B3 Sa Brasil Unsp/Adr

Good morning ladies and gentlemen and welcome to the audio conference call of B3's earnings results for the third quarter of 2023. At this time, all participants are in a listen-only mode. Later, we'll conduct a question and answer session and instructions to participate will be given at that time. If you should require assistance during the call, please press the 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 now like to turn the conference over to André Milanes, B3 CFO, who will be joined by Fernando Campos, Investor Relations Associate Director. Please, you may proceed.

Thank you. Good morning, everyone, and thanks for joining. joining our third quarter results, call for the third quarter results. I'll start with a few remarks about the quarter. So we had a quarter where we finally saw the beginning of the easing cycle here in Brazil with two rate cuts that took place during the quarter and after the quarter more recently, a third cut that was done to the interest rates. But as we have been saying that that's the beginning, we should see activity picking up when interest rates are lower. And with that, we had a quarter that was more influenced by the by the global environment, with the performance of the more mature economies remaining with tightening cycles and higher interest rates for longer. That has had a negative impact on the equities market, not only here in Brazil, but across the globe. And to add to that, we typically have some seasonal impacts here on the third quarter, especially when compared to the second quarter, given the holiday period in the northern hemisphere. With that, in that context, we posted consolidated revenues, which were pretty much flat. we saw another quarter that reinforces the strength of our diversified revenue model. Even with the decrease of approximately 10% in the ADTV of cash equities against both the second quarter of this year and third quarter of last year, as I said, we were able to post stable, consolidated revenues. Even if we exclude the addition of Neurotech during this quarter, where it was consolidated in full for the first time. Fernando will discuss revenue performance in more detail. On the expense side, as we have been saying, we continue to reap the benefits and the results of the long-term initiatives that we began to implement last year. And I think the expenses for this quarter show a little bit of that. If we exclude the neurotech expenses, which were not part of the comparison with the last quarter and the same quarter of last year, our expenses would have grown below the inflation for the period, even considering that in August we had the annual inflation adjustment of our year. salaries of our personnel expenses given the collective bargaining agreement that happens every year. It is also worth highlighting that the increase that we see in personnel line in relation to the third quarter of last year above inflation also reflects not only the inflation that we have on salaries, but also on another important line on our on our personal expenses, which is the health plans. We will talk into that in a little bit more detail, but remain focused, as we have been saying, in staying closer to the lower band of our expense guidance for this year. I'm going to call Fernando now to talk a little bit about the operational performance, and I'll come back afterwards.

Thank you, André. Talking a little bit about the performance by segments, starting with the equities, we saw ADTV of 23.7 billion in the cash equities, which was a drop of 12% quarter-to-quarter to 9% year-on-year. The turnover stood at 134% and was impacted by the reasons that André mentioned before, the challenging market environment with interest rates in mature economies. Regarding margins, fees, the slight recovery that we saw compared to the second quarter of 2023 reflects mainly the customer mix for the quarter. And it's two other important aspects on the revenues. First, the performance of indices derivatives, Ibovespa futures, which presented solid volumes in line with the volatility of the period. And it's a little further from the results that we saw from the cash equity market. and we saw lower seg lending revenue, mainly as a decrease of the lender rate. Talking about listed derivatives, we saw a decline in revenue in low single digits, but it's still a good and solid performance with the strong volumes in interest rates in ERL in shorter terms that has a lower RPC, as a driver for the segment's results. In OTC, another good quarter, benefiting from an environment of higher interest rates, the volume of new issuances in the average outstanding balance of bank funding instruments grew 3.7% compared to the second quarter, to the third quarter of 2022, and two other Aspects that are worth mentioning here, corporate debt, which we saw a market that we saw favorable conditions in this market. And we saw a growth of 12% in outstanding balance year on year for this product. And also the growth in treasury direct with outstanding balance growing almost 30% when compared to the third quarter last year. So as a result, we saw revenue growing 14% year-on-year and 3% quarter-to-quarter. And finally, in technology data and access, the aspects that are worth mentioning here is the growth in the OPC utilization line. mainly 14% versus the third quarter, 22%, and 1% the second quarter, 23%, and basically grows with the finance industry. It's also worth, and I think just to complement what Andrea mentioned, there was in the data, we saw the consolidation for the full quarter of Neurotech, revenue and that represented a revenue of approximately 24 million reais. Now I'm going to give the floor back to André to talk about some of the other highlights of the results and some of the strategic advances in the quarter.