Mario Pierry

Mario Pierry questioned the increase in provision expenses and cost of risk in Q4, contrasting it with previous quarters' lower cost of risk due to AI. He also sought clarification on the consolidated NPL metrics, asking why they appeared lower than previous Brazil-only NPLs and if Mexico's NPLs were lower than Brazil's.

Answer

Guilherme Lago, Chief Financial Officer of Nu Holdings, clarified that the increase in Credit Loss Allowance (CLA) was entirely due to portfolio growth (11% quarter-over-quarter) and increased unused credit limits, not asset quality deterioration. He noted that asset quality remained stable and in line with expectations. Lago explained that consolidated NPLs provide a more holistic view as the international book grows, and while Brazil-only NPLs would also show a benign trend, the lower consolidated NPLs are primarily due to shorter write-off policies in Mexico and Colombia, rather than inherently lower risk. He reiterated no concerns about asset quality but cautioned about an expected seasonal uptick in 15-90 NPLs in Q1 2026.

Mario Pierry asked about the increase in provision expenses (CLA) in Q4 2025, contrasting it with previous discussions of lower cost of risk due to AI. He also sought clarification on the consolidated NPL metrics, questioning why they appear lower than previous Brazil-only numbers and if Mexico's NPLs are lower than Brazil's.

Answer

Guilherme Lago, Chief Financial Officer, clarified that the increase in Credit Loss Allowance (CLA) was entirely due to portfolio growth and increased unused credit limits, not asset quality deterioration. He emphasized that asset quality performed in line with expectations, with no signs of degradation. Lago noted that NPL formation and Stage 3 formation remained stable. Regarding consolidated NPLs, he explained that they provide a more holistic view as the international book grows. He attributed any lower NPL figures in Mexico and Colombia to shorter write-off policies in those countries, rather than inherently lower risk, and reiterated no concerns about asset quality, while also reminding of typical Q1 seasonal uptick in NPLs.

Mario Pierry from Bank of America Merrill Lynch questioned Nubank's seemingly cautious strategy regarding the new private payroll loan product in Brazil, noting that other industry players appear more excited and active.

Answer

CFO Guilherme Lago responded that while Nubank is very excited about the product's potential, they are being cautious because the quality of the underlying collateral has not yet been fully tested or proven. He cited early industry data showing high first-payment defaults (10-18%) as a reason for their current stance. He believes there is no first-mover disadvantage and Nubank will be able to win significant share once the product matures.

Mario Pierry from Bank of America challenged the forecast for rising Net Interest Margins (NIM) in Brazil, citing the growth in lower-margin secured loans and the potential for higher funding costs. He also suggested the consolidated NIM would decline as Mexico and Colombia grow, and questioned the consolidated loan-to-deposit ratio calculation.

Answer

CFO Guilherme Marques do Lago conceded that funding costs in Brazil are unlikely to improve significantly. However, he argued that the primary driver for NIM expansion in Brazil will be the re-leveraging of the balance sheet as the loan book outpaces deposits. For Mexico and Colombia, he agreed NIMs will be tighter in the short term but stated their long-term profitability (ROA and ROE) could meet or exceed Brazil's, driven by compelling unit economics.

Mario Pierry asked for details on Nu's 'Act 3' global expansion strategy, including potential costs, target markets, and timing. He also challenged whether it was too early to focus on global ambitions, given the significant growth opportunities remaining in Latin America and the risk of management distraction.

Answer

CEO David Velez-Osomo explained that 'Act 3' is a long-term vision, and the current focus is on building a foundational, multi-country technology platform to enable future expansion efficiently. He assured that this does not represent a significant change in expenses, as it's part of ongoing investments. In response to the follow-up, Velez agreed that the overwhelming focus (90%+) remains on Brazil, Mexico, and Colombia ('Act 1'). He framed the global preparations as a prudent, low-resource 'parallel execution' to be ready for the next decade, not a current distraction from core markets.

Mario Pierry asked about the decline in risk-adjusted NIM due to the mix shift towards secured lending and questioned the quarter-over-quarter contraction in credit card purchase volume, suggesting market share gains may be slowing.

Answer

CFO Guilherme Marques do Lago clarified that the NIM contraction was driven by higher funding costs in Mexico/Colombia and mix shift, but expects NIM to expand as the loan-to-deposit ratio increases. He stated Nu is not moving away from credit cards. Regarding purchase volume, Lago explained that on an FX-neutral basis, volume actually grew, and Nu's market share continues to increase, with growth now driven more by higher volume per active card rather than new card issuance.

Mario Pierry asked about Inter&Co's progress towards its 60/30/30 guidance, noting ROE and client growth are halfway to target but efficiency ratio progress has been slower. He inquired about confidence in the plan, potential changes at the Investor Day, and strategies for efficiency improvement. He also followed up on the dividend strategy, payout ratio, and capital consumption given rapid loan book growth and 15% ROE.

Answer

Global CEO João Vitor Menin affirmed confidence in the 60/30/30 plan, highlighting significant progress in ROE (0% to 15%), clients (25M to 43M), efficiency (73% to 45%), and credit portfolio doubling. He expects 2026 to be a strong year for KPI achievement, leveraging technology, innovation, and AI for expense management, aiming for expenses to grow less than revenues. CFO Santiago Horacio Stel detailed the capital structure, noting 14.4% at the bank level and BRL 2 billion excess capital at the holding level (4.5 percentage points of CET1), totaling roughly 19% CET1. He confirmed capital consumption is slowing and moving towards neutrality, with excess capital strategically held at the holding level. Menin also stated the 20% dividend payout ratio trend is expected to continue.

Mario Pierry asked about Inter&Co's progress towards its 60/30/30 guidance, specifically the ROE and client targets being halfway met, but expressed concern about the slower-than-expected improvement in the efficiency ratio, asking what actions could be taken and if guidance changes are anticipated. He also inquired about the company's dividend payment strategy given ongoing capital consumption and loan book growth.

Answer

Global CEO João Vitor Menin affirmed confidence in the digital banking model to achieve the 60/30/30 goals, noting significant progress from 0% ROE to 15%, 25M to 43M clients, and 73% to 45% efficiency ratio, alongside a doubled credit portfolio. He indicated that 2026 would be a strong year for KPI convergence and highlighted technology, innovation, and AI as key drivers for expense efficiency, aiming to grow expenses less than revenues. Regarding dividends, Menin stated the 20% payout ratio trend should continue if it doesn't impact growth. CFO Santiago Horacio Stel detailed the capital structure, noting 14.4% at the bank level and BRL 2 billion excess capital at the holding level (approx. 19% CET1 combined), confirming capital consumption is slowing as they approach neutrality.

Mario Pierry asked why Inter & Co is more optimistic about the private payroll product than incumbent banks and questioned the recent stagnation in the efficiency ratio, asking if future improvements would be revenue or expense-driven.

Answer

Global CEO João Vitor Nazareth Teixeira de Souza suggested incumbents are reluctant due to cannibalization of existing loan portfolios, a risk Inter does not have. On efficiency, CFO Santiago Horacio Stel pointed to an underlying improvement when excluding certain taxes and stated that the focus is on making revenues grow significantly faster than expenses, supported by long-term efforts to shift vendor contracts from variable to fixed costs.

Mario Pierry asked about Inter's ability to sustain its loan growth of around 30% in 2025, contrasting it with the more cautious outlook from incumbent banks, and questioned how its Net Interest Margin (NIM) would perform in a rising rate environment.

Answer

Executive João Vitor Nazareth Teixeira de Souza explained that Inter's diversified and well-collateralized portfolio, low market share, and competitive cost of funding allow it to target 25-30% growth even in a challenging macro environment. Executive Santiago Stel added that hedging strategies have made the company's NII slightly positive to rate hikes and that they expect the NIM expansion trend of ~20 bps per quarter seen in 2024 to continue, driven by a richer loan mix and new high-ROE products.

Mario Pierry from Bank of America Corporation questioned the BRL 700 million additional restructuring expense, its focus (e.g., branches), and why overall expenses are projected to grow 8% (5% excluding technology) despite significant footprint reductions, expecting growth below inflation.

Answer

CEO Marcelo de Araújo Noronha and CFO Cassiano Scarpelli clarified that administrative expenses (third-party services, maintenance, lease, transportation) were down, but technology investments grew 22%, profit sharing increased, and strategic advertising (e.g., Principal launch) contributed. They noted ongoing footprint review, new Principal office openings, and a target efficiency ratio of 40% by 2028, with top-line growth influencing OpEx.

Mario Pierry inquired about the BRL 700 million additional expense for restructuring, its focus (e.g., branches), and why the 8% expense guidance (with 3% for technology) implies the rest of the bank's expenses are growing 5% in line with inflation, rather than below, despite significant footprint reductions.

Answer

CEO Marcelo de Araújo Noronha detailed that administrative expenses like third-party services and maintenance were down, but technology investments (up 22%), increased profit sharing, and strategic advertising (e.g., Principal launch) were key detractors. He confirmed continued footprint review, opening 50 Principal offices, and refurbishing private stores. EVP and CFO Cassiano Scarpelli added that 5% of expense growth relates to human resources (excluding profit sharing), and the efficiency ratio dropped 2.2% to 50%, with a target of 40% by 2028. He noted that top-line growth (almost 10% in 2026) naturally leads to some OpEx growth due to increased transactions.

Mario Pierry from Bank of America asked which specific loan segments are expected to slow down and what metrics provide comfort that delinquency will remain controlled amid a slowing economy.

Answer

CEO Marcelo Morojin explained the expected slowdown is due to a higher comparison baseline from the previous year and lower overall market demand for credit. He expressed comfort with delinquency due to rigorous, dynamic risk management, including vintage-by-vintage analysis and a strategic focus on secured lines like payroll-deductible loans and government-backed programs, which have higher risk-adjusted returns.

Sought clarification on the expected slowdown in loan portfolio growth and questioned the source of the bank's confidence in maintaining low delinquency amid a slowing economy.

Answer

The portfolio growth slowdown is attributed to a higher comparison base and lower market-wide credit demand. Confidence in asset quality stems from rigorous, dynamic risk management, including vintage-by-vintage monitoring and a strategic focus on lower-risk, secured credit lines like government-backed programs and payroll-deductible loans.

Mario Pierry questioned the sustainability of the insurance group's strong performance, which grew 25% year-over-year and accounted for nearly 40% of net income, asking if the growth and low claim rates could be maintained.

Answer

An executive explained that the performance is sustainable, with two-thirds driven by production (sales) and one-third by financial results. The claims ratio is on a downward trend due to long-term investments and is now normalizing. Executive Marcelo de Noronha added that strategic partnerships with hospitals are also helping control costs and improve efficiency, supporting the positive outlook.

Mario Pierry focused on the long-term, asking for a specific target for the bank's efficiency ratio, which remains high, and questioned the impact of BRL depreciation on credit growth.

Answer

CFO Cassiano Scarpelli provided a long-term target for the efficiency ratio, aiming for 'close to 40%' by the 2027-2028 period, explaining it will peak during the current investment phase before declining. Executive Marcelo de Noronha stated that the currency depreciation had no relevant impact on the retail or SME portfolios, with wholesale variation driven more by new origination in trade finance.

Mario Pierry from Bank of America focused on the long-term, asking for a specific target for the bank's efficiency ratio over the next five years, noting it remains high at nearly 52%. He also asked about the impact of the Brazilian Real's depreciation on credit growth during the quarter.

Answer

CFO/CTO Cassiano Scarpelli provided a clear target for the efficiency ratio, stating the goal is to reach 'close to 40%' by the end of 2027 or 2028. He explained the ratio would first rise due to transformation investments before beginning its descent in 2025-2026. Executive Marcelo de Noronha added that there was no relevant FX impact on the individual and SME portfolios, though trade finance origination was strong.

Mario Pierry from Bank of America Corporation inquired about Itaú Unibanco's future technology investment strategy, including the necessary investment amount, the mix between efficiency improvements and growth-driving initiatives, and specific loan portfolio growth expectations per segment for the 2026 guidance.

Answer

Milton Maluhy Filho, CEO of Itaú Unibanco, affirmed continued high levels of technology investment, emphasizing disciplined capital allocation and careful activation of intangible assets to avoid 'selling out the future.' He noted a shift in investment mix towards new product development and client experience, reducing maintenance costs due to platform modernization. Regarding the 2026 loan portfolio growth, Maluhy Filho stated it's well-distributed across segments, with large companies being the most uncertain due to capital market dynamics, while SMEs, Middle Market, and individuals are expected to show consistent growth.

Mario Pierry from Bank of America asked for more details on the BRL 600 million in extraordinary restructuring expenses, inquiring about the specific measures being taken and if the bank could anticipate a future efficiency target.

Answer

President & CEO Milton Maluhy Filho described the expense as a non-recurring provision to support the bank's ongoing digital transformation and efficiency plans, driven by the success of initiatives like One Itaú. He stated that while the bank is always seeking to improve its competitive efficiency ratio, especially in retail, they do not provide a specific guidance for footprint reduction, as it's a consequence of client demand.

Mario Pierry from Bank of America asked about expense management, pointing out the relatively stable number of branches and employees, and questioned the future function of the physical branch network.

Answer

CEO Milton Maluhy Filho clarified that the bank does not have a brute-force branch closure target. Instead, it uses a complex algorithm to optimize its footprint, often migrating locations to a lower-cost digital branch model while ensuring client service continuity. He stressed that the goal is to serve clients through their preferred channel, and ongoing digitalization will enable a more competitive cost structure over time.

Mario Pierry from Bank of America questioned the seemingly conservative loan growth guidance relative to nominal GDP, asking for a regional breakdown and clarification on the stable cost of credit outlook.

Answer

CEO Milton Maluhy Filho noted that growth in Brazil is expected to be higher than in Latin America and depends on capital markets activity. He clarified there is no contradiction on credit cost; the guidance reflects expected portfolio growth and provisioning for expected losses on a high-quality portfolio, not a fear of worsening credit quality.

Mario Pierry asked about two topics: the potential capital impact from the IFRS 9 implementation next year, and the possibility of reversing provisions made for the company Americanas.

Answer

CEO Milton Maluhy Filho stated that the IFRS 9 impact should be immaterial for Itaú, though discussions are ongoing to mitigate system-wide effects. On Americanas, he confirmed a significant recovery of the 100% provision is expected. The exact accounting treatment is undecided but will be a positive, one-off event detailed next quarter, potentially impacting the coverage ratio.

Mario Pierri asked for more details on Santander Brasil's 16% growth in technology and expansion expenses, its competitive positioning in tech investments, and how AI is being deployed in credit models to potentially accelerate credit growth and reduce delinquency.

Answer

CEO Mario Roberto Opice Leão clarified that the 16% growth includes both technology and franchise expansion (e.g., increased headcount for SME coverage). He emphasized ongoing heavy investment in modernizing legacy systems and migrating to platform-based processing. CFO Gustavo Alejo Viviani added that AI and Gen AI are being used in both loan granting and recovery models, with a clear agenda for advancement, while maintaining a disciplined risk appetite.

Mario Pierri inquired about the future investment in technology, particularly given the 16% growth in expansion and technology expenses. He also asked how Santander Brasil is deploying AI in its credit models to expand credit with lower delinquency, comparing its position to peers.

Answer

CEO Mario Roberto Opice Leão clarified that the 16% growth includes both technology and 'expansion,' which involves increasing headcount in areas like SMEs and AAA segments. He indicated continued heavy investment in modernizing legacy core systems, migrating from mainframe to platform-based processing, and enhancing machine learning with Gen AI in risk models. CFO Gustavo Alejo Viviani added that AI is used in both loan granting and recovery models, with a clear agenda for Gen AI advancement, aligning with the bank's specific risk appetite and LLP targets.

Mario Pierry asked about Santander's risk and credit appetite, noting the strong performance of new cohorts and high capital ratios. He questioned what factors, such as political uncertainty, might prevent the bank from adopting a more aggressive loan book position, and sought expectations for portfolio growth over the next 12 months.

Answer

CEO Mario Leão stated that Santander will continue to grow disproportionately in profitable sub-segments and products, prioritizing cohorts with high profitability (above 20% ROE) and those that drive customer transactionality. He emphasized a disciplined, technical approach to portfolio management, reallocating risk-weighted assets to segments with higher net margins, even if gross margins are lower. Leão noted that while overall portfolio growth might not be 'exuberant,' it's disciplined, with flat growth in individuals (reduction in mass retail, increase in high income), strong SME growth, and growth in wholesale, with carryover effects expected in Q4. He added that the challenging macroeconomic context and high interest rates are expected to persist, influencing continued capital allocation discipline.

Mario Pierry asked about the bank's risk and credit appetite, noting the better performance of new cohorts and strong capital ratios. He questioned what factors, such as political uncertainty or upcoming elections, might prevent the bank from taking a more aggressive position in loan book growth, and sought expectations for the next 12 months.

Answer

CEO Mario Leão stated that the bank would continue to grow disproportionately in segments and products offering high profitability (above 20% ROE for new cohorts). He emphasized a disciplined, technical approach to portfolio management, reallocating risk-weighted assets from lower net margin segments (like low-income) to more perennial net revenue streams. He highlighted growth in mortgage, checking accounts, credit cards, SMEs, and wholesale, aiming for profitability first, then growth. He noted that the macroeconomic context, even with declining interest rates, would remain challenging, necessitating continued capital allocation discipline.

Mario Pierry from Bank of America focused on the individuals portfolio, asking about the strategy to offset the decline in public payroll loans (INSS) and what is needed to accelerate growth in the private payroll loan segment.

Answer

CEO Mario Roberto Opice Leão explained the strategy involves rebalancing the portfolio towards mid-to-high income clients. He noted that INSS loans are unattractive due to rate caps and new biometric friction. For private payroll loans, the bank is being conservative as the market mechanics are still new and settling, but they expect to resume growth cautiously in the coming months.

Inquired about the bank's increased appetite for credit cards despite the regulatory uncertainty surrounding the industry's profitability, and asked for their expectations from the regulating agency.

Answer

The executive stated that the bank is actively involved in technical discussions with regulators to find a sustainable balance. The plan involves reducing revolving credit interest rates while evolving the funding structure, such as by phasing out interest-free installments and introducing interest-bearing ones. They believe the final regulation will be positive, not negative, which justifies their calculated resumption of credit card sales.

Mario Pierry questioned the 6% year-over-year growth in retail revenues, specifically the 2% contraction in fixed income revenues despite a 22% AUC growth, indicating significant pressure on take rates. He also asked about the EBT margin contraction this quarter and whether the medium-term guidance (29-32%) is achievable by the end of 2026.

Answer

CEO Thiago Maffra attributed the fixed income revenue contraction to a significant decrease in take rates (10 bps overall, 20 bps for fixed income). This was driven by a mix shift towards daily liquidity CGs (from 25% to 45% of new allocations) and shorter duration products. Regarding EBT margin, Maffra stated that ongoing investments in sales force, SMB, and technology would likely keep the efficiency ratio flattish in the short term, but the 2026 guidance remains 'still doable.'

Mario Pierry questioned the year-over-year contraction in retail fixed income revenues despite a 22% growth in AUC, suggesting significant pressure on take rates, and asked about the EBT margin contraction this quarter, which is below guidance, seeking clarity on whether an improvement trend is expected soon or if the guidance is for a later period.

Answer

Thiago Maffra attributed the fixed income revenue pressure to a significant decrease in take rates (20 basis points for fixed income), mainly due to a mix shift towards more daily liquidity CGs (now 45% of new allocations, up from 25%) and shorter duration products. Regarding the EBT margin, he explained that ongoing investments in sales force expansion, SMB, and technology are impacting it, expecting a more flattish performance in the near term but still aiming to reach the guidance by the end of next year.

Mario Pierry of Bank of America Merrill Lynch asked for more color on Q3 inflows to gauge confidence in the BRL 20 billion quarterly target. He also questioned if XP could enhance cost controls to protect the EBT margin if revenue growth falls short of expectations.

Answer

CEO Thiago Maffra reiterated confidence in the BRL 20 billion retail net new money target but declined to provide intra-quarter data. CFO Victor Mansur addressed the EBT margin, stating it depends on the product mix, which is expected to remain stable. He noted that after significant efficiency gains, the SG&A ratio might be 'flattish' this year as they continue strategic investments in advisors and technology, committing to cost control without halting core business investments.

Mario Pierry from Bank of America sought an update on retail inflows, asking if there were signs of improvement beyond the BRL 20 billion quarterly level and if adviser productivity was increasing. He also requested data on the company's progress in the affluent and wealth management market.

Answer

CEO Thiago Maffra confirmed that retail net new money remains stable at the BRL 20 billion quarterly level with no significant acceleration yet. He noted that while productivity has improved in the B2C channel, they are still working to replicate that success in the B2B channel. On the affluent strategy, he highlighted investments in the Private Bank are beginning to yield positive inflows after a long period of stagnation, framing it as a long-term initiative.

Mario Pierry asked why IFA commissions were growing faster than retail revenues, questioned the net financial impact of the Expert event, and sought an explanation for the rise in credit revenues despite a flat loan book.

Answer

CEO Thiago Maffra explained that quarterly commission costs are skewed by revenue mix and the Expert event's net impact was zero. CFO Victor Mansur attributed higher credit revenue to new, more profitable margin loan operations and the repricing of renewed loans at higher NII.

Mario Pierry asked for the expected closing timeline for the Linx deal, the rationale for the accounting change, and whether recent price hikes were too aggressive and caused the slowdown in TPV.

Answer

CFO & IRO Mateus Scherer Schwening clarified that reporting Linx as a discontinued operation is an IFRS requirement and the deal timing is subject to regulatory review. Strategy & Marketing Officer Lia Machado de Matos explained that Q1 repricing was a necessary response to interest rates and that the TPV slowdown was driven by both this short-term impact and a weaker macro environment, not excessive pricing.

Mario Pierry asked about the company's pricing outlook, questioning if Stone would pass on lower funding costs to clients amid a tightening yield curve, given concerns about market share. He also inquired about the percentage of the client base that has been repriced and followed up on market share trends.

Answer

VP of Finance Mateus Schwening stated there are no plans to change the pricing policy, as current rates are aligned with the assumptions used for the repricing wave. He clarified that Stone is not losing market share in its core MSMB segment, which has been flattish. Executive Lia de Matos added that the long-term TPV guidance implies continued, albeit slower, market share gains driven by new solutions and distribution enhancements.

Mario Pierry requested more details on the Q1 2025 repricing initiative, including its scale and expected impact, and asked for the rationale behind guiding for basic EPS instead of the more commonly used fully diluted EPS.

Answer

CEO Pedro Zinner confirmed a substantial repricing initiative was executed in Q1 2025 with record-low churn. Executive Mateus Schwening added that the repricing was extensive, calibrated against a ~15% yield curve projection. Schwening explained the decision to guide on basic EPS was to avoid the volatility introduced by accounting rules for diluted shares and to prevent a 'double counting' effect, as share-based compensation already flows through the P&L.

Mario Pierry asked for clarification on why the MSMB take rate of 2.58% significantly exceeded the 2.49% guidance, especially given the dilutive mix effect from PIX. He also asked for details on what changes were made to the credit card product to make it more attractive and drive its growth.

Answer

Executive Mateus Schwening explained that the higher take rate was almost entirely due to the better-than-expected penetration and performance of the credit and banking solutions, not pricing changes. Executive Lia de Matos clarified that the credit card product is still in its early scaling phase, with the company taking a conservative approach to risk and still fine-tuning the value proposition for micro and SMB segments.

Asked about the drivers behind the strong 50% TPV growth in the LMEC (Large Merchants, e-Commerce, Cross-Border) segment and its profitability compared to the MSMB segment, questioning if this mix shift was tempering the net income outlook.

Answer

The company confirmed that the LMEC segment has lower margins than MSMB but is still accretive to the bottom line in absolute terms. The accelerated growth is attributed to a combination of factors, including the integration of their online payments platform, offering banking solutions to larger merchants, and gaining new clients in cross-border and e-commerce, rather than any single driver like sports betting.

Questioned the math behind the updated guidance, pointing out that the increase in expected provisions seemed to outweigh the increase in expected NII. He asked how the bank planned to maintain its net income guidance with this apparent gap.

Answer

Executives explained that the guidance is supported by other business lines like social security and consortiums, which contribute significantly to income. They also noted their NII guidance is conservative, administrative expenses are slightly down, and results from Previ are also helping to balance the equation. Their commitment is to deliver high single-digit net income growth.