Daniel Vaz

Daniel Vaz from Safra sought clarification on Cielo's strategic integration, especially concerning large accounts where profitability was prioritized over TPV, and the current stage of integration. He also asked about SME growth, including the role of governmental programs.

Answer

CFO Cassiano Scarpelli and CEO Marcelo de Araújo Noronha explained that Cielo is undergoing significant transformation with verticalized connections for wholesale and corporate retail, focusing on logistics, tap-on-phone, and new pricing. They noted giving up TPV in some large accounts to maintain profitability. For SMEs, they highlighted strong growth, high market share in government lines (25-26%), and robust digital hiring, credit modeling, and risk-adjusted return criteria.

Daniel Vaz inquired about the strategy for Cielo as a strategic asset, its integration within SMEs, the TPV difference, the approach for large accounts, and the current stage of integration.

Answer

EVP and CFO Cassiano Scarpelli explained that Cielo is undergoing a significant transformation, with verticalized connections for wholesale and corporate retail, improved logistics, and new features like tap on phone and app integration. He noted that the bank chose to forgo TPV in a few large accounts to preserve profitability. He highlighted strong SME growth driven by accelerated traction, reduced attrition, and digital offerings. CEO Marcelo de Araújo Noronha added that a new app for businesses, migrating 500,000 clients, is enhancing competitiveness with integrated Cielo.

Daniel Vaz inquired about Bradesco's strategy for the private payroll deductible loan segment, particularly regarding its growth potential, market share ambitions, and approach to loan portability.

Answer

Executive Marcelo de Noronha described private payroll loans as a significant growth opportunity where Bradesco's share is currently low. He explained the bank is shifting from a defensive to a more aggressive strategy. He also highlighted the higher credit risk in this segment, noting a market delinquency rate near 9% versus 2% for public payroll loans, which necessitates robust credit models that assess both the individual and their employer.

Daniel Vaz inquired about the bank's accelerated branch footprint optimization, asking about the management of client migration, key learnings, and whether the current pace of change will be maintained.

Answer

Executive Marcelo de Noronha confirmed the pace will continue due to the success of the disciplined and careful process. He highlighted that the client base continues to grow despite the changes. CFO Cassiano Scarpelli added that a key lesson is the bank's ability to execute this transformation while keeping the client central, aided by high digital channel adoption and the redesign of service points into specialized, productive hubs.

Daniel Vaz of Safra Bank inquired about the bank's accelerated reduction of its physical footprint, noting that the client base continued to grow. He asked about the key learnings from the client migration process and whether the current pace of branch adjustments would be maintained or moderated.

Answer

Executive Marcelo de Noronha confirmed the pace of footprint optimization will continue due to its success, emphasizing that the process is managed with great discipline and intelligence to minimize client impact. CFO/CTO Cassiano Scarpelli added that a key lesson was preserving 'client principality' and that future service points will be redesigned for higher productivity, moving away from the traditional branch model.

Daniel Vaz from Safra asked about the sustainability of the FGI (Government Guarantee Fund) program's production for 2026, questioning if recapitalization would be needed to maintain similar volumes. He also sought to understand if Itaú Unibanco foresees clear, tangible revenue growth opportunities from Generative AI (GenAI) and related technologies, beyond cost efficiency.

Answer

Milton Maluhy Filho, CEO of Itaú Unibanco, praised the FGI program as an effective allocation of public resources, benefiting smaller companies and job creation. He explained that a BRL 100 billion 'pocket change' return of resources in late 2024 boosted FGI production, but for 2026, similar volumes would require an additional government decision on resource allocation. On AI, he emphasized Itaú's vanguard position, leveraging its modernized data architecture and internal knowledge to train models. He sees AI driving revenue growth by increasing client engagement, improving efficiency, expanding risk appetite, and enabling more competitive, scalable digital offerings like Pix on WhatsApp, ultimately leading to market share gains and stronger client relationships.

Daniel Vaz from Banco Safra S.A. questioned the sustainability of the FGI program's production for 2026 (need for recapitalization), and tangible revenue growth opportunities from GenAI and related technologies for the bank.

Answer

Milton Maluhy Filho, CEO of Itaú Unibanco, expressed enthusiasm for the FGI program, highlighting its effectiveness in allocating public resources and benefiting smaller companies. He explained that while BRL 100 billion in additional resources were made available in late 2024 through leverage adjustments, maintaining similar production volumes in 2026 would depend on a government decision for additional fund recapitalization. Regarding AI, Maluhy Filho emphasized Itaú's vanguard position, leveraging its modernized data architecture and deep business knowledge to train models. He sees AI driving revenue growth through increased client engagement, higher efficiency (e.g., Emps platform, Pix on WhatsApp), expanded risk appetite, and improved cross-selling, ultimately enhancing client proximity and top-line generation.

Daniel Vaz from Safra Bank inquired about Itaú's strategy for its acquiring business, Rede, asking how the bank is gaining market share and achieving a more competitive and directed offering for clients.

Answer

President & CEO Milton Maluhy Filho explained that market share is a consequence, not a primary objective. He stated that the Rede network is fully integrated into the bank's holistic client strategy, focusing on the overall relationship and value creation, such as share of payments, rather than pursuing volume through potentially negative-margin deals.

Daniel Vaz of Safra Bank inquired about Itaú's growth strategy, its competitive stance against new entrants in mass-market segments, and whether the bank would adopt a more aggressive position given its asset quality and capital generation.

Answer

CEO Milton Maluhy Filho stated that the bank remains optimistic but cautious due to high interest rates affecting credit demand. He emphasized a strategy of disciplined, double-digit growth in target client segments where Itaú has gained market share. He highlighted that the seamless integration of the acquiring network (Rede) has created significant synergies, allowing for a more holistic client offering rather than a mono-product approach.

Daniel Vaz from Credit Suisse Group AG questioned the 2025 expense guidance, which implies a potential worsening of the efficiency ratio, and asked for details on the key drivers behind the cost growth.

Answer

CEO Milton Maluhy Filho explained that the expense growth is driven by three main factors: increased profit sharing due to strong results, a year-over-year effect from improved labor provisions, and depreciation from significant technology and platform modernization investments made since 2021. He emphasized that this investment phase is crucial for enabling future efficiency gains and value capture.

Daniel Vaz asked about the acquiring business's growth and market share strategy, and separately, about the recent hiring of 700 technology employees and the specific focus of these new roles.

Answer

CEO Milton Maluhy Filho responded that for acquiring, market share is a consequence, not a goal; the focus is on client-centricity and integrating payments into a full banking relationship. Regarding the tech hires, he explained that about 90% are focused on the individual client segment to accelerate digital projects, enhance the super app, and improve the overall client experience and NPS.

Daniel Vaz sought clarification on the primary challenge in the low-income segment: whether it's higher expected losses or an inadequate cost to serve. He also questioned Santander's cautious stance on private payroll-deductible loans compared to more aggressive peers.

Answer

CEO Mario Roberto Opice Leão stated that in the mid to long term, the fundamental issue for low income is the cost to serve, which needs further reduction beyond the 43% already achieved. In the short term, macroeconomic context and performance of some rollovers and card portfolios affect results. CFO Gustavo Alejo Viviani added that Santander's approach balances risk predisposition, cost of risk, and cost to serve to achieve segment profitability. Regarding payroll-deductible loans, CEO Leão acknowledged a moderate, gradual approach in 2025 due to testing and learning, but expects an ascending curve of production throughout 2026, believing in the product's potential.

Daniel Vaz sought to understand the primary challenge in the low-income segment (high losses vs. inadequate cost-to-serve) and Santander Brasil's cautious approach to private payroll-deductible loans compared to more aggressive peers.

Answer

CEO Mario Roberto Opice Leão highlighted that in the mid-to-long term, reducing the cost-to-serve (aiming for another 30%+ reduction after the initial 43%) is fundamental for low-income viability. In the short term, macroeconomic context and performance of rollovers affect results. He acknowledged a moderate, testing-and-learning approach to payroll-deductible loans, expecting an ascending curve in 2026 after initial caution. CFO Gustavo Alejo Viviani added that the bank's risk predisposition and loan-to-deposit ratio also influence profitability.

Daniel Vaz sought Santander's vision for 2026, particularly regarding provisions and asset quality, given the bank's selective portfolio origination and controlled costs. He asked how the bank projects cost of risk and liquidity for next year, and how these factors would influence profitability in a scenario of slowly accelerating revenue.

Answer

CEO Mario Leão outlined a strategy focused on improving the jaws ratio by increasing revenues (client NII and fees) while maintaining stable expenses and provisions. He emphasized reducing the 'legacy portfolio' faster to lower the cost of risk, aiming for positive evolution rather than increases. Leão stated an 'obsessive' approach to expense management, targeting near-zero nominal growth year-on-year, even while investing in AI and new platforms. He expressed confidence in achieving a 20% profitability level by consistently growing revenues and managing costs and provisions.

Daniel Vaz sought the bank's vision for 2026, considering a conservative origination scenario, slow revenue acceleration, and controlled costs. He asked for projections on provision and asset quality, including expectations for liquidity and a dropping cost of risk, to understand the bank's overall outlook.

Answer

CEO Mario Leão outlined a strategy focused on building a positive jaws ratio by increasing revenues, maintaining stable expenses, and managing provisions. He emphasized growing net revenue through disciplined portfolio management, not just top-line growth. He highlighted efforts to reduce the legacy portfolio faster, expecting cost of risk to ideally stabilize or decrease, with healthy stage one provisions for growth and reduced stage three ALL. He reiterated an obsessive expense management agenda, aiming for near-zero nominal growth while investing in technology. CFO Gustavo Alejo did not add to this specific question.

Daniel Vaz of Banco Safra asked about the bank's level of concern regarding the SME portfolio, noting an increase in delinquency and a challenging macroeconomic environment for these businesses.

Answer

CEO Mario Roberto Opice Leão affirmed the bank's continued belief in the SME segment as a significant growth opportunity. He explained that while the macro environment necessitates caution, the SME portfolio is highly profitable, largely self-funded by deposits, and the strategy focuses on growing with strong transactionality and guarantees, not just credit extension. He stated the direction for the business will not change, though caution will be applied at the margin.

Inquired about the competitive landscape for payroll loans, specifically regarding pressure on rates, the entry of new digital players, and the bank's strategy to defend its portfolio against increased portability.

Answer

The executive argued that rate caps on INSS loans are hurting consumers by reducing credit availability. Santander is rebalancing its strategy by focusing more on internal channels and diversifying across different types of payroll loans (private, public sector). They are monitoring new digital competitors but are not yet significantly impacted. Their main defense is to focus on being the client's primary bank, offering a full suite of products, not just a single loan.

Inquired about store efficiency, specifically the economics of the Work/Café model versus traditional branches. He also asked about a slight decline in the profitability of new credit vintages and whether this was due to challenges in less collateralized lines.

Answer

The executive explained that the overall store strategy involves significant network reduction for efficiency, with about 460 closures in two years. The Work/Café is a specific concept for brand positioning in key locations, not a widespread model. On the follow-up, another executive clarified that there was no relevant negative change in the performance of new vintages and that all portfolios are performing as expected, with risk models being constantly fine-tuned.

Daniel Vaz followed up on the 7% quarter-over-quarter drop in fixed income revenues, questioning how this occurred despite improved DCM activity, net new money, and increased warehouse securities, and asked for clarification on the EBT margin guidance, specifically if it applies to Q4 of next year or the full year.

Answer

Victor Mansur explained that the fixed income revenue behavior was due to the sale of short-duration banking notes from the warehouse book and the warehousing of corporate bonds, aligning with clients' preference for short-term floating rates. Thiago Maffra clarified that the 30% EBT margin guidance is for the full next year, not specific quarters, and remains a doable target.

Daniel Vaz followed up on fixed income, questioning the 7% quarter-over-quarter drop in revenues despite improved DCM activity, net new money, and warehouse security increases. He specifically asked if the mix shift towards daily liquidity CDs (from 25% to 45%) occurred within a single quarter. He also sought clarification on whether the EBT margin guidance applies to Q4 2026 or the full year.

Answer

CFO Victor Mansur explained that the fixed income revenue behavior was due to selling short-duration banking notes from the warehouse book while warehousing corporate bonds, aligning with clients buying short-term floating rates. CEO Thiago Maffra clarified that the EBT margin guidance of 30% is still considered 'doable' for next year, but they do not provide quarter-by-quarter guidance.

Daniel Vaz of Safra National Bank noted the deterioration in B2B (IFA) channel productivity compared to the B2C channel and asked if this channel was experiencing net outflows and if the model required a significant review.

Answer

Chief Executive Officer Thiago Maffra acknowledged that B2B productivity had been low but stated it is now improving 'bit by bit' due to focused efforts. He denied the need for a major overhaul, describing the changes as a 'normal evolution.' He mentioned that XP recently announced new minimum service standards for the B2B channel, creating more of a 'franchisee model' to ensure consistency and improve performance, which supports their confidence in overall net new money targets.

Daniel Vaz asked for the underlying assumption for DCM market contraction in the 2025 revenue forecast. He also requested a breakdown of the expected growth in Corporate & Institutional, questioning how the institutional business could grow in a challenging environment for the fund industry.

Answer

CEO Thiago Maffra noted that Q1 is seasonally weak for DCM, which is why the company warehoused assets to ensure product availability. CFO Victor Mansur clarified that the institutional business is expected to perform similarly to last year, with growth being driven by the Corporate segment. This growth stems from cross-selling opportunities tied to DCM issuance, such as hedging, and is expected to track the issuer services revenue.

Daniel Vaz requested details on the 'other operating income' line, specifically regarding incentives and provision reversals, and also asked for an explanation for the sharp quarterly drop in 'equity income' from JVs and associates.

Answer

CEO Thiago Maffra explained that partner incentives for distribution access are recurring. He noted a specific BRL 42 million provision reversal and provided a baseline for expected credit loss. He attributed the equity income drop to reorganizations at associates and expects the line to be higher and more stable next year.

Daniel Vaz congratulated Credicorp on strong performance and expressed interest in Mibanco, noting its surprising ROE expansion, improving asset quality, and accelerating loan growth (from 1% to 8% year-over-year). He asked if this outperformance and controlled asset quality would lead to accelerated growth, potentially reaching low to mid-teens portfolio growth in 2026.

Answer

CEO Gianfranco Ferrari provided context on the microfinance sector's past challenges (rising rates, squeezed margins, weak transactional business). He agreed with the positive outlook for Mibanco's lending business due to improved portfolio quality and better-performing new vintages. He also highlighted Mibanco's long-term strategy to grow fee income and transactional business faster than lending, which should also reduce funding costs.

Daniel Vaz from Safra expressed interest in Mibanco's strong performance, noting its ROE expansion, improving asset quality, and accelerating loan growth, including double-digit growth in Colombia. He asked if this outperformance and controlled asset quality would lead Credicorp to accelerate Mibanco's growth, potentially reaching low to mid-teens portfolio growth by 2026.

Answer

CEO Gianfranco Ferrari provided context, explaining that the microfinance sector in Peru faced significant challenges in recent years due to rising rates, squeezed margins, and weak transactional business. However, he agreed with Daniel Vaz's assessment, stating that Mibanco's portfolio quality has dramatically improved, and new loan vintages are performing well, leading to positive expectations for future lending growth. He also highlighted Mibanco's long-term strategy to complement its lending business by growing fee income and transactional business at a faster pace, which should also reduce its cost of funding.

Daniel Vaz with Safra inquired about the detailed breakdown of Grupo Bancolombia's projected 7% loan growth for 2026, specifically across regions and loan categories (commercial, consumer, mortgage). He also asked for insights into a sustainable level for new Past Due Loans (PDL) following a significant quarterly drop.

Answer

CEO Juan Carlos Mora outlined expectations for commercial loans to grow around 6.2%, consumer loans around 10%, and mortgages around 6.2% for 2026, driven by better economic activity in Colombia. He noted that current credit risk levels are closer to mid-long-term expectations, with a cost of risk for 2026 projected between 1.6% and 1.8%. CFO Mauricio Botero Wolff added that Nequi's spin-off and projected 56% loan growth will significantly boost consumer loan growth for Grupo Bancolombia.

Daniel Vaz asked for details on the 7% loan growth guidance for 2026, including a breakdown by region and segment, and sought to understand a sustainable level for new Past Due Loans (PDL) given the recent significant drop.

Answer

Juan Carlos Mora (CEO) projected 2026 loan growth for commercial loans at ~6.2%, consumer loans at ~10%, and mortgages at ~6.2%. He noted improved credit risk behavior, expecting a 2026 cost of risk between 1.6%-1.8%. Mauricio Botero Wolff (CFO) added that Nequi's projected 56% loan growth significantly boosts the consumer segment.

Daniel Vaz inquired about the drivers behind the upward revision to net income guidance, asking if it was solely top-line driven, and requested more detail on improving selling expense trends.

Answer

CFO & IRO Mateus Scherer Schwening attributed the stronger net income guidance to a lower-than-expected effective tax rate and better-than-anticipated operating leverage on selling expenses. Strategy & Marketing Officer Lia Machado de Matos added that selling expense leverage is due to marketing efficiencies and the natural dilution of acquisition costs as the client base scales.

Daniel Vaz asked if it was fair to assume take rates would increase in Q2 due to the full impact of Q1 repricing and if further adjustments were planned. He also followed up on the cash sweep strategy, asking if the Q1 conversion had already produced a positive P&L effect.

Answer

VP of Finance Mateus Schwening confirmed that the full effect of repricing will be felt in Q2, creating room for improvement in the gross profit to TPV ratio. He noted that some effects from the Ton brand repricing would also appear in Q3. He reiterated that the P&L impact from the Q1 cash sweep was minimal, with most benefits expected from Q2 onwards.

Daniel Vaz asked for more details on the plan to use client deposits for funding, specifically the timing and financial impact. He also inquired how close the company is to reaching an optimal ROE level where organic capital generation can fully fund both growth and shareholder returns.

Answer

Executive Lia de Matos explained the shift to using deposits for funding will be rolled out throughout the year and will be accretive to the bottom line, as reduced funding costs will more than offset the loss of float revenue. Executive Mateus Schwening added that the BRL 3 billion excess capital figure already accounts for the capital needed to fund the 2027 growth plan, suggesting the company has a clear view of its capital needs versus its generation capabilities.

Daniel Vaz inquired about the outlook for card TPV in 2025, referencing external retail index data that suggests struggling physical retail growth. He also asked how the deteriorating macroeconomic environment in Brazil might alter the company's strategy regarding its sales force and marketing expenses in 2025.

Answer

Executive Lia de Matos stated that while 2025 guidance is not yet available, the current 20% TPV growth is healthy and the shift to PIX is accretive. CEO Pedro Zinner added that sales force planning is a bottoms-up process and will not change due to macro factors. He noted that the impact of the changing yield curve will be managed through dynamic pricing, with adjustments likely beginning in Q1 2025.

Daniel Vaz asked for clarification on how Inter & Co classifies its renegotiated loan portfolio within the different risk stages and inquired about the company's overall renegotiation strategy.

Answer

CFO Santiago Horacio Stel explained that classification depends on the specific case. He noted that the recent growth in renegotiated loans was primarily in Stage 1 and driven by commercial amendments to performing real estate contracts, not from defaulting credit card clients. This reflects adjustments to loan conditions rather than credit deterioration.

Daniel Vaz asked about the key factors driving the meaningful improvement in credit penetration, questioning whether it was due to activating existing clients, specific new products, or a change in onboarding new clients.

Answer

Executive Santiago Stel attributed the growth in credit penetration to the company's overarching 'Inter By Design' strategy. He explained that it is a deliberate process where clients are onboarded, build a behavioral history on the platform, and are then offered credit products. The expansion of specific products like FGTS loans and the new private payroll loans are key contributors to this 'by design' growth, which is expected to continue.

Asked about the long-term vision for the credit portfolio and how it will align with the payments strategy of moving upmarket to SMBs and Large Merchants. Also asked when LMEC growth might normalize to rates similar to MSMB.

Answer

The company expects the credit portfolio to become more balanced over time, with a greater contribution from merchant-focused products like working capital and overdraft, which are currently in their infancy. Regarding LMEC growth, they still see significant room for rapid expansion, particularly in card-not-present transactions (e-commerce, cross-border) where their market share is lower, so it is not expected to slow to MSMB levels in the near term.