Banco Do Brasil Sa S/Adr

Hello, good morning, everyone. I'm Genaína Storti, Investor Relations Manager at Banco do Brasil. Welcome to our third quarter 2024 results live stream. Our event will be in Portuguese with simultaneous translation into English, and you can choose between three audio options, original, Portuguese, or English. Joining us today are our CEO, Tarciana Medeiros, our CFO, Giovanni Tobias, and also our CRO, Felipe Prince. Well, we will start our presentation with Tarciana, and then next we will move to the Q&A session. Since the beginning of this year, we have changed the format of our live streaming, bringing you the CFO's presentation of the results on the evening of the announcement so that we can devote more time to the Q&A session. This commented presentation is available on our Investor Relations website. Now, I will hand it over to our Chairwoman Tarciana. Thank you and good morning everyone. Thank you so much for joining us on our live stream on the results of the quarter. At this moment of interaction and dialogue with analysts and investors, I know that many journalists and employees are also joining us online. As you saw in the video we presented before our live streaming, culture moves us. It gives people an identity, promotes their development, creates bonds and boosts the economy. Banco do Brasil has believed and supported Brazilian culture for over 35 years. It's been more than three decades of uninterrupted support for the most diverse artistic expressions in Brazil and around the world, democratizing access to high-quality initiatives for the population. And it's also Bibi's culture, our DNA, that drives us in yet another quarterly results. Quarter on quarter, we have reinforced the management's commitment to adding value to our shareholders, clients, suppliers, employees, and the entire Brazilian society. And this is translated into figures in the statement of added value, which totaled 63.4 billion BRLs. Discipline in the execution of our corporate strategy drives the result that we are announcing today. of 9.5 billion BRLs in the quarter. This net income represents an increase of 8.3% year-on-year. It reflects the way the entire BB team works, with proximity, knowledge, and specialized attention to our clients' needs. I would also take this opportunity to thank my colleagues, both at BB and also in the companies that make up our conglomerate. I thank them for this collective and continuous development. We have more than 125,000 people dedicated to helping our clients fulfill their dreams or get through difficult times, fostering job creation, social and economic development in every country, every corner of this country. This is an example of our integration of the value chains and the participation of companies of the conglomerate in our total results. As you know, credit is undoubtedly an important pillar of our main business. We have been working with credit in an integrated and synergic way in all the markets where we operate, balancing risk and return. We exceeded 1.2 trillion BRLs in the balance of our loan portfolio. up by 13% in only one year. Credit disbursements in the quarter was over 160 billion BRLs. This figure stems from our commercial strategies, new solutions, process improvements, hyper-personalization of approaches and interaction with clients, in addition to financial advice to clients. For individuals, I would like to highlight 11.2% growth in payroll loans in one year with record disbursements for the period. You might recall that in previous meetings I talked about our strategy to grow INSS payroll loans. In the last 12 months, we've increased this portfolio by 21%, expanding our service to beneficiaries and offering them the best credit conditions. And we also made progress in private payroll loans. We reached 1.4 billion BRLs in this portfolio, up 23% in one year. And here we see a significant growth opportunity. We also expanded our corporate portfolio by 13.5% to more than 421 billion BRLs, which demonstrates our support to entrepreneurship, our proximity to large companies, and our strong presence throughout the value exchange. One of the highlights is the portfolio of micro, small, and medium-sized companies, which increased by 7% when compared to September 2023. Another highlight was the 14.5% growth in the wholesale portfolio, especially in the mid and upper middle segments. The government portfolio was up by 22.8% in one year. This portfolio is mainly focused on investment in urban mobility, health, education, public safety, generating effective benefits to the population and also contributing to the country's development. In addition, it's a very profitable portfolio. I would like to remind you that most of these operations are are guaranteed by the Treasury and has an excellent risk-adjusted return. The third important component of our loan portfolio is agribusiness. Banco do Brasil is the bank of agribusiness, and we remain so. We total 386 billion BRLs, up 13.7% in 12 months, driven by costing, which grew by 19% in the period, and also investment loans, which were up 16.5%. And speaking about agribusiness, I would like to go into more details about our work in the sector and the cycle we are going through. This quarter, delinquency rose by 65 basis points, reaching 1.97%. But with a highly qualified team that understands the segment in great depth, we are carrying out detailed mapping of the field, talking to our clients, we apply analytical intelligence, and also we have an extensive historical database and we call in our specialist we make we are trying to dialogue and understand the current context and more importantly we drop a plan to restore a healthy credit profile for our clients the first thing that this diagnosis told us and this is also something that I've been stressing for quite some time is that there is no crisis in Brazilian agriculture delinquency in our portfolio is not widespread Almost 80% of the increase is related to soybean crops, especially in the Midwest region. I mean, you see 98% of every business continues to honor, I mean, its commitments. Everybody is honoring commitments. We operate in more than 200 crops throughout the country. Every business is cyclical at this time. It is crucial to adjust the cash flow of some growers, adopting an individualized analysis and granting and settling loans. And I would like to draw your attention to something new, which is the in-court reorganization of rural growers. It's an instrument used by a few, but which has negative effects on everyone. And we have seen an increase in its representativeness. Today, we have 210 clients in-court reorganization status, which represents 0.01% of our total agribusiness portfolio. In the AgriPortfolios NPL, the in-court reorganization impacted around 15% of the overdue balance. Recently, our VP of Risk, Philippe Prince, said that in-court reorganization of rural growers is not healthy, and I would like to go further. The reorganization of farmers prevents them from getting access to credit, compromises confidence in the agri... agribusiness chain creates a rupture in the economic activity of rural women and men and impacts the cost for the entire segment. I would like to reiterate that we are and always have been close and relevant in the lives of producers and there are some structural alternatives including those provided for in the rural credit manual, which are more appropriate for getting through this moment rather than simply using the path of judicial reorganization. Agribusiness remains stronger resilient and will continue to be an important pillar of the Brazilian economy and the results of Bibi. While the 24-25 crop season is still in motion, we have a constructive scenario with crops representing an important price improvement improvement in margins with corn, coffee, and livestock. We expect to see a greater neutrality in the environment in the coming months, and our projections point to a growth of more than 5% in the agribusiness GDP in 2025. The strength of Banco do Brasil in agribusiness is is in disbursements of more than 97 billion BRLs in 275,000 operations. Moreover, we increase our share of disbursements in the system with resources equalized and compatible to the size of BB in Agri. And with that, we can certainly serve a large number of our clients. We also... you know, got new producers that were not no longer working with us in the last crop season given the competitive scenario. But in the long-term scenario, the use of biofuels will gain traction and productivity will continue in the field. Brazil will increasingly become a reference in sustainable agriculture and bioeconomy and the recovery of degraded pastoral lands. The demand for food produced in Brazil is growing. We will continue to be the bank of agribusiness, offering technical assistance, more encompassing solutions for credit, investment, consortium and insurance alike, All of that aligned to a purpose of becoming more revelating all the moments of their lives. And in fact, this proximity is not just to the agribusiness clients. but it extends to all of our clients and I will draw your attention to the fact that we want to offer one Bank of Brazil for every client the term hyper personalization has become a buzzword but BB is a pioneer in this movement and we have invested in developing models supported by analytical intelligence to conduct a more assertive and closer relationship today we are reaping the benefits of this strategy boosting business and generating value we might recall that here a few quarters ago, we announced the investment we made to enhance our CRM tool for a vision that is 360 degrees. This year, through this new platform, our expert teams already conducted more than 2.8 thousand personalized strategies for individuals and small and mid-sized companies, generating 475 million interactions And our MarkTech operation continues to evolve. 70% of the entire volume dispersed in loans for individuals from January to September 2024 was done through identified clients through our intelligence models and also hired by our CRM. This is a strategy that's fully digital, allowing efficiency and the scale of our digital channels together with specialized advisory from our employees according to the profile of each client and their channel of preference. Another highlight has to do with our excellence in terms of specialized relationship, where the human factor becomes our major differential, be it through physical or digital channels. More recently, our private and still segments, just celebrated their 20th anniversary two decades of trust and security now being with our customers from the beginning we have the largest high income network in the market we are the private bank with the highest capillarity operating in brazil and abroad this quarter once again with all of managed resources from clients from this segment we grew above a market average our still segment is present in all capitals of the country allowing us to deliver our differentiated value proposition, specialized per niche with investors, digital clients, and agribusiness. We also made progress in our personalized advisory service for investments with clients between 1 million and 5 million BRLs. Launched in August in the cities of Sao Paulo, Vitória, and Belo Horizonte, the high-steel segment focuses on proactive advisory services, you know, Wealth management and onshore and offshore solutions with the aim of increasing our market share investments with those clients. We hope to achieve 138,000 clients until the first quarter, the first half of 2025. Operating in a very hyper-personalized and specialized way and very close to our clients, this helps us to increase profitability. Profitability of our managed clients is almost 10 times higher than a self-assisted client. Moreover, NPS of BB grew 12% in the last two years, and for the ninth consecutive quarter, we are the bank with the least number of complaints. And now, moving to the last part of our presentation, I would just like to talk about some new things that are part of our ESG agenda. Bank of Brazil has been for a long time a protagonist in sustainability and the promotion of businesses and environmental and social practices and governance as well. And we're making great progress and we are now broadcasting live from our cultural center of Banco do Brasil in Rio de Janeiro, a unit that is part of our operation in terms of fostering culture. And it's from here that we will also operate during the G20 meetings. Our motto is we care, and that will help us to give voice, understand, and be a bank that takes care of people. In the last three years, we were able to fund over $36 billion abroad for investments in sustainable projects, and I would like to announce that we will engage in new partnerships in the next few days. Currently, we were one of the main funders of forestry and biodiversity projects, 1.4 billion BRLs in projects in the bioeconomic sphere in the legal Amazon. We are working together with small growers, associations, and co-ops. In addition to our social relevance, there is a direct relationship in terms of generating income.

Other important fronts of green businesses that we have been fostering are the products and services linked to originating carbon credits and sustainable agriculture and cattle grazing, besides recovery of degraded areas growing every day and giving our clients the financial feasibility to support environmental preservation. So to conclude, I would like to stress that the strength and robustness of Banco do Brasil. We are facing an important moment for agribusiness supporting and continuing to support the farmers. We want to continue to grow in agribusiness and other segments. We have delivered a consistent financial margin with a good diversification of income in the bank and in the groups businesses without losing sight of controlling expenses and necessary investments in the digital transformation. Besides that, our capital continues to robustly support our long-term ambition. Thank you for your attention, and now I will give the floor to Janaína to start our questions and answers session. So thank you. We will begin our Q&A session. You can ask your questions in Portuguese or English. We will be answering in Portuguese. Our first question is from Daniel Vaz from Safra Bank. Welcome, Daniel. Thank you. Good morning, Janaina and others. Well, first of all, I'd like you to talk about disbursements. in the third quarter, given that we are in the half of Q4, these disbursements could have been improved with the seeding season, especially what we see in soybeans. So my first question is whether this is really improving. And still about agribusiness, we see that we are in a more cyclical period, demanding greater performance. How should we consider the provisions for 2025? I know this is cyclical, but it has some drag, and it could go on for two or three quarters yet. So thinking about 2025, how will this impact, especially the beginning of the year? Thank you very much, Danielle, for your question and for being with us again. I will begin to explain the answer, and I will ask Pritz to supplement this. So we have, in fact... started a first month that was a greater challenge. We expected a higher disbursement, but right now we have reached the expected level of disbursements. We recovered the level from the same period of the earlier crop. So as I announced here, we have $100 billion in disbursements beginning with the SAFA plan, and we have two more months of disbursements for this year. So to answer the first part of your question, yes, we have recovered the speed of disbursements, which was coincided with the planting period for soy, especially in our safra plan or crop plan. So I will ask Prizi to complete my answer. Thank you for your question, Danielle. It's a pleasure to have you with us again. I believe that with these provisions, first of all, we need to think, and we publicized this, that in agribusiness, we have delays and drags. So what are we paying in terms of provisions? We are paying for the transfer of NPLs to... 1.97 basis points. So naturally, most of the pressure on the provisions has already happened. Our challenge now is to stabilize the NPLs and work on recovery. We have to highlight that this portfolio has more than 95% of linked guarantees. So its recovery is much higher than the other portfolios. when you combine the stabilizing of NPLs with the more robust credit recovery, then we will certainly have a smoother flow than what we are seeing now. which has culminated with our guidance revision. I also have a comment. There is a specific point reflected in this result, which are the RJs, or in-court reorganizations. If we look at this provision, considering the in-court reorganization cases specifically, and therefore consider we will have to provide a 30% provision. If it weren't for that, we would be at the 1.7 level, 1.7% level with our agribusiness portfolio. If the disbursements in July were faster and this didn't happen because of the rainfall, which was delayed, but the crops are already being planted and with expectations of record-breaking crops. And therefore, for 2025, we do expect to return to the normality. in terms of this specific portfolio and its provisions, around 1.7, which is our expectation. This is good to comment that when we isolate this effect from delays or drags, that is, new provisions, which we call the good type of cholesterol, is depending on the previous results of the crops. makes us reliant that we will be able to work very well at the end of Q4 and also along all of the year of 2025. Very clear. Thank you, and congratulations on your results. Our next question is from Olivia Fernandez from JP Morgan. Judy Fernandez. Thank you, Zana. Good morning to all. I will talk about the credit cycle because agro sees this worsening of the NPLs. We also see a drop in individuals and companies, businesses. And for next year, we see that interest rates will drop. remain higher for a longer period, and my prediction in this scenario is that we had a very bad cycle for credit in 21 and 22, so I believe the market's concern now is that it starts to worsen again. I would like to know the bank's vision after you have reduced your speed credit card portfolio is dropping for the last year, but what about next year? The increases we are seeing for the next quarter, do you think that they will also remain along the year, next year? And how will the bank prepare for that? And regarding the 496 law, 496, Could you share any numbers or figures with the market? Thank you, Judy. I will begin to talk, and then Prinspey will complete my answer. Well, regarding the physical portfolio, let's see some figures. Specifically regarding individuals, consignment loans, and others, and this is very much detailed in the report, we see a greater stability, especially also regarding payroll loans, especially with regards to the risk of this portfolio. We have lower NPL in this regard. And this impact, and this helps... small growth in our credit card operations. We are focusing on this growth for 2025, and we can go into greater detail later on this. But we see that the main part of our individual's portfolio is in payroll credit and loans. We had a very low default rate and a growth of NSS and private debt. So this is not a concern. Our greater drop or loss was in the renegotiable portfolios, especially some that come from a program called Disinghala. And We are very comfortable with this risk level and with ENPLs in our individual portfolio, and we do not expect any major changes for next year because the strategy, considering the higher interest rates and everybody working to close this year at 12% and maybe considering 13% or more for next year, Since our lines bring a very attractive risk return rate for the payroll, We will continue to grow and maybe close to 10% in 2025, and we will keep controlling the NPL of the individual's portfolio. It will remain stable. Now, with regards to the 146 law, well, yes, because we have the legal entity or the business entity, area also because we have to go back to the agribusiness and when you consider the corporate portfolio you have been seeing that it depends on the agribusiness chain so when you consider the individuals or corporate portfolios and you isolate the effect of renegotiated loans in individual and the specific operations in the agribusiness area, then the portfolio would either have a stable NPL or slightly lower than the earlier quarter. And we are very reliant with that and confident because we will be able to stabilize these portfolios with the agribusiness results and the provision that is caused by delays in agribusiness was $3 billion in the last quarter. So imagine taking that away from the behavior that we were channeling to the results. So specifically about the 4966 law, we are ready to turn our engines on in the beginning of the year. We are expecting this loss. Some actions are being done right now at the end of the year, and we want to reassure you that we will not have impacts on our results yet. resulting from the adoption of the RF-9 and the Rule 4966. And it's important for you to know that in our estimates with the implementation, we will continue to have a robust volume of capital above 11%. the core of it, and we will continue to pay dividends to our shareholders at 45% payout, irrespective of this implementation, because according to our estimates, we will continue to deliver robust results that support the growth of our business and that will generate revenues and income for our shareholders. Thank you very much. One last follow-up question about this comment. So do you believe we'll have any impact in capital? You already said that you're working above 11%, and even if there are operational impacts, and, well, we'll have many things happening next year, so you will remain with your payout, right? Right. Yes, this is the main message. Of course, we will have adjustments in the PL. We have sufficient income to cover this adjustment, but this will not impact our capacity either to grow and expand our business and to remunerate our shareholders. Well, we had already anticipated that the operational part is already considered in these projections. So we will have a very good year 2025. Great. Thank you to all of you. Our next question comes from Bernardo Gutman from XP. Gutman. We already have you, Bernardo. Yes, we can hear you. Good morning to all. Thank you, Jana, Tatiana, Giovanna, Principe also. Thank you for opening for questions. I would like to hear about the payroll loans a little bit more with the regulatory situation, repricing these loans. Is the bank reassessing its strategy for this segment? Do you consider an adjustment to continue to have profits? And if you could comment on the competitive scenario, especially with the new entrants. Bernardo, good morning. Thank you for your question and for being with us again. Speaking about the payroll loans, and its strategy. This is one of our greatest portfolios and strong points. So for 2025, I would say that back in 23 and 24, the government segment had increased their wages in all levels, federal, state, and local. So the bank, being the biggest bank in this segment, took care of that. So for 2025, with a new increase in wage, we will still have room to keep this margin for payroll loans. This means that our payroll loan portfolio will not suffer any impact, but we still have millions of clients to seek in this strategy as Giovanni has mentioned earlier one of the strategies is to offer the payroll loans to the private segments because we work with that in the government segments we know how to do it and it's important to know that in the private segments there are some nuances that we have been displaying in our strategy, so we will seek this portfolio, and it also depends on the SELIC interest rate. So it's also interesting to note that the competitive environment with banks is always there. Every 10 years, Requests for portability, for example, we are able to retain eight of them. Now I'm talking about the financial system as a whole. And when we mention payment institutions, we have not suffered any impact, any impact at all with regards to credit portability or migration of clients to other institutions. Important to mention that. Now my comments about the high SELIC rates And I think you wanted to know more specifically about the INSS payroll loans, which is regulated, right? Yes. So I would highlight that we have been working with a result that is adjusted to risk, to the return that this operation brings. And we act very differently from the market with regards to INSS loans. Our distribution structure is different because I don't have to pay the bank correspondent. With the INSS, our operations are mostly cash. performed by our own agencies, by our own branches that cover the whole country. So we have this good result. Another feature is that we have been monitoring the Selic movement, and if it rises again, the government will have to talk about the regulatory cap for Selic. payroll loans, but this is all in line with our results, with what we expect, so we will continue to grow in the INSS segment, and if we find any need, if there is any need for the financial system, the government will review the cap, and we already know that we are working with that possibility. It's also important to know that pricing considers the interest rate curve, which was already rising, and we already have this adjusted for most of our portfolios. This is a highly competitive segment, so we have to pay attention not only to the price that we need to use to continue being competitive, but also the cost to attract interest. these clients we were able to grow thanks to the portability attraction and if this spread becomes unfeasible for some reason then The same thing that already happened will repeat itself. You have the specific INSS committee that establishes the level, and when it grows too much, all the banks paralyze the portfolio, including our bank. So the structure is attractive. We are acting according to the curve. So we already made the adjustments in the curves. We have competitiveness. That's why we're growing. and we are maintaining our return adjusted according to interest rates. So we believe that we will continue to attract this, and we will be ahead of the competitors. Just highlighting the cost of this credit for us, which is infinitely lower than the rest of the market. Our funding costs also are different from the rest of the competitors, and this benefits us to offer credit. payroll loans. Another important thing, Tasia, is that when we mention payroll loans at Banco do Brasil, this means over 7,000 contracts with different public agencies. So we are certain that we will continue our situation even with higher competition.

great thank you very much okay let's move to our next question from Hannah to Negroni good morning good morning Hannah thank you for taking my questions I would like to revisit Prince's comment on the agribusiness cycle could you please elaborate a bit more on terms of how do you see things advancing going forward and when do you think that provisions will become more stable and it will start coming down and my second question a bit related to that and also in terms of the guidance since the beginning of the year the portfolio was aggravated and this should impact your financial margin but you you gross guidance was maintained your provisions increase and your net that income guidance was also maintained. What are the leverages that are in your business plan? Thank you, Renato. Thank you for your question. What's important here? Giovanna said something about it, and Tarsiana said something about it, too, during her presentation. Delinquency is very much concentrated in agribusiness, mostly in the soybean crops and in the Midwest. Soybean crops, I mean, it's not even... prevails in our portfolio because our major portfolio is with livestock and as you've seen the landscape for the coming years is quite favorable and then comes the soybean crop portfolio and they are facing some difficulties but the evolution of the safra plan or the crop season plan and the windows they were delayed but they are now becoming materialized going forward into the next season gives us the possibility of mean we didn't lose profitability but there will be a rebound in the entire process in terms of the soybean crop corn is also going through a favorable momentum because the margins are being reconstructed and rebuilt in the field so once you look at all of the indicators we see that the scenarios should be more favorable going forward so NPL would go back to normal levels. This is something that we have been telling you before. Today, delinquency is 1.97, which is higher than the level of normalization that we expected. But most of it was due to the court, in-court reorganization processes. And we've been telling farmers about it because this process shields farmers farmers in the market because since this is a very cyclical business it's constantly demanding more loans and farmers their resort to loans and the resort to in court reorganization they cease to receive credit and their production is halted so because of all of the joint guarantees I think going forward things will improve. And this certainly contributes to a reduction in NPL. And again, we may be able to see a normalization of the provision levels. We believe that if we are able to deliver all of these initiatives aiming at improving the composition of our agribusiness portfolio, NPL and provision levels will go back to normal. And I think that 2025 will be quite favorable. We see pressure, mostly related to 2024, in this crop, soy crop. And because of that, we had to make changes to our guidance. As I said, $3 billion. in provisions for this quarter related to delays or overdue payments in the agribusiness portfolio. If it were not for that, we wouldn't even need to review the guidance. But since we are very much driven by risk-adjusted returns, the risk was more than what we had anticipated in this particular portfolio. therefore we have 125,000 colleagues working hard to find profitability coming from order portfolios and so help us to maintain the guidance and I was just going to say I mean adding to what Prince was saying it's important to highlight that our portfolio is the dream portfolio of every bank because all of the portfolio mix is very very good I mean individuals in corporate in our portfolio is quite balanced so once we see a portfolio going through some difficult situation that marries our attention then there is another portfolio that helps us mitigate the other result but I think there is also important to mention one thing I mean 98% of our Agra portfolios are secured are secured we do not want any that's not what we want to to not help growers. I mean, we want to help them. We do not want them to be away from the credit portfolio. We have 210,000 customers in that Midwest region. So we want to go after these guarantees. And I also think it's important to highlight the work that we are doing to create awareness vis-a-vis the effects of the in court reorganization I mean to our business it's a different effect when it comes to corporate because farmers cannot take their farms and take it someplace else and start planting something else soybean growers will continue to plant where they are located in that geography and they will have to plant in the next crop season so all this work of talking to farmers, presenting the solutions that we have, even before they resort to the in-court reorganization, we are being very objective in our approach because this involves, I mean, this is a movement of predatory advocacy. We train our entire network for over five years. Now we have a specialized network operating with the agribusiness chain. Our contact with clients is not via WhatsApp or text message. We have a personal contact with the farmers. So our clients are being advised. They are receiving advisory services from an expert. So this part of our portfolio that is relevant, all the clients and farmers are being personally contacted contacted by experts from our own network it's important that that you understand that we are very serious in this regard we're talking to clients we are reorganizing their financials because we are advising them about the consequences of the in court reorganization to their businesses this is very important because this predatory advocacy You know, it hurts the entire industry because we are talking about short cycles. And usually the reorganization process is very lengthy. Unless that farmer wants to leave that business or maybe if he wants to sell the farm to a new farmer, he won't even be able to do that because he has to have a sound financial system. So we are already... talking to farmers because maybe they can renegotiate their debt and this has been approved by the National Monetary Council but many of them are now giving in to predatory advocacy this prophecy that involves explaining our clients about the risks and what that means that promise from lawyers trying to get them to to engage in in-court reorganizations is predatory. I mean, unless they finally decide to leave that industry because the crop season is coming, you know, rainfall is here, and if they resort to reorganization, they will be more or less sealed. It's important to realize that we're already seeing the benefits of the work we did. we saw this quarter a much lower number of clients resorting to reorganization. This is not something that we started last week. It started the moment we saw the first cases, and we understand that the benefits are coming. We have not received new cases of farmers resorting to reorganization in this past month. And this is an effect that does not only affect Banco do Brasil, but the entire financial system, because the client is... hurt through all over the financial chain now going back to the second part of your question how what are the the avenues of revenue I know that the provision level in agribusiness drew the attention of many people but it's important to look at the growth of our NII we are managing to grow loans and we expanded the margins even with the effect of Patagonia that led us to this growth of 9% if it were not for that we would have delivered 12% growth so our growth avenues are now being put in place in the fourth quarter because the year is not over yet our entire network is focusing not only in improving collection but also we are focusing on generating more revenue streams. We also have results on the fee income line. We also have a huge growth avenue coming from credit cards. So on purpose we put a halt on this line just to make adjustments. We had over 10% delinquency and today delinquency in that area for revolving credit in credit cards is something that we know we need. When we compare ourselves to private credit, we have two and a half times more volume with credit when compared to other peers. And also non-payroll loans. We are very strong in payroll loans, but non-payroll, which was another line where we were losing market share, we are now recovering that and there are now recent disbursements in October, which posted record numbers, of course, but if you look at risk and return, it's quite adequate, and this will certainly improve our margins going forward. So with all of that, in addition to expenses control, and that's why our expense guidance is lower. I mean, it's down, and we hope to save more to mitigate that hiccup, I would say, that comes from this new NPL coming from the agribusiness sector. Thank you. Thank you so much for the answers. Thank you, Renato. Our next question is from Gustavo Schroeder from Citi.