Good day, everyone. I am Marcelo Noronha, CEO of Bradesco. I am here to present the earnings of the Third Quarter 2024. I'm speaking at Cidade de Deus. It's a little over 10:30, 10:31. It's a pleasure to be with you again. Thank you for joining us. And we'll speak about the balance sheet of the third quarter, and then I'll sit with my colleagues to answer some of the questions from our colleagues of the sales side. I'll start with the earnings of Q3 '24, which we received. We had a recurring net income of 5.2 billion barrels, growing almost 11% compared to the second quarter '24. In the past quarter, as a reminder, we grew more than 12% quarter-on-quarter. So we have been delivering what we committed to do. We don't promise things. We deliver things. And we are growing step by step consistently. And here we have a snapshot of everything we are going to present to you today during this video conference call. Our profitability is growing. It's a solid and safe profitability growth. Our NII evolves driven by client NII and reduction of loan loss provision expense. We'll speak more about that. Productivity gains with rising revenues, risk of credit risk controlled in the footprint adjustment, balanced credit portfolio growth, and improving delinquency ratios, operating expenses evolving as expected, and the insurance group delivering an ROE that was very relevant, almost 24%, growing practically all the lines. And we'll speak about increased stake in Cielo as a result of the tender offer we had and with the closing in the month of September. So moving forward, let's speak about total revenue in the quarter, R$30.6 billion. And I'm always comparing quarter-on-quarter more than year-on-year. So 3.7% quarter-on-quarter, and we wanted to break it down for…

That's great. So this was a summary of our new segment we saw on the video. I must tell you, we feel great pride in this team that worked to launch the new segment. We have three flagships, which you can actually see in the [indiscernible]. One will be here on Faria Lima and Juscelino Kubitschek, another one in Rio in the neighborhood of Leblon, and one more unit in Campinas. As of tomorrow, our team will be there. They have been trained, and we will begin to invite our clients to enjoy this new experience. By late January '25, we will have between 45,000 and 50,000 clients in the new segment, which we will continue to expand until 2026. We will also have geographical expansion throughout Brazil in the main locations that have been selected for this new segment for high net worth individuals with a new value proposition for these clients. And I believe we will have more opportunity to talk about that in the future with you. And now, Andre, over to you.

Thank you, Marcelo. Thank you, Cassiana. It's a pleasure to be here with you. Good morning, everyone. I'd like to tell you that Ivan Gontijo, CEO of our insurance group, is here with us today. Remotely, he is with us online. You can ask your questions either in Portuguese or English. You just have to send your questions by email to investidores@bradesco.com.br or you can use this WhatsApp number (11) 9 7443 8238. Or you can use this QR code. The first question comes from Eduardo Rossman from BTG. Rossman, please.

Hello, good morning, everyone. I have a question. Hello, good morning. I apologize. My camera is not working, so I only have the picture today. But my question is about the low in portfolio growth. You are again opening the doors of the bank for clients looking for loans. You will try and recover that loss of market share and the loss of principality with these clients. But when we look at the low in portfolio, the profitability is lower, not only in corporate, but also in payroll-deducted loans. Even Noronha spoke about that in his presentation. So I'd like to hear from you about growth and the prospect of growth. And what is your number one concern if inflation and employment, or maybe the price, you would have to be more prudent with that. I'd like to understand the speed of this recovery?

Thank you, Rossman, for the question. It is a deep question. And it certainly relates back to what I said. Yes, we are conducting this movement based on data. We want to have the right mix and the right ratings. Because let's think about it. Think about an individual who went through financial stress in the last three years.

Have they recovered completely?

They may have a job. Their real individual income is growing more than 6% a year.

But have these people truly been able to pay back their liabilities?

Well, if you look at banks' models, you will see many of them have not. So we do not want to play the game of financial stress. We want to have a safe portfolio with the right risk-adjusted return, because that has an impact on the bottom line. So for example, you say, well, I had an expectation of a higher NII. Oh, well, some time ago, we prepared a new plan, a 60-day plan. We conducted, we've executed the plan. And we were looking at a certain level of risk. I mean, we have a very high penetration in all client segments. Otherwise, we wouldn't have so much traction as we do. However, as we built this new business unit and with the integrated work we were conducting, what have we seen? Well, we realized that if we could use FGI and ProNEP more, we would have a much better risk-adjusted return, because although the NII can be lower, you need much less provisions. And so that is a more attractive way of business for us. If you look at a ranking of these different collateral projects, ProNEP, FGI, you will see that Bradesco has a great traction. And we have a very attractive risk-adjusted return. So looking at our channels, we're always looking for the best RAR, because that's the name of the game. We may not have a quick growth of NII, but we have a significant growth of our profit, of our net income. So don't be surprised. Our provisions are now lower than in the past.

Why?

Oh, well, because the quality of risk is much better. And also, the mix has a much better quality. And when we look at the current economic scenario, Rossman, I can tell you that looking at our strategy, we feel very confident about what we've been doing. I've just had a meeting with journalists, and one of the journalists asked about the economic scenario. Said, well, the economic scenario has worsened. What is that? What do we mean by a worsened economic scenario? First, if we look at the current scenario, we may have a deterioration. But I think this is less probable. This is less probable than the second option. A benign outlook, we are not really considering. So we may have a change in the exchange rate. Yes, we may. And inflation will certainly grow more, grow faster. I mean, this would be a more stressed scenario, but I don't really believe in it. Let's wait for the new measures to be taken by the Finance Minister, Minister Haddad, because yesterday we had important statements where we will have more expenses, which means that we will need more expense control. And we believe this is good news. However, what do I view as the most probable scenario? Interest rates growing up into 13%, maybe closing the year at 1175. And the unemployment in Brazil is currently 6.7%. However, there are regional variations. For example, Sao Paulo has a higher unemployment, and also center west that has 5.2 unemployment rate. You see, so we have regional differences in Brazil. And the GDP will be growing 3% this year, inflation about 4.5%. If this is the scenario we expect, well, what will we have next year? And real income is growing this year, 6.3% with this level of unemployment. And if we project this scenario towards the future, Rossman, what will we see? I mean, I'm sharing more information with you using your question, Rossman. We will see the GDP will probably grow slower, about 2%, 2.1%, but there will be growth. The expected unemployment level will not be very different from 8%. In the conclusion, I'll come to the conclusion in a minute.

And what about real income?

It may grow between 2% and 2.5% next year. So look here, the market for individuals will possibly be good. We have great traction. That's what we want because this is risk we consider good. We've actively participated in the auction of the INSS because we want to have a clear strategy to operate in this line of business. So we will continue to monitor this scenario. If we had a financial stress, we feel safe because of our current mix. Now, for individuals, but what we are truly looking at is the risk-adjusted return. This is what really moves the needle. Now, looking at the company clients, because of these programs that provide collaterals and because of the specific credit lines we're offering, we feel confident about what we've been doing. And we're growing in cross-sell. We are attracting new clients. We are attracting companies' payroll. So my answer to that journalist was, what is the scenario? Will it deteriorate? But what does it mean? It means this, but is this probable? Well, it depends. And depending on what happens, we'll make a decision. I fear for the country. Nobody wants to see high unemployment. Nobody wants to see economy growing slower. We don't want financial stress. So I hope the most probable scenario will materialize. And it's not bad. It's not a bad scenario at all for our country. And also, it's not bad for our business, because the next question is, and what will happen to me? Maybe for different industries, you will have different consequences. But for us here, we are very much aware of the current scenario. We see a good correlation in terms of interest rate increase. We continue to monitor our risk models and also NPL. However, we have two important variables here, especially one, which is when the population loses income. And how may that happen? Well, if you have a very high inflation, if you look at the current deviation that would be the price of beef today. But the other prices seem to be under control. And the other issue would be if the unemployment rate would soar, because that would end up reducing individuals' income. But this is what we project. I believe we will have a controlled expected loss and lower provisions for the new ventures and a growing NII. We will be growing in fee and commission income. We will be also growing in the insurance group. That's where we place our expectations. I'm sorry for such a long answer. I just wanted to add more information about the current economic scenario.

Thank you, Marcelo and Rossman. Positive macro scenario, portfolio growth, inclined NII growing looking forward. Next question from Renato Meloni with Autonomous. Hi, Renato.

Hi, good morning. Thank you for taking my questions. I'd like to understand the dynamic of client NII and other provision. Because in your presentation, it seems clear that there is some difficulty in going back to accelerating growth and mass retail, both for SMEs and individuals. You justified that with the cost of risk. Good. Are there other challenges, for example, regaining principality of these clients? And the second part of the question is how important is the change in bank strategy, depending on this acceleration? And will you have to review the plans for next year?

Thank you for the question. But let me clarify. Perhaps I was not clear. We are not decelerating the mass market, neither in SMEs. Let me give you some data. There is a public ranking. Do access it, if you're curious. That's ProNEP, ProNEP ranking. And you will see which bank is ranking first or second in distribution to SMEs. We're talking about companies making less money in the client base. So we have principality. We are leaders in small businesses, and so we're decelerating those. And if you answer that ranking, you will see that the most operations happen with the Bradesco. I don't want to be transparent. I don't want to mention competitors, but Banco de Brazil is fighting for the number one position with us. So we have client principality. We are growing. We are growing with clients with a good rating, with loans that will ensure constant and pre-annual growth. So change the bank helps in our growth strategy because we will deliver a number of better initiatives for our organization. We will make our organization more competitive. One of them is the new segment, the principal segment that we were calling the affluent one. And the credit BU, which is super important for us, with a number of quick wins. And then later, Renato, in the future opportunity, we can explore this in more detail. The SME segments with 122 branches increase into 150 that increased market value, penetration, and quality of risk. Our portfolio management quality improved. You will remember that in the credit business unit, we created a new unit of portfolio management. They have delivered models to us with a prediction of the fold in the middle market with companies that will turn over up to R$300. So we have very important deliveries in portfolio management, in granting loans to clients in our timeframe for approval of loans in the wholesale bank dropped by 40% for our own. So we have good traction in large corporates, middle market, SMEs, and also individuals. But I want, together with my team, to grant high-quality credit and deliver perennial deliveries. And I don't want to have a good margin and then have a trough, a pick and a trough. And also, cost management is under control. We are reducing the footprint. And we are managing our personnel and administrative expenses, which are very much under control. And our cost to serve is under control for the whole organization. Also in terms of internal processes. But another interesting element to mention is that ProCred program was launched, providing collateral for micro-companies, micro-enterprises in October. Very few banks started operating with this. Bradesco was the first one. And you can do it all via our app. So we have good traction, but we are now going to deliver an NII that will peak and then get to a trough.

And let me add to that, Marcelo. There are two slides in the presentation that Marcelo just made showing the new credit vintages. The first slide shows our origination in mass retail individuals and then mass market for companies. And we show significant growth in both, in Q3 against Q2, even stronger performance in mass market individuals. So we don't see any difficulties in growing these two segments. But we're growing carefully because we're looking at a longer run. We want to continue to grow quarter after quarter.

Thank you, Renato. Next question by Yuri Fernandes with JP Morgan.

Good morning to all. I'd like to have an update in ROE converging to cost of capital. We had that question almost every call. I'd like to get an update from you. Last time this was asked, I think that your answer was that this was going to be a gradual process that it was doing slightly better than expected, but that would be aligned with long-lost provision and then improvement of the top line and NII. But I'd like to focus on the cost of capital because in Brazil we have a higher cost of capital. So my question, for 2026 are we going to see a higher ROE or will the plan be delayed because the ROE is improving but QE doesn't seem to be improving in Brazil. So how to balance these two?

Thank you for the question. You always mentioned that that's our mission and our target, our goal. Regardless of the cost of capital being a little higher or not, we'll pursue it and our expectation is to deliver better returns quarter after quarter and growing absolute results. This is our expectation and growing wood safety. And with the reduction in footprint, we had a reduction in our headcount. But we also hired for the credit business unit and for technology, people with greater seniority and we have to pay them four or five times more and that will hit the operating expenses. But still, that's where we are going. We will pursue this balance. And Yuri, what matters is that we pursue this with quality. This gives us some predictability and gives some predictability for the market. Cassiano, do you want to add?

No, really, I think you said it all. We continue to do strong work in all of the initiatives you mentioned. And we have spoken with Yuri about that. The matter is how much more we want to bring this forward. We're working for it, but we have our internal problems in Brazil. But we have the dynamic of our balance sheet, one of continuity. And this shows that we're very serious about 2025 and in the future to continue to change the bank and the transformation process led by Marcelo and under my responsibility. The outcome of that will be a solid bank as we have always been, more profitable every quarter and with clear consistency in how to serve our clients, how they want so we can get that principality. And improving our competitiveness in all segments, that's very important because that's all the transformation is about. Thank you.

Thank you.

Thank you, Yuri. The next question comes from Thiago Batista from UBS. Thiago, please.

Hello, everyone. Good morning. My question is about investment in technology. It seems like the bank is investing more in technology to close the gap compared to peers. But how much can this process become easier now with artificial intelligence? How will that help close the gap? And if you do this now, I mean, is it easier to do it now than it would have been a few years ago? And also a follow-up about the Selic basic interest rate you spoke about 13% or around 13% next year. What would be the impact if the basic interest rate really confirms at this level? What would be the impact in a few years?

Well, thank you, Thiago, for participating. Thank you for your question. It's a pleasure to have you with us. About technology, we do not see a technology gap. Our diagnosis shows we have an opportunity to increase significantly our productivity, because we have more third parties than our own employees, and that changes our productivity. We also want to have a more senior team, and then we want to roll out this initiative to the whole organization using our enterprise agility, whose use was more restricted until now. So we are investing in line with the large players on the market. Sometimes we press the gas pedal a little bit more, but the fact is that artificial intelligence has been with us for some time now. BIA has evolved. It's now moving into GenAI, but BIA has been with us for quite some time. We have been using artificial intelligence, machine learning to develop models in our business units, but we're using that very strongly also in our pricing efforts, regardless of the value proposition we have in each business unit. So we do have a lot of use of artificial intelligence, even in pricing, so that we can price in microclusters even at coming down to the client level, and that will support our digital channels, which we call business experience BE [ph]. So we continue to work hard on this and also on other fronts. If you think about technology development using GenAI, we are also using that in our daily work, and that will expand even further. However, we want to translate that into a better experience for clients and operating efficiency gains.

About the interest rate, maybe you'd like to answer. Well, I believe the interest rate curve is still under stress. We'll have to wait and see. However, at first sight, I believe the effect is neutral. I mean, from our point of view and looking at 2025, there will be higher floating gains, but then I will have perhaps a lower result in asset and liability management. So even if it is at this level of 13%, I do not see a great impact. But of course, there will be other consequences. I mean, if we have such a high interest rate, the inflation will be different, and then we will have a different scenario altogether.

Yes, let us wait for the U.S. elections, which will also have an influence on this, on the foreign exchange rate, and other variables on the Brazilian market. Thank you, Thiago, for the question.

Thank you, Thiago. Daniel Vaz from Safra, do you have a question?

Thank you, André. Good morning, Noronha. Good morning, Cassiano. Noronha, as I was listening to your presentation, we believe you are focusing on risk-adjusted return and also on the mass market with collateralized credit lines. But if you think about other lines, I mean, how was the result of the testing you did in the last few months? What was the return you had in the vintages that you tried, and then you stepped back, and now you are advancing in collateralized lines? Because if we think about fintech, many of them are providing clean loans without collateral, so can you tell us more about this market where you played or did not play in the last three to six months?

Thank you, Daniel, for the question. I can tell you that we always look at the risk-adjusted return, even at the wholesale bank. If you talk to any one of our regional managers, they will say, I have a dynamic curve of the risk-adjusted return for every client, and that's omni-channel. The officers can have that information on the mobile phone, on the tablet, and they also have a risk-adjusted return simulator, so you can work on the margin only if you have the right level of risk-adjusted return, because that is the target that our officers have to meet. And if we look at small businesses, individuals, and even high net worth individuals, when we do pricing, when we look at the price of risk, when we always consider that in every opportunity we have, in SMEs, we may have an RAR as high as 60%, but when we had clean loans, you could never reach such a high RAR. We were at the lower quartile, however, yes, we do provide clean loans in some selected clusters. Remember, we are a large payroll payer for companies, and so I know our clients cash flow. We also provide payroll deductible loans, and then you can have other types of relationship that come out of these transactions, so we do have clean loans, but only for very good credit rating clients. And obviously, we always work within a certain range of expected losses compared to the price that is the margin provided by each client. And when we provide clean loans, that is the case. However, we have to be realistic, Daniel. Individuals of lower income, who had delinquency issues in the past, have they fully recovered? Have they been able to repay all of their liabilities? Do they have a higher risk? I mean, we conduct a battery of tests, we are testing all the time, and I will tell you, Brazil is a blue ocean, there is risk everywhere you look, so you have to take care of your own portfolio. Of course, I respect the strategy of other players, but we feel very confident about what we have been doing to deliver results that can be sustainable. We do provide clean loans, however, that cannot hurt our results. I mean, unless you have a specific situation, a very large company, but it is not the case. And thank you for the question, Daniel, and please continue to observe, we work case by case.

Next question from Mario Piery with Bank of America.

Good morning everyone, thank you for the opportunity. I'd like to focus on the insurance group. 45% of the earnings coming from insurance, and we see increased profit in health insurance. In the nine months, it's growing 66% year-on-year. So, Noronha, I'd like to understand, what are the drivers here, and can you maintain those level of growth next year, also in the insurance business?

The PNC profit grew 76% quarter-on-quarter. I imagine that this might have been some effect of the state of Rio Grande do Sul and everything that happened there. Perhaps you could explain the PNC phenomenon. I would like to invite our colleague, Ivan, to answer your questions. Ivan?

Thank you, Marcelo. I'd like to thank Mario with Bank of America for the question. So here's your answer. The issue is group growth, if you work at the line items, it happened in all of the revenue streams of companies, products and segments, savings, bonds, health, pension, growing very in a robust way. And PNC, as you well observed. In the combined ratios, we can see a substantial improvement in this quarter in all line items, in all companies, in terms of the claims ratio. Of course, that gives us more robust results as well as we improve the operational part of the business. And that's why Marcelo mentioned that our results had two-thirds coming from the operational part and one-third from the financial part. Just your question about health issues, we started adopting some practices over the year that started ripping the fruits now in Q3, but these are things that have been implemented since the start of the year, with some adjustments made regarding some excessive ease of the health plans and also tackling frauds. And of course, that led to a decrease in claims ratio for veterans with a better operating result. Prospectively, to answer your question, we are comfortable, we'll continue to do this work, which I insist, we started at the beginning of the year and the results are only showing now, but this improvement should continue in the next quarter. Regarding PNC, that's a business that has been growing with an ROE which is extremely solid, showing the robustness of the business and of the transactions. In terms of auto assurances and homeowners insurance, and the growth, you probably saw this. We have to compare Q3 to Q2, and Q3 and Q2 show events related to the south of Brazil. Those events were observed in the balance sheet of Q2 with comfort. And now in Q3, without these events in the south, we were able to grow the PNC business with more comfort, lower claims ratio and with a commercialization and administrative ratios which were extremely positive. This is how we can explain those positive results for both of the companies that you mentioned.

Excellent, Mario. Thank you for the question. I can end saying that we have good traction in all segments of clients and distribution of the bank is very strong also for the insurance business. Thank you.

Thank you, Mario. Thank you, Ivan. Next question from Pedro Leduc with Itaú Unibanco.

Good morning. Thank you for taking my question. I want to know about -- and I guess that the years unfolding as planned in February, the first stage of ROE recovery came from last provision. You got that and then growing the portfolio, you're getting there too. And the next would be NII and that's starting. And finally SG&A in the future. So I'd like to get your take on this. If this sequence to improve ROE, first loan loss provision, then portfolio, then NII, if this is still valid, now that you have the new vintages, you have pricing and you have funding and gross NII can increase in the next 12 months. So that's what I would like to know.

Thank you for the question and for participating in the call. I believe so. I think that we can continue in the trend that you mentioned and that you mentioned so well. NII will grow depending on the scenario that we mentioned, the portfolio mix. What you can promise? I don't like to promise, I like to deliver. I haven't seen this, it ran over. But what we have in mind is if we deliver an NII which is stable, let's look about 8%, 9%, doesn't matter high or low. If we deliver this with an adequate cost of provision, this is what we need to do. Because that's our NII net of provisions and that's why we use the risk adjusted return. We'll continue to prove NII. The NII behavior will depend on the mix, because if I can originate movie role deductible loans, the INSS deductible loan, well it lost share but it is good. It gives me RAR for our channels. For external production, that commercialization cost is more complicated. If I can produce more, originate more, I will. This will bring us somewhat lower NIA than other lines but it will bring us more NII and will require very little provision. So this is the promise that we continue to have and our expectation is to grow our NII over time and deliver a more focused and ROE for the bank.

We should not forget the liabilities in spite of this NII that we've been working with. We do work not only with SMEs, with our cash tools and also now with our principal segment because we want to have greater principality in the high net worth individuals. So it's a mix of things. And we'll have the right trend and this will allow us to take the next stride along 2025.

Thank you for the question, Pedro.

Now may I ask about the L&M of the current portfolio? Do you have more hedging especially for the pre-fixed or the non-variable products?

Well, there is not a big change but I believe it is more neutral. Now, when I look at the portfolio and look at the perspective curve compared to our funding in our own capital, today it is more neutral.

No. We do not have more hedging but we're monitoring the risk. If the rates go up, you have an opportunity to have gains on the liability side, but when you have volatility on the market, you also have opportunities in the trading portfolio and also in other business. So, our policy of not doing hedging continues. However, we have also reduced the risk using other levers.

Perfect. Thank you. Thanks for the question. The next question is from Eduardo Nishio from Genial. Nishio?

Hello. Good morning. Thanks for this opportunity. Good morning, Noronha, Andre, Cassiano. I'd like to go back to the question about the transformation plan. You have conducted a number of changes. I'd like to hear from you about where you stand in the new compensation plan, both for executives and also at the branch level. I'd like to understand the number of branches. If that will continue to change, I think you had 5,300 branches in 2016 and now 2,300. So, you've had a dramatic reduction in the number of branches. Also about digital banking, if you could provide an update about the future and also the rollout of new platforms. You have just rolled out a platform for individuals. And what are your plans for the next quarters? Now, my second question is about delinquency and loan loss provisions. The delinquency seems to be quite well behaved, coming down quarter after quarter. But do you expect to go back at the same level before the pandemic? Will that happen? Now that we see a different situation in terms of credit?

Look, Nishio, about loan loss provisions, as I said, we are attracting better ratings, a safer mix, and so we will continue to see delinquency coming down. And this is something we believe we will be able to control. Unless, I mean, we have a surprise coming from large corporations, which we don't really expect. So, I believe it may go back to the previous levels. Now, about compensation, this is the first six months when our compensation is based on individual evaluation. Of course, we have different waves. The level of responsibility of each executive is considered. All client segments are receiving incentives depending on what they can deliver. This is what we call extrinsic motivation, because we also have the engagement of our teams and our professionals. And we will see that at the end. Our compensation plan at all levels, both at the branches and here for executives. Each person is being evaluated according to the deliveries. I will now hand it over to Andre and Cassiano, because they will speak about our footprint. Now, about digital banking, I can come back to provide an answer to you, because we have been working with Tulio. Tulio has just joined the company. He came from the market. He will be responsible for a few products and the digital mass segment. So, we have been working. We will soon be able to provide more information. Now, I will begin talking about our branches. Oh, yes, I'd like to add, you spoke about the number of branches, but we don't really look at branches alone. We look also at our service centers, because these are branches. They are business units. I mean, although they may have a different size, they're still business units.

Yes, we are now at the level of 5,000 points of sale or points of service. We did see an evolution in the cost to serve. 1,041 points of sale is a big number, but we have not only a qualitative and quantitative analysis, but we also look at the behavior of clients. We also have our ears at the branch level to look at the behavior of clients to see if we have any kind of attrition and how our Bradesco Espresso is serving clients in each region. We analyze all of these points. Actually, for us to participate in the INSS auction, we have to provide this data. And we've been testing new models. Bradesco Espresso has gained principality. Marcelo spoke about how the platforms of Bradesco Espresso have improved. So that's part of the vertical channel of client service, even non-account holders. So we continue to monitor, and we still have adjustments to make to improve our cost to serve in the mass market. So I believe we are in a comfortable position to attract the best profitability for the mass market. Would you like to speak about the loan loss provision?

Well, when we look at our points of sale, we are advancing at a quick speed. We have actually anticipated future adjustments in 2024 and 2025. We have temporary expenses to conduct the adjustment. However, this will not be present in our operating expenses. So the impact will be seen as of 2026, right? We are still in a vicious circle because the virtuous circle will begin in 2026. Right, when we will have our efficiency level closer to the target of 40%. But it's interesting to say that our plan is being executed. I mean, do we have perfect numbers? Not yet, but we will see a great impact of 2026. Now, about loan loss provisions, we're always based on credit risk. As Marcelo said, we now have a vintage of higher quality, so we have lower needs for loan loss provisions. Every time we have a new portfolio, we calculate a new loan loss provision. The credit risk has come down to 3% now, which is very close to what we consider normal. It may even go up slightly, but still controlled. So we see a portfolio expansion with controlled credit risk so that we will have a better NII. And that is what truly moves the needle at the bottom line. And this is what Marcelo said. Thank you, Nishio, for your questions.

Turning to English, the next question comes from Tito Labarta from Goldman Sachs. Tito, the floor is yours.

Okay. Good morning, everyone. Thank you for the call and taking my question. I have two brief questions, hopefully, if I can. Just first on your deposit growth, we saw a nice pickup on your demand deposits, but savings and time were down a bit on the quarter and still haven't really grown much on a year-over-year basis. Just understand the drivers of the deposit growth and the demand savings and time. Is competition impacting that at all or what's the driver behind that and the somewhat muted growth overall? And then the second question was on your fee income because we saw good growth in asset management up 11% on the quarter, even though the investment funds and managed portfolios didn't grow as fast. And also the loan fees were up 9% on the quarter. Loan growth was good, but didn't grow that fast. So just understand the drivers of those two fee income fines if you can? Thank you.

Now, Andrea, Tito was asking about deposits, demand deposits. Yes, it has grown, but we can look at it in different combinations because with some clients we even pay because it's good for us to have these demand deposits. So this number is growing. We can provide further information to you after the call. We can provide more details on this, but we are growing in demand deposit. We have a good level of traction in terms of our relationship with these clients. Now savings accounts, I mean, it is only natural. This is something very Brazilian and it is in fact a challenge for the real estate market. So, but we feel very comfortable vis-à-vis the competition. We have shown we are competitive, otherwise we would not be growing on these lines. But yes, we have things coming out of one line and into another line, but we are looking at all of this, trying to do better every day, delivering a non-friction experience to clients, be them micro companies, high net worth individuals, different clients using different channels. We're always looking at providing the best possible experience. And let me open for you to add.

Yes, if I could add, Marcelo, I think it is important to say, and I mean, even Tito spoke about competition. Demand deposit and savings account, you always have market competition. That's clear. I mean, looking for attracting clients using FGC and brokerage firms and investment companies are also doing that. And there's a high demand for CDB, certificates of deposit. But I can talk to you, Tito, about our demand deposits. So demand deposits and savings account, although they are growing slightly, that is always connected to the principality of the relationship. When we open an account, we continue to grow 1.8 million accounts, even though we have adjusted our footprint. And the other element is improving our cash, the insertion, the introduction of our cash management. We now have client centricity in all of these lines. So we have a positive number in demand deposit, and we also have new transactions from FGC. So we see this migration and a higher demand for certificates of deposit. A Bram has received a number of awards as a wealth manager. Bram has received a number of awards, and $55 billion in assets under management. That's also an important number.

Yes, about asset management, we said that we had a $33 billion increase in AUM, now $55 billion, and now we have a performance fee because we had a great performance in some of our funds, so assets under management have been growing quarter after quarter. That's helping us a lot. In terms of loans and services, that is something, I mean, in a number of lines, we may have a lower spread in a few credit lines, but we are having more cross-selling, and we have developed skills to work with that. That's why, when you look at the top line, you are adding the revenues coming from insurance, fee and commissions, and also NII. And if you look at company clients, we charge fees, we have a monthly fee. And also, he asked about the capital market. You know that variable income, the equity market is at a standstill right now in Brazil, and that's a pity for the market. However, fixed income is certainly growing. That is why we have more colleagues. We've expended the team because we see a lot of opportunity here, and we are adding value. We believe we will grow this quarter and also next year. This is the expectation we have in the investment bank.

Perfect. Thank you.

Tito. Now turn it to Carlos Gomez-Lopez from HSBC. Carlos, please.

Hello.

Hi, Carlos. How are you?

Very well, thank you. So two questions on other segments. You mentioned the investments that you are doing in credit cards. You mentioned the investments that you are doing with ELO, and a lot of investment in debit cards. Does it make sense to continue to push the debit cards when perhaps they're going to be replaced by PICS? How do you see that market evolving? And the second would be on your new segment, principal, how does it relate with Prime? Thank you.

Okay, thank you. Cassiano, you can speak about this dynamic of debit cards because there's an initiative in the change bank regarding that.

Yes, Carlos, thank you for the question. We have been working exactly to understand this dynamic of debit cards, vis-à-vis PICS. And the trend is that we'll work more and more with one channel, more digital, with less plastic. And this is part of these news that Marcelo mentioned. We will be communicating particularly in the mass market. But the investments are made to clearly maintain our status quo. But we have been doing a lot of work so that we won't have any cannibalization, and so that we can have a direct, effective digital channel for our clients with less plastic.

But Carlos, let me say something. This cannibalization by PICS is natural, but the volume captured through debit cards is still significant. We see this in the bank, in the market, and we see that at ELO. So to us, this is an economically better business. Now, with the interchange being fixed and with this obvious cannibalization, it does make sense to send out plastic, as Cassiano mentioned. But they can use virtual cards. That's what we're working with. Virtual cards to be distributed to clients. So as long as we can maintain that -- as long as clients want to use them, fine. And of course, we'll be prepared for a natural evolution of that regard with PICS and debit cards. Now, the news segment compared to Prime, as you mentioned, we're also working primarily with the clients because of the other. It's not like we're opening a new market front to gain new clients. Of course, new clients are always welcome. They want to open checking accounts with us. That's great. We are inviting our own clients, but as of January, Carlos, you were invited to visit our new business office. And of course, new clients will be very, very welcome. But we already have the clients. They are with Prime. They're being worked on. And the managers will be sitting side by side, so clients will have no discontinuity when they migrate to the new affluent segment. And we have been working with a remodeling. And we're working on the value proposition of Prime. That means working with different account loads for the managers of Prime and with a much more objective value proposition for also the Prime clients. Clients want to have self-service, but they still want to have contact with their manager, their investment advisors, our colleague mentioned in the video. So it all speaks together. They are with this new segment, but we're also working to deliver an even better value proposition to our individual clients.

And let me add to that, Marcelo, because I think that was also asked. The new segment is above the Prime. It's superior quartile, 300,000 investments up to R$10 million. It is between Prime and Private. It is a qualified high net worth individuals. And it is to maintain both? Yes, we'll maintain both. Prime for a lower category up to R$25, mass market, and then Prime, Principal and Private. That's all for individuals.

Okay, thank you very much. Next question from Bernardo Guttmann with XP.

Good morning, everyone. Thank you for taking my question. I have one specific question about the behavior of the agribusiness portfolio. Looking at the rural portfolio, there's a relevant delta between a growth of rural loans for individuals, which posted strong growth of 16% quarter-on-quarter against a reduction in loans from companies. What is the strategy of the bank for this segment, also considering this slightly more challenging scenario with delinquency in the sector?

Thank you, Bernardo. Well, actually, this was the only company's portfolio that showed a drop quarter on quarter, because we had some settlements and some companies closing down. Bigger companies that went to the capital market, given the offering with good custody. And since we have a good penetration in individuals and they're kind of mixed with legal companies in agribusiness, so we have a lot of collateralized business with these groups. So, 3% growth for rural individuals, but for the companies that were linked to bigger companies that accessed the capital market, because they had an attractive cost. But we stand strong in that sector. We have our distribution across the agribusiness belt of Brazil, and we have our support team, marine force, we have agronomists for the different segments. We have people well positioned for this, and we're also moving in some news about that. This business we have with John Deere is something we want to close this year, so we're starting next year full steam with them. So, that's kind of the phenomenon that explains the difference between the two portfolios, but we also have a very good quality of risk.

Our delinquency rate in the agribusiness portfolio is absolutely stable. Thank you, Bernardo. Next question from Henrique Navarro from Santander. Navarro, please.

Thank you. Thank you for this opportunity. Now, I'm sorry, I'd like to go back to a topic that has created some more noise in the interactions I've had. Not only it was very good to hear from you that maybe we should not look at why NII and sheer growth, but maybe look at an NII net of provisions. When you look at this number, 27%, it would be fine. So, my question is about the future. You have already shed light about the fourth quarter. You said you will continue to have accelerated growth, but what about 2027? You will look at client NII net of provisions, right? And looking at 2025, I know the guidance will come only closer to year end, but how much growth is based on risk of recovery market share? Market share that has always been yours in terms of principality, continue to have your previous share of wallet, and how much of that depends on gaining market share in the competition with other players, just so that we have an idea about 2025.

Thank you, Navarro, for the question, and thank you for your comments. Thanks for being with us. Navarro, I will tell you that I feel extremely confident. We're growing client base and mass individuals, our high net worth individuals. I mean, we are growing. We already have huge base, but we are growing in the Prime segment. Look at the private onshore. We have also been gaining market share here. Our value proposition has become increasingly more robust, and we now have the new segment, the principal between Prime and Private. So, we have a great penetration in all of these segments. I believe that there will be a natural principality in line with our fair market share. If we did not have that, we would not have such a high level of traction. I mean, our portfolios are growing, and the portfolios that we want to see growing, delivering what we want to deliver to clients. We are growing in fee and commission income. I showed you how our credit card holders are transactors, and this segment of transactors is growing. So, we want to gain market share. We have gained a little bit, but not much. I mean, we gained share in this quarter, and we will certainly be well positioned. This is our expectation. But with the right portfolio, also in insurance, I believe we have great traction. We have been reviewing our footprint and growing the client base. Of course, many of these new clients are payroll-deductible law and clients, but we also do cross-selling with these clients. So we see that we have a great penetration in the client base, and with our fair share, we have everything needed for 2025 to be even better than 2024. As I said, we have a lot of traction. That's why I feel so confident in all client segments and verticals. I mean, when we have monoline, for example, auto loans, but if you look at heavy vehicle loans, trucks and heavy vehicles, we have a very significant share, which we will further accelerate now with our business with John Deere. So, we have a great penetration in all business lines where we operate. The insurance group, as Ivan mentioned, I mean, and even I told you, we have a lot of traction also in the insurance group. I mean, look at our penetration. Look at our share. Our risk appetite has decreased a little bit, but we are now pursuing the right quality. This is our expectation, and we expect to deliver a higher top line and have a credit cost under control in 2025.

Looking at client NII, there are three main drivers. First, portfolio growth. Marcelo and Cassiano were clear, telling you that we continue to grow those portfolios. Next, our cost of funding is below 5% of the CDI, and we are taking action to lower that even further, which will help us improve our client NII. And again, look at our spread, which is the risk adjusted return. We don't want to have more spread with a higher loan loss provisions. We're always looking at the RAR. So, these drivers will help us. The first two will certainly help us, and the third one, too.

So, thank you, Navarro, for your question. Now, the last question with Brian Flores from Citi.

Hello. Thank you for taking my questions. It's a brief question about the impact of the interest rate. Thinking about the market NII now, I think we are now closer to $2 billion in 2024, and looking at the scenario you described with a higher basic interest rate, do you believe that in 2025, could we dream of having an NII similar to this one, similar to the one in 2024?

Thank you, Brian. Obviously, we're not talking about 2025 yet, but I can tell you that we have a more neutral view. I mean, we do not have our structure hedged, but we do have important action that make our liability management more neutral. For 2025, we still don't have a clear view of what will happen to the market, so I prefer to talk about that when we publish our guidance. But I believe we have a more neutral position now for this new higher interest rate cycle.

Thank you. Well, we're closing the question and answer session. Those questions we were not able to answer here will be answered by our investor relations team. I'd like to turn the floor to Marcelo for his final statement, and I'd like to let you know on your website, you can find the whole package of our results.

Thank you, Andre. Thank you, Cassiano. I'd like to thank all of you for joining us today. Our team is always available, myself and Cassiano, also are available to answer any more questions you might have. We'll be meeting soon, and I expect you to join in the next earnings conference call. Thank you very much.