B3 Sa Brasil Unsp/Adr

Good morning, ladies and gentlemen, and welcome to the audio conference call of B3's earnings results for the second quarter of 2023. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions to participate will be given at that time. If you should require assistance during this call, please press star key followed by zero. As a reminder, this conference is being recorded and broadcasted live via webcast. The replay will be available after the event is concluded. I would like now to turn the conference over to André Vega-Milanes, B3's Chief CFO and Investor Relations Officer, who will be joined by Fernando Campos, Investor Relations Associate Director.

Thank you. Good morning, everyone, and thanks for joining our call for the results of the second quarter. I'll start briefly just with some general comments about the environment during the quarter. We saw a more favorable environment, especially more towards the end of the quarter. The market started ready to anticipate the beginning of interest rate cuts in Brazil, which have recently materialized last week. A more constructive view or more favorable view in terms of economic growth as well. And that has benefited volumes in our core business, especially in the in the equities market. So as a result of that, Fernando will provide more details regarding the performance of our revenues by segments. But in general terms, we saw revenues pretty much in line with the last quarter of last year and then small advance in relation to the first quarter this year. equities have shown volume recovery compared to the first quarter, but are still below the levels that we saw during the second quarter of last year, primarily because of the lower market capitalization of companies, although we saw a very healthy turnover velocity during the quarter. The performance of the listed derivatives were driven primarily by the performance of interest rate contracts that are also associated with this beginning of an easing cycle here in Brazil. One thing that I think it is worth highlighting is that we had two business days less than in the first quarter of this year, and that makes a material difference in terms of revenues. On the listed segment, this represents around 25, 30 million reais a day. OTC remain with the performance very robust, reflecting that still environment of still high interest rates with both new issuances and inventory growing quite well in relation to the last year. In data, it's worth, again, highlighting that this already incorporates the results of Neurotech, roughly speaking, a month and a half amounted to 12.5 million reais. In the expenses side, As we have been discussing, the project that we carried out last year, consisting in initiatives aimed to seek for efficiencies, not only at that point, but in a more permanent way, we have been able to reap the benefits of that project and those initiatives, expenses for the quarter reflect this to a large extent, excluding the impacts of the consolidation of neurotech, which was not in our numbers in the prior years. Expenses would have, not only on the prior year, but were not also included in the prior quarter. Expenses would have been 0.4% higher to last year and 0.7% lower than the first quarter, well below the inflation measured by the IPCA during the quarter. On that end, I just wanted to, again, reemphasize our commitment to cost discipline and that our target remains to be closer to the lower end of our expenses guidance for this year. I will now bring Fernando over to talk about the operational performance of each segment.

Thank you, André. Starting with the equities segment, so we saw ADTV of 26.9 billion in the cash equities market during the quarter, 7% growth compared to the first quarter. When compared to the same quarter last year, it was 7% lower, mainly due to the smaller market cap of companies. while the turnover remained at high levels at 160%. Regarding fees, the recovery from 1Q reflects mostly the customer mix, where we saw lower activity from players that use the ARC location, which usually is related to customers that pay smaller fees. Still in equities, I think there are two things that are important to mention here that offset the growth in the trading revenue of cash equities. First, index derivatives, which showed a volume decrease both compared to 2Q22 and 1Q23, mainly reflecting the decrease in individual investors' activity. In stock lending, we saw the reduction of the negative market sentiment led to a lower transaction rate resulting in lower revenues for B3. Moving on to a list of derivatives, we saw a second consecutive quarter of historical record with 6.4 million contracts of ADV, a 50% growth year-on-year and 7% growth quarter-on-quarter mainly reflects the increase in the Brazilian real interest rate futures contract, which increased 83% year-on-year and 9% quarter-to-quarter. On the other hand, we saw a decrease in the average revenue per contract, mainly due to the concentration of volume in the short-term part of the curve, which is cheaper to trade than the longer part of the curve. So in the OTC market, it performed well, mainly due to the high interest rates. We saw, like I mentioned, the volume of issuances and the average inventory of bank fund instruments grew by 10% and 40% respectively, compared to the second quarter of 22. Here, it's also worth highlighting the strong growth in the a treasury direct product, which saw an increase of 30% compared to the second quarter of 22, and 11% compared to the first quarter of 22 in the inventory of the product. Lastly, in technology data and access, it's worth mentioning the growth in the OTC utilization line grew 10% year-on-year, 2% quarter-on-quarter, mainly driven by the growth of the funding industry. And that also, it's just reinforced that here we have 12.5 million reais in revenues from Eurotech. And now I'll give a call over to André to talk a little bit about all the financial results and strategic advancements.