Itau CorpBanca

Hello, good morning everyone and thank you very much for taking part in another quarterly earnings conference, this time to talk about the third quarter of 2024, which we are broadcasting, as always, from our office in Avenida Faria Lima in Sao Paulo. The event will be divided into two parts. In the first part, Milton will take you through our performance and earnings for the third quarter of 2024, and then we will have a Q&A session, during which analysts and investors will be able to interact with us directly. I would like to provide some guidance to help you make the most of our meeting today. For those viewing this through our website, there are three audio options on the screen. You can choose to listen to the entire content in Portuguese, the entire content in English, or just the original audio. For the first two options, we will have simultaneous translation. To choose your preferred option, just click on the flag at the top of your screen. Questions can also be sent via WhatsApp. For those viewing through the website, just click on the button on the screen. Or simply send a message directly to the number plus 55 11961768561. Today's presentation will be available for download on the website screen and, as always, on our Investor Relations website. That's it for now. I will now hand over the floor to Milton, who will begin the earnings presentation. And then I will come back to you at the end to moderate the Q&A session. Milton, the floor is yours.

Good morning, everyone. Welcome to another earnings presentation to talk about the third quarter earnings. I will try to keep my presentation brief so that we have more time for our Q&A chat. I will talk about earnings, ESG, digital, technology, transformation, and at the end, a little more about our guidance. Starting with the earnings for the third quarter of 2024, we saw quarterly managerial recurring results of 10.7 billion reais, which is a very strong result. growing 6% quarter over quarter and almost 20% year over year on a comparable basis. This result leads us to a consolidated return on equity of 22.7% and a return on equity in Brazil of 23.8%. These are very important results. That being said, it is always important to pay attention to capital. In this quarter, we delivered a Common Equity Tier 1 ratio of 13.7% with a growth of 60 basis points in the period, and we are substantially above our capital approved by the Board within the risk appetite, which is a Common Equity Tier 1 ratio of 11.5%. If we were to simulate what the ROE would be adjusted by the minimum capital ratio approved by the Board of Directors, We would be running at 24.6% in the consolidated ROE and in Brazil at 26.4%. So this shows you the level of profitability that is most comparable in relation to the numbers that have been released. An ROE of 26.4% in Brazil is truly a very strong profitability with significant growth. In the loan portfolio, we grew 1.9% quarter over quarter, with a growth of almost 10% in the year. Later on, I will give more details about the portfolio and present the delinquency levels, which are within acceptable thresholds, with drops in both short and long-term indicators. We also have very positive news concerning the financial margin with clients, which has grown 4.5%, quarter over quarter and 8.2% year over year on a comparable basis. So this is the summary that I always bring to you and the numbers speak for themselves. I think we are succeeding in delivering a very solid performance with good profitability and the capacity to generate capital while at the same time investing in the bank's growth. We added an additional column to the loan portfolio presentation this quarter, which I think is important for us to conduct the presentation in the best possible way. The individual loan segment grew 2.5% quarter over quarter, which is a very important growth. This happened throughout the quarter, which shows that the average balance for individuals is reasonably well in line with the growth in the quarter, which is what matters for the NII and NIM, showing the bank's full revenue generation capacity. The SME portfolio posted a quarter-over-quarter growth of 4.1%. This is slightly lower in the average balance, which shows that much of the growth occurred toward the end of the quarter. But the most important thing for this picture is to look at what happens with the portfolios of large corporates and Latin America. In large corporates, despite a growth of only 0.7% in the period, We must remember that an asset that left the balance sheet in this quarter had a significant effect. We saw the recovery of a credit case at the end of the period, which we mentioned a lot in the last presentations, which shows that the average balance grew 5.9% in the quarter. And it is this growth that affects the banks in NIMA and NII. In the Latin America portfolio, this effect is even stronger. The portfolio grew 1.2% quarter over quarter. Excluding the effect I mentioned, it grew 8.2% in the average balance. So we could say that when we talk about gross NIM, that is, without the risk adjustment, the main effect of this 10 basis points drop was due to the average portfolio of Latin America having grown more than the average portfolio of large corporates and more than the average portfolio of individuals and SMEs. So this is the mathematical effect of the mix on the average balance of the portfolios. When we remove the cost of credit, we see an expansion in the risk-adjusted NEM, going from 5.7% to 6.0% in the consolidated. When we look at Brazil's risk-adjusted NEM, which naturally does not include the Latin America effect and can be explained by the mix between large corporate SMEs and individuals, we see a 30 basis points expansion, going from 6.2% to 6.5%. During this presentation, I will go into a little more detail about the dynamics of the cost of credit. I would also like to present another number that is also relevant to you. The financial margin with clients grew by 1.2 billion Ries quarter over quarter, which represents 4.5% growth. Considering the financial margin with clients ex-Argentina, which was present during 7 months of 2023, We had a comparable growth of 8.2% or 2.1 billion riyals, which shows a very significant result in this line. The financial margin with the market did not show any major highlights in the period, but we can say that we had a good result considering that we started from an exceptional second quarter, which shows that the bank was still able to grow its earnings with a dynamic of greater financial margin with clients, better cost of credit, and lower financial margin with the market. So, I understand that this trend is positive for the mix. In Brazil, we are performing well, not the same as the previous quarter, but substantially better than in fourth quarter 2023 and first quarter 2024. Everything remains constant in the financial margin with the market, with no major changes, with the exception of the cost of capital index hedge, which has been slightly higher due to the interest rate differential. I don't have anything major to highlight when it comes to commissions, fees and results from insurance, but I do want to pass on some important messages. we grew 7% year over year, which is very significant, and some lines attract more attention, such as asset management, where we had 5.2% growth in the quarter and 16.9% growth year over year. In advisory services and brokerage, despite observing a drop in the quarter, it is important to remember that the previous quarter was exceptional, especially in fixed income, which posted the best result in the bank's history. So although we had a good result in this period, it was low than what we had in the last quarter. When we look year over year, we grew 11%, that is, we continue to hold a leading position.

It is very surprising to us that we have posted very consistent results in all lines of commissions and insurance operations, and that we continue with a very good trend. has showed a positive evolution.