Neha Argawal

Neha Argawala followed up on loan yields, noting a Q4 pickup and increased risk-taking, asking if this implies a future increase in 90-day NPLs. She also sought confirmation if the loan yield increase was primarily from higher risk in Brazil and Mexico, rather than an increased portfolio share in Argentina.

Answer

CFO Martín de los Santos stated confidence in current risk levels and models, booking expected losses in advance, and did not foresee surprises in 90-day NPLs. He clarified that loan yield increases were not primarily from Argentina, where credit issuance was more cautious in Q4 due to macro instability. President of Commerce Ariel Szarfsztejn added that the philosophy is to grow the credit book with a healthy portfolio, with high margins in Argentina and Mexico, and overall NIM improving quarter-on-quarter.

Neha Argawala followed up on NPLs, asking if increased risk-taking would lead to higher 90-day NPLs in upcoming quarters, despite pricing. She also sought confirmation that increased loan yields were primarily from higher risk in Brazil/Mexico, not an increased portfolio share in Argentina.

Answer

Martín de los Santos, CFO, stated that MercadoLibre does not guide but is comfortable with its risk management, as models are improving and good spreads are maintained, with expected losses booked in advance. He clarified that they do not foresee an increase in loan yields, with growth similar across Brazil, Mexico, and Argentina. He noted caution in Argentina in Q4 due to elections, which temporarily reduced credit demand. Ariel Szarfsztejn, President of Commerce, added that their credit philosophy focuses on healthy book growth, pricing risk appropriately, and that NIM improved quarter-on-quarter, reflecting confidence in their models and collections.

Neha Argawal requested more details on the upcoming changes to XP's credit card proposition and confirmed whether the company would maintain its strategy of focusing only on its captive client base.

Answer

CEO Thiago Maffra confirmed XP will not target the open market and will continue focusing on its own clients. He explained that as part of a new client segmentation strategy, XP will launch new credit cards in Q2 2025 for its 'Unique' (BRL >3M AUC) and Private Banking clients. These cards will feature superior value propositions, benefits, and rewards tailored to these high-end segments, with no material impact on expenses.