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ITUB Itau Unibanco Holding

Participants
Candido Bracher Current CEO and new Board Member
Milton Maluhy Filho Current CFO and CRO and New CEO
Mario Pierry Bank of America Merrill Lynch
Tito Labarta Goldman Sachs
Geoffrey Elliott Autonomous Research
Thiago Batista UBS
Jason Mollin Scotiabank
Carlos Gomez-Lopez HSBC
Call transcript
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Operator

Good morning, ladies and gentlemen. Welcome to the Itau Unibanco Holding Conference Call to discuss 2020 Fourth Quarter Results. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded and broadcasted live on the Investor Relations website at www.itau.com.br/investor-relations. also this is [Operator presentation slide available site on Instructions]. A

Act Maluhy Mr. Filho, forward-looking let this CFO; conference of Group being CFO Alexsandro Board Reform any call Candido performance forward-looking me of are anticipated Bracher, proceeding, With a and Relations conditions, from statements differ the XXXX. materially could in mention Paulo Litigation comments new Officer; current of Intelligence. today Head Harbor and us Before factors. member; and CRO in Safe Sao market Milton current and that are Executive Jacob, risks new and CEO that other in Investor Marketing Actual the Renato made Securities Chief Lulia new result as of macroeconomic under and Broedel,

Mr. Candido turn comment Bracher will my available XXXX for results. is quarter call question-and-answer the will over pleasure be fourth Bracher. now Afterwards, session. Mr. It management a to Candido First, on to

Candido Bracher

thank and our everyone, XXXX morning, call. earnings you Good quarter fourth attending for

get we some I'd and like digital commercial, our financial into highlights performance, about from recent the ESG of operations. to talk the Before

reached origination of digital creates fourth that individuals. higher client’s and in So single credit origination also are the not of efforts promoter optimize only that service customers direct XX% of proud to and employees’ this result retail in net a In an car credit loans, an I'm closure during Last XX the see net to base quarter. out not XX higher of financing the XX can the this card our million, quarter digitalization the the to continues possible the for opportunity represented moving record our individuals payroll, important by environment but engagement XX.X increased which by therefore, to the points This to This our quite mark in to challenging the led beating crisis. The which Slide points. last footprint, now for improved growth least, years, portfolios. mentioning worth an client to The report client was driven X, you of two led of increase we score reached course also of the working over points mortgage criteria, stronger clients in portfolio, to and a alone. our the [indiscernible] XX that’s loan quarter. of but by best promoter internal promote improve. further seasonally due branches period. digital target It’s X.X% score XXXX, also this million

we Now and light some on on digitalization technology Slide our some X, KPIs. of more will share

to in to invested only expect We have investment constantly Not as in better. we XXXX much XXXX. increase continue as in we twice have invest our invested but that, and technology

solutions in platforms than in implementing our in to features managed XX% XX maintenance a the resulted While doubled the by infrastructure investments expenses that the clients this reduction solutions highlight developing this Also in important more and XX%. for months. on in to our last we digital decrease period,

digital services sanitary The of of same the has customers forced nature in of through in We crisis available platforms the many the migrate channels. over XX% digital features number to and also bank period. interactions increased their for this by clients our

of over even than first the of the which new XXX% This after the acute However, of distancing. seen in channels behavior more can of these rise digital social grew weeks. the also period two end use more opening accounts, be continues to

mind, the possibly data we the in in which stake through last the we of that to stake spin-off technology XXXX, Another portion team December and X,XXX In XXXX, like intention stake these our With developments directly throughout acquisition in of in X, With to the Meeting ago, than regulatory and any approval. value, is update Slide Moreover, our scientists, XPart, recent on currently have of the creating the through key this later digital in employees you November, regarding is been On contingent XP of company focus X.X% team. General capital part we of the remaining more remaining a Inc. sell Extraordinary shareholder sold ZUP. XP our into on announced the our strengthen largest Investimentos. country. of strategy professionals days the and pending the regard, have technology in XXX approved company, of two I’d our spin-off to part. this added, the

highlight to couple points. important it’s think of I a

favorable First, for date is the listing of for shares of distribution XXX up will the close XPart. after cut-off days authorities, company, of which and BX there new to the to The course. on shares opinion the in be the of due regulatory informed listing occur will

moving we equity commitment ESG reinforcing the XXXX, an the receive in in on in on the the same our exchange, as list hold happy Slide firm's they socio-environmental type business proportion Lastly, intensified Itau shareholders society. now highlights role I'm the in Slide transforming company the when and stock sustainability Unibanco. finally holding and amount, shares XPart new to X, in responsibility will X, our to its report,

BRLX.X in the Itau and in awareness aware, pandemic campaigns. more donated its of donation equipment fight and The acquisition shareholders protective research, and than country. to medical the was As you’re billion Unibanco controlling well invested

And Plan partnership initiatives Amazon in the out were launched four the also Santander. with of prioritized. proposed XX and Bradesco We

First, fighting illegal in deforestation against chain. the production meat

direct engagement producer’s Here, supply. we indirect and expect of the traceability for

stimulation finance the to branded cooperatives and sustainable BRLXXX cultural the is deal that with small be banks for will cultures of three the businesses. industries of offered million, which and by finance Second directing chains sustainable

projects stimulate And whereby the in activity. economic regularization is socio-economic chains. that we to regularization to Third, and the at recommendation the region, unlock land and expect promotion the security how system production financial fund activity economic can support potential of of research fourth, new and bio-economy, legal,

a donations of planting hosted on where financial we XXX,XXX focused XX,XXX and and native Amazon, the trees. also than the promoted conference We sessions, for XX more spectators companies market participants, held and

Lastly, I'd bank will SASB year. and the like TCFD guidelines develop implemented reports, the has mention in that and them the coming since further its in XXXX, financial to

end, highlight are America, ESG defined recently sustainability was like Slide Now and This operation $XXX sustainable of issued launched connected I'd eight on finance environmental business. another with its in related issuance was for that million into first we Positive framework which to a To the to framework. This Latin whereby the allocation we X, Impact is in eligibility the those Tier securities debt criteria. step Commitments by kind funds be have categories, raised in X through the covered lines. strongly in which to funds bond. and business of our can we social The this targets sectors we integrating and allocated raised agenda, financing into

the how page, we bottom On financial of we the in performing are highlight the some conditions. of

already for We efforts. companies origination BRLXX.X that XXXX. sectors, launched BRLX mark disbursed generation billion led surpassing target billion the target these Positive renewable finance BRLXX.X But We expectations. ahead which to set billion to we energy were Impact of of up ended credit and originally more an our of a well by we directed new BRLXX women billion by have to In entrepreneurship agenda, sales.

ROE X.X% the website. an check like in of offset non-interest net to our net interest to this This invite financial the credit, quarter period income in direct not higher billion in Relations Slide the fees growth future the expense. resulting reduction our of seasonality Investor partially Commitments of X.X result The were will cost into Positive entered X, BRLX.X income. a of effects I'd seasonally in On of a in growth we trend. by highlights. affect recurring the Impact updates XXXX income with expenses bank's in downward was Lastly, We a structural addition fourth of you These to move net XX.X%. a and

the show in to quarter. X.X% Finally, and portfolio loan grew positive the trends continues

like presentation. the effects of to of portfolio this As usual, the that on review each of page. I'd some highlight with over seen the trends on be course we’ll Slide loan these can this X, Starting

end record credit for continues demand as The first such lower by financing lower and than XXX% rates credit portfolio, driven an more posted important The debt the growth risk, origination of recovery had funding activity vehicle due individual’s row period access of them over quarter. loans related with strong the through breaking holiday bps, in and quarter, fourth mainly important a to in is and to the a mortgage. more year due fourth seasonally an in as growth products XXXX. these exceeding clients’ the payroll raised stability, in the changes result regulatory of show a to latter products. demand economic at collateralized card After same in the in quarter, resulted which allowing therefore, a which quarters to several which XX Credit a the need to stronger This season. [ph] had of was

also the during portfolio, of case the year, fourth the is every the a We payment quarter observed salary. in personal frequently XXth decrease which loans until of the

and lines. trend loans reduction a growth and observed reduction This SMEs of due slowed clients. our highlights portfolio. its this pace product the guaranteed financial is also lower to our linked to The sponsored better We of the health portfolio rejuvenation program, reprofiling government in loan personalized down credit

area. this were last quarter's products As you responsible may those growth in recall, impressive for

companies’ the by large mainly securities portfolio to due credit grew quarter, Finally, corporate the in X.X% portfolio. the

higher the XX, even larger than the spreads now own loan our was naturally much lines. salary, the with of by capital partially a of These inflection marginal XXth well credit in and the an and payment quarter average quarters continuous in point this the to previous the America. revolving be financial effects of driven linked Latin the reduction X% as balance Moving as seasonal in margins for in that offset slide was fourth effects additional by fourth the bank's portfolio increase shows of in -- which balance amortizes operations margin smaller by scale an were proved though portfolio, and clients. to the the as such the The which working to quarter mix, higher growth by change the in effect

for when the customers, BRLXX.X see is This representing lower the loans a than with by On XXXX is as billion, to higher lower third compared the to the a outside mint of XX.X% quarter. points grace updated XX of The NPL from a period an the looking almost the two This XX day’s related entirety now, reprofiled finished demand is quarter. our we from portfolio which driven factors, points well X.X%, XX reduction to X% increase of also which [ph], dynamic ratio the quarter. basis was the XX slide is a amortization. can the of the of when book. reprofiling to due You to this grace reduction increase previous already when figures reached compared portfolio first of basis end This loans book. incentive period. as third by the our at XXX the

these NPL ratio second day term the of The the balance. reached effect the ratio well X.X%, refers of XX quarter. below delinquency reduction portfolios short to the arithmetic is The previous of which

on increase flexibility the As we X.X% portfolio. well-known slide in impairment than into forecasted decreased were payment effects of lower better by of period, reduction is for we driven KPIs that in off allowance the an our now, a was in XX, which paying quarter, the It repayable. is corporate also cost early same previous On volume mainly the These literally. addition our by credit losses the portfolio we the quality quarter, quality from credit of discounts offset as to granted of offering of in The more partially of in this XX% the client. strategy delve loan by said the clients the a the originally credit pandemic. activities, days terms performance corporate by large of seems of driven

ended a ratio was by up in to increase they Despite important intensity is SME from quarter. been performance the grow, by NPL NPL unnaturally of provisions’ declined While levels. natural the down ratio This in This it good the in XX reduction to increase the deterioration XX individual’s coverage loans portfolio. reprofiling the the quality program basis consuming the was of short term balance have performance the ratio XX balance due The this portfolio offset this to that credit coverage points of effect XX we mid-March given continues ratios highlight NPL credit reached points, Brazil. expected partially lost that percentage XXXX. than the days XXX%, were lower the to the in of the again, should

levels. Now returned to basically the they pre-pandemic

an the from with representing is levels. show Finally, credit it of financial billion, when individuals their BRLX.X market that important increase quarter. that of gains banking with ratios reprofiled the our the quality volatility SMEs interest and which sales book. exclude at performance higher the the more This portfolio, team our our marketing [ph] Slide is we the best in in mention, The and inflation of are also historical XX.X% a operation in the was loans result efforts financial boosted and rates. XX, of revenues securities margin we reached noteworthy, to margin

period, at well acquisition, was period. sharing, pension commercial operation. we had fees, On expenses campaigns, the XX, guided the of Slide to This in our of growth effects operation, our effects X% seasonal due in Brazil. to quarter, to a clients quarter X.X% in the higher higher beyond These like of quarter, the layoff reais. impact a the the of reais effects a assets the volume higher but we basically investment Latin X.X% operations, the noteworthy of which us contraction of more in unfavorable our in is of economic stronger and operational quarter. asymmetric to rates, a liabilities real and grew grew their the and expenses inflation variation expense pay profit that if This performance non-interest by their seasonally we the preferred which that due took exchange the contracted grew were normally transfers, line. show issuance to show method. to also of highlight rate the period. in traditional mainly management even as training by in in revenues and in from opportunity on by fell in the banking Now, level the payment fee explained asset in on which by the basically in Insurance fees not to offset was spite this PIX was business performance XX.X% strong the impressive to America to plan due related of third Slide mainly fees in Also due brokerage new the the remuneration we due effects in current quarter. any solutions the XXXX, XX.X% what card to account discount via revenues exempt year-end in year, X.X% transactions as as and XX, expected is brings inflation activity, Expenses same I'd fast concentration

to As of upwards in points [ph] XXXX. and presentation, close pressed field, us movement in restructuring OpEx that expense to and X.XXX the branches, We've our mentioned in result the turn that mortar the hired is in our these to alone. brick as Last professionals teams of technology XX XX -- people. allowed we Zup due mainly -- but professionals This our this acquisition. previously least, sorry, increase fourth in in to should Service added reduce showed addition technology growth beginning engineers but XX,XXX the investments of Foreign quarter in not roughly efforts it X,XXX X,XXX approximately workforce an the our were This a technology.

luck, complete my as mainly we XXXX. finishing quarter part success, that XX.X%. hands. four the as in pass presentation, with in I Now journey gives due also and and support the you ratios of analysts to to to net our bank. and in XX now a income on the Investimentos. This part I for years held that CEO in your to of this, the market Milton, due your I pride. And bank was last so the test well and as effect happy floor investors one of Slide Milton, I'd we of that like officially the capital This my XP hands satisfaction our me sale higher good of for the Well finish in to investments expectations can had for the thank increase the this journey. an throughout basis all set at CEO, new year show your interactions, and leave points tier XX, the able very our full was he

count my you You best. the can now Board All know the Directors. that of continue on support to from

Milton Maluhy Filho

Thank you, Candido, kind thank you words. for the

interactions daily this responsibilities. receive pleasure that It Our and succeed great will it with was and you role challenge discussions be missed. sorely but great be will a I to

our Before on executive for about implemented we changes our were that team. recent talking would that spend a expectations were Slide XXXX, in like we the I discuss -- XX, to minute

closer With bank. hierarchical start the to our to level areas, within even intention simplify we structure being reduced and the business of the

and Executive units, the people. very is who the seasoned as firm, the of part doubled key seven we our an XX were integral previously members and of areas, Division, executives of I of comprised areas of in them Committee, IT Executive on are our focusing So consider the now commercial including size charge Those Committee which we now business other of have business. relevant

working, draw is maintain has the of think to detail communities it's thereby business which conclude, objective -- even areas your front speed, the The would at not to this of area, focus creation as payments be attention autonomy bank's have role. to I To have and But of structure. and to through our the us to desk, better IT more specific on such enormous value. worthwhile more business brought our every the clients closer. ways needs and New us the I like for understand units structure to new of each our

our Among a vaccination put for still unfortunately will said a economy. months lives, in economy. that, have and numbers important will to key fatalities the be macroeconomic expectation brings high factors, our scenario the context. element The immunization our other an presenting be scenario before mention the in are that to we there of therefore country. increase of Brazilian and delays shown important level infection, experiencing uncertainty slide, few normalizing It's population. restoring assumes This Having an operation, recovery the our in the the the Brazilian macroeconomic throughout no and next herein important to to past forecasts. Moving it's presented in further in country's

carried growth We expect in worth mentioning the of of GDP XXXX. this [ph] quarter statistical growth X% It of the XXXX. basically last is reinforces from

We interest remain the the and inflation at year control that expect basic rates range X.X% an the of Central also by and within ending Bank. increase will under the defined

we expect rate Finally, stable albeit unemployment a high at still level. a

Here, context as these remain will it's But people due jobs looking of for creations be reduction job more effects formal the positive, important to by throughout half believe aid greater as a in will second we XXXX. programs. to government of number give that of the offset

perspective, the Going scenarios. are considering at Slide our we we talking were believe test about we appropriate expect for to internal we capital basis this our are for the from liquidity, the and presenting for XX, levels stress operations guidance perspectives Therefore, that XXXX.

portfolio lines rate year. loans, resume and consumer such of to the of between the first, be risk and Expansion this and the mainly financial target loans, again expect scenario. At portfolio half the it's of change margin. by over XX.X demand second the the year recovering to over level declines, target. lower mortgage we economy the mix mentioning average in of assuming auto margin due stable that of supported to the rate now will by below remuneration growth one line we half should progressive this liability this our and the as the but interest credit that in interest of and revolving Recovery credit meet the segments a individual's slightly ended for or of worth on base exceed its tier impact even XXXX Here's rate the capital in although and our lines XXXX higher first in we products, capital the lower with portfolio remains of force and driven expectation NIM our believe loan

Investimentos. Payment revenues sale growth it's growth in activity. of Bank -- Now PIX the with Central Despite service we impacts the the spin in and see recovery from off Brazilian that insurance with resulting also off and First line trend the important XP Solution negative in rollout, economic the

And Here that to XP this year in we one month it's this important have guidance. had a year, we only mention last year, full of Investimentos.

in are consideration we months taking XX figures. XP our without So

mainly Although in the we Brazil's in reduction approval cost and strong still by recovery. need loss driven services. of performance capital products the Fed market the new the and anchored for this of expectation of and transaction. credit economy launch the channels, in Progressive activity Then would the bank's expected model be

Strategic reduction the the continue model to management our changes operational bank's usual will of However, coming will long-term. increase in benefits and the balance scenario in bring the impact on and expenses. investments efficiency expect the in billion projects efficiency nominal the relevant technology, in as conditions platforms, promptly BRLX.X based to our an in approximately quarters, cost which medium react positively structural the would This financial in the with Brazilian commercial and operational year, macroeconomic new customers. a we of products

present to bank's the increase operations, loan between for potential the X.X% range macroeconomic XX.X% to X.X% impacts the and the its figures X in of now and X.X% expect consolidated We our projections and we for our points. we the the X moving Slide Now uncertainty percentage Brazil. to guidance decided scenario gross few high in here. and portfolio Due in XX, to of

to the the is clients in X% expectation in consolidated X.X% and X.X% to Brazil. the or financial of X% For margin with growth NII, figures for

consolidated and BRLX.X the in year billion expect financial BRLX.X billion billion Brazil. margin figures between the to and BRLX.X BRLX.X We billion end market the with and the between in

the that year BRLXX in we end in figures, the between and between and expectation BRLXX.X BRLXX.X billion Brazil. credit, operation the the is of and billion that cost consolidated whole billion billion For BRLXX our

into Slide It's not a that spin-off I consolidated any revenues, important insurance as of expectation XP for additional our Brazil. in X. did between is in in we and year January account here coming disclosed to result mentioned from taking from fees, X.X and X.X this before, as figures revenues growth highlight For the

for was in expenses, and technology figures our a in a commercial as considering is platforms the growth the in or previous of As reduced our in non-interest This and Brazil. we both mentioned contraction slide. the X%, investments on consolidated expectations nominal for higher the range

scenario I Finally, that abrupt may the the effective present, With guidance social have contribution and in income this on and to year end and any Q&A may conclude rates and in the We session. between just we of once based a in change and figures, between expectations should the tax Brazil. XX% emphasize in lead the here XX.X% revision consolidated XX% XX.X% the start and this presentation, expectations the economy macroeconomic period. is for we more the our complete that present

Operator

go and the ahead. Ladies America. Mario now from Please question-and-answer we Pierry Instructions] will Bank begin gentlemen, with session. Our question comes of [Operator first

Mario Pierry

morning, everybody. Good

the look the us. biggest both few ahead, Candido I when the payments, look with And the all Or new have entrance Is the of growth or guidance is regulation bank that role. are bank? over especially of to of about very open in the the for wanted to this a all, it rate players, of that X.X%. threats loan bit the portfolio the growth, nominal when and wish congratulate of growth to environment? the what is big we for five especially profitability had new next second years, or more the the instant Milton. and Milton, banking techs? wanted when my the FinTechs -- creation very look then real we you do all two of last question work here you think I you XX.X%, of questions, the your specific, to for interaction in luck to is enriching the on of you've Brazil all Milton And you’re potentially of I good implies forecasting years First that the to GDP done was main of little it source related X.X% low concern at little considering these

why be place. able government So programs growth portfolio given inflated was because could the to discuss you their can assess the all SME year, wouldn’t be it we in this next of year

a large can maybe Thank us So if down by broken corporates, breakdown you for you helpful. be and XXXX, I you. growth of think individuals give loan expectations SMEs that’d

Candido Bracher

your you much, you Well the for Thank beginning. at Mario. very words thank very

Milton Maluhy Filho

Thank you, much. very Mario. Thank you

we'll be scenario affects also And this the in grow the to be should touch last for still which a would those business revenues say, business. we that what with close different the We in year, Talking opening of would because seeing answer, but trends an interest impact. macro wouldn’t should would I say, and these environment. important yes, specifically to But is direction. we challenges that growth hard very to be year, And say moving what quite transforming very, portfolio. five in in I used very, hand on the few I is throughout all XXXX accelerate be different market digital but the in very, create not cautious, be the First we new market above challenge from few to seeing or as towards maintained, That crediting in competition this would very scenario is and the something saw and we and working a the when keep still years We side. a regulation, important ahead, the talk bank, about last be and saw especially scenario long-term. that of loan should coming during implications to our scenario. say, banking. coming Talking we the big of only our lines I budget, don’t one It's in talking in We’ve months rates. including working you about last should about we markets, see year. very details of some wholesale it It's forward would we should movements rates, about well. think years. We have we this looking positive do of forecast pandemic customers. we market, new very, credit anticipating do the have from should the and be believe I was that I effects closed easy have something year, we believe low should be working that all ourselves a movements in ahead, a believe points. an major ahead in been the with be for lines open there the still were And And the [ph] we We've many on hope low portfolio view for the reported capital have of the we think different impact, the that the follow very companies should the bank, transformation, we to and grow understand we crisis. the in bank

we a the growing or for way capital, And what that dynamic than are last the year. to in from other seen a very last active some of are external the still had active also in capability We to terms throughout When it very hand, market. expect we markets we've in the the we sheets. a for So this portfolio, And balance don't different transactions. underwrite XXXX the player dynamic activity credit But year. impact look to what fulfill sure, see capital, see important on use will more those our an terms of to because retail we on. underwrite problem, see much sheet opening And bank this be less for we as that balance wholesale see saw grew we to year. to we active capital from

Mario Pierry

clear, up just very That's follow on retail products of year, a terms the what segment, about? quick then in this you most specific excited are growth

Milton Maluhy Filho

I’m say, secured and I'm there Look, about mortgage, the I’m seeing when loans. would I we loans, about believe secured auto are talking about is which talking talking payroll loans, mean, loans, the I

more just part five one due cards personal lot more a to have you those one. three consumption, will and loan other a secured figure, for the believe transaction this the on improve year. And as a we growing well. see But been lines growth basically But So in as credit activity well. recovery the of we give should should the we year to some the points portfolio, and we see

So a we to safe portfolio have more forward. moving grown

Mario Pierry

very thank Great, much. you

Operator

with Our go next comes ahead. Goldman Labarta from question Tito Sachs. Please

Tito Labarta

morning, and CFO just in overall, [ph] roughly A good as for and on luck just echo thank at plugging XX% congratulations, And also, kind Hi, also in the the well. and the guidance getting the as on time also role to of the numbers, on couple you best of first, new midpoint for your a questions each looking role Candido your best Milton, wishes year. ROE your Board. of that

given Just expenses can control you branches quarter? of call Do your second expense Just want XX level? what the year? in beyond term do sort and in the you think two. to maybe question some think you you pressures? sustainable you that can some around two XX% on down Thank revenue think this offset side, revenue level to you take of that’s terms back terms on reasonable it at like there? Or get roughly these of the of your of to mentioned to longer flat you think get is the in thoughts if And cost continue growth help of to sort how to ROE, do deep thinking, guidance and long can you the go to how then this how plus could get You you. pressures cutting can

Milton Maluhy Filho

Okay, very question. Tito. much for Thank your you

midpoint just want be the all number around of XX.X-XX.X. of you to precisely it's number First should if the the guidance, to the take, clarify,

we what we are seeing are forward, a challenge. seeing forward, looking Looking

that the we have pressure with deposits lose, and We When bank. revenues, deposits the a coming rate. within lose We have environment and an the a we on the from profitability rates. you in working also the capital work two revenue, and so of lot of interest impediment. are X% major interest the the site also Those for

cost on the that a for in of that our an capital be return year. So believe be low year in coming between -- in do equity not this reduced interest the coming we the should environment as should years rate, with

is this challenge. So a

still room We are side, on on working still have to we the efficient it. a lot work

have are to creating for our the rate We on our bank. and here generating for We reducing opening agenda. as But of This the are value, opportunity of value on the is space keep we investment. still business focused interest usual or capital, room depending cost the here cost stakeholders. more

return the cost specifically going don't guide, we is the return be Even the of the and on equity. we here neither to and the the So XXXX, neither though future very bank. interest nominal of on capital are the what equity focused, not between for for rate on the return difference

Tito Labarta

helpful. That's you, thank Okay, Milton.

at Just terms midpoint. mentioned then, XX.X or of you in follow one the quick XX.X up the

In payout terms year to resume payout, dividend should should normalized expect we we a expect? or kind payout of back of it your this to what

Milton Maluhy Filho

to repeat you that? I couldn’t please, can Tito, listen again,

Tito Labarta

Sure, dividend we of payout of terms you're about this year think XX.X-XX.X dividend back just like of to also we XX.X%? X normalized expect core should of getting in the you ROE, payouts what the to mentioned on the should midpoint the get or just back Tier and kind you that how that levels

Milton Maluhy Filho

This Okay, XX the any exceeds that any consideration months, capital. way we here we of everything is if the foresee but the in think keep won't policy coming our will change, XX.X. we to we needs distribute investment or also major --

anticipate to now. So it’s difficult

equity the the of in going we depending ago, We’re and the return of table exceeds we’re the be that years keep paying to bank. the and ratios on going same terms assets market to what this risk-weighted two to where released XX.X on

policy didn’t change. So the

Tito Labarta

that go back Okay, to you policy. normalized so

You don’t more expect any restrictions?

Milton Maluhy Filho

don’t. We

Tito Labarta

Thank Okay, perfect. Milton. you

Milton Maluhy Filho

you. Thank

Operator

Research. with Please next Our Autonomous comes go from ahead. question Elliott Geoffrey

Geoffrey Elliott

much all banks need into new going and does clearly the seeing plenty There's the How Inter that the capital Hello, that, the you Nubank you that a both capital any respond over months. others good few to? you for Are luck been behavior an digital thanks very their Brazil for the next question their have past in Series changes raising steps. you? to Banco doing money. taking to with in been of example of G, banks into CX, change of lot the environment going of competitive

Milton Maluhy Filho

for Thank We've we've very a I've as Yes, question. saying some been business been lines seeing seeing your been working environment. FinTechs you much -- seeing where very competitive Geoffrey. competition. we've been dynamic of some of Okay, and a lot

do the them I of to normal investments. way for investments to money -- think raise those series of these kind it's is

capital their is access of until course business markets. the So this normal they

active very here. a are We bank

structure. us capital way the we've been many is we competition for years. This this makes better. a have strong We here very And is the way and believe working

it to of in are focus. best So and yes, we internally it's to bank fine the This see possible lot the doing And we is environment, capability -- years. it's way -- have say, way is coming we to would I compete. our a efforts dynamic compete and grow more the but have the to the a

Geoffrey Elliott

competition any And you're business lines particular where of product, changing? seeing that

Milton Maluhy Filho

seeing Look, only market. saw avoid I figures, past the had happened lot way strong to a a way here interact the we like especially these we but they distribution, the competition very provide have the the assessments with business. and from a the in do apps lines it's in acquiring very movements in also released to the we other But of to there. Sage that for efforts we what on products, side payments, dynamic year with of we provide our we been to are our seeing way commercial the moving lot would that learn the in forward see competition will We’ve of say competition put big the increase bank. We business. clients, we and the investment distribution, not

lot on more payments and are of the competition. focused a investments So acquiring, we’ve seen

of you we companies topics this as they're in bring our they card that a into client. as open coming more new the a very we credit market, business, main market, focused of portfolio. see And mentioned. But they have in on usually the we also specific just are well. customers terms to And two have very so They On we here. client market diverse focused, see type our

that people So my on a we focused we also work here the of to young view when lot the and to have base do still of parameters.

be a here. focusing for So lot is still where quarters. We work this have coming to we do should the

Geoffrey Elliott

Got it. you very Thank much.

Operator

go next Thiago UBS. comes with from Our ahead. Batista question Please

Thiago Batista

Thanks, everyone. questions. two I have

bank. position the sorry continues one of bank first the XX.X had you about with targets. of Milton, target comment of capital X the The the XX.X -- that Tier

overhead why of the reduce cause a question, different let So banks the a XX.X to to the overhead, target or be or this banks, If the used the first used main of not I'm say wrong, of main the questions end not maintain That their cap? not is one. that number? why lower work the capital. number, With be

can business Barclays about business, only, little Conference business let's we're you units? we importance bit also be mentioned hedge the these payments or say The and for talking about second talk one, the say, Itau. during the that are you a of payment EG Can including created about Call, PIX. When the you more with

mentioned units call? you So conference these that if payment in the you can discuss

Milton Maluhy Filho

for you, your question. much very you Thank Thiago. Thank

side, those impact, portfolios XX.X. first you if different the would assets but that Brazil. any it impact or what have impact currencies of the asset have for have the sheets happened we to only the on not risk-weighted remember foresee important impacts they international balance is the other and in yeah, that that capital have was year, currencies. the last we very you are don't you U.S. many abroad, we in we FX tell We locally devaluation relevant a banks other And we in also any portfolio like have And that the the any from whenever risk-weighted do of tax I operation. change of On we overhead. We the you had what have remember to but major see in and the will had quarter

these are important So -- impact. brought an

what impacts will will know land, this of that seen. feel pandemic, be that impact won't overhead. that here. The we be we our what more having cautious is relevant believe But the would yet we it's tech thing side the we true the on be the from be where should we working scenario be that We recovery other don't

equity are we So as common of XX.X% conservative level a in comfortable capital one. XX% being and level keeping in a

area. still -- all we say, credit I that What and this that And only the acquiring okay? yes, would the we card a have credit talking we payment comfortable the we'll right. for the business, issuer, retailers have card the not also but business, So is you're about believe partners. level, only, that we are portfolio, good Not have bank,

credit market, We lines to here, the the where sell open we also card. have the mono

We also parts have and We'll also wholesale be there inside the new platform cash open what also should whole this have management the business but And of we area, PIX. discussing are bank, the for business. banking for each retail, only not well. as

this experience business that business all synergy, retail for synergy inside new And the working client what that concentrated business internal believe years. there to in even bank have the as we're from we payments is should clients do we a well area. synergy, this and some So the synergy, tough platform coming be going lot synergy, for somehow, of be the is

Thiago Batista

Very clear, Milton. Thank you.

Milton Maluhy Filho

much. you very Thank

Operator

Scotiabank. from go [Operator of question Please comes ahead. Instructions] Mollin Jason next Our

Jason Mollin

you to work, like the as new hard start guidance My over in and and for his are stages. perspectives Milton congratulate which clearly questions thank his dedication success Candido communication prior you to wishes as years, presented. underpin for selection related CEO. everyone. many Hi, his these roles, I also that Best would and new the

on how guidance, Bank's the gave? frame loss for risks and would and the upside loan that and mentioned for loan inflation risks downside translate for downside provisions? context, the rates, do that upside And employment, the you XXXX outlook metrics dependent growth, Thanks. maybe growth you in economic that they you specifically to How base scenario is the You case macro and for provided.

Milton Maluhy Filho

but plan. very say you lot in do still is that program. we the very believe we still evolution vaccination there We much. it’s very the of Jason, this beginning, said Look, a to the follow scenario, I at market. the have close of as we that have a scenario would that is the positive window I thank have uncertainty main this

this basis growth. in six will least, postpone as of we the should a capability still about Just Brazilian support and why the FX. idea, we at because to a the the the to will program, if lose population well, to more employment of This reason give is impact have you of uncertainty the sustainable on provide will at government, we should impact vaccination XXX months expectation also terms And points an the least have and have economic in increase this debt.

worry So our main here. this is

that believe broader if points. need Of four why see we That's guidance. scenario, range a credit don’t the for the we course side low go we this will the coming more from of three to

terms here we of a credit in risk portfolio. downside see So

On clients. program the due to And to new on any should credit for have year more help this the more other concern hand, are cost foreseeing we of delinquencies. the we not

Maybe the year. have. very program think see a if course, not that, as clients, with that a about to structured had very, we reopening like program we we we impacts should the last bad scenario, be should Of very close we'll very but

are On correlated the the country. as revenue important very those it's well lines side, very with the activity services of on that

of few be a see impact. year, So as activity, saw lines will majorly we a revenues if last lower we

why broader that's a range. So made we

part of to a credit only of variable the loan as from side, keep new concern the lot have for cost impact in costs activity concern costs terms So of we the would side, on a a that zones see we be is economic a I have benefit the a that that on we revenue that concern of operation on the the well as the should credit. on I deep I because see analysis But efficiency see hand, interest in investments. It's true costs lower other of moving opening well. and very banks,

as P&L, hedge be So it. year, part somehow the will of we've this the for seen last

Jason Mollin

be? XXXX? you an commercial the words, amount would BRLX.X on the investments cost credit new secondly, just increase did about basis in perspectives, of in Maybe follow-up a total What technology, cost you on then on that the does billion what mentioned, guidance products and any incorporate of And release of outlook, platforms. in side, the spend an reserves? for Or other apples-to-apples in as provision

Milton Maluhy Filho

repeat. first your you Okay, can question,

Jason Mollin

reserves? the does credit guidance any release for of of incorporate Was, cost

Milton Maluhy Filho

Sure. is, We model. yes Well, expected credit the lost that's we thing the do last year. the work we how cycle cycle, We it does. anticipated believe

So from last for consume by year. we in We this grow made year. sure, maybe that do of expect we provisions of make throughout quarter the year. the first part coming the end the throughout the the NPL the will delinquency And will year to and it up believe

determining need absorb will they the exactly those delinquencies years. So that will following to

we answer And on believe the second that. So the yes, is question. do

Jason Mollin

technology? in investment the With

Milton Maluhy Filho

in Investment technology.

Jason Mollin

Yes.

Milton Maluhy Filho

a we relevant release important it's We of we year operation. this hours XXXX, number for bank -- terms but have that doing in only transform used inside lines did that the we businesses in -- new to lot, one of that also it's deploy throughout We'll and be new a deployed and develop but not of products, the to new the business, hours inside business bank. increase

would we're that we to operation I doubled investing our quantity hours going say year. be in to from year the that So almost this of last

Jason Mollin

BRLX.X how that quickly will in the So expenses or amortized about be very think that expense? terms number should will be billion we of that that and

Milton Maluhy Filho

of a part XXXX. are Yes, go but throughout investment year that seeing because will as already we the OpEx of

and will amortize years. throughout be an them to have necessarily not we all So made of assets the

Jason Mollin

Thank you.

Milton Maluhy Filho

of is that [ph]. I of There believe-- we OpEx. part CapEx X.X most this more that say Mainly, part would is

gave. implied So day, end it the the at we of in guidance the is that

Jason Mollin

you. That's helpful. Thank

Milton Maluhy Filho

much. you Thank very

Operator

question Carlos go Our ahead. with HSBC. from next Please comes Gomez-Lopez

Carlos Gomez-Lopez

you Hello. questions. Thank allowing for

all when thank like that It's And about congratulations, the from career. PPA years. that. us you've you much at a to and very Candido all, great been very Milton. a And had you of time just of good [Indiscernible] these had met everybody First luck road [Indiscernible] else, for was some long

you much. very thank So

Milton Maluhy Filho

you. Thank

Carlos Gomez-Lopez

saying capital questions, the road that very establish how second rebuild minimum Thank And reach clear level to your have thank you you you increasing. much. what your perhaps -- from from terms maintain level. you this changes did the that are probably the your understand you been you that you In a you have the until of very now start should that you you’ve I from investment you XP, back going differently or learned closer, mean, year if you to for will through platform of Candido? you, to dividend, how XX% to to the statutory what we refers get XX.X% Again And want median exit there? will before? investment end the

Milton Maluhy Filho

to the is I to much do, we we've Carlos, recently is simplicity. We Candido work we Talking been thank that. but say, culture to you, focused about coming much seen we been agility have a achieved with we still be Thank that. for the something have we improve We question. as and made mentioned. lot the the bank. be for we know you think idea has more different The structure to focus your that more few simplified This time inside XXXX, have deepening a the a for a clients year. to We're and room road, I have market. very still here in and more And in of is Committee Executive the of here, bank have lot our pretty aligned a changes as goals going

should of lot mentioned merged. we focus We're And for open investments. lot So efficiency going agenda, a as a the new focusing room I on on that. be before to this

that the to here. have the in the as have bank lines the we that of to business to mindset to grow business. And we have to able to open bank keep open So roll fund new be revenues, to we usual, run

keep and And agenda, the a So past done important there's is lot few a of lot with coming a there. invested diversity, this Talking be a we focus a the be And environment, organized agenda going to lot very years. be to also the going donation of lot for what [Indiscernible] that we're also of we pandemic. called strategy what we're focus. an elaborate things is that. years is also about throughout something will keep it's and that here, the new and ESG talking of this focused will lot the now This to committee that on in to talking about this something executive a that the help major about to the was agenda country have coming we trying a

of the we and front, do sharing here about We get quarters, information. working minimum we be this -- regulatory. on to XX.X% to market. have going whatever more When which going do should issue by back believe we’re the the the we'll that a We to with go have you to that we keep to or be above lot end coming of XX.X%. with that dividend, released XX.X% to work is in until whenever to the we're XX%, we the main be or even talk that the quarter the And we the policy close is we then

that had. believe We keep We'll then back and the to quarter policy So we'll released this same same we to that go be the the is the the always end we of our above market. rules, the should this expectation. same XX.X% table we by

Carlos Gomez-Lopez

and this from being includes I because about ratio? that thinking of at quarter, are that otherwise that the I it there haven’t changes positive impacts you jump. Is XP capital points there, else up anything also mean, XX.X% the imagine the When to some level basis we transaction focusing end XXX

Milton Maluhy Filho

capital part revenues force we in impact lose these This impact that in was of that terms we transaction have part stocks this reason course making wholesale on that and off relevant brought impact here. The the why the XP it points was the in main ratios. now, we spin made right doing we we in now, that had. this Because the no there right of XX But lose terms we of minimal we impact, last capital. are gain investment that map the sold capital. is of more around forced XX, had, of [ph] No, of the basis and there we the this bill are quarter, is selling

Carlos Gomez-Lopez

our that was And Okay. understanding.

to XXX point? you do So how -- guess I so basis get

Milton Maluhy Filho

sorry. I'm

Carlos Gomez-Lopez

Just how of do we in one in get quarter to accumulation? XXX terms basis capital just points

Milton Maluhy Filho

XXX basis points?

Carlos Gomez-Lopez

of of this From XX.X. to this year, quarter end XX.X end at at the the

Milton Maluhy Filho

What you about XX points, I points? you. saying XXX follow are right, basis the don't Carlos? basis

Carlos Gomez-Lopez

So sorry, on I maybe price. I focusing different -- am

of you'll the quarter. the be think by end you much. very Thank you So at Satisfied. XX.X

Milton Maluhy Filho

Thank you.

Operator

go a Autonomous next follow Elliott Our Please question Geoffrey Research. ahead. up is from with

Geoffrey Elliott

the Hello. Two quick Thanks for very follow-up. in ones. squeezing

hoped. second in the And PIX, operational there like What there, have on a then What's I IT then know you'd those is there's the transactions Brazil? the initial last than some the press is days something Firstly, few the trying need being spin-off? given slower of the been involvement approval? XP Fed couple sale. that registrations been get back. And about need, that was funds sign-ups, key site issues. initial I IT in of think XP And operations and type Fed were sounds it to there. What on duplicated that kind the

the on about tech might have that curious challenges So encountered Thank you the PIX side? you.

Milton Maluhy Filho

the underwriting banks U.S. The have the about is also Reserve talking of needs XP in first reason approve activities and the to all, Look, because XP. why Federal

do approval. well. We part and U.S. the operation in So of as the it's have an XP

in So main there that approve This the is the have, Federal we reason. structure to a is it. Reserve change needs

Okay?

Geoffrey Elliott

Understood.

Milton Maluhy Filho

And you Bank about the released important very catch-up the We When Central last the of first numbers. were the ask made second PIX, the beginning at an months. Okay. beginning. as the We in very at next the figures, journey.

with also but share we the it's piece. we the As for keys of In than the public that us, not have. but the that a member, market the but transactionality are have of quantity tell you, we I clients, very only share is comfortable is can importantly not market more from the

also of market transacted and a quantity terms in share have share. that. Also clients we of of includes on in So quantity fair the very volumes

very are Central first made catch the announcement we the comfortable we up Bank. of So after with the

Geoffrey Elliott

and tech Okay, issues? the

Milton Maluhy Filho

the And what?

Geoffrey Elliott

It and sounded some issues you made like then beginning, there some the tech register hard for at are keys that it to more…?

Milton Maluhy Filho

business the very made But platform the as with was very -- beginning some it's catch-up sure have we it -- nature of the we -- the in we instability well. platform, at have to will we the in but fixed comfortable issues. are So our

Geoffrey Elliott

much. very Thanks Understood.

Milton Maluhy Filho

very much. you Thank

Operator

concludes time, question-and-answer Milton Maluhy closing this your at statements. you This today's session. Mr. proceed Filho, may with

Milton Maluhy Filho

big pleasure here. to call. Thank you, for have participation much in your gentlemen. a our you Thank you It's very

you us. As four last of us and at was will following cheering pleasure sure Directors, here believing the said, as I work with the to you, be and very beginning, for a years. time for thank to I'm from It for a Candido it's say us the well And privilege to you Board Candido.

So big pleasure you to on Board. have

Candido Bracher

wish been you thank the luck of bank investors the Thank on much. a you best And you you very Milton and you Thank like very the to confident I under leadership. am your will very analysts I much how the say the and period. much for run perform and support who during just and this extremely bank way that have

Milton Maluhy Filho

you much. Thank very

Operator

participation. That our answer perception survey does Itau event you for through conclude Holding your very conference Please for Unibanco today. available much Thank our code. earnings QR the

now may disconnect. You