Home Blogs Loans

Itaú Unibanco Holding (ITUB) Q4 2020 Earnings Call Transcript

Itaú Unibanco Holding (ITUB) Q4 2020 Earnings Call Transcript

Image supply: The Motley Fool.

Itaú Unibanco Holding (NYSE:ITUB)
Q4 2020 Earnings Call
Feb 02, 2021, 9:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning women and gents. Welcome to the Itau Unibanco Holding convention name to debate 2020 fourth-quarter outcomes. [Operator instructions] As a reminder, this convention is being recorded and broadcasted stay on the Investor Relations web site at www.itau.com.pr/investor-relations. A slide presentation can be out there on this website.

[Operator instructions] Before continuing, let me point out that forward-looking statements are being made beneath the Safe Harbor of the Securities Litigation Reform Act of 1996. Actual efficiency may differ materially from that anticipated in any forward-looking feedback on account of macroeconomic situations, market dangers, and different elements. With us at the moment on this convention name in Sao Paulo are Mr. Candido Bracher, present CEO and new board member; Milton Maluhy, COO, present CFO and CRO, and new chief govt officer; Alexsandro Broedel, new CFO; and Renato Lulia Jacob, group head of investor relations and advertising intelligence.

First, Mr. Candido Bracher will touch upon 2020 fourth-quarter outcomes. Afterwards, administration will probably be out there for a question-and-answer session. It is now my pleasure to show the decision over to Mr.

Candido Bracher.

Candido BracherNew Chief Executive Officer and Board Member

Good morning, everybody, and thanks for attending our 2020 fourth-quarter earnings name. Before we get into the monetary efficiency, I’d like to speak about a number of the latest business, digital, and ESG highlights from our operations. So, shifting now to Slide 2, you’ll be able to see that credit score origination for people elevated 15% in a single quarter. This robust origination led to an vital progress within the mortgage portfolio which was pushed not solely by seasonally greater bank card loans but in addition by the payroll, mortgage and automotive financing portfolios.

It’s additionally price mentioning that the digital engagement with shoppers continues to enhance. The digital shopper base reached 24.2 million, out of which 23 million are people. This represented a rise of two.9% within the fourth quarter alone. The greater digitalization of consumers created a chance to additional optimize our retail footprint and led to the closure of 95 branches and shopper service factors this quarter.

I’m additionally fairly proud to report that our workers Net Promoter Score reached the document mark of 89 factors within the prior 12 months in 2020 as a sound results of our efforts to advertise the absolute best working atmosphere which we needed to shortly adapt throughout this. Last however not least, we improved our shopper Net Promoter Score by 10 factors over the course of the final two years, due to this fact beating inner goal for the interval. Now on Slide 3, we are going to shed some extra mild on a few of our digitalization and expertise KPIs. We proceed to continually enhance our investments in expertise and anticipate to put money into 2021 twice as a lot as we now have invested in 2018.

Not solely that, however we now have invested higher. While our investments in creating new options and options for our digital platforms greater than doubled on this interval, we managed to lower the bills on infrastructure upkeep by 28%. Also, vital to spotlight that this resulted in a 25% discount within the time to implement new options within the final 12 months. We additionally elevated the variety of options and providers out there for shoppers within the financial institution’s digital platforms by over 80% in the identical interval.

The sanitary nature of this disaster has pressured a lot of our clients emigrate their interactions to digital channels. However, using these channels continues to rise even after the top of extra acute interval of social distancing. These behaviors can be seen within the opening of latest digital accounts which grew greater than 200% over the previous two years. Another key a part of our digital technique is to strengthen our expertise staff.

In this regard, we at the moment have 261 information scientists which is presumably the biggest contingent of those professionals in any firm within the nation. Moreover, all through 2020, greater than 3,700 workers to our expertise staff have been added straight and thru the acquisition of Zup. On Slide 4, I’d wish to replace you on the latest developments relating to the stage XP investments. With a deal with creating shareholder worth, final November, we introduced our intention to promote a portion of the stake within the firm and later spin-off the remaining half.

With this in thoughts, in December 2020, we offered 4.5% of the capital of XP Inc. And two days in the past, the extraordinary common assembly authorised the spinoff of the remaining stake into XPart pending regulatory approval. I feel it is vital to spotlight a few factors. First, after the favorable opinion of the regulatory authorities, there may be as much as 120 days for itemizing shares on B3 and for the distribution of latest shares of XPart.

The cutoff date will happen near the itemizing of the corporate which will probably be knowledgeable in the end. Lastly, when the brand new firm is lastly listed within the inventory change, the shareholders will obtain an fairness holding in XPart in the identical quantity, sort, and proportion because the shares they maintain in Itau Unibanco. Slide 5. Now shifting to our ESG highlights on Slide 5.

I’m comfortable to report we intensified our sustainability dedication in 2020, reinforcing the agency’s social and environmental accountability and its function in remodeling society. As you’re nicely conscious, Itau Unibanco and its controlling shareholders donated greater than BRL 1.2 billion to battle the pandemic within the nation. The donation was invested in analysis, acquisition of medical and productive tools, and consciousness campaigns. We additionally launched the Amazon Plan in partnership with Bradesco and Santander.

And out of the ten proposed initiatives, 4 had been prioritized. First, combating towards unlawful deforestation within the meat manufacturing chain. Here, we anticipate to be producers of engagement for traceability protecting direct and oblique suppliers. Second is the stimulation of sustainable change, directing BRL 100 million which will probably be provided by the three banks to finance agricultural industries and cooperatives that take care of sustainable cultures and blended finance for small producers.

Third is the promotion of bioeconomy, whereby we anticipate to fund analysis on tasks that unlock the socioeconomic potential of latest manufacturing chains. And fourth, land regularization and advice of how the monetary system can help regularization to stimulate financial exercise within the area, authorized, safety and financial exercise. We additionally held and promoted a convention targeted on the Amazon, the place we hosted greater than 70 specialists. Companies and monetary market individuals, 12,000 and donations for the planting of 380,000 native bushes.

Lastly, I’d like to say that since 2019, the financial institution has applied the TCFD and SASB tips in its monetary studies, and we’ll additional develop them within the coming years. Now, on Slide 6. I’d like to spotlight that we lately issued a $500 million tier 2 sustainable bond. The issuance was the primary of its form in Latin America and was one other step in integrating ESG into our enterprise.

To this finish, we launched the sustainability finance framework, whereby we outline eligibility for the allocation of funds raised by way of debt securities with social and environmental standards. The funds raised could be allotted into eight classes, that are within the slide. This operation is strongly related to the constructive impression dedication agenda, by which we now have financing targets associated to sectors and enterprise lined by the body. On the underside of the web page, we spotlight how we’re performing in a number of the monetary commitments.

We have already disbursed BRL 47.7 billion to constructive impression sectors, of which BRL 12.5 billion had been directed to renewable power technology and gross sales. In the entrepreneurship agenda, we initially set an origination goal of BRL 9 billion to finance small firms led by girls by 2024, however we ended up surpassing that mark nicely forward of our expectations. Thus, we launched a brand new BRL 11 billion credit score goal for this effort. Lastly, I’d like to ask you to examine future updates of the constructive impression commitments in our Investor Relations web site.

On Slide 8, we transfer into our monetary highlights. We entered the fourth quarter of 2020 with a recurring web revenue of BRL 5.4 billion leading to an ROE of 16.1%. The 7.1% web revenue progress on this interval was a direct results of a 4.5% discount in the price of credit score along with the expansion in charges and web curiosity revenue. These results had been partially offset by a seasonally greater noninterest expense.

This seasonality is not going to have an effect on the financial institution construction bills’ downward development. Finally, the mortgage portfolio continues to point out constructive developments and grew 2.7% within the quarter. As regular, we are going to view every of those results over the course of this presentation. Starting with the mortgage portfolio on Slide 9 I’d like to spotlight a number of the developments that may be seen on this web page.

The first is said to the automobiles credit score portfolio, which continues to point out an vital restoration pushed by shopper demand for collateralized merchandise with decrease charges and decrease danger, akin to automobile financing and mortgage. The latter had a record-breaking credit score origination within the fourth quarter which resulted in a progress of greater than 130% over the identical interval in 2019. After a number of quarters in a row of stability, payroll loans posted an vital progress within the fourth quarter. This was primarily as a result of regulatory adjustments which raised the indebtedness ceiling for retirees, due to this fact permitting them to entry extra funding by way of this product.

Creditcard had a robust quarter on account of a seasonally stronger demand because of the financial exercise on the finish of the 12 months and vacation season. We additionally noticed a lower within the private loans portfolio, which is incessantly the case through the fourth quarter after the New Year and to the fee of the thirteenth wage. We additionally noticed a discount within the customized credit score portfolio. This product is linked to our reprofiling loans program and this discount development highlights the higher monetary well being of our shoppers.

The SMEs portfolio slowed down its progress tempo as a result of decrease origination of government-sponsored and assured mortgage traces. As it’s possible you’ll recall, these merchandise are accountable for final quarter’s spectacular progress this section. Finally, the big firms credit score portfolio grew by 1.6% within the quarter, primarily because of the company securities portfolio. Moving now to Slide 10, which present that the fourth quarter proved to be an inflection level for the monetary margin with shoppers.

The 3% enhance was pushed by the continual progress of the mortgage portfolio in addition to by the upper common steadiness of the financial institution’s personal working capital and better margins in our operations in Latin America. These results had been partially offset by the marginal discount in spreads and by an extra change within the portfolio combine regardless that this latter impact was in a a lot smaller scale than in earlier quarters and linked to seasonal results such because the fee of the thirteenth wage which naturally amortizes the steadiness of revolving credit score line. You may also see this dynamic when trying on the NIM which is 20 foundation factors decrease than the third quarter. On Slide 11 now, we up to date the figures from our reprofiling loans progress.

This portfolio completed 2020 with BRL 15.8 billion portfolio representing a discount of 5% when in comparison with the third quarter. This discount is because of decrease demand from our clients in addition to by a better depth of amortization. 96.1% of the portfolio is already outdoors the grace interval. The NPL 15 to 90 days’ ratio reached 8.3%, a rise of 190 foundation factors when in comparison with the earlier quarter.

This enhance was pushed by two elements. The first of which is said to the top of the grace interval for nearly the whole thing of the reprofiled loans guide. The second refers back to the arithmetic impact of the discount of this portfolio’s steadiness. The 90 days NPL ratio reached 5.2% which is nicely under the short-term delinquency ratio of the earlier quarter.

As was mentioned on the earlier quarter, the twelve-quarter efficiency of this portfolio was higher than we initially forecasted within the early days of the pandemic. It additionally appears that our technique of providing shoppers extra versatile fee phrases is paying off actually. On Slide 12 now, we dive into the credit score high quality of KPIs from our portfolio. The price of credit score decreased by 4.5% within the quarter, pushed by an 11% discount in allowance for mortgage losses in the identical interval along with the decrease quantity of reductions granted on the compensation.

These results had been partially offset by the rise of the impairment of company securities which was primarily pushed by a widely known massive company shopper. While the provisions steadiness continues to develop, the protection ratio reached 320%, down 19 proportion factors on this quarter. This discount was a community impact of the rise of the NPL steadiness that ended up consuming the protection loans. The short-term NPL ratio declined by 10 foundation factors which is an effective efficiency of the people credit score portfolio in Brazil.

This efficiency was once more partially offset by the anticipated enhance within the 15 to 90 days NPL ratio from the SMEs portfolio. Despite the depth of the deterioration, it is very important spotlight that credit score high quality ratios had been unnaturally decrease than they need to have been given the reprofiling loans program we launched in mid-March 2020. Now they mainly returned to the pre-pandemic ranges. Finally, it is very important point out that once we exclude the consequences of the reprofiled loans from the people and SMEs portfolio, their credit score high quality ratios are at our greatest historic ranges Slide 13, we present that the monetary margin with the market reached BRL 1.6 billion, representing a rise of 14.1% within the quarter.

This efficiency is a results of greater good points in our banking guide. The monetary margin danger market in our operational outcomes are noteworthy. These revenues boosted the gross sales of securities and extra volatility in curiosity and inflation charges. Now, on Slide 14, we present that the charges revenues grew 4.1% within the quarter.

This efficiency is principally defined by the upper quantity of transactions in card issuance and acquisition which grew past what was seasonally anticipated as nicely with the upper efficiency charges in our asset administration enterprise line. These results had been offset by the funding banking and brokerage operation which had a robust quarter, however not on the similar stage because the third quarter. Also noteworthy was the enter of the brand new quick fee answer PIX and present account charges as we took this chance to exempt our shoppers to pay any charge in wire transfers regardless of of their most popular methodology. Insurance revenues fell by 14.5% within the quarter mainly because of the uneven impact of inflation charges and the remuneration of property and liabilities in our personal pension plans operation.

On Slide 15, we present a 5.1% progress in non-interest bills within the quarter primarily as a result of seasonal results associated to a stronger financial exercise, greater revenue sharing, conventional year-end business campaigns, and in addition as a result of a focus of coaching and layoff bills within the interval. I’d like to spotlight that the operational expense in 2020 contracted nominally 3% in Brazil. This is much more spectacular if we low cost the consequences of being affected person within the interval, which brings us to an actual contraction of seven.6% within the interval. Expenses from operations in Latin America grew by 13.6% in reais within the 12 months, mainly because of the unfavorable change fee variation of the reais.

As we beforehand talked about at first of this presentation, the digitalization effort allowed us to shut 95 brick-and-mortar branches and shopper service factors within the fourth quarter alone. This motion pressured our bills efforts within the discipline. But in flip, it ought to scale back Opex in 2021. Last however not least, our workforce confirmed a rise of roughly 1,700 individuals.

This progress is principally as a result of our investments in expertise. We’ve employed 1,700 expertise professionals along with the roughly 2,000 engineers that had been added to our groups on account of the Zup acquisition. Now, on Slide 16, we confirmed that our Tier 1 capital ratios had a rise of 80 foundation factors within the quarter, ending the sphere at 13.2%. This impact was primarily because of the greater web revenue in addition to because of the sale of part of the funding to be held in.

Well, with this I end my half within the presentation and I formally full my final activity as CEO of the financial institution. This was a journey of 4 years that offers me satisfaction and satisfaction, and I want to thanks all, buyers and market analysts, for our interactions and in addition to your help all through this journey. I now cross the ground to Milton, our new CEO, in order that he can set the expectations for 2021. Milton, good luck success.

I’m very comfortable to go away the financial institution in your palms, in your in a position palms. You know that you could proceed to rely on my help now by way of the board of administrators. All the perfect.

Milton Maluhy FilhoChief Financial Officer and Vice President

Thank, Candido. Thank you for the sort phrases. Our day by day interactions and your endurance will probably be sorely missed. It will probably be an amazing problem to succeed you, nevertheless it’s with nice pleasure that I obtain these roles and obligations.

Before we focus on our expectations for 2021, I want to spend a minute on Slide 18 speaking in regards to the latest adjustments that had been applied in our govt staff. With the intention of being even nearer to the enterprise areas, we thought to simplify our construction and scale back one hierarchical stage inside the financial institution. So, we doubled the scale of our govt committee which is now comprised of 12 individuals. Those are very seasoned executives who had been beforehand in command of related enterprise items and different key areas of the agency.

And we now have seven members of the manager committee specializing in business areas, together with the IT division as I contemplate them an integral a part of our enterprise. New methods of working akin to by way of communities have introduced our enterprise items and IT even nearer. The goal of the brand new construction is to achieve extra velocity, to have extra autonomy on the entrance desk, to raised perceive the precise wants of every enterprise areas and our shoppers, and thereby keep our deal with the financial institution’s progress. To conclude I feel it is not worthwhile to deleverage construction, however I want to draw your consideration to the creation of the funds space which for us has huge worth.

Moving to subsequent slide and earlier than presenting our expectation for our operation, it is vital to place the macroeconomic state of affairs in context. The previous few months have proven an vital restoration in Brazilian economic system. Having mentioned that, we’re sadly nonetheless experiencing a rise within the an infection numbers and fatalities all through the nation. This brings a excessive stage of uncertainty to our macroeconomic forecasts.

Among different elements, vaccination will probably be a key aspect in normalizing our lives and due to this fact restoring the nation’s economic system. It’s vital to say that the state of affairs offered herein assumes there will probably be no additional delays within the immunization of the Brazilian inhabitants. We anticipate a GDP progress of 4% in 2021. It’s price mentioning that studies of this progress is mainly a statistical carry from the final quarters of 2020.

We additionally anticipate a rise of the fundamental rate of interest ending the 12 months at 3.5% and that inflation will stay beneath management and inside the vary outlined by the Central Bank. Finally, we anticipate a secure employment fee, albeit nonetheless at a excessive stage. Here, it is vital to present extra context as we imagine that formal job creations will stay constructive, as seen all through the second half of 2020. But these results will probably be offset by a higher variety of individuals in search of jobs because of the discount of presidency help applications.

Go to Slide 20 speaking in regards to the views. We are presenting the views for our operations that had been the idea for this steerage for 2021. Therefore, we anticipate that from capital and liquidity, we imagine we’re at acceptable ranges contemplating our inner stress take a look at eventualities. Here it is price mentioning that our goal of 13.5% for Tier 1 capital stays in drive.

And though we ended 2020 barely under this stage, we imagine that over the primary half of 2021 we are going to once more meet and even exceed this goal. Expansion of the mortgage portfolio pushed primarily by the person portfolio assuming now recovering the economic system in step with ahead base state of affairs. At first, this progress needs to be supported by decrease danger and decrease rate of interest merchandise akin to payroll loans, mortgage, and auto loans. But we anticipate demand for client credit score traces and revolving traces to renew in second half of the 12 months.

Recovery of the common fee of economic margin with shoppers, the NIM, over the 12 months because of the progressive change within the credit score portfolio combine between segments and the expectation of a better rate of interest and its impression on the remuneration of our capital and legal responsibility margin. Now it is vital progress, the expansion that you will notice in service and insurance coverage revenues in step with the development of restoration in financial exercise regardless of the unfavorable impression ensuing from PIX rollout, Brazilian Central Bank quick fee answer, and in addition the spinoff and sale of the stake in XP Industry Investimentos. Here, it is vital to say that final 12 months we had a full 12 months of XP Investimentos. And this 12 months, we solely have one month on this steerage.

So, we’re taking consideration, 11 months with out XP in our figures, though we nonetheless want the Fed approval for this transaction. Then the efficiency will probably be pushed primarily by the expectation of stronger exercise within the capital market and the launch of latest channels, merchandise, and providers. Progressive discount in price of credit score anchored within the financial institution’s anticipated loss mannequin and Brazil’s economic system restoration. However, the mannequin will react promptly to related adjustments within the Brazilian macroeconomic state of affairs and the monetary situations of our clients.

Strategic price administration based mostly on the structural effectivity tasks will proceed to deliver profit within the coming quarters with a nominal discount within the BAU, enterprise as regular operational bills. This 12 months we anticipate a rise of roughly BRL 1.5 billion in our investments in expertise, new merchandise, and business platforms, which ought to positively impression the financial institution’s operational effectivity within the medium and long run. Now shifting to Slide 21, we current our steerage right here. Due to the nonetheless excessive uncertainty of the macroeconomic state of affairs and its potential impacts within the financial institution’s operation, we determined to extend the vary of projection towards 3 to 4 proportion factors.

We now anticipate a progress for the mortgage portfolio between 5.5% and 9.5% within the consolidated figures and eight.5% and 12.5% in Brazil. For the monetary margin with shoppers or NII, the expectation is for a progress of two.5% to six.5% within the consolidated figures and three% to 7% in Brazil. We anticipate the monetary margin with the market to finish the 12 months between BRL 4.9 million and BRL 6.4 billion within the consolidated figures and between BRL 3.3 billion and BRL 4.8 billion in Brazil. For the price of credit score, the expectation is that the entire operation will finish the 12 months between BRL 21.3 billion and BRL 24.3 billion within the consolidated figures and between BRL 19 billion and BRL 22 billion in Brazil.

For charges and insurance coverage revenues, our expectation is for progress between 2.5% and 6.5% in consolidated figures and in Brazil. It’s vital to spotlight right here that we didn’t keep in mind any further revenues coming from XP as I discussed earlier than from January of this 12 months on account of the spinoff mentioned on Slide 4. As for our noninterest bills, the expectation is for a nominal contraction or progress of two% each within the consolidated figures and in Brazil. This vary was contemplating the upper investments in expertise and in our business platforms as we talked about on the earlier slide.

Finally, the efficient revenue tax and social contribution charges ought to finish the 12 months between 34.5% and 36.5% within the consolidated figures and between 34% and 36% in Brazil. We emphasize right here as soon as extra that this steerage relies on the macroeconomic state of affairs that we now have simply current and any abrupt change in our expectations for the economic system could lead to a whole revision of expectations current within the interval. With this, I conclude the presentation. And we could begin the Q&A session.

Questions & Answers:

Operator

[Operator instructions] Our first query comes from Mario Pierry with Bank of America. Please go forward.

Mario PierryBank of America Merrill Lynch — Analyst

Good morning, all people. First of all, I needed to congratulate Candido for all of the work that you’ve got carried out in the previous couple of years and all the interplay that we had was very enriching for us. And I needed to want Milton right here good luck on the brand new function. I’ve two questions, each to Milton.

Milton, when — if you look forward if you look over the subsequent 5 years, what do you suppose are the most important threats to the financial institution particularly for the profitability of the financial institution? Is it regulation of all of those, you recognize, — with — with the creation of open banking or the moment funds, or is it the low-rate atmosphere? Or is the primary supply of concern associated to the doorway of latest gamers, particularly the fintechs and probably the — the massive techs? And then my second query is somewhat bit extra particular, once we have a look at your mortgage portfolio progress steerage in Brazil of 8.5% to 12.5%, this means little or no actual progress, proper, contemplating that you just’re forecasting nominal GDP progress of about 7.5%. So, can — are you able to focus on why we — we would not have the ability to sim — assess their progress subsequent 12 months? You know, it may very well be as a result of the SME portfolio this 12 months was inflated given all the — the federal government applications in place. So, possibly in case you can provide us a breakdown of you mortgage progress expectations for — for 2021, damaged down by particular person SMEs and enormous corporates, I feel that’d be useful. Thank you.

Candido BracherNew Chief Executive Officer and Board Member

Thank you very a lot, Mario. Well, thanks to your phrases on the very starting.

Milton Maluhy FilhoChief Financial Officer and Vice President

Thank you, Mario. Thank you very a lot.

Candido BracherNew Chief Executive Officer and Board Member

First of all, speaking about problem we see forward, I feel you pointed a couple of factors. We are — we needs to be working in a unique state of affairs with low charges. We’ve been seeing some actions out there, coming from competitors and totally different traces of enterprise. And in regulation, sure, we do not — we do not forecast what needs to be the implications of the opening banking.

That is one thing that we needs to be very, very — I would not say cautious, however we should always comply with very shut to know what could be the impression. We do imagine that in a state of affairs of low-interest charges, a couple of revenues that we used to have that had been main impression final 12 months with these impacts ought to keep. We ought to develop the financial institution, which might be our view this 12 months, particularly on the credit score aspect. And additionally, we needs to be open to the touch or to create new traces of enterprise for the financial institution as nicely.

It’s a — it is a totally different state of affairs. We — we do imagine we’re nonetheless in 2021 and we nonetheless have problem forward once we speak in regards to the pandemic and all the consequences it ought to have within the macroenvironment. But trying 5 years forward, we nonetheless imagine there’s a constructive development and we hope these new markets, I’d say, state of affairs maintain for the long run. Talking about particularly — and I feel we’ll be seeing an vital digital transformation, not solely within the financial institution however within the clients.

We’ve been working laborious on that and that is one thing that ought to speed up within the coming years. And we now have to be very, very, I’d say, remodeling ourselves and dealing and shifting ahead for our– towards the — the route. Talking in regards to the mortgage portfolio, it is fairly a simple reply, I’d say, as a result of, in a single hand, we noticed very, crucial progress within the wholesale portfolio final 12 months, above our finances, together with particulars of the actions we noticed from the massive firms, anticipating crediting the market to develop all through the disaster. And the capital market was closed for a lot of months throughout final 12 months.

So, the financial institution had to make use of the steadiness sheet to satisfy or to underwrite these transactions. When we glance — search for 2021, we nonetheless see an energetic dynamic from retail portfolio, totally different from what we noticed final 12 months. But however, we see that wholesale rising a lot lower than what grew — grew final 12 months. And additionally, we anticipate to see capital markets opening all year long.

And this may impression for certain {our capability} to underwrite credit score for the steadiness sheet. We do not see it as an issue, as a result of we’re a really energetic participant on this market. And when it comes to exterior capital, the — the way in which to be extra dynamic when it comes to capital, we have — it is vital exercise that we’re very energetic on.

Mario PierryBank of America Merrill Lynch — Analyst

That’s very clear, simply — only a fast comply with up then on the retail section when it comes to progress this 12 months. What — what particular merchandise are you most enthusiastic about?

Milton Maluhy FilhoChief Financial Officer and Vice President

Look, we — we imagine there are secured loans, seeing once I imply, secured loans, I’m speaking in regards to the mortgage, I’m speaking about auto loans, and I’m speaking about what we would say, which is the payroll loans. So, mainly these three traces we imagine ought to enhance lots this 12 months. But we are going to see some restoration on the private mortgage as — as nicely. And bank cards because of the exercise and extra transaction and extra consumption, we should always see a progress as nicely.

But we — we now have been rising the secured a part of the portfolio, simply to present you a determine, 5 factors into — in — in a single 12 months for the opposite one. So, we — we now have grown to a extra safer portfolio shifting ahead.

Mario PierryBank of America Merrill Lynch — Analyst

Great, thanks very a lot.

Operator

Our subsequent query comes from Tito Labarta with Goldman Sachs. Please go forward.

Tito LabartaGoldman Sachs — Analyst

Hi, good morning. And additionally, I’ll echo that, you recognize, thanks Candido for — to your time as CFO and — and greatest needs in your new function on the board. And additionally, congratulations, Milton, and — and better of luck in — in your function as nicely. A pair questions additionally.

First, simply trying on the — the steerage general, simply type of plugging within the midpoint on every of the — the numbers, attending to roughly a 17% ROE for the 12 months. Just wish to get your ideas in case you suppose — does that is affordable when it comes to possibly type of longer-term ROE? You know, do you suppose you may get again to the — the 20% stage? Or what do you suppose is sustainable and the way lengthy it may take to get there? And — after which second query when it comes to your expense progress steerage roughly flat, you recognize, down 2% to plus 2%. Do you suppose you’ll be able to proceed to regulate bills at round this stage type of past this 12 months? You know, you — you talked about you — you name like 95 branches in — within the quarter? Just considering, you recognize, given a number of the pressures on the income aspect, you recognize, how deep are you able to go on the cost-cutting and, you recognize, how that may assist to offset some — a few of these income pressures? Thank you.

Milton Maluhy FilhoChief Financial Officer and Vice President

OK, Tito. Thank you very a lot to your query. First of all, simply to make clear, the midpoint of the steerage, if you wish to take the quantity it is exactly the quantity, needs to be round 17.6%, 17.7%, OK? Looking ahead, what we — we’re seeing trying ahead, we’re seeing a — a problem. We have a profitability coming from the revenues and loads of strain on the rate of interest.

When you’re employed in an atmosphere with a 2% of rates of interest, we lose income, so the working capital. And additionally, we lose additionally for the deposits and the positioning deposits that we now have inside the financial institution. Those are the 2 main impediments. So, we do imagine that as the price of capital needs to be diminished within the coming years in an atmosphere with a low-interest fee, that our return on fairness needs to be — not in between this 12 months, for the approaching 12 months.

So, it is a problem. We are nonetheless working lots on the environment friendly aspect. We nonetheless have room to work on it. We are opening house or room for funding.

This is our agenda. We — we nonetheless have alternative right here to maintain lowering the enterprise as regular — regular price of the financial institution. But relying on the rate of interest and the price of capital, we’re extra targeted right here on creating worth, producing worth for our stakeholders. So, the distinction between the price of capital and the rate of interest right here and the return is what we’re going to be very targeted, not particularly on the — on nominal return on fairness.

Even although we do not information, neither for 2021, neither for the long run the return on fairness of the financial institution.

Tito LabartaGoldman Sachs — Analyst

OK, thanks, Milton. That — that is useful. Just one fast follow-up then, when it comes to the 17.6% to 17.7% you talked about on the midpoint. In — when it comes to your — your dividend payout, ought to we no less than anticipate you to renew again to a normalized payout this 12 months, or — or what sort of payout ought to we anticipate?

Milton Maluhy FilhoChief Financial Officer and Vice President

Tito, are you able to repeat once more, please? I could not take heed to that.

Tito LabartaGoldman Sachs — Analyst

Sure, simply on — on the midpoint of the ROE. You talked about 17.6%, 17.7%. Just — what sort of dividend payouts ought to we anticipate that — must you anticipate to get — get again to normalized ranges this 12 months when it comes to the payout, or how ought to we take into consideration the dividend and — and in addition, you are getting again to that — that core Tier 1 of like 13.5%?

Milton Maluhy FilhoChief Financial Officer and Vice President

OK, our — the way in which we — our coverage right here is to distribute all the pieces that exceeds the 13.5%. This will maintain, we cannot change, however we additionally suppose in consideration the approaching 12 months if we foresee any main funding or any wants of capital. So, it is troublesome to anticipate now. We’re going to maintain this similar ratios and the desk that we — we launched to the market two years in the past, the place we will be paying what exceeds when it comes to 13.5% relying on the risk-weighted property and the return on fairness of the financial institution.

So, the — the — the coverage — the coverage did not change.

Tito LabartaGoldman Sachs — Analyst

OK. So, you return to that normalized coverage?

Milton Maluhy FilhoChief Financial Officer and Vice President

Yes.

Tito LabartaGoldman Sachs — Analyst

You do not anticipate any extra restrictions?

Milton Maluhy FilhoChief Financial Officer and Vice President

We do not.

Tito LabartaGoldman Sachs — Analyst

OK, excellent. Thank you, Milton.

Milton Maluhy FilhoChief Financial Officer and Vice President

Thank you.

Operator

Our subsequent query comes from Geoffrey Elliott with Autonomous Research. Please go forward.

Geoffrey ElliottAutonomous Research — Analyst

Hello, thanks very a lot for taking the query, and good luck to each of you with the — the subsequent steps. There’s been a — loads of capital going into the digital banks in Brazil over the previous few months. Nubank is doing their Series G, clearly an instance of that, however loads of others C6, Banco Inter have all been elevating cash. How does that capital going into the newer banks change the aggressive atmosphere for you? Are you seeing any adjustments in — of their habits that it’s worthwhile to reply to?

Milton Maluhy FilhoChief Financial Officer and Vice President

OK, Geoffrey. Thank you very a lot to your query. Yes, as I — I’ve been saying — we have been seeing a really dynamic and aggressive atmosphere. We’ve been seeing some fintechs working some traces of enterprise the place we have been seeing loads of competitors.

I feel it is the — the traditional manner for them to — to boost cash is to do these type of investments — these sequence of investments. So, that is the traditional course of — of their enterprise till they entry capital markets. We are a really energetic financial institution right here. We have a really robust capital construction.

And competitors makes us higher. This is the way in which we imagine and that is the way in which we have been working right here for a few years. So, sure, we see a extra dynamic atmosphere. But it is high quality, it is the way in which it’s and we now have to compete and we’re doing loads of efforts internally to have, I’d say, the potential to compete one of the best ways attainable and to develop the financial institution within the coming years.

This is our focus.

Geoffrey ElliottAutonomous Research — Analyst

And any explicit product, traces of enterprise the place you are seeing that competitors altering?

Milton Maluhy FilhoChief Financial Officer and Vice President

Look, we now have been seeing prior to now years huge competitors for funds, particularly within the buying enterprise. We’ve launched the figures, we — we noticed very robust competitors there. I’d say that we had lots to study from what occurred with Sage to keep away from seeing actions like these in different traces of enterprise. But it is a very dynamic market.

We see loads of competitions on the funding aspect and we’re shifting ahead right here to extend and to place efforts in our business distribution, not solely the distribution but in addition the way in which we do the — the assessments of our shoppers, the way in which we offer merchandise, the way in which we offer the apps that they are going to work together with the financial institution. So, investments and funds are extra targeted on the buying, we have seen loads of competitors. On the bank card enterprise, we see firms coming into this market, as you simply talked about. But we see two — two foremost matters right here.

They — normally, open market. So, they convey new clients to the market as nicely. And additionally, they’ve a really targeted — they’re very targeted on a particular sort of shopper and we’re extra various when it comes to our shopper that we now have in our portfolio. So, my view right here that we nonetheless have loads of work to do once we targeted on younger individuals and in addition to the bottom of the parameters.

So, that is the place we needs to be focusing lots for the approaching, I’d say, coming quarters. We nonetheless have work to do right here.

Geoffrey ElliottAutonomous Research — Analyst

Got it. Thank you very a lot.

Operator

Our subsequent query comes from Thiago Batista with UBS. Please go forward.

Thiago BatistaUBS — Analyst

Thanks, everybody. I’ve two questions. The first one in regards to the capital place of the financial institution. Milton, you had remark that the financial institution continues with the goal of 11.5% — sorry 13.5% of Tier 1 targets.

With the top of overhead, why not scale back this goal of cap? So, why not work, for instance, 12.5% or a unique quantity — a decrease quantity? If I’m not incorrect, overhead was once the primary query the banks — or was once the primary reason behind the questions that the banks keep their capital. That is the primary one. The second one, through the Portuguese convention name, you talked about in regards to the significance of the fee enterprise for Itau. Can you speak somewhat bit extra about these items? When you say funds enterprise, are we speaking about hedge solely, or we’re together with, for instance, EG and in addition the enterprise that may be created with PIX.

So, in case you can focus on these fee items that you just talked about within the Portuguese convention name?

Milton Maluhy FilhoChief Financial Officer and Vice President

Thank you, Thiago. Thank you very a lot to your query. On the capital aspect, what I want to — to — to inform you is that we do not foresee any change within the 13.5%. And in case you bear in mind what occurred within the first quarter of final 12 months, you will notice that yeah, we had the impression of the overhead.

We had these — these tax impacts. But the foremost impression we now have was the risk-weighted property and you must — to recollect they’re totally different from many banks in Brazil, we do have a vital and related worldwide operation. And every time we now have any devaluation of the FX, it impacts the risk-weighted asset not just for the U.S. or another currencies portfolio that we now have overseas but in addition the portfolios that we now have on steadiness sheet domestically in different currencies.

So, these are — introduced an — an vital impression. The different factor is that it is true that we cannot be having extra related impacts on the tech aspect from the overhead. But we really feel working our state of affairs that we imagine we needs to be cautious right here. We do not know but what could be the impression of this pandemic, the place it can land, what would be the restoration that will probably be seen.

So, we’re comfy in retaining a conservative stage of capital being 12% as a typical fairness and 13.5% in stage one. So, we nonetheless imagine that it is a good and comfy stage, OK? And speaking in regards to the — the funds space. What I’d say, sure, you are proper. Not solely we’ll have the buying enterprise, the issuer, all of the bank card portfolio that we now have not just for financial institution bank card enterprise but in addition the retailers that we now have — we’re companions.

We even have the mono-liners right here, the place we promote to the open market the bank card. We even have money administration for the entire financial institution, not solely retail but in addition for the wholesale enterprise. We’ll have the EG platform inside this new enterprise space, and in addition PIX. And we’re discussing what elements of open banking needs to be there as nicely.

So, all enterprise that we now have contained in the financial institution that contact funds in some way, even some enterprise from the retail as nicely needs to be concentrated on this new enterprise space. And we do imagine there may be loads of synergy, inner synergy, shopper synergy, platform synergy, expertise synergy for the shoppers. And that is what we will be working for the approaching years.

Thiago BatistaUBS — Analyst

Very clear, Milton. Thank you.

Milton Maluhy FilhoChief Financial Officer and Vice President

Thank you very a lot.

Operator

[Operator instructions] Our subsequent query comes from Jason Mollin of Scotiabank. Please go forward.

Jason MollinScotiabank — Analyst

Hi, everybody. I’d additionally wish to thank Candido for his laborious work, dedication, and communication over a few years. And congratulate Milton for his success in prior roles, which clearly underpin his election as the brand new CEO. Best needs as you begin these new phases.

My questions are associated to the views and steerage that you just offered. You talked about that the financial institution’s outlook for 2021 depends on the base-case macro state of affairs that you just supplied. How would you body the upside and draw back dangers for financial progress, possibly charges, inflation, and employment, the metrics you gave? And in that context, how do they translate to upside and draw back dangers for the steerage, particularly for mortgage progress and mortgage loss provisions? Thanks.

Milton Maluhy FilhoChief Financial Officer and Vice President

Jason, thanks very a lot. Look, as I mentioned on the very starting, that this state of affairs that we now have it is a constructive state of affairs. But we do imagine there may be nonetheless loads of un — uncertainty out there. I’d say that the primary window we now have is the vaccination program.

We nonetheless should comply with very shut the evolution of this plan. Just to present you an thought, if we now have a postpone of six months on this vaccination program, we should always have no less than — we should always lose no less than 300 foundation factors when it comes to financial progress. This will impression unemployment as nicely, and this may impression the present — the FX. And the rationale why is as a result of the expectation of the federal government nonetheless present extra help to the Brazilian inhabitants will enhance.

And additionally, the uncertainty in regards to the functionality to have a sustainable debt. So, that is our foremost fear right here. Of course, if we see this state of affairs, we do not imagine that the credit score will frow — will go extra for the low aspect of the steerage. That’s why we — we want a broader vary coming from three to 4 factors.

So, we see a draw back danger right here when it comes to credit score portfolio. In the opposite hand, we should always have extra concern on the price of credit score as a result of extra delinquencies. And we aren’t foreseeing for this 12 months any new program to assist the shoppers. Of course, we’ll be very near the shoppers, however not very structured program as we had final 12 months.

Maybe if we see a really, very unhealthy state of affairs, we should always take into consideration reopening a program like with impacts that we should always have. On the income aspect, it is crucial as nicely that on providers, these traces are very correlated with the exercise of the nation. So, if we see a decrease — decrease exercise as we noticed final 12 months, a couple of traces of revenues will probably be majorly impression. So, that is why we made a broader vary.

So, I see a priority on the credit score aspect, I see a priority on the income aspect, I see really a priority on the price of credit score. It’s true that solely prices mortgage curiosity prices of the banks, a part of that’s effectivity that we now have to — to — to be very, you recognize, deep within the evaluation and maintain shifting when it comes to opening room for brand new investments. But within the different hand, we — we should always profit as nicely from a decrease financial exercise as a result of we now have loads of variable prices that will impression the operation as nicely. So, this would be the hedge in some way for the P&L as we have seen final 12 months a part of it.

Jason MollinScotiabank — Analyst

May — possibly simply as a follow-up on the supply outlook, does the price of credit score steerage incorporate any launch of reserves? And then, secondly, on the price aspect, you recognize, views, you talked about the — a rise of about BRL 1.5 billion in investments for expertise, new merchandise and business platforms. What would that complete quantity be? Or in different phrases, what did you spend on — on an apples-to-apples foundation in 2020?

Milton Maluhy FilhoChief Financial Officer and Vice President

OK. Your first query, Jason, once more?

Jason MollinScotiabank — Analyst

Was — does the steerage for price of credit score incorporate any launch of reserves?

Milton Maluhy FilhoChief Financial Officer and Vice President

OK. Sure. Well, the factor right here is, sure, it does. We do imagine that as we work with the anticipated loss mannequin, we anticipated this cycle — the credit score cycle final 12 months.

So, we anticipate the delinquency coming from the NPL to develop all year long. We imagine it can make a peak by the year-end and possibly on the primary quarter of final 12 months. And for certain, this may eat a part of the provisions that we made for the 12 months. So, they had been made precisely to soak up these delinquencies that would be the coming within the following years.

So, that is — yeah. So, the reply is sure, we do — we do imagine that. And on the second query?

Jason MollinScotiabank — Analyst

Was the funding in expertise —

Milton Maluhy FilhoChief Financial Officer and Vice President

Investment in expertise.

Jason MollinScotiabank — Analyst

Yeah, yeah.

Milton Maluhy FilhoChief Financial Officer and Vice President

We didn’t launch in 2020, nevertheless it’s — it is vital — it is a related enhance that we now have this 12 months when it comes to hours that we deploy all through the operation. We’ll be doing lots, the — the variety of hours that we use not solely to rework the financial institution but in addition to deploy into creating new — new — new traces of enterprise into new merchandise and new enterprise contained in the financial institution. So, I’d say that — I’d say that we virtually doubled the — the — the amount of hours that we will be investing in our operation from final 12 months to this 12 months.

Jason MollinScotiabank — Analyst

So, will that BRL 1.5 billion be in bills? Will that be amortized in a short time or — or, you recognize, how — how ought to we take into consideration that quantity when it comes to the expense?

Milton Maluhy FilhoChief Financial Officer and Vice President

Yes.

Jason MollinScotiabank — Analyst

That —

Milton Maluhy FilhoChief Financial Officer and Vice President

Part of that sure as a result of we’re seeing funding. But part of that can already go as opex all year long of 2021. So, not essentially all of them will probably be made in property and we now have to amortize all through the years.

Jason MollinScotiabank — Analyst

Thank you.

Milton Maluhy FilhoChief Financial Officer and Vice President

Yeah. But primarily, this BRL 1.5 billion, that manner we launched — I’d say that the majority a part of that’s opex, OK? The small a part of that’s capex. So, on the finish of the day, it’s implied within the steerage that we gave.

Jason MollinScotiabank — Analyst

That’s useful. Thank you.

Milton Maluhy FilhoChief Financial Officer and Vice President

Thank you very a lot.

Operator

Our subsequent query comes from Carlos Gomez-Lopez-Lopez with HSBC. Please go forward.

Carlos Gomez-LopezHSBC — Analyst

Hello and thanks for permitting questions. First of all, like all people else, congratulations and good luck to Milton. And thanks very, very a lot Candido for all these years. It’s been a really lengthy highway.

From the time when a few of us have met you at [Inaudible] Carlos Constantini can discuss that. And — and simply type of — you had an amazing governing. So, thanks — thanks very a lot.

Candido BracherNew Chief Executive Officer and Board Member

Thank you very a lot.

Carlos Gomez-LopezHSBC — Analyst

In phrases of our questions — one — thanks. In phrases of our questions, now that you’ve got a –a — a highway to exit from XP, what adjustments for you? What have you ever discovered out of your funding there and the way — how will you identify your funding platform otherwise from maybe how you probably did it earlier than? And the second refers back to the dividend. You’ve been very clear saying that you just wish to rebuild your capital again to the 13.5% stage. I imply, ought to we perceive that you will keep this minimal statutory dividend, the 25%, most likely by way of the top of the 12 months till you attain that stage? Or in case you get nearer, you will begin growing it? Thank you very a lot.

And once more, thanks, Candido.

Milton Maluhy FilhoChief Financial Officer and Vice President

Thank you, Carlos. Thank you very a lot to your query. Talking in regards to the highway as we have been seeing right here, we made a — a couple of adjustments lately on this energetic committee as I discussed. The thought right here is to have a extra simplified construction the place we will have extra agility and focus, and we — we’ll have a unique time to market.

We’re going to be targeted lots on what we see in shopper simplicity. This is one thing that Candido has been doing contained in the financial institution. And I feel the tradition of the financial institution is just about aligned with that. We nonetheless have loads of work to do, we all know that.

We achieved our objectives for 2020, however we nonetheless have room to enhance for the approaching 12 months. So, loads of deal with that. We’re going to be focusing lots on the effectivity agenda, as I discussed earlier than, which is a should and we should always open room for brand new investments. So, we now have to maintain the mindset to develop the financial institution, to develop revenues, to open new — new — new traces of enterprise.

And to have the ability to fund that, we now have to open room within the enterprise, as regular, run the financial institution that we now have right here. So, there’s loads of issues to be carried out there. And additionally, an agenda that we will be loads of — loads of focus. And that is one thing additionally that we invested lots prior to now years.

With the ESG agenda, that is one thing crucial and we will maintain loads of deal with that. Talking about variety, speaking about atmosphere, speaking about what we referred to as right here the Todos pela Saude was a significant donation to assist the nation all through this pandemic. This is the agenda that we maintain loads of focus. And additionally, we now have a brand new govt committee now that’s organized and making an attempt to elaborate what would be the technique coming for the approaching years.

We have loads of work to do on that floor, and we’ll be sharing with you within the coming quarters every time — every time we now have extra info. When we discuss dividend, the primary subject right here is that we — till we get to the 13.5%, we will be working with the 25% which is the minimal regulatory. We do imagine that by the top of this quarter, we needs to be above the 13.5% and even near the 13.5%, after which we are going to maintain or return to the coverage that we launched to the market. So, that is our expectation.

We imagine by the — the top of this quarter, we needs to be above the 13.5%. And then we’ll maintain the identical guidelines, the identical desk that we launched to you to the market. And we’ll return to the identical coverage that we all the time have.

Carlos Gomez-LopezHSBC — Analyst

The — sorry, when you’re enthusiastic about being on the 13.5% stage on the finish of this quarter, I — I think about that that features the XP transaction and a few constructive impression from there as a result of, I imply, in any other case it is a 200 foundation factors soar. Is there anything that — that we now have been specializing in that additionally adjustments your capital ratio?

Milton Maluhy FilhoChief Financial Officer and Vice President

No. The XP transaction that we’re doing proper now, there may be minimal impression on capital ratios. The a part of the deal that had extra impression for us, the — the — the promoting of the inventory that we made within the final quarter, it introduced round 20, 25 foundation factors when it comes to capital. This was the primary achieve that we had, and this was the rationale why we offered a part of the funding we had.

But on this spin-off that we’re making proper now, there is no such thing as a impression — related impression when it comes to capital as a result of we lose web price and we lose, additionally, revenues right here.

Carlos Gomez-LopezHSBC — Analyst

OK. And that was our — our understanding, So — so, I assume — so — so — so, how do you get to 200 foundation factors?

Milton Maluhy FilhoChief Financial Officer and Vice President

I’m sorry?

Carlos Gomez-LopezHSBC — Analyst

Yeah. So, how will we get to 200 foundation factors simply in a single quarter when it comes to capital accumulation?

Milton Maluhy FilhoChief Financial Officer and Vice President

200 foundation factors?

Carlos Gomez-LopezHSBC — Analyst

From 11.5% on the finish of this 12 months — at this finish of this quarter to 13.5%?

Milton Maluhy FilhoChief Financial Officer and Vice President

20 foundation factors, proper, Carlos? What are you saying in regards to the 200 foundation factors? I — I do not comply with you.

Carlos Gomez-LopezHSBC — Analyst

So, I — sorry, possibly I’m specializing in a — on a unique query. So, you suppose you will be at 13.5% by the top of the quarter. That is ok. OK.

Thank you very a lot.

Milton Maluhy FilhoChief Financial Officer and Vice President

Thank you.

Operator

Our subsequent query is a comply with up from Geoffrey Elliott with Autonomous Research. Please go forward.

Geoffrey ElliottAutonomous Research — Analyst

Hello. Thanks for squeezing within the — the follow-up. Two — two very fast ones. Firstly, the XP sale.

Why does that want — the XP spinoff, why does that want Fed approval? What — what is the Fed’s involvement there given the operations are in Brazil? And then second on PIX, it appears like there’ve been a few type of operational IT-type points. I do know the preliminary sign-ups, preliminary key registrations had been slower than you’d hoped. And I feel that was one thing on the IT aspect there. And then there’s been some press the previous couple of days about transactions being duplicated and — and making an attempt to get these funds again.

So, curious in regards to the tech challenges that you just might need encountered on — on the PIX aspect. Thank you.

Milton Maluhy FilhoChief Financial Officer and Vice President

Look, initially, speaking about XP. The cause why the Federal Reserve must approve is as a result of the financial institution, and in addition XP, have underwriting actions within the U.S. So, it is a part of the approval. We do have an operation within the U.S.

and XP as nicely. So, if there’s a — a change within the construction that we now have, Federal Reserve must approve it. This is the primary cause, OK?

Geoffrey ElliottAutonomous Research — Analyst

Understood.

Milton Maluhy FilhoChief Financial Officer and Vice President

OK. And speaking about PIX as you requested on the very starting, when the Central Bank first launched the figures — the numbers, we had been on the very starting of the journey. We made an vital catch-up within the final — final months. As — and I can inform you, it is not a public quantity, however we’re very comfy with the market share we now have.

And the market share for us will not be solely the amount of keys that we now have from the shoppers but in addition —- however extra importantly there than that’s the transactionality of the PIX. So, we now have a particularly reasonable share on that. Also, in amount of shoppers and in addition in amount of the volumes transacted when it comes to market share. So, we’re very comfy with the catch-up we made after the primary announcement of the Central Bank.

Geoffrey ElliottAutonomous Research — Analyst

OK. And — and the tech points?

Milton Maluhy FilhoChief Financial Officer and Vice President

And the what?

Geoffrey ElliottAutonomous Research — Analyst

The — it appeared like there had been some tech points that made it laborious so that you can register keys at first after which some extra —

Milton Maluhy FilhoChief Financial Officer and Vice President

No. At the very starting, it was — yeah, some instability in our platform. But we predict — we certain could have — it is — it is the character of the enterprise to have points. But we’re very comfy with the catch-up we made within the platform as nicely.

Geoffrey ElliottAutonomous Research — Analyst

Understood. Thanks very a lot.

Milton Maluhy FilhoChief Financial Officer and Vice President

Thank you very a lot.

Operator

This concludes at the moment’s question-and-answer session. Mr. Milton Maluhy Filho, presently, it’s possible you’ll proceed along with your closing statements.

Milton Maluhy FilhoChief Financial Officer and Vice President

Thank you, gents. Thank you very a lot to your participation in our name. It’s an enormous pleasure to have you ever right here. As I mentioned on the very starting, it is — it is a time to say thanks to Candido as nicely for main us for the final 4 years.

It was a privilege and a pleasure to work with you, Candido. And I’m certain from the board of administrators, you may be right here cheering for us and following us. So, an enormous pleasure to have you ever on board.

Candido BracherNew Chief Executive Officer and Board Member

Thank you very a lot, Milton. And thanks very a lot for the analysts and buyers who’ve given us help throughout this era. And I’d identical to to say that I want you the perfect of luck and I’m extraordinarily assured on the way in which you will run the financial institution and the way the financial institution will carry out beneath your management. So, I want you all the perfect.

Milton Maluhy FilhoChief Financial Officer and Vice President

Thank you very a lot.

Operator

[Operator signoff]

Duration: 72 minutes

Call individuals:

Candido BracherNew Chief Executive Officer and Board Member

Milton Maluhy FilhoChief Financial Officer and Vice President

Mario PierryBank of America Merrill Lynch — Analyst

Tito LabartaGoldman Sachs — Analyst

Geoffrey ElliottAutonomous Research — Analyst

Thiago BatistaUBS — Analyst

Jason MollinScotiabank — Analyst

Carlos Gomez-LopezHSBC — Analyst

More ITUB evaluation

All earnings name transcripts

Exit mobile version