Thiago Bovolenta Batista

Thiago Batista asked about the intended completion timeline for the new BRL 1 billion share buyback program. He also inquired about the flattish IOC (Income from Operations with Clients) in the equity business quarter-over-quarter, despite Bovespa reaching an all-time high, and client behavior regarding asset allocation.

Answer

CFO Victor Mansur stated that while no specific completion timeline can be given for the buyback, XP is committed to executing it fully. CEO Thiago Maffra added that the company maintains a high capital ratio to seize opportunities in a potentially volatile next year. Regarding equities, Maffra noted that retail clients tend to lag market movements, and while demand for funds (REITs, primary offerings) is increasing, a significant shift to equities or other products has not yet occurred, with clients still favoring daily liquidity CDs.

Thiago Batista asked about the intended completion timeframe for the BRL 1 billion share buyback program and observed that the IOC in the equity business was flattish quarter-over-quarter despite Bovespa reaching an all-time high, inquiring about client behavior.

Answer

Victor Mansur stated that the company intends to execute the entire BRL 1 billion buyback program but could not provide a specific completion timeframe. Thiago Maffra added that the company maintains a high capital ratio and is holding capital for potential opportunities in a volatile next year. Regarding equities, Maffra noted that retail clients are lagging, with no significant change in mix yet; demand is increasing for funds (primary offerings, REITs) but not for equities, as clients continue to favor daily liquidity products due to high interest rates.

Thiago Batista from UBS Group AG posed two questions: first, about the specific initiatives intended to accelerate net new money in the second half of the year, and second, whether management remains comfortable with the revenue guidance provided for 2026.

Answer

Chief Executive Officer Thiago Maffra expressed confidence in achieving BRL 20 billion in quarterly retail net new money. He outlined key drivers including channel diversification, development of new competitive products, enhancing IFA productivity through technology, and improving client service models. Regarding guidance, Maffra stated they are still pursuing the target for next year, albeit likely at the lower end of the range, and are aiming for around 10% revenue growth for the current year with an expected acceleration in the second half.

Thiago Bovolenta Batista inquired about the significant quarterly increase in risk-weighted assets (RWA), particularly in market risk, and questioned the high productivity of internal advisers, who constitute a small part of the sales force but contribute disproportionately to net new money.

Answer

CEO Thiago Maffra clarified that the 60% net new money figure includes all B2C channels, not just internal advisers. He attributed the advisers' high productivity to superior data-driven sales management tools, which he plans to scale across the IFA network in 2025. An executive also explained that the RWA increase stemmed from a regulatory change allocating credit spread risk to market risk, coinciding with an expansion of the corporate securities book.

Thiago Bovolenta Batista inquired about the recent increase in XP's headcount, specifically the number of new B2C advisers, and asked for guidance on the company's long-term profitability target, such as Return on Tangible Equity (ROTE).

Answer

CEO Thiago Maffra clarified that 300 of the 400 new employees were B2C advisers and explained that a regulatory change affected the total adviser count. CFO Victor Mansur projected that XP's ROTE could reach the mid-to-high 20s after the current guidance period is complete.

Thiago Batista asked about the expected effects of the One App implementation, specifically whether the biggest impact would be on cost reduction, consumer experience, or cross-selling. He also inquired about the anticipated impacts of regulatory changes concerning real estate credit funding and FGTS advance regulation.

Answer

CEO Mario Leão explained that the One App's primary drivers are improving customer experience (UX/CX) and enabling hyper-personalized, streamlined conversations to increase transactionality and convert mono-product customers. He noted that cost reduction would be a secondary benefit over time through increased digital interactions. Regarding regulatory changes, Leão viewed real estate credit measures positively, highlighting Santander's strong market share in home equity. He acknowledged that FGTS regulation changes would reduce its share for Santander and the market, requiring a shift in credit appetite to other products like payroll loans, where Santander is growing.

Thiago Batista asked about the expected effects of the One App implementation, specifically regarding cost reduction, consumer experience, and cross-selling. He also inquired about the anticipated impacts of regulatory changes, such as funding adjustments in real estate credit and new regulations for FGTS advances.

Answer

CEO Mario Leão explained that the One App's primary driver is to enhance customer experience and personalization, leading to increased transactionality and cross-selling for mono-product customers. He noted that cost reduction would be a long-term consequence through more digital and AI-based interactions. Regarding regulatory changes, he viewed real estate measures positively, expecting continued growth, but acknowledged that FGTS changes would reduce its share for the market, requiring a shift in credit appetite to other products like payroll loans. CFO Gustavo Alejo did not add to this specific question.

Thiago Batista from UBS inquired about the feasibility of reaching the 20% ROE target, asking about the key drivers and whether a decline in Brazil's Selic interest rate is essential for achieving this goal.

Answer

CEO Mario Roberto Opice Leão acknowledged the 20% ROE target is a key ambition. He stated that while a high Selic rate presents a challenge, the bank will not rely solely on its decline. He outlined other significant levers, including a robust efficiency agenda, disciplined NII growth from both credit and liability spreads, and expanding high-growth fee-based businesses like cards, consortiums, and insurance.

Asked about the bank's efficiency ratio, which is higher than historical levels, and whether significant improvements can be expected. A follow-up question concerned the SME growth strategy, specifically whether the focus would be on smaller or medium-sized enterprises.

Answer

The executive stated they aim to return to an efficiency ratio in the '30% and some' range. This will be achieved by making the low-income segment profitable through a drastic reduction in the cost-to-serve, combined with revenue growth. On SMEs, the strategy is to grow across three blocks: very small, small-to-midsize, and large SMEs, with a balanced approach depending on market conditions and profitability, rather than focusing on just one sub-segment.

Thiago Batista from UBS asked if management feels its retail app is now 'state of the art,' making branches secondary, and whether the bank's strong asset quality performance is due to its specific strategy or reflects a broader market trend.

Answer

President & CEO Milton Maluhy Filho stated that Itaú's superior credit performance, particularly in credit cards and auto loans, is a direct result of its long-term portfolio management strategy, not a market trend. Regarding the app, he expressed satisfaction with its evolution and NPS scores, clarifying the goal is to offer clients a choice of channels (digital or physical) without forcing them into one due to a lack of offerings in another.

Thiago Bovolenta Batista from UBS asked for Itaú's positioning in the private payroll loan market, why incumbent banks seem less active, and the potential for cannibalization of more expensive credit lines.

Answer

CEO Milton Maluhy Filho provided a detailed overview, noting Itaú already holds about 30% of the existing BRL 40 billion private payroll market. He explained that Itaú's competitive advantage lies in its deep understanding of corporate risk, which is crucial for this product. He stated the bank is being disciplined, declining to underwrite credits that don't meet its risk-return criteria, and sees the product as a healthier financing alternative to credit cards.

Thiago Bovolenta Batista from UBS asked why the financial margin with clients guidance is significantly higher than portfolio growth guidance, and why the market margin guidance is below the 2024 run-rate.

Answer

CEO Milton Maluhy Filho explained that client margin growth is boosted by mix effects, liability management, and working capital. The more cautious market margin guidance reflects the difficulty in projecting trading results, higher hedging costs due to interest rate differentials, and overall market uncertainty. He declined to provide a specific payout ratio target.

Thiago Batista questioned the sustainability of the bank's high adjusted ROE of 24-25% and asked if there were plans to increase the frequency of capital distribution from its current annual cycle.

Answer

CEO Milton Maluhy Filho attributed the high ROE to a benign credit cycle and, notably, a structural improvement in wholesale banking profitability. Regarding capital, he stated that an annual distribution cadence remains prudent due to various regulatory uncertainties (IFRS 9, Basel III). While an extraordinary dividend is expected at year-end, more frequent payouts are not planned for 2024.

Thiago Batista asked about Bradesco's strategic positioning in the low-income mass market segment and the future role of its digital bank, Next.

Answer

CEO Marcelo Morojin affirmed the bank's commitment to the mass market, emphasizing a digital transformation with high personalization for remote clients. He highlighted the strategic importance of the Bradesco Expresso banking correspondent channel, which is being upgraded to a B2C platform with enhanced CRM intelligence. The specific strategy for Next will be detailed at a later date.

Thiago Bovolenta Batista asked about the bank's ROAE of 14.4%, noting that the insurance group's high return implies a much lower return for the core banking operation, and questioned which segments have the most room for improvement.

Answer

Executive Marcelo de Noronha identified mass retail as the primary area needing improvement due to its high cost to serve. He contrasted this with the wholesale, high-income, and principal client segments, which already generate high returns. Executive Cassiano Scarpelli concurred, stating that enhancing productivity and reducing the cost to serve in mass retail are the key levers for boosting the bank's overall ROE.

Thiago Bovolenta Batista questioned if the bank's recovery is proceeding faster than anticipated, given its ROE targets, and asked for the financial impact of the Rio Grande do Sul floods on the insurance business.

Answer

Executive Marcelo de Noronha confirmed that the bank is 'moving faster than what we previously anticipated,' with results tracking above the implicit guidance. Regarding the floods, he and Executive Ivan Gontijo stated the BRL 100 million net impact was fully provisioned in the quarter, with no further effects expected on future results.

Thiago Bovolenta Batista from UBS inquired if the bank's profitability rebound is occurring faster than initially anticipated, referencing the 2025/2026 target for ROE to approach the cost of capital. He also asked for the specific financial impact on the insurance business from the flooding events in Rio Grande do Sul.

Answer

Executive Marcelo de Noronha confirmed that the bank is 'moving faster than what we previously anticipated,' with results tracking above the implicit guidance. He clarified the ROE target timeline is closer to 2026. Regarding the floods, he stated all impacts were fully absorbed in the current half. Executive Ivan Gontijo quantified the net impact at BRL 100 million, confirming no further effects are expected in future P&L statements.

Thiago Bovolenta Batista from UBS inquired about the approximately 9 million active cardholders who are not currently transacting, asking if this is a concern and what strategies are in place to reactivate them. He also asked if the recently announced refinancing program could help improve the number of active transacting users.

Answer

President and COO Youssef Lahrech explained that this is a common occurrence driven by Nu's conservative initial credit limit assignments. As customers demonstrate good risk behavior, their limits are expanded, which in turn drives transaction activity. CFO Guilherme Marques do Lago added that the new renegotiation program, announced in Q2, is expected to have a mild positive impact and could help foster more card activity.

Thiago Batista asked if Nu's credit card business in Brazil is approaching maturation and questioned the cause of the recent contraction in the credit card division's net interest income (NII).

Answer

CFO Guilherme Marques do Lago attributed the NII contraction to a mix shift towards more affluent 'Ultravioleta' customers, who command lower interest rates, and the deliberate slowdown in the expansion of high-yield Pix financing. Chief Product Officer Jagpreet Duggal asserted that the credit card business is far from mature, citing significant growth opportunities in re-engaging inactive users, expanding in the high-income segment, and penetrating the small business market. He noted Nu's market share by purchase volume is still only 14%.

Thiago Bovolenta Batista asked about the potential for further user expansion for Yape, given its high penetration in Peru, and whether the 2026 user target includes international operations.

Answer

Chief Executive Officer Gianfranco Piero Ferrari de Las Casas clarified that the 16.5 million active user target for 2026 is for Peru only. He acknowledged that user growth will eventually slow, but emphasized that the strategy has evolved from acquisition to deepening usage and, most importantly, generating income, which is now the primary focus.

Thiago Bovolenta Batista requested details on the client profile and strategic evolution of the Global Account, and asked whether the current levels of NPL and cost of risk are normalized or if further improvements are possible.

Answer

Executive João Vitor Nazareth Teixeira de Souza described the Global Account strategy as an 'arbitrage' to attract premium clients from Latin America and offer them USD-based products, noting these are Inter's best clients with high ARPAC. Executive Santiago Stel explained that future asset quality levels will depend on the portfolio mix, as new products like private payroll scale. He emphasized the primary goal is to maximize the risk-adjusted NIM, not just minimize NPLs.