Banco do Brasil S.A. (OTCPK:BDORY) Q3 2022 Earnings Conference Call November 10, 2022 9:00 AM ET
Company Participants
Janaína Storti – General Manager, Investor Relations
Fausto Ribeiro – Chief Executive Officer
Ricardo Forni – Chief Financial Officer
Renato Naegele – Vice President, Agribusiness
Paula Teixeira – Vice President, Internal Controls & Risk Management
Conference Call Participants
Gustavo Schroden – Bradesco
Eduardo Rosman – BTG
Rafael Frade – Citi
Marcelo Telles – Credit Suisse
Jason Mollin – Scotiabank
Flavio Yoshida – Bank of America:
Pedro Leduc – Itaú
Natalia Corfield – JPMorgan
Tiago Binsfeld – Goldman Sachs
Janaína Storti
Good morning everyone. I’m Janaína Storti, General Manager of Investor Relations at Banco do Brasil. Welcome to our live event to discuss the results of Q3 2022. Our events bilingual and has simultaneous translation into English. To choose the language, click in the icon on the bottom on the button on the right corner of the screen and select the desired audio.
To begin our CEO, Fausto Ribeiro; and CFO, Ricardo Forni will give a brief presentation of the performance of the bank. Then we will have a Q&A session. We remind analysts that it is only possible to ask questions through the webcast link. Also with us are Paula Teixeira, Vice President of Internal Controls and Risk Management; Joao Carlos Pecego, VP of Wholesale Business; Renato Naegele, VP of Agribusiness; and Daniel Maria, Head of Finance and Investor Relations.
I now turn the floor to CEO, Fausto so we can begin.
Fausto Ribeiro
Good morning everyone. Good morning to all of you joining us today. It is a huge pleasure to be with you today to talk about our Q3 2022 results. Today we celebrate yet another record result. It was a performance based on delivering value to customers, also based on accelerating our digital transformation, business sustainability and continuing our strong performance on our new agenda, the ESG agenda.
Focused on our strategy we went from an ROE below 15% to 21.8% with an adjusted net income of BRL8.4 billion, and more than a strong result we delivered to society and added value of BRL57.8 billion, up 34.8% compared to the same period of the previous year and this is a consistent delivery, which makes us very proud, and as the result of the dedication of the employees of Banco Brasil spread from north to south.
Since the beginning of this management, we have become even closer to our workforce. I have been personally to practically all Brazilian states, visiting our teams and also visiting our clients thus putting into practice what I advocate the most proximity is a practice.
Today the engagement of our team is clearly reflected in our numbers. One of deliveries of our result is the growth of credit. With a mix that brings a better risk-adjusted returns, for example, in Q3 2022, our expanded loan portfolio exceeded BRL969 billion, up 19% year-on-year. Coming to the market they grew 16.8%, almost 17%. We’re in line with the market and a little above. We maintained our delinquency level under control, another very important point for us to achieve these wonderful results at 2.3% below the Brazilian financial system as you can see on the screen and with a coverage ratio of 234.9%, above the average of the Brazilian financial system.
It is worth pointing out the growth of our portfolio with quality is the result of the good origination of operations and the accuracy of our credit risk models, which are permanent evolution. Over the last few quarters, we implemented a series of initiatives to improve our relationship with our clients being closer and closer to them and promoting a comprehensive human and specialized experience in both our online and offline channels.
As a result, we have more engaged and satisfied clients. We see that we increased the number of engaged clients. In other words those clients who have a frequent relationship with us with recurring business generation, engaged clients increased by 17% in the yearly comparison. We realized that when the client is engaged, we generate more results and have lower churn paving the way for a long-lasting sustainable relationship.
We observed the devaluation of services provided remains at a high level with a score of 4.81 on a five-point scale. So good service also translates into a lower rate of complaints. We exceeded historical mark, our best. We achieved the top rank among incumbent banks and surpass the best position in our history in the Central Bank ranking, its historical mark that we have to celebrate. All these moves support the increase of more than 10 MPS points in one year redefining our readiness of our proximity based strategy.
So all of that proves that Banco do Brasil strategy is a right one to achieve a level of quality and excellence in the eyes of our clients, showing that it is possible to achieve results, earnings on one hand and on the other hand having satisfied clients with us.
We strengthened our leading position in a number of alliance [ph], for example, an individual our payroll loan portfolio has already reached more than BRL113 billion with a 20% market share. It is a safe online with a good percentage of return with low delinquency. At the same time, we advanced the strategy that we talked about in the last call of diversification in non-payroll loan line strength to improve the mix of our portfolio, to bring a higher NII.
We remain committed to supporting the country’s micro-small entrepreneurs. And we were the first bank to reach the mark of BRL 10 billion releasing the latest Pronampe tranche. And we did that with quality benefiting more than 103,000, micro-small companies all over the country 41,000 of which are headed by women. That’s an important observation. Well the resources released generated positive impact across all sectors of the economy.
In foreign trade, we increased our relevance the ACC ACE portfolio grew 36.6% year-on-year in here. It’s important to pause, because again we are ranked number one, in the ranking of the Brazilian Central Bank and fund trade. And that is important because we offer a close cycle of service to our clients particularly, agribusiness clients that export their crops abroad.
So it is important that we have competitive rates so that we can fully serve our clients particularly those that are creating added value for the bank and agri-business clients are part of that group. And as the biggest partner of Brazilian agribusiness, as we said before, by September we had disbursed BRL 63.5 billion in the 2022-2023 crop plan.
And I can tell you that today disbursements already exceeded BRL 84 billion, if we get the latest numbers. So agribusiness is strong growing being supported by Banco do Brasil. And we’ll continue to lend the hand to agribusiness. It is a segment that is very capitalized, with favorable commodities, price, delinquency rates way below the average of the market comparing with other industries.
And Banco do Brasil is stronger and stronger in supporting these transactions. And I must highlight our ESG performance, which is present which pervades all of our company’s decisions. We have constantly expanded our portfolio with sustainable solutions and are attentive to new businesses that generate financial results, as well as a positive social environmental impact.
The highlight goes to our sustainable portfolio, which totaled BRL 321 billion in September 22. Reinforcing our leading role in the sector of Banco do Brasil, is the biggest partner of the Brazilian agribusiness as mentioned before, we are present in the entire value chain. Agriculture credit is the product with the highest NPS at BB. And more than offering credit, the bank works side-by-side with farmers getting to know the reality of the field, the clients’ needs and potential and thus offering solutions with assertiveness and agility.
With the Circuito Agro, we have already visited more than 350 municipalities and will reach the mark of more than 500 by year-end, offering training for family agriculture throughout the country. We take the best production in harvest practices. The — is to take them more than just credit to take them training, skill building.
We have a partnership with Embrapa and our experts to train more than 6,000 small growers. We’re also working to develop new sources of financing for the sector. The objective is to create a permanent line within ESG bias, at an attractive cost. And that little by little, will help the sector reduce its dependence on public resources what we call the agricultural subsidy or equalize the resource.
I would also like to highlight, the balance of the sustainable agriculture portfolio, which posted a total of BRL 140 billion in September 22, reached €112 million of the gold that BB had defined in the beginning of 2021 and its 10 long-term commitments to sustainability. In addition, we have the low-carbon agriculture program.
In addition, BB is digital out in the field as well. We have advanced our partnerships to bring innovation to the field. One example is, FieldPRO climate intelligence startup in the innovation hubs, research and development and sustainability we likeness the partnership with Embrapa and Bayer and AgTech Garage.
Over there we have a lab, seeking to develop innovations that can be taken to the rural areas. Banco do Brasil, wants to offer a lot more than just credit and loans. We want to offer technology solutions so that we can be more engaged and generate more business so that the Brazilian agriculture can continue to do the wonderful work of transforming society, involving technology and record after record of grain production generating more and more exchange results to Brazil.
In addition, we are exploring three ecosystems. We have invested in the development of new technologies to enhance client experience, generate value for all those involved in our relationship chain and create new business models going beyond traditional banking.
For the agribusiness segment, from small to large pharmas, we have been scaling up the digital platform called Broto, which has already achieved more than BRL2 billion in business in two years, facilitating farmers access to banking and nonbanking products and services.
And now we have incorporated a broad company preparing ourselves to monetize and boost the results of those platforms. For individuals we have Loja BB stores, bringing even more relevance to our app and increasing the offer of products to our clients.
With our relevant audience the super app BB has already achieved a daily peak of more than 10 million users in year-to-date. Loja BB store has already posted BRL680 million in sales of products and services and that brings to BB commissions that range from 5% to 12%.
And to give you updated numbers close to BRL900 million in sales of products and services. Today, we have more than 50 brands offering cash back directly to the client’s account.
And our next step is to evolve to an end-to-end model to have a checkout of the operations also offering the possibility of clients by using payment slips to complement our banking activity which is to fund trade.
For SMEs, we created the Liga PJ platform. The solution has reached more than 530,000 users and has already referred more than 4,000 users to the patrons of our 21 partners. This is a space for the exchange of information experiences and business connections between entrepreneurs and partners in this market. We seek to expand our strategic partnership to strengthen and complement our business.
Well, speaking a little about our core business strategic partnerships. We are celebrating two years of our partnership with UBS. We have achieved robust results. Since the beginning, we have participated in the structuring of around 345 deals. And aiming to expand this successful partnership to other businesses, we recently signed a binding Memorandum of Understanding for specialized wealth management services in the US. It’s not going to be an exclusive partnership with UBS in the US.
But since we’ve been successful in our own market, we’ll extend to the United States, the possibility of broadening our private wealth management offering our clients to offering our clients a wide range of products in the famous advisory, which is so important in wealth management.
Last week BB Asset announced its first partnership with an independent fund manager called Occam. This partnership seeks to expand our operations in the management of products with more sophisticated strategies to meet the growing client demand for diversification and to join the ecosystem of independent wealth managers.
After recently announcing the investment we made in the startup called Yours Bank, we now announced a new investment from our venture capital program. Bitfy, start-up the connect large financial ecosystem that increases our ability to build blockchain solutions and opens possibilities for us to work with crypto activities crypto assets actually and tokenization.
Again the bank looking for partners in venture capital with direct partnerships trying to modernize the company to bring it to a whole new level of management in the digital world.
In addition, part of our strategic agenda is to divest non-core assets. The example is Banco Digio, which we sold to Bradesco and they were our partner. So we sold it to Bradesco for BRL645 million in February of this year. The screen shows our strategy of strategic partnerships and the sale of non-core assets. The strategy remains. It is in force and it is showing positive effects helping the bank enhance our results.
Okay. Expanding the engagement with young people is fundamental to guarantee the company’s sustainability and the offering of products and services customized to this moment of life is one of our priorities to rejuvenate our client base.
In view with this, we have carried out a series of actions to get even closer to this audience both in language and channels used with the goal objective of promoting an experience connected to the behavior of young people in their moment in life.
Here we highlight our recent launch called BB Cash. This is a 100% digital account developed for 13 to 17-year-olds with gamified content. With a focus on financial education, BB Cash brings a card for online purchases, access to Pix, investments among other customized functions.
And there’s more. Just this week we strategy campaign where when opening a BB Cash account, our young clients will receive a toy art from Squad BB [ph]. You can see these figure actions — action figures. They were designed in partnership with our sponsored [indiscernible]our star from surfing and others. Just like you imagine every friends. And the idea is that our young clients will be interested and more engaged when they open a BB Cash account they will get a toy art. They can choose and they can continue to get other action figures so that they can have the whole collection.
Very well cultural transformation with employee engagement and we continue to work hard to transform the capabilities of our company to engage our employees towards the new FTR all transformation is brought about by people. With the evolution movement, on the left, we focused on up-scaling and re-scaling actions to develop the digital competencies of our employees.
In addition the second block we have advanced on internal innovation front with experimentation labs for new technologies and the development of data and analytics solutions. We have four laps. We spoke about this in the past. The ideas to create a perfect environment for innovation.
We are also continuously enhancing and developing new programs and initiatives related to talent traction, career development, succession, and talent retention. The application of people analytics to identify talent has allowed us to reduce traditional selection process times by 75%. We’re also modernizing more and more senior management succession program.
We have internal missions for our executives and managers, so that they can be open to adopt new market trends, so that they can get to know different markets. So, they have online merchants in major innovation centers such as the Silicon Valley, China, Israel, London. And this is a continued education program so that our executives can have access to different views.
In addition, we have evolved with new work models enabling more flexible alternatives remote working and so on and so forth. The idea is that cultural transformation will be one of the basic pillars for this transformation that we need to have at the bank and everything that we did all these levers for client proximity, leading roll into [ph] loan lines, foreign trade, SMEs, individuals, agribusiness, innovation, partnerships and people. So that all of these pillars will sustain BB to boost us forward in a scenario of increasing competition.
As part of the digital acceleration strategy to generate value to clients, we have a digital strategy well-designed at the bank to have an end-to-end process. We are selecting three sectors talking about investors, the youth, micro and small companies. We are investing strongly in technology in our cloud environment, reinforcing our whole technology complex.
We’re investing a lot in cyber and an agile operating model, so that we can have the whole organization with a fast and effective way of promoting transformations and we are bidding a lot on automation and analytics so that we can be more efficient in the offering of services and products to our clients.
In other words telethon culture, because it’s people that do things that make things happen. And these are the key pillars in this digital acceleration strategy for perennial value generation at the bank. For the digital ambition to become a reality, we have seven main levers. They will be subdivided into KPIs that are being followed by the whole management of the bank. We mentioned that this is a three to five-year journey for the process to be complete so that we can materialize the wishes we have for digital transformation of the bank.
Lastly, I take home message is that we have a corporate strategy that was reviewed this year with a number of basic pillars such as sustainable result, ESG agenda, digital transformation and innovation to be accelerated. We want to be a benchmark in the market. We’ve engaged the professionals focus on innovation in meritocracy has been one of the main pillars for a high-quality management so that we can have that better results.
We also reviewed our purpose based on our practices and our values. Our new purpose is to be close and relevant in people’s lives at all times. So proximity, the proximity strategy has been proven to be effective in solving the issues the problems of our clients to have a qualified a more customized offering of products and services to our clients and at all times in all moments of their life. It’s nice when we hear our clients saying that, they’ve been with us for 56 years. And to know that yes, we played an important role in their management of their business that, we will present in the beginning of the business and that we were present, when they were generating more results when the company was consolidated into large economic groups. And our values or proximity efficiency innovation commitment to society and integrating these values are building blocks. So that we could have a solid strong consistent corporate strategy that would be a guide for what’s coming in the future.
Now, I turn the floor to Ricardo Forni, who will speak about the numbers.
Ricardo Forni
Thank you very much, CEO Fausto, good morning to all. Let me start the presentation with some highlights. But I would like to underscore that, the points expressed by our CEO, show us how this relationship of maintaining – this approach of maintaining close ties with our customers, the digital strategy and also our clear strategy, and engagement of the team. So how it’s done is very important. And we were very happy to produce the numbers that we reached.
In the last nine months, we can report expressive earnings of BRL22.8 billion, 50.9% in comparison to the nine months of 2021. This performance reflects the levers that will continue to sustain our positive results, healthy growth in the loan portfolio, reaching BRL969 billion diversification of lines of revenue, elevating our net interest margin by 16.7% and fee income revenue by 11%.
Cost management discipline, which coupled to the new business generated, enabled us to retain a cost-to-income ratio of 31.6%, the best in the historical series and a solid capital position with common equity Tier 1 amounting to 11.77%.
Next slide please. Here, we report our quarterly adjusted net income in a total of BRL8.4 billion, an increase of 62.7% vis-à-vis 3Q 2021. Our return on equity reached 21.8% and ranks among the best in the comparison with our peers. Our expanded loan portfolio exceeded BRL969 billion, an increase of 19% compared to September 2021. And our sustainable business portfolio reached BRL321 billion that is approximately one-third of the expanded loan portfolio. The individual’s loan portfolio grew 10.9%, compared to September 21, and 2.7% in the quarter, as a consequence of the good performance in payroll loans, consumer finance and credit cards following our origination strategy focused on lines, with better risk-adjusted returns.
The SME portfolio surpassed the mark of BRL106 billion, up 18.4% in 12 months, resulting from the release of the new Pronampe tranche. The high demand observed in the agricultural sector of close ties with the segment, cost our agriculture loan portfolio to a level of BRL286 billion. And almost half of this portfolio is made up of loans for sustainable agriculture.
In the Corporate segment, our loan portfolio reached BRL190 billion, with annual growth of 29%, and quarterly growth of 3.2%.
In the next slide, as previously announced the expanded ALLL climbed 53.8% in the quarter-to-quarter comparison, and 15.1% if compared to the same period last year. We would like to emphasize our performance in write-off recovery with a growth of 10.5% in the year year-to-date and in the quarter increasing 4.1%.
Delinquency longer the 90 days reached 2.34% under control and below the Brazilian financial system indicator. In the quarter, we observed an expansion of non-payroll loans individual segment, while the Corporate & Agriculture segment showed the behavior near stability. The coverage ratio closed the quarter at 234.9% and the new NPL over portfolio is reported at 0.85%, with a coverage of 91%.
In 3Q 2022, NII totaled BRL19.6 billion, up 14.7% in the quarterly comparison and 25% in the 12-month comparison. Year-to-date NII grew by 16.7% totaling BRL51.9 billion. The strong 10.2% quarterly increase in revenue from credit operations can be explained by the growth and re-pricing of our loan portfolio. The 36.3% quarterly increase in treasury income, reflects our growth in the securities portfolio, which has more than 80% of assets linked to the CDI rate and benefited from a higher average solid rate.
Service fees totaled BRL23.9 billion in the first nine months up 11% in the yearly comparison mainly influenced by the performance of fund management, pensions and credit operations. In the accumulated view administrative expenses grew 6% in the year, below inflation in the period as a consequence of the bank’s discipline in cost control.
On the next slide, yes, we present the common equity Tier 1 which stood at 11.77% in September mainly impacted by the increase in RWA credits driven by a growing portfolio and partially offset by higher earnings withholdings in the quarter.
And now, considering the performance shown up to now and also in order to express the management’s expectations for the year, Banco do Brasil revised its corporate projections. In the loan portfolio we increased the estimates for the company segment to the range of 15% to 17%, mainly reflecting the strong disbursement of Pronampe 3Q 2022.
We brought down to 23% the high-end of the guidance on the individuals, reflecting greater selectivity in the growth of non-payment role credit lines. And considering the agribusiness, we revised the range for growth between 15% and 17%.
We reviewed the NII range to a range of 19.5% and 25% with the purpose of reflecting the above expectations performance in the loan portfolio caused by the repricing moves treasury income and also a greater volume of securities and higher solid rate.
Fee income was reviewed to a range between 9% and 11% as a result of the sound management in funds pensions, loan operations and guarantees. The numbers expected for the expanded ALLL and administrative expenses were maintained.
So finally, the adjusted net income was reviewed to a range between 30.5% and BRL32.5 billion to account for the changes in the other lines.
We can now start the Q&A.
Question-and-Answer Session
A – Janaína Storti
Thank you. We will now begin the Q&A session. I’d like to remind you that this is going to be a bilingual session. You can ask questions in both, English or Portuguese. Our first question comes from Gustavo Schroden with Bradesco. Gustavo?
Gustavo Schroden
Good day everyone. Congratulations on the results. Fausto, Forni, Daniel, Janaína, indeed very strong earnings. I have two questions. First I’d like to understand a little what we can expect from this NII line for 2023 because I think the 2022 is a given.
More specifically, this combination between market NII and client NII, market NII was BRL10 billion a very strong result. So I’d like to have two explanations. What can we expect looking forward? And the composition of this market NII. Sometimes there’s a confusion of client NII market NII I think BB accounts for this slightly differently than the rest of the peers.
So I’d like to understand the market NII so that we can have a comparative base with the private peers. And still on NII can we imagine 2023 evolving these levels of course considering the current information that we have particularly regarding interest rates.
The second question has to do with the quality of the portfolio. I think that we had normalization to €4.5 billion. NPL increased 30bps with NPL individuals increased BRL 90 million. So I’d like to understand where are we in the cycle of NPL particularly Banco do Brasil specifically in individuals because I was looking at the chart that show by cohort.
And if we look particularly consumer finance and the 2022 cohort, I think that this is worse than the historical series. I would like to understand where are, we in the delinquency rate particularly in consumer finance. And what could — what could we expect? And when should we achieve the delinquency or the fall peak.
Fausto Ribeiro
Excellent questions, Gustavo. We will all share the answers. Forni, we’ll start talking about NII. And then, Ana Paula our VP of Risk and internal controls will speak a little about the quality of the portfolio. Forni, let’s start with you.
Ricardo Forni
Thank you Gustavo for the question, I think that NII well for example, the division between treasury and client, we don’t have the same breakdown. We have a different view of that. A view that is very similar to what our peers have been informing and the IR team can give you more on that. But the treasury result includes the composition of the portfolio. The treasury result has been benefiting from growth of the portfolio and higher solid rates. And this is a reflection that we see quarter-after-quarter.
In growth of the loan portfolio coupled with the whole set of revenues minus expenses on the funding side. That’s what drives our NII to be robust and growing and at a higher pace of the growth of the loan portfolio. So on the side of assets, we’ve been repricing because the portfolio takes some time for repricing and it incorporates this higher rate over time in what we have signaled and expected for 2023 is that NII as a whole will reflect growth greater than the portfolio growth that we’re expecting for next year. So the benefit of this repricing move in the diligence in managing liabilities cost will continue to evolve and evolve above the growth of the loan portfolio.
That’s a movement that we clearly see in our forecast for 2023. And this is consolidated. Now when we try to break it down similarly to our peers this product is a client NII because after all we are talking about a funding cost compared to market rates and the credit spread. So this dynamic is positive and we see 2023 evolving even more. I don’t think that we expect such a strong growth as we had in 2022 but a stabilization at a high level and some residual growth in 2023.
Unidentified Company Representative
If I may add to that Schroden I think the one chart that helps us understand the dynamic of portfolio repricing shows our DNA. I think it’s figure 25 where we show contracts by cohort and we can see how much of that applies to 2022 should be something between 25% to 30%. So that shows the process of portfolio repricing.
This is an important dynamic contained in the assumption mentioned by Foroni. Also it is important to remember that we have active management of our assets and liability positions. We do that considering the several scenarios. And let me add something about 2023. And this was asked in the press conference. The expected solid interest rate reduction in 2023 will contribute to repricing the liabilities faster than the assets. So that’s another contribution, a contribution that is minor as a whole. But in 2023 it will also be felt.
Well from the standpoint of cohorts, it’s important to remember that this is a reflection of our mix of assets. If we are positioning ourselves and when we compare with prior quarters, when we implemented the strategy very prudently, cautiously to have a mix with more profitable lines in our portfolio. And if we compare with the previous period when we weren’t at the current status in terms of more profitable lines of course, they will be shown to be a little different.
But the new chart brings a little bit of this reflection this change it reflects the change in the mix. But what we monitor here what we’ve been seeing in monitoring all of the risks is that all of those measures that we put into practice will start having an effect in Q4. So when you look and you say “Oh but I still see a cohort that would be more aggravated. If you compare you have to remember that the change in the mix is more present in the more current cohorts compared to the previous ones.
Janaína Storti
Next question by Eduardo Rosman with BTG.
Eduardo Rosman
Hello, everyone. Congratulations on the results. I have two questions. And I think that they addressed the same topic. The earnings were record mark spectacular. The shares are very, very cheap being treated at almost three times the earnings this year. So we have a lot of concern – perhaps you could elaborate on governance sustainability of results. If you think that this year’s earnings are recurring or can grow next year? Perhaps you can remind us all of the dividend payout policy of the bank. If there’s any reason for this policy to change in the short term. In the last 10 years to 15 years it’s been close to 40%.
So could you elaborate on that i.e. sustainability of earnings and results for the coming years, dividends and perhaps you could remind us of the strength of the governance of Banco do Brasil?
Fausto Ribeiro
Eduardo this question was also asked in the press conference and what we have been seeing and talking about regarding governance and then we’ll speak about the dividend payout policy. So let me start with governance. Number one, Banco do Brasil is regulated by a regulatory environment which is different from other state-owned companies.
We are a listed company in the stock exchange. We are subject to CVM rules. So that’s the first stage of the process. We also have the oversight of the court of accounts of the federal government. So we have a very solid corporate governance which has been improving for at least 20 years, 25 years.
As part of this governance, we have minority shareholders in the Board of Directors of Banco do Brasil and they have a seat in many of the boards linked to our Board of Directors such as coating which is the Remuneration Committee. It is the one that gives us thumbs up or down for the executives appointed for key roles in the organization.
Our decision-making process is a collegiate one at several levels of administration we have compliance and control policies for capital risk management. And we have a corporate strategy, which I showed you in the last slide, which was revisited this year. It was approved by the highest Board of the bank.
So the role of the management looking forward is to execute on this strategy so that we can guarantee that the strategic goals and targets will be attained. We also have a process to choose our executives for the bank. And this is based on good practices with nine box methodologies to identify the leaders that are the most skilled to take on leading roles in the organization.
So in a nutshell we have a number of good practices implemented at the bank and supervised by the highest boards of the bank also with the presence of minority shareholders and they give us some comfort so that Banco do Brasil can perpetuate its action.
I’d like to remind you that Banco Brasil is 214 years old. We’ve been learning with different situations that we have faced and more and more Banco do Brasil is a benchmark in terms of governance both in Brazilia and in the eyes of the market as a whole Okay. So that was the first topic. I don’t know if I answered it. If I said everything if my colleagues want to add anything please feel free to do so.
As we got to the other topic what was it really – dividend policy and sustainability of results. Okay. Sustainability of results. That is also one of the pillars of this management. I showed you in the chart that our results have been increasing. And not a lot of magic this is actually a strong strategy.
Very well disseminated at the company. We have an engaged team a team with highly skilled and qualified professionals and we have a cohesive team that understood the corporate strategy of the bank and then have moved hand-in-hand so that we can execute on that strategy. In addition, we have robust credit models.
We have a system of checks and balances at Banco do Brasil so that our decisions will be more and more sustained by purely technical criteria. So what you can expect is that the results of the bank should continue in this ascending curve because there is a strong governance process in-house and there are decisions tend to be made purely based on technical parameters aiming or seeking the best for our shareholders.
And we say that the government is not the only shareholders who have a share base or shareholders base of almost one million shareholders and they represented here one way or another, and this is good for balanced decisions and so that we can have more
and more positive results.
As for the payout policy will turn the floor to Forni. That’s another question that was asked during the press conference today. And we think that the current 40% dividend payout policy we believe it is fair just — of course it is revised annually and it is subject to other variables.
In terms of our aspirations for growth how much capital we need to face the challenges, to achieve the goals? And what I can tell you is that right now, as we speak, this policy seems to be the most adequate, the most attractive in the market in terms of dividend payout. And it can support the growth that Banco do Brasil desires for 2023?
Ricardo Forni
I would like to just make a comment and perhaps add a few points to what CEO, Fausto has mentioned, regarding governance. This was a long process of improving our governance, a continuous process. Banco do Brasil is the only bank in Novo Mercado. And this places us in a level of corporate governance, which is differentiated — so we follow a number of rules.
And over the years, we have been — we have been adding to this. The law of state-owned companies was approved, and we have to reinforce the rules for the Executive Committee. The Board of Directors is very active, and we have several specialized committees, particularly the coding committee. So, this governance is robust, and it contributes the science to the quality and intensity of our results. I think that this is a value of the company. And it is not personified in one or a couple of people. It’s crosscutting in the company.
And the second question regarding sustainability of results, I think that we spoke about the pillars results. But at the end of the day, we are delivering Q3 earnings. We refined our corporate forecasts for Q4 and as Eduardo mentioned. This is practically a given. It’s just about executing the strategy. We are actually reducing the range with a lot more assertiveness regarding the numbers for Q4.
And looking at 2023, we have just approved at the Board of Directors just this week, our risk appetite. Risk appetite is a fundamental element when we think about results sustainability and dividend payout policy. Translating that, looking at the economic landscape into businesses, we also approved up budget for 2023. So we have a very clear view of what we can produce in terms of results in 2023. And the results are consistent with what we’ve seen so far.
Of course, the role of the management and the role of the 80,000 employees in our day today is to execute on the strategy. And with a lot of quality and we have to adapt because the scenario is not fixed. So we forecast a scenario. We’ll have to deal with the evolution in terms of delinquency, interest rates, and so on and so forth. This is not an exact science, but we will be diligently working as we have been diligently working throughout the year, and we have clarity regarding our budget that was reviewed. It is one of the points mentioned by CEO, Fausto. And that is very important because in terms of governance, this management continued the planning that existed before us. And this is diligently reviewed in a very structured process. So all new information, new demands will be analyzed by this governance structure.
And lastly, dividend policy, the dividend pay policy is attractive for investors. We pay out above what is set forth in the law, and it is appropriate to some determining factors from the technical standpoint. To remunerate our shareholders, all of them and also to retain capital to sustain the expected growth of the business. We did this very diligently in 2022. We followed all moves in that direction. And I believe that this past quarter, we had a capital consumption, which was strong because we had a strong loan portfolio growth.
So this is totally aligned with our strategy. And now that we have this piece of risk appetite and the budget approved. Now in the last two months of the year, we will be discussing this, reviewing this in light of all of the information available, and in a timely basis, we’ll announce payout in 2023, the guidance for 2023 as Banco do Brasil periodically does every year, nothing changes.
Janaína Storti
Thank you very much. Our next question is from Rafael Frade, Citi.
Rafael Frade
Good morning to all. Congratulations on the results. I have two questions. One about the fees and the current accounts, we have seen that this is a line that has been suffering. And at the same time, you have 10% growth year-on-year. So I would like to understand what exactly you’re doing that is still driving growth in this line. And the second question is about well you have been underscoring the fact that delinquency in individuals is now being driven by a move towards more risky lines where you have higher net interest income and with a net benefit. But when I look at the card issuance business considering for example payment means using cards, the result in the previous quarter was negative in this quarter as well. So I would like to find out what’s coming next in that regard because this is something that does not really match the discourse and I would like to understand why.
Fausto Ribeiro
Thank you very much Rafael. Well to talk about the current account feed. This is a business line that is under a lot of pressure and especially in a longer horizon well it should go down and we are doing everything we can to create new sources of revenue and income to replace the current account feed . I think that in the past we took more heat because of this more accelerated slowdown in that line. And now this line is a little more flat. I think that the growth was small. We had the effect of new accounts being created by new customers and repricing of packages contributed to the recent performance.
But overall this is a line that is standing to more stability or a slight decrease. And also it will be replaced by other lines. So we don’t have a specific strategy in that regard. But we just want to keep it stable and flat while we work at other strategies and services. And other services are added to our services portfolio.
Now on the riskier lines for individuals, we are now — well we’ve been talking about this change of mix for quite a long time for at least a few years. And it’s something that’s being done structurally, because especially considering the non-accountholder clients well Banco do Brasil served as a paradigm for the entire market because it took us longer than the competition to enter this market. So we start originating in this market and perhaps this could explain the fact that we see a worsening of credit risk in the individual segment as a whole. But depending on the comparison we’re still below our peers probably because we stepped into this market a little later than our peers. And soon we realize well we need to refine our models in order to incorporate more information, more granular information so that keep — so that we can keep in line with what we expected. We really had to spend a lot of energy and a lot of dedication in that. As a result of this our growth is slightly below what we — expected initially, but we still expect that this — this line will grow as we adjust credit risk. So this is a constant effort that’s being led by our loan risk team led by [indiscernible].
Now speaking of cards issued. I think that the numbers picked up in the second half of 2021. And this is now reflected in this year. So the results are seeing this worsening of credit and this is what is being shown. So that’s why we’re working on enhancing our models and combining the issuance of cards and age and loans addressing all the three of them at once to make loans more sustainable.
The only thing I would like to add in relation to the cards strategy is that, growing our clients in this open market and selling higher-quality products with higher spend is what we are betting on to maintain a healthy portfolio position.
This has been one of our beliefs that’s been guiding our actions. So we continue to work on our models, perfecting them, monitoring them, doing continuous revisions, but always with a growth perspective, because there are clients that can give us great results and we can monitor and track them. And this is where we believe that the positive spend is going to take place. And the next cohorts will be better because of that. Okay. Let’s take the next question please.
Janaína Storti
The next question is from Marcelo Telles Credit Suisse.
Marcelo Telles
Good afternoon to all. Congratulations, once again, on the earnings. I think that, my question is more of a follow-up on the previous question. When we try to analyze the bank’s risk appetite in relation to growth in retail banking, in spite of the increase in delinquency, there is an appetite to grow in retail.
For example, in SMEs, growth amounted to 11% in the quarterly comparison. And we also observed substantial growth in loans to individuals. And if we look only to unsecured loans, we’ll see actually that growth represented almost 4% quarter-on-quarter.
Well, you’ve talked about the credit cards already, but do you believe that the economic proposition to continue growing in retail banking, especially considering unsecured lending makes sense, or is it a market in which you can make money, or do you think that you have to pull back — you’ll have to pull back eventually?
Because, clearly, there is a market concern that the retail segment might be saturated. But when we look at the bank’s earnings in the first half, we see that retail is still growing. So, I believe, maybe, that it’s still possible to profit from retail banking. So, if you could, take — give us a little flavor on retail banking, we would appreciate it.
Fausto Ribeiro
Well, thank you very much. Let’s talk a little bit about our retail strategy. Well, we grew in both secured and unsecured loans. The growth amounted to 8.3% in payroll loans, where risk is lower, but also margins are smaller.
And what we said to you, for, at least, the last two earnings conference calls is that, we would make progress, but steady progress, step-by-step, performing any necessary modeling adjustments on the so-called open market, non-payroll loans.
And just to show you how cautious we’re being and perhaps our Vice President, Paula, could shed some light on this. On every 100 applications for credit cards, well, firstly, we use a model in which 30% were approved of those applications. Now, that we have boosted our robustness through the performing of several checks. So approval is now at the most at 7%.
So there is room for growth, definitely, but we want to take a cautious approach, so that we can grow consistently and profitably. If we do that, it’s always going to be plain sailing, smooth sailing for us and our profitability will outstrip any potential losses that we might incur in.
So, it’s still — when we look at the whole portfolio, this is also very small and especially in the open market. Well, our experience has been very restricted. But we are able through this to adjust our credit risk models.
So, we read — make rebounds of the markets. We analyze each of the cohorts, then we recalibrate our models. And — so, yes, we believe that there is still room to enjoy the benefits of this market provided that you act cautiously and have very stringent modeling.
Marcelo Telles
Thank you very much, CEO, Fausto. I just wanted to add a comment summarizing what has been said by you. So if we were to request a formal guidance, we can expect that the retail banking portfolio will continue to grow next year. Do you think this is correct?
Fausto De Ribeiro
Yes, I think it’s possible provided that we move forward step-by-step with very stringent criteria and it’s going to be an equation that’s positive on the balance provided that we act in this way. I think that the focus is in growing the portfolio in line with the market. However, something that we have very clear in our minds is that you should grow, but with quality, with quality in origination. What we see very visibly is that SME which is the bulk of retail banking as well. There are several other institutions that are suffering in the segment, but we are very happy about the credit quality of this portfolio because of the sound origination we have used.
Now in non-payment role loans, we are in exactly the same condition as other peers. We are working hard to reach the credit risk quality that will be equivalent to the remuneration we seek. So obviously, there is greater risk involved in remuneration should be — should reflect that because this is how we’ll build our portfolio for 2023. I think that the key message here is that we monitor this all the time. So if there are any deviations, they will be addressed immediately. The important thing is to have control mechanisms and to keep track all the time so that you can make the necessary course adjustments timely well.
And specifically, about the individuals retail banking portfolio, we continue to grow with some lines that act as mitigators for example in payroll loans there were changes in margins that we have now longer terms 120 months. So this gives us some wiggle room in those lines. With some room to grow that because we are changing the mix in quality at risk indicators and always to maintain return that is adjusted to risk. So there’s a lot of money on the table. Especially, in the payroll loan products.
Janaína Storti
I’d like to ask the analysts to please ask just one question because we have a limitation of time. So one question I’d like to bring Jason Mollin from Scotiabank.
Jason Mollin
Hello, can you hear me?
Janaína Storti
Yes.
Jason Mollin
Congratulations on the strong profitability in earnings in the quarter. English, if that’s okay. Has been brought up on asset quality that’s what I’d like to ask about. Maybe you can provide some color on what clients you’re targeting, what income segments. Are there differences in the asset quality by origination channel digital or physical, or what can you tell us about the dynamic that’s shifting the increase or driving the increase in non-performing loans over 90 days for individuals? Thank you.
Paula Teixeira
Jason, I can start just to make some comments. Yes, there are differences. For instance, let me give you the example of credit card. Yes, we have several doors to underwrite this product. And for instance, we see a higher delinquency in a certain way for the low-income segment. And some of those stores and probably some of the digital doors exactly we saw the delinquency coming earlier. And all those adjustments that we made were exactly to address those aspects. And certainly, the credit portfolio of the bank is quite big and we have different profiles. And we take this into consideration our credit models and we take this into consideration when we designed these strategies.
Jason Mollin
But are there any comment on digital versus physical origination or the type of client anything outside of low income where you’ve seen some signs that client could be riskier?
Paula Teixeira
Jason, I think that what we have like a digital origination is much more than what we call here the open seat. So we have our directed open seat transactions for let’s say new credit card holders that we are doing this and this is the one that I say has a higher NPLs. Also we have the partnerships with retailers that is also origination — originating this. It’s like a digital channel as well. So these are the higher profile in terms of the NPLs. And this is quite different from let’s say the traditional account holder client of the bank. And we are, for example, in the credit cards they have — they clearly have different profiles in terms of NPLs, and we are working on, let’s say, stimulating the spending on the good parts of the portfolio that it’s performing well, and this is bringing the balance for our portfolio.
And when you see as a whole what Banco do Brasil has different from peers is a much more diversified like the defensive portfolio when you put agribusiness portfolio, SME in a very, very good quality originated and you have big companies, and the corporate companies that are performing really well in Brazil right now.
So that’s why as a whole we have a very good, very well-behaved portfolio. And we see this addition of risk as — let’s say, we are less pricing up a little bit, but still very, very conservative. And as the CEO said on the interview, I believe that the conservative risk model taking and the risk models of Banco do Brasil are really the magic that say we are — we have on the quite portfolio as a whole.
Jason Mollin
Has the portion of low income increased, decreased, or what do you expect the strategy will be there going forward?
Ricardo Forni
Jason, I would not say that decrease or increase, yeah. Certainly, as I said Banco Brasil has a big credit portfolio and we have services and products for the different segments. And we take this into consideration.
Let me give an example, we have proprietary model that reached how mature is that customer to use the digital channels. And we use ways of reaching this customer taking this into consideration. When we go to the non-account holders, certainly and mainly when we talk about credit card, certainly there is a segment of low income because this is the entry products, not only for us but for the entire product, for the entire system.
But we have services for the different segments and probably when you consider the characteristics of the bank, we are quite diverse bank in terms of the portfolio. But we take those differences into consideration in our credit models, in the way we approach, in the marketing process and so on.
Jason Mollin
Thank you very much.
Janaína Storti
Thank you. Our next question comes from Flavio Yoshida with Bank of America.
Question
Flavio Yoshida
Hello, everyone. Congratulations on the results. They came really strong. I have a question regarding agribusiness that ends up being a very important portfolio for you and we haven’t discussed it yet.
Looking at the spread, it’s showing a downward trend. I’d like to understand, do you think that this trend will reverse? And I would like to understand competition in agribusiness. When we talk with the private competitors of Banco do Brasil, we feel that they have a little more appetite. And given that you have a market share, which is quite relevant, should we expect a drop in market share? And also there’s competition for the co-ops. There are some tax benefits, tax advantages. And so how is this competition playing out in agribusiness?
Fausto Ribeiro
Thank you Flavio for the question. I will answer and Renato will add. Okay. Agribusiness. It’s a dream moment. We see that, when we talk about the Brazilian agribusiness, everybody gets excited, because the commodities prices are high. The business cycle is very capitalized. There’s a lot of technology in the field.
And if you look at agribusiness, if you look at one transaction individually, perhaps initially many banks in the past given the spreads at the time well it didn’t seem to be very attractive, but we don’t look at one thing, we look at the whole in agribusiness.
Well, the first deal with the client is just the first and many mobile come financing, loans, insurance, financial investments. So this is a very special moment. And, of course, it triggered the interest of many players, so that to compete with equalizable resources with the federal government, we had a lot of openings in recent years.
Banco Brasil was practically the single player in agribusiness, but we have been learning with the business, we have a strong portfolio of products and services, a portfolio which is well-structured with several lines and facilities and that’s what brought us this far in terms of financial volumes in our portfolio.
Now of course, there is a lot of pressure with the reduction of spreads, because now we have new entrants in this operation. We now have 22 banks operating, of course each one operating with not-so-significant volumes as ours. As I mentioned that, for this drop that began in June one to now we have BRL84 billion this first. The numbers in the quarter’s balance sheet are restricted to September, but it was a significant increment of almost 30% compared to the same period before.
Of course we have to discount inflation of costs and there was inflation given the increase in prices of fertilizers. So this brought along a certain inflation for the agribusiness but the volume is strong. We’ve been growing our volume. Of course, margins are a little tighter but it’s what I said. We believe that every business is just an entry door for more businesses with the clients exploring the whole business chain in the whole agribusiness chain. So this reduced spread is offset by other businesses there are generated. And Renato you can add.
Renato Naegele
Hello, Flavio. Thank you for the question. I believe that the first point is to highlight the size the robustness and the resilience of this economic agribusiness system. We are talking about a GDP of BRL2.5 trillion. A very overheated demand, as our CEO said in this go heart June one week to last week 84 billion this first, in the past crop had BRL153 billion in the 12 months. So, it’s a very overheated demand. So this competition is healthy, because agribusiness requires a lot of resources.
The bank continues with a market share in individuals in agro of about 59% to 60%. So we maintain our market share of our individuals. Individuals account for 96% of our agribusiness portfolio. The remaining 4% would be companies. So our position is really solid. We are leaders in the agribusiness market. The portfolio grew 26%. Our guidance was 22% towards year-end.
We had increased share of contracting and talking specifically about the impact of greater competition and the share of contracting farm loans has grown from 42% to 48%, despite the entry of new players in new segments and specifically about co-ops, the two main co-ops secret.
Without a doubt you spoke about some tax differences, but I believe that the most relevant from the standpoint of competition is that the action of the co-op systems is regional. It’s localized in six, seven states of Brazil that account for 70% of the credit three states in the South the three main states in the Midwest and [indiscernible] So they generate a Pareto of 80% of placement and their own loan portfolio.
Will the bank acts and all municipalities in 97.8% of municipalities that have a loan portfolio meeting all sizes of clients and all needs of clients. So we have diversity and quality in our portfolio. Our delinquency is 0.47 million, it was 0.71% last year. So it was low already and we grew the loan portfolio but with a lot of quality, so that gives us peace of mind that the bank, just like in the other line items is growing in agribusiness in a sustainable and high-quality fashion.
And I would like to add something objectively regarding the spread. Looking at Q3 with the start of the new cohort, it reflects competition but we only reported the spread of the loan operation and we have a holistic approach to clients. We’ll look at the chain as a whole. And we consider cross-selling. And at the end of the day looking forward, the spread should continue to reduce. Although, this is defined cohort by cohort. We have to see in 2023, what would be the crop plan for 2023, 2024, we’ll have to analyze the different crops, and we’ll have to assess everything. But agribusiness revenues are disseminated to many other places in addition to the simple spread of credit.
Janaína Storti
Thank you. Your next question is from Pedro Leduc, Itaú. Pedro, you are on.
Pedro Leduc
Good afternoon, to everybody. Thank you for taking my question. First of all, I would like to congratulate CEO Fausto and his team management and consistent results. This is a very admired team in the market and also among shareholders current and future shareholders. So I have a question about expenses. We saw that, there was an increase in efficiency.
Janaína Storti
Pedro, I think we lost you. Unfortunately, your image is frozen on the screen. I think his connection dropped. Okay, let’s do the following. Can you hear us Pedro? Okay. I’ll move on and we’ll have a second question, and then we’ll go back to you. Your connection was dropped. So Natalia Corfield, JPMorgan. Natalia, can you hear us? Did you hear me? Okay, Pedro is back online. Now, we hear you Pedro.
Pedro Leduc
Should I repeat my question?
Fausto Ribeiro
Yes, we couldn’t get it.
Pedro Leduc
Okay. So very quickly about staff expenses, there was an increase of 1% quarter-on-quarter. And then we saw that there was a decrease in the proceeds line. And also, I would like to know about this line, whether we should expect a slowdown in future quarters.
Ricardo Forni
Well in relation to overhead, I’m not sure, if Pedro is following us, but we didn’t have any significant changes in relation to expenses with staffing. If you look at the dynamic while I’m starting with the first half of 2021, we had the voluntary dismissal plan, and then we had the new recruits that were approved in the admission exam, and started working this year at a lower cost, but there were no changes in that aspect.
Later, we could also talk a little bit about the numbers to check, if any other clarifications are needed. I think that, the best way for you to analyze this line is together with provisions because sometimes there is a variation in that quarter, overhead dropped, but provision increased. So the best way of modeling is looking at the two lines in combination, but really nothing very substantial or significant.
Janaína Storti
Thank you very much, Pedro. Now Natalia Corfield, JPMorgan. I think, we have a connection program. Natalia, we can see you. Thank you. Please go ahead.
Natalia Corfield
Thank you. Thank you very much. My question is about capitalization and your CET1 with premium bonds. Well you had – I would like to know, if the market is still rough like it is now. What are the options to call those two premium bonds? And also speaking of your capitalization it has been decreasing in recent quarters. And I would like to ask what is the comfortable level for you in Tier 1 and CET1?
Ricardo Forni
Well, I’ll start with this. And if Daniel wants to complement, we are really attentive to the maturities in 2023 and 2024. We have been looking to the market to see if any prepayments would be a choice, but the market dynamics did not favor that. So we have been working on the capital issue by making emissions in the local markets.
I think that, we have to look at this from two points of view. Liquidity in US dollars and capital. And in our perspective, we are doing — we’re very proactive about this, we are in 2022. Looking ahead to 2024, we have already reinforced our capital requirements through those local issuances. And we’ll keep track of this to detect any emerging opportunities, and we are very price sensitive by the way. So we’ll be looking to the domestic market, to the overseas markets to really seize the best opportunities and roll out in the best possible way.
Just a comment, Natalia, the calls and the dynamics of the market are seen by us as an opportunity to optimize our capital structure. This is one of our premises. Now looking at the past behavior of the bank, we always took several stakeholders in consideration. We’re not going to do any unexpected actions, so this is what is important, prepayment, of course, management and also optimization.
Those are the keywords from our side. In relation to our base level capital level, in our understanding and our CFO, Ricardo has said this, our risk appetite and risk tolerance has been approved in a document. And in this document, we always take heat of the regulatory limits, prudent rules also confronted with our growth expectations for an horizon of three years to understand what will be the capital level that’s robust and strong enough to meet all of this demand so that we can make an optimal allocation of capital. This is what I can say to you. We monitor this very closely. We run stress tests every month. And this is something that’s part of our capital management instruments, considering regulatory limits, prudential limits and our targets, as I explained.
Natalia Corfield
Thank you. I’m not really sure if I can follow-up. Now about capitalization, isn’t there a number? For example, I don’t want our CET1 below x percent. Is there a number like that?
Fausto Ribeiro
So as I said our targets may change also depending on our ambition. So please note that we have to comply with the regulation. There are some regulatory requirements that we have to meet. And as we renew our credit portfolio, we saw, for example, consumption and all of this is fed back and monitored. So I cannot really give you a set number. What I can say is that we are always above regulatory limits in order to provide comfort and to optimize our growth strategy as a corporation.
Just a detail that I would like to underscore in relation to our capital management strategy, we have projections for the next three years. This is also linked to our budget, our business budget. We monitor the variables. And it’s very important to act diligently in relation to this process, because this is what enabled us to grow our capital recently, including with purging of capital. This is very important for the reputation and track record of a bank. Thank you.
Janaína Storti
We are getting to the end of our conference call. And I would like to invite for the last question Tiago Binsfeld with Goldman Sachs.
Ricardo Forni
Thank you, Janaína. Good afternoon. I have a quick straight to the point question regarding the quality of the portfolio, it has been discussed. But when — in which quarter do you expect the delinquency to reach a peak point? And also talking about coverage there was a consumption of coverage. What level would you be comfortable to getting with the coverage ratio given the mix of your portfolio? Thank you.
Fausto Ribeiro
Well, we answered that question before. In terms of our coverage ratio we believe that it should stabilize at the current number 234%. This is our expectation. This is our feeling that it should stabilize around that level. As for delinquency, of course, we have discussed this a lot and we understand that particularly, when we look at individuals, there has been some pressure.
And we understand that this is a level in which we will start seeing an inflection of this pressure that we felt in recent quarters in terms of delinquency for individuals for the individual segments. And we spoke about this consumer credit, non-payroll deductible loan, and credit card.
And I’d like to remind you that coverage is a result. It’s not a target. So, it’s at the end of the day, the model in practice working. And that is why we understand that looking forward, there will be a certain stability at the level that we presented here.
Tiago Binsfeld
Yes, perfect. Forni, it will always result from the assessment of our risk models. Thank you.
Janaína Storti
Thank you. We will now end the Q&A session. And we would like to say that all of us in the Investor Relations team will be available to answer questions that we did not have time to answer here. So, now I would like to turn the floor to our CEO, Fausto for his final statements.
Fausto Ribeiro
Well, I would like to thank each and every one of you who participated in this happy moment of the history of Banco do Brasil. We posted really positive earnings, 21.8%, that puts us in the game of the incumbent banks of Brazil with profitability, with ROE, with dynamism. And we have a presence, a footprint all of Brazil. The bank privileges a consistent growth strategy.
The bank has proximity as a note for our actions and we want to be close to our shareholders, to our peers, the society, in general, and perform with our clients, so that we can identify their needs and wishes and choose the right product for every client.
Lastly, our team is very skilled and engaged. The team of employees, they are admitted to the company after they set a public examination. So, that’s a big filter. We already hire highly qualified professionals and the bank invests a lot of resources to improve the technical expertise and the academic knowledge of these young employees so that we can have a highly qualified and highly prepared staff to cope with the challenge, which is to always keep this bank abreast society, so that Banco do Brasil can provide a higher and higher quality service to the Brazilian population.
That’s our magic. These three factors that have been driving us forward so that more and more we can achieve sustainable results. And meeting the expectations of all of our shareholders because this is also our mission to provide quality of service and to give you dividends comparable with the investments that you made when you bought shares of Banco do Brasil.
I hope that we continue to have a technical team and so that Banco do Brasil will continue to post strong results so that we can record even more spectacular results. And you can be sure that as long as we are here, we will be working firmly and strongly for Banco do Brasil to continue to be big providing high-quality services to the Brazilian society. Thank you very much.
Be the first to comment