Gustavo Schroden

Gustavo Schroden asked about Nu's strategy for credit products and client mix, specifically regarding the impact of FGTS changes on secured loans, the appetite for public and private payroll loans, and the bank's evolution in exploring the affluent market after recent credit limit increases.

Answer

Guilherme Lago, Chief Financial Officer, addressed secured loans, noting FGTS originations dropped 50% due to new regulations but expressed bullishness on public payroll loans, expecting faster growth in 2026 due to market efficiency, lower costs, and interest rate drops. He was optimistic about private payroll loans structurally but cautious due to current credit risk and collateral effectiveness. David Vélez, CEO, added that secure lending is a significant opportunity, with accelerating market share gains as operational friction decreases. Vélez also discussed the high-income segment (BRL 12,000+/month), where Nu has 40% of customers but low share of wallet. He highlighted opportunities to improve credit limits with AI, enhance the credit card value proposition (cashback, NuTravel, lounge), and build a compelling investment platform. Lago added that the SuperCore segment (BRL 5,000-BRL 12,000/month) is Nu's fastest-growing, at 100% in 2025.

Gustavo Schroden inquired about the evolution of Nu's secured loan portfolio, specifically the appetite for public and private payroll loans given the recent FGTS changes, and how the bank is exploring the affluent market (mid to high-income customers) following increased credit limits.

Answer

Guilherme Lago, Chief Financial Officer, detailed the secured loan portfolio: FGTS originations dropped by 50% due to new regulations, but Nu remains in dialogue with the government. He expressed bullishness on public payroll loans (CAP and INSS) due to market efficiency opportunities, expected interest rate drops, and portability. For private payroll loans, Lago is optimistic structurally but noted that credit risk improvements and collateral effectiveness are not yet at full potential. David Vélez, Founder, Chief Executive Officer, and Chairman, added that secure lending remains a significant opportunity, with accelerating market share gains. On the high-income segment (BRL 12,000+ per month), Vélez noted that 40% of Brazilians in this bracket are Nu customers, and the focus is on improving credit limits, enhancing the Ultravioleta credit card value proposition (e.g., travel platform, lounge access), and building a compelling investment platform. Lago added that the 'SuperCore' segment (BRL 5,000-12,000 per month) is growing fastest, at about 100% in 2025.

Gustavo Schroden of Citigroup asked about the 'Recomeço' debt renegotiation plan, questioning if it was related to the Pix financing product and whether it could create a moral hazard. He also inquired about the program's evolution and its expected impact on the P&L, balance sheet, and asset quality.

Answer

CEO David Velez-Osomo clarified that the program is new, had no impact on Q1 results, and is not related to Pix financing. He emphasized that it is carefully designed to avoid moral hazard by selectively offering a fresh start to customers, often with small, secured credit lines, and excluding those with a history of recidivism. The goal is to incentivize healthy credit behavior and is expected to have a small but positive impact in Q2.

Gustavo Schroden expressed concern about the deteriorating macroeconomic environment in Brazil and asked why Nu appears to maintain a positive outlook on credit growth when other banks are becoming more conservative, questioning the risk of adverse selection.

Answer

President and COO Youssef Lahrech responded that Nu's underwriting model is inherently conservative and designed to withstand economic cycles. He emphasized that they always underwrite with the assumption that the future will be significantly worse than the past and that their portfolio is 'battle-tested' from previous recessions. Lahrech stated they do not try to time the market but instead rely on a resilient, through-the-cycle underwriting framework, while also reflecting worsened economic forecasts in their loan loss provisions.

Gustavo Schroden asked about XP's strategy to capture volumes from the estimated BRL 40 billion in FGC reimbursements to Banco Master depositors and the expected impact in Q1 2026. He also questioned the decline in XP's NPS to 65 points from a +70 baseline, asking for the reasons behind it and how the company is addressing it.

Answer

Thiago Maffra, CEO of XP, attributed the NPS drop to two Q4 events: Ambipar structured notes and news surrounding Banco Master, noting a selection bias among impacted clients. He expects the NPS to improve and be temporary. Maffra highlighted that XP's retention rate for Banco Master funds was above 85%, higher than typical maturing events, indicating a significant inflow of money, which will be disclosed in Q1 2026.

Gustavo Schroden inquired about XP's strategy and performance in capturing volumes from the estimated BRL 40 billion FGC reimbursements to Banco Master depositors, and whether a positive impact is expected in Q1 2026. He also asked about the reasons behind the decline in NPS to 65 points from a +70 baseline and how the company is addressing it.

Answer

CEO Thiago Maffra attributed the NPS drop to two Q4 events: Ambipar structured notes and news surrounding Banco Master, noting a selection bias among impacted clients. He indicated that NPS is already improving. Maffra also highlighted that XP's retention rate for Banco Master funds is above 85%, exceeding typical maturing event retention rates, suggesting a significant inflow of money that will be disclosed in Q1 2026.

Gustavo Schroden sought to reconcile the hiring of approximately 500 new employees, mostly in sales force, with the decreasing total number of advisors, and asked for the reasons behind the decent decrease in financial expenses quarter-over-quarter and year-over-year despite higher CDI rates, specifically if it was due to lower borrowings or other factors.

Answer

Thiago Maffra clarified that the new hires are internal advisors, while the overall IFA network is seeing conversions to employees due to regulatory changes and a strategic focus on higher-quality 'AAA advisors,' leading to some lower-quality IFAs leaving the network. Victor Mansur explained that the decrease in financial expenses is primarily a 'geographic effect' from organizational restructuring, where corporate debt is now rolled over as bank debt, moving from financial expense lines to net interest margin, resulting in a considerably lower overall cost of debt.

Gustavo Schroden sought to reconcile the reported 500 new employees, mostly in sales force, with the decreasing total number of advisors (IFAs and XP employees). He also asked about the reasons behind the significant quarter-over-quarter and year-over-year decrease in financial expenses, despite higher CDI rates, and its relation to lower borrowings.

Answer

CEO Thiago Maffra explained that while total IFA numbers decreased due to regulatory changes converting some IFAs to employees and a focus on higher-quality 'AAA advisors' (forcing lower-quality IFAs to leave), the number of internal advisors and AAA IFAs has been increasing. CFO Victor Mansur clarified that the decrease in financial expenses was primarily a 'geographic effect' from reorganizing the conglomerate, moving bank debt from financial expenses to net interest margin, and also benefiting from the bank debt being cheaper than corporate debt.

Gustavo Schroden of Citigroup Inc. asked for clarity on XP's revenue guidance, noting that Q1 growth of 7% was below the full-year target of at least 10%, and inquired about the drivers for the lower consolidated tax rate observed in the quarter.

Answer

CEO Thiago Maffra reaffirmed the 10%+ annual revenue guidance, stating that H1 was expected to be slower and that growth will accelerate in H2, driven by retail fixed income and new verticals like credit cards and insurance. CFO Victor Mansur explained the lower tax rate resulted from a favorable business mix, with less revenue from higher-taxed Issuer Services and more from lower-taxed secondary market activities.

Gustavo Schroden sought clarification on the strategy to enhance IFA productivity by replicating internal adviser tools. He also asked about the outlook for the take rate in 2025, questioning if it would face pressure from the increasing share of fixed income products.

Answer

CEO Thiago Maffra confirmed his 2025 focus is on deploying the successful sales management technology and techniques from the B2C channel to the B2B (IFA) channel to boost productivity. Regarding the take rate, he stated it has been stable for three years and the company's 2025 growth forecast assumes a flat take rate. While the mix shift to fixed income has been a headwind, he believes that cycle is nearing its end but is not yet projecting a recovery in the take rate.

Gustavo Schroden asked for Inter&Co's expectations for 2026 regarding loan growth, net interest margin (NIM) expansion, and efficiency ratio improvement, following the anticipated cost of risk of 5.5%-6%. He also inquired about Inter's competitive advantages in the private payroll loan segment and its strategy to maintain growth without impacting prices or delinquency.

Answer

CFO Santiago Horacio Stel stated that Inter&Co does not provide guidance but discussed general trends. For 2026, loan growth is targeted at 25-30%, with hopes to exceed it, and NIM expansion is expected to continue due to repricing the back book and allocating more credit to private payroll and credit cards. Efficiency ratio improvement is also anticipated, with a similar 10 percentage point delta between revenue and expense growth, driven by AI efficiencies in CX, fraud, credit underwriting, and coding. Global CEO João Vitor Menin highlighted Inter's competitive advantages in private payroll: digital client base, best funding costs, and non-cannibalization of other revenues. He emphasized a cautious, collateralized approach to growth, aiming for a 'win-win' scenario for clients, balance sheet, economy, and regulators.

Gustavo Schroden asked for Inter&Co's expectations for 2026 regarding loan growth, net interest margin (NIM) expansion, and efficiency ratio improvement, specifically if loan growth would remain around 30-35% and if NIM still has room to expand. He also inquired about Inter's competitive advantage in the private payroll loan segment and how it plans to sustain growth without impacting prices or delinquency, given aggressive competition.

Answer

CFO Santiago Horacio Stel stated that Inter&Co does not provide guidance but discussed general trends. For 2026, he considers 25-30% loan growth a reasonable target, aiming for the high end or beyond, given the larger base and private payroll's contribution. NIM expansion is expected to continue due to repricing the back book and allocating more credit to private payroll and credit cards. Efficiency ratio improvement is a core goal, with a similar 10 percentage point delta between revenue and expense growth expected, driven by operational leverage and early-stage AI efficiencies. Global CEO João Vitor Menin highlighted Inter's competitive advantages in private payroll: digital distribution, best funding costs, and non-cannibalization of other revenues. He emphasized a cautious, collateralized approach to growth, aiming for a 'win-win' product.

Gustavo Schroden asked for commentary on the company's '60/30/30' plan (60M clients, 30% efficiency, 30% ROE by 2027), presenting his own projections based on the current run-rate and asking if they were reasonable.

Answer

Global CEO João Vitor Nazareth Teixeira de Souza affirmed the company's commitment to the plan, stating that while there are macro uncertainties, the platform's network effect is accelerating progress. He expressed confidence in achieving the goals and confirmed that Mr. Schroden's projections were 'pretty much in line' with the company's internal expectations.

Gustavo Schroden asked about the potential to increase the loan-to-deposit ratio from its current 75% level toward that of incumbent banks. He also requested an outlook for the cost of risk in 2025, which stood around 5% in 2024.

Answer

Executive Santiago Stel responded that while the loan-to-deposit ratio could rise toward 80%, strong deposit growth continues, driven by the app's transactional nature. He expects the cost of risk to remain stable in the 5.0% to 5.2% range for 2025, as the benefit from growth in secured lending is balanced by marginal risk-taking in new, higher-margin unsecured products.

Gustavo Schroden asked if Inter plans to be a counter-cyclical player regarding risk appetite, given other banks' conservative views on consumer finance. He also inquired about the expected impact of Central Bank Resolution 4966 on capital and provision expenses.

Answer

Executive João Vitor Nazareth Teixeira de Souza reiterated Inter's historically conservative stance but stated that its small market share and strong funding position allow it to maintain its ~30% growth target for 2025 without changing its risk appetite. Executive Santiago Stel explained that Resolution 4966 will primarily affect reporting metrics like NPL formation due to longer 'healing periods' but will not impact cost of risk, provisions, or Tier 1 capital, as the company already reports under IFRS. He emphasized that the risk-adjusted NIM is the key metric and is expected to continue improving.

Gustavo Schroden asked about the outlook for loan growth acceleration amid the current macro environment and sought clarification on the factors causing a decrease in net ARPAC (Average Revenue Per Active Client) despite a rise in gross ARPAC.

Answer

Executive Alexandre De Oliveira projected 25-30% loan growth for the year, boosted by the new private payroll product, and noted the Consumer Finance 2.0 portfolio could reach BRL 1.5 billion. Executive Santiago Stel explained the net ARPAC decrease was primarily due to a BRL 100 million sequential drop in fee revenue, caused by seasonality (BRL 40M), one-off factors (BRL 40M), and the deferral impact of the 4966 accounting rule (BRL 20M).

Gustavo Schroden from Citi inquired about the bank's strategy for efficiency gains, particularly in relation to ongoing and increasing technology investments.

Answer

CEO Marcelo de Araújo Noronha stated that the bank will not stop investing in technology to improve infrastructure and architecture, emphasizing that efficiency doesn't solely come from reduced investment. He highlighted expected efficiency gains in other areas like lawsuits and bets, aiming to drive top-line growth and improved ROEs.

Gustavo Schroden asked about the bank's strategy for balancing continued technology investments with efficiency gains and improving client relationships, particularly in light of the expense guidance.

Answer

CEO Marcelo de Araújo Noronha emphasized that the bank will not stop investing in technology to improve infrastructure and architecture, viewing it as a constant requirement for competitiveness. He stated that efficiency gains would come from other lines, such as lawsuits, and would be driven to the top line, aiming for increased penetration and better ROEs, expecting to increase from the current 15.2%.

Gustavo Schroden asked about management's confidence in growing the loan portfolio amid a challenging macroeconomic environment with high inflation and interest rates, and how the bank would mitigate these external risks.

Answer

Executive Marcelo de Noronha stated that while the bank maintains a moderate risk appetite, he sees significant opportunities for growth in secured and collateralized loan segments. He specifically mentioned payroll deductible loans, rural loans, and receivables-backed financing for SMEs (FGO/FGI). He expressed confidence that focusing on these high-quality, secured lines will allow the bank to grow and maintain asset quality regardless of a broader economic slowdown.

Gustavo Schroden inquired about Santander's strategy for Pix in installments, particularly regarding potential regulatory changes that might disconnect it from credit cards. He also asked if the bank is considering any hedging policies to reduce NII sensitivity to interest rates, referencing a note from Santander Spain's earnings.

Answer

CEO Mario Leão clarified that Santander has been implementing a hedging policy for marginal origination of the fixed portfolio for over a year, aiming to reduce NII sensitivity to interest rates, with effects becoming more noticeable now. He explained that the bank advocates for a fluid, streamlined Pix finance journey defined by the industry, rather than separate tracks for credit cards and Pix finance. CFO Gustavo Alejo added that while Selic rate impacts market NII, it also benefits client NII, and the 18-month hedging process is two-thirds complete, promising a more stable market NII and reduced interest rate exposure by next year.

Gustavo Schroden inquired about the bank's strategy for PIX in installments, particularly in light of potential new Central Bank regulations that might disconnect it from credit cards. He also asked if the bank was considering any hedging policies to reduce NII sensitivity to interest rates, referencing a mention in Santander Spain's earnings.

Answer

CEO Mario Leão explained that the bank has a complete PIX payment offering, including PIX on credit cards, which is engaging non-credit users. He advocated for banks to define the customer journey for PIX finance, rather than regulatory division by product. Regarding NII sensitivity, he stated that the bank has been hedging marginal origination of the fixed portfolio for over a year, a dynamic management approach that has started to show effects, reducing negative sensitivity to Selic rate increases. He noted that while some sensitivity remains due to long-term positions, the overall risk profile is much better.

Focused on the bank's strategic business composition, asking if the emphasis on high-income clients means the strategy for lower-income retail has been exhausted. He sought to understand the future balance between different client segments and if this reflects a broader industry transformation.

Answer

The executive clarified that while the high-income strategy is now well-positioned, they are actively rethinking their offerings for mid- and low-income segments. The biggest challenge is low-income, where profitability can only be achieved by drastically lowering the cost-to-serve. He agreed that the old, highly profitable model for the low-income segment is unlikely to return for the industry, as clients became over-indebted, necessitating a new, more efficient approach.

Gustavo Schroden questioned the sustainability of financial income growth in offsetting weaker transaction volumes and asked if the 30% ROE for continuing operations is a new sustainable level.

Answer

CFO & IRO Mateus Scherer Schwening advised focusing on overall gross profit growth, which is outpacing TPV growth due to pricing and engagement. He indicated that the 30% ROE for the financial services segment is likely on the 'lower bound' of its potential, as it is currently being dragged down by the company's excess capital position.

Gustavo Schroden from Citibank inquired about the profitability of the mass-market segment, asking if it has improved to a level that would justify a more aggressive growth strategy.

Answer

CEO Milton Maluhy Filho confirmed a significant improvement in retail profitability, which rose from 16.4% in Q3 2022 to 25% currently, with both individual and corporate segments running above the cost of capital. However, he acknowledged a large opportunity remains in the low-income segment, which will be unlocked by optimizing the service model through the bank's ongoing digital transformation.

Gustavo Schroden asked for details on the composition of the strong treasury results (Market NII), questioning if there were any non-recurring items and whether the BRL 1.4 billion level is sustainable.

Answer

CEO Milton Maluhy Filho clarified that the quarter's result was an atypical outlier, driven by strong trading and banking book performance within existing risk limits, with no non-recurring artifacts. He stated that the expectation is for this line to normalize towards a more reasonable BRL 1.1 billion threshold in future quarters, rather than sustaining the current high level.

Questioned the economics of the LMEC segment, asking if the marginal TPV is at or below breakeven given the flat pretax earnings. Also asked for a target loan-to-deposit ratio to better understand the monetization strategy for their fast-growing deposits.

Answer

The company asserted that the LMEC segment is profitable and accretive in absolute terms, and the flat pretax earnings were a result of a conscious decision to reinvest in growth. They do not have a specific target for the loan-to-deposit ratio because deposits are used flexibly to fund both the credit portfolio and the acquiring prepayment business, based on daily capital allocation decisions.

Sought clarification on the change in ALLL guidance, asking what differed from initial expectations. He also questioned the higher trends in credit renegotiation and recovery and whether ALLL would be in the lower part of the guidance in the second half of the year.

Answer

The unexpected factor was farmers deliberately delaying payments in the agribusiness sector. The bank is now using the new crop plan to normalize payments. Higher renegotiations are a result of strategic programs. Credit recovery will remain above historical levels. For the second half, they are targeting the middle of the ALLL guidance, around BRL 8-8.5 billion per quarter.

Asked for clarification on the Allowance for Loan and Lease Losses (ALLL), specifically questioning the BRL 800 million impact from a specific case on NPL creation and its implication for the full-year guidance. He also inquired about the rising NPL in the corporate segment and whether it was driven by SMEs, a high-growth area for the bank.

Answer

The executives confirmed the BRL 800 million impact on NPL creation from a specific large corporate case in both Q2 and Q3. They stated that the focus for the last quarter is on recovery to stay within guidance. Regarding SMEs, the NPL increase is seen as a normalization post-pandemic, and it's noted that 30% of the growth comes from lines with risk mitigators like government guarantees.