-100%, noting the LCR is over 180%, and does not see it as a constraint to growth, expecting peso deposits to grow. He confirmed continued high demand for dollar lending in the commercial sector. Customer demand for dollar purchases has returned to normal levels (around $15 million daily) after the elections, down from $50 million daily before.

Carlos Gomez-Lopez inquired about the timeline for the impact of high interest rates on asset quality to dissipate and whether loan demand has started to recover. He also asked about the optimal capital level the bank aims to achieve, given its reduction from 33% to 16.7%, and sought clarification on a perceived regulatory change causing higher capital consumption relative to loan growth between Q2 and Q3.

Answer

CFO Carmen Morillo Arroyo stated that retail loan demand is expected to return slowly due to NPLs, while commercial demand, especially for US dollar and peso credits, remains strong. She attributed the 45%-50% loan growth to companies and dollar-based lending, noting that retail loan demand is affected by both lack of customer interest and more restrictive bank lending policies. Head of ALM and Investor Relations Diego Cesarini clarified that the capital ratio decrease in Q3 was temporary, mainly due to the valuation of public sector debt at its lowest point, expecting a rebound in October. He added that the bank aims to finish 2025 around 17% capital ratio, well above their management minimum of 13%, with no capital concerns for future growth.

Carlos Gomez-Lopez asked when the impact of high interest rates on asset quality, specifically NPL deterioration, is expected to subside and if credit demand has started to recover. He also questioned the optimal capital level for the bank, given its reduction from 33% to 16.7%, and sought clarification on a technical change in risk-weighted assets (RWA) between Q2 and Q3.

Answer

Carmen Morillo Arroyo, CFO, stated that retail credit demand would return slowly, contingent on NPL normalization, while commercial credit (US dollar and pesos) shows high demand, expecting 45%-50% loan growth from companies. Diego Cesarini, Head of Asset and Liability Management and Investor Relations, indicated that the bank aims to finish 2025 around 17% capital ratio, well above their management minimum of 13%, with no capital concerns for coming years. He clarified that the Q3 RWA change was mainly due to the valuation of public sector debt at its lowest point, expecting a higher capital ratio in October. Carmen Morillo Arroyo concluded that in retail, both lack of demand due to high rates and more restrictive bank lending policies contribute to the situation.

Carlos Gomez-Lopez from HSBC congratulated Credicorp on Yape and Bolivia's performance and asked if the 'target-rich environment' for investment across the region (Bolivia, Chile, Peru) due to political changes and commodity prices would make Credicorp more inclined to invest more and distribute less, and if there are any particular geographical preferences for investment. He also requested an update on Credicorp's sensitivity to interest rates in both US dollars and Peruvian Soles.

Answer

CEO Gianfranco Ferrari stated that Credicorp's vision extends beyond political environments, but expressed positivity about the outlook in Bolivia, Chile, and Peru, driven by pro-market governments and high commodity prices (copper, lithium, gold). He sees a much more positive environment for these three countries in the upcoming years compared to the last four or five. CFO Alejandro Perez-Reyes updated the theoretical interest rate sensitivity: a 100 basis points parallel decrease in rates (soles and dollars) would result in a 17 basis points impact, with 15 from the dollar book and 2 from the soles part. He noted that in practice, NIM has grown despite significant rate cuts in Peru.

Carlos Gomez-Lopez from HSBC asked for clarification on the tax impact of a bond exchange gain and questioned the potential net income contribution of Yape, seeking a specific figure for its future earnings.

Answer

CFO Alejandro Perez-Reyes clarified that the gain from the sovereign bond exchange was not subject to income tax. Regarding Yape, management confirmed the analyst's estimate of its current contribution was correct. They stated the goal is for Yape to become Credicorp's second-largest line of business within three to five years, driven by its lending business. However, CEO Gianfranco Ferrari declined to provide a specific future net income figure, prompting the analyst to do their own math based on the relative sizes of BCP and Pacifico.

Carlos Gomez-Lopez asked for a reminder of Credicorp's sensitivity to a 100 basis point decline in both local and international interest rates. He also noted management's surprisingly positive tone on Peru's political situation and asked for confirmation of this outlook.

Answer

Chief Executive Officer Gianfranco Ferrari confirmed the positive outlook, stating that despite political noise, Peru's macroeconomic fundamentals remain solid. Chief Financial Officer Alejandro Perez-Reyes addressed rate sensitivity, stating a 100 bps parallel shift would impact NIM by about 17 basis points, with 16 bps of that coming from the dollar portfolio, as the local rate is considered near neutral.

Carlos Gomez-Lopez from HSBC asked about the seasonality of expenses, particularly the significant jump in Q4, and inquired about the expected future investment required for the Tenpo neobank operation in Chile.

Answer

CFO Alejandro Perez-Reyes stated there are no plans to alter the expense recognition process and that spending on Tenpo next year will be similar to this year. CEO Gianfranco Ferrari added that Tenpo, which expects to be fully operational by Q4 2025, will require further capital investment both by regulation and to fund its operational ramp-up. He noted that overall, new ventures are expected to be near cash flow neutral in the coming year.

Carlos Gomez-Lopez asked about the strategic rationale for the Banmedica acquisition and whether Credicorp might seek a new partner, and also inquired about the impact of a competitor's recent cybersecurity breach.

Answer

Chief Executive Officer Gianfranco Piero Ferrari de Las Casas explained that the decision is to run the Banmedica business themselves, leveraging their extensive prior experience, with no current plans for a new partner. Chief Risk Officer Cesar Rios confirmed that Credicorp was not affected by the competitor's data breach and remains confident in its own cybersecurity posture.

Carlos Gomez-Lopez questioned the impact of Argentina's current interest rate volatility on the bank and the financial system, its expected duration, and the key benchmark rates affecting clients. He also sought to verify that the Q2 decline in the CET1 ratio was not due to a change in Basel III capital rules.

Answer

CFO Mariano Biglia confirmed the capital rule change occurred in Q1 and the Q2 CET1 decline was unrelated, partly due to dividend payments. CEO Gustavo Manriquez and CFO Mariano Biglia described the high real interest rates as a transitory government measure to control FX volatility ahead of elections, expecting them to ease afterward. Biglia identified the Tamar interest rate, which recently jumped to 50%, as a key benchmark affecting short-term corporate loans.

Carlos Gomez-Lopez asked how the bank is managing the current volatility and high levels of interest rates in Argentina and how long this situation might last. He also sought clarification on the capital rules regarding Basel III and the reason for the CET1 ratio decline in the quarter.

Answer

CFO Mariano Biglia confirmed the change in operational risk capital requirements was implemented in Q1, and the Q2 CET1 decline was unrelated, partly due to a dividend payment. CEO Gustavo Manriquez acknowledged the high interest rates are harmful but believes the situation is transitory until elections. Biglia added that the government is prioritizing FX stability over interest rate stability and expects rates to ease post-election, identifying the Tamar rate as a key benchmark.

Carlos Gomez-Lopez from HSBC inquired about the drivers for the targeted 40% real-term deposit growth, the strategy behind a new remunerated account, and the impact of a recent regulatory change on the bank's capital ratio.

Answer

Chairman & CEO Julio Patricio Supervielle and Banco Supervielle CEO Gustavo Manriquez detailed a new remunerated account strategy to attract and retain retail and SME deposits, aiming to compete with fintechs and offset higher interest costs with expense reductions. CFO Mariano Biglia explained a regulatory change increased operational risk requirements, negatively impacting the Tier 1 ratio by 1.4%, but stated the bank is comfortable with an 11% Tier 1 ratio.

Carlos Gomez-Lopez from HSBC asked about the bank's deposit growth, noting the Q1 increase was driven by wholesale funding and questioning the feasibility of the 40% real-term growth target for the year. He requested details on the new remunerated accounts, including interest rates and adoption. He also followed up on a recent regulatory change impacting capital and the bank's minimum acceptable capital level.

Answer

Chairman & CEO Julio Patricio Supervielle and Banco Supervielle CEO Gustavo Manriquez explained their strategy to grow CASA deposits by launching remunerated accounts to compete with fintechs, detailing the product's structure for both individuals and SMEs. They asserted the added interest expense would be offset by cost reductions. CFO Mariano Biglia addressed the capital question, explaining the negative 1.4% impact from an operational risk regulation change and stating the bank is comfortable with a minimum Tier 1 ratio of 11%.

Carlos Gomez-Lopez from HSBC asked for the outlook on the company's share count over the next two years and inquired if Marex had considered acquiring RJ O'Brien.

Answer

Group CEO Ian Lowitt expects the share count to remain very consistent, with a commitment to limit dilution to no more than 1% annually, and noted buybacks are not currently planned. Regarding RJ O'Brien, Lowitt confirmed they had conversations but concluded it was not a great cultural fit, preferring their current strategy of smaller, accretive acquisitions.

Carlos Gomez Lopez asked if a potentially less stringent regulatory environment for U.S. banks could change the competitive landscape for Marex and also requested guidance on the 2025 tax rate.

Answer

CEO Ian Lowitt expressed his view that it is unlikely U.S. banks would use increased capacity to re-enter services like clearing, believing they would more likely focus on trading and lending, which could in turn make them larger clients for Marex. CFO Crispin Robert Irvin provided tax rate guidance for 2025, expecting it to be between 25% and 26%, down from 26.3% in 2024, with the final figure depending on the geographical split of profits.

Carlos Gomez-Lopez congratulated the company on its 30th NYSE anniversary and asked about the potential impacts of the restructuring at its main shareholder, Sura. He also questioned if the limited operational overlap between Bancolombia's and Sura's international operations might change in the future.

Answer

CEO Juan Carlos Mora Uribe responded that the new Grupo Sivest structure provides significant flexibility and clarity for stakeholders. He noted that Sura is now focused on financial services with Bancolombia as its main investment, which consolidates their relationship. Regarding future growth, Mr. Mora stated that the new structure allows them to explore all value-adding options and new avenues for growth, which they will pursue if it makes sense for shareholders.

Carlos Gomez-Lopez from HSBC inquired about the potential impact of the shareholder restructuring at Sura on Bancolombia and asked about future international strategy, given the limited operational overlap between the two entities.

Answer

President & CEO Juan Carlos Mora Uribe explained that the new Grupo Sivest structure provides enhanced flexibility and clarity for stakeholders. He noted that Sura is now focused on financial services with Bancolombia as its main investment, which should consolidate their relationship. Regarding international expansion, he stated that the new structure allows the company to explore all avenues of growth that add shareholder value, and they will do so if opportunities make sense.

Carlos Gomez-Lopez from HSBC asked about the potential impacts of the corporate restructuring at major shareholder Sura on Bancolombia and the future of their relationship. He also questioned if the limited operational overlap in international geographies between the two companies might change in the future.

Answer

CEO Juan Carlos Mora Uribe responded that the new Grupo Sivest structure provides significant flexibility and clarity for future corporate development. He noted that Sura is now a financial services-focused company with Bancolombia as its primary investment, which he believes will consolidate their relationship. Regarding international strategy, he stated that the new structure allows them to explore all avenues of growth that add shareholder value, keeping possibilities open.

Carlos Gomez-Lopez from HSBC asked about the sustainability of the insurance group's high profitability, particularly in health care, and requested a definition of the bank's cost of equity.

Answer

Insurance Group CEO Ivan Contigio expressed optimism for the insurance guidance, citing a consolidation trend in private health insurance and strong demand from the middle class. He noted that while the second half may see challenges from financial indexers, the operational trend of reducing medical loss ratios and gaining new lives is positive. IRO Andre Garvalho stated the cost of equity has oscillated between 14-16%, with the latest analyst median at 15.6%.

Asked about the sustainability of the insurance division's high profitability, particularly in healthcare, and requested a definition of the bank's cost of equity.

Answer

The insurance group is optimistic, seeing continued growth in the private health insurance market. While the second half of the year may face challenges from financial indexers, the operational trend of gaining new lives is positive. The bank's cost of equity is estimated by sell-side analysts to have a median of 15.6%, with a slight downward trend observed.

Carlos Gomez-Lopez asked two questions: first, about the sustainability of the record-low cost of credit in the corporate sector, and second, what drove the health insurance result to be three times its typical level and if that is sustainable.

Answer

Regarding health insurance, an executive reiterated that the lower claim rate is a sustainable result of multi-year investments and post-pandemic normalization. On corporate credit, Executive Marcelo de Noronha explained that the benign scenario is due to large companies accessing cheap funding in capital markets, a condition likely to persist while interest rates are high. An executive added that large corporations generally have healthy balance sheets, so they do not anticipate surprises in delinquency from that segment.

Carlos Gomez-Lopez inquired about the balance sheet's positioning for interest rate changes affecting market NII and asked for a macro assessment of Brazil's economic demand.

Answer

CFO Cassiano Scarpelli described the balance sheet as 'very balanced' and not positioned for any strong, fast rate movements. On the macro outlook, IRO Andre Carvalho and Executive Marcelo de Noronha noted that while financial assets face uncertainty, real economic activity for 2024 remains solid. However, they cautioned that persistent high interest rates could dampen growth in 2025.

Carlos Gomez-Lopez of HSBC inquired about the bank's balance sheet positioning for market NII, asking about its sensitivity to interest rate movements. He also posed a broader macro question about the strength of demand in Brazil and the overall economic outlook.

Answer

CFO/CTO Cassiano Scarpelli described the bank's ALM position as 'very balanced' with no specific directional bets, expecting healthy market NII if rates follow market expectations. On the macro front, IRO Andre Carvalho and Executive Marcelo de Noronha noted that while financial assets are impacted by uncertainty, real economic activity for 2024 remains solid. They expressed caution for 2025 if high rates persist and affirmed the bank's readiness to adjust its risk appetite accordingly.

Carlos Gomez-Lopez of HSBC asked about the significant decline in the rural (agribusiness) portfolio and its future prospects. He also requested management's current sentiment on the macroeconomic environment compared to three months prior.

Answer

CEO Mario Roberto Opice Leão explained the agro portfolio decline was concentrated in the grains sector due to past price mismatches, leading to restructurings. He noted the bank is currently 'digesting' these challenges and expects to resume broader growth in the segment next year. Regarding the macro view, he described it as 'marginally worse' due to the high Selic rate and global uncertainties, but the bank remains optimistic for the medium-to-long term.

Carlos Gomez-Lopez from HSBC requested an update on the share buyback program and asked about the company's exposure to the gaming and gambling industry.

Answer

Executive Artur Schunck reported that the first $250 million buyback program was completed and a new $200 million program is being executed opportunistically. Executive Ricardo da Silva acknowledged that the company serves some regulated gaming clients, describing the business as accretive but having a 'low single digit' and non-material impact on the company's bottom line.

Carlos Gomez-Lopez from HSBC requested an update on the share buyback program and asked about the company's exposure to the gaming and gambling industry.

Answer

Executive Artur Schunck confirmed the completion of a $250M buyback and noted a new $200M program is partially executed. Executive Ricardo da Silva stated that while PagSeguro serves some regulated gaming clients, the exposure is marginal and not material to the bottom line, representing a very low single-digit percentage.

Inquired about the reasons for the significant increase in legal risk provisions, particularly the recurring provisions for 'economic plans,' and asked for the future outlook on these expenses.

Answer

The increase is due to a deliberate strategy to accelerate legal agreements, especially for 'economic plans,' ahead of a Supreme Court agreement deadline in 2025. While this increases short-term expenses, it is expected to be economically favorable long-term. They anticipate a reduction in these legal costs starting in 2026.