Good morning, ladies and gentlemen. And thank you for waiting. We’d like to welcome everyone to Banco Bradesco’s First Quarter 2016 Earnings Results Conference Call. This call is being broadcasted simultaneously through the Internet, in the website, www.bradesco.com.br/ir. In that address, you can also find the presentation available for download. We inform that all participants will only be able to listen to the conference call during the company presentation. After the presentation, there will be a question-and-answer session when further instructions will be given. [Operator Instructions] Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of Banco Bradesco’s management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events, and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Banco Bradesco and could cause results to differ materially from those expressed in such forward-looking statements. Now, I’ll turn the conference over to Mr. Carlos Firetti, Market Relations Department Director. Mr. Carlos, you may begin your conference.

Good morning, everybody. Welcome to our conference call for discussing our first Q 2016 results. To start our call, we turn the presentation to Luiz Carlos Angelotti, Executive Director of Banco Bradesco and our Investor Relations Officer. Please.

Good morning, everyone. Thank you for joining our Q1 2016 conference call. I will start with Slide 2 with the highlights. The adjusted net income reached to R$4,113 million, down 3.8% from - when you compare it to the first part of 2016. And the ROE reached actually 17.5%. The NII Interest-earning portion increased 11% as a result of the reflecting in our loan portfolio, the management of the funding cost and the asset liability management during the period. The fees and commission income increased by 11.5%, as a result of the segmentation process and the IT investments and the digital channels platform and Internet that actually is increasing the offer of products in our countries. The operating expense went up 11.1%. Our goal is to bring this - to drop this expense for the inflation level. During the year, with the new quarters that you can in the accumulated index, we have a deceleration, when we have expectation that we will have the targets that the inflation level going up the year. As a result of our performance, in context of the revenue generation, our efficiency ratio reached actually 37.2%, the best ever level. And the operating coverage ratio, which is actually fee, 80.1%. It’s one of the best levels that we had, and the coverage over the fixed costs. The Tier I ratio reached 12.9% in the quarter, considering the increase actually the phase-in that we have in adjustments from 40% to 60%. Then the impact may be due to the little more dilution. Assets amounted to R$1.102 trillion. Expanded loan portfolio reached up to R$463 billion. And the delinquency ratio over 90 days reached at 4.2%. We are now in a group of [sequel of] [ph] delinquency ratio over the segmentation that went through at the end of the year. We had deceleration in this site approval and we expect some stabilization during the 2017. The effective coverage ratio reached actually 220%, and the one for continuing our insurance business that we have diversification in our process of reclassification and we had a very good contribution of R$1.380 billion and it was one-third of our total profit in the company. And we had a very good performance in premiums from insurance fee, with evolution of 11.4% on top of the market standards. Now, I will turn the call to Carlos Firetti to comment on the next few slides.

Okay. Thank you, Luiz. So now we’ll go for more details on the results. In Slide 3, we have the reconciliation of our group net income and the adjusted net income. Basically we had a few adjustments, R$90 million after-tax from the sale of Bank CBSS to EloPar. The R$25 million contingent liabilities and R$57 million impairment of assets, mainly shares with the adjusted net income we reported at R$4,113 million. In Slide 4, the adjusted net income growth. Basically Q-on-Q our results dropped 9.8%, basically due to higher provision expenses for credit recoveries, and mainly affected by one specific provision we made for a specific case of our corporate client in the value of R$836 million. The quarter had growth drivers, good performance in terms of NII growth and also reduction in the operating expenses compared to the last quarter. Year on year, our results dropped 3.8%, also mainly impacted by provision expenses, also affected by that specific case. On the positive side also we had a very relevant increase in net interest income, also good performance in fees and insurance. In Slide 5, we have the breakdown of our net income. Basically, it states our very important diversification of results. 34% of our results come from the insurance business. 28% of the results come from fees, 9% securities and others, making 71% of total results coming from non-credit operations. The credit intermediation this quarter was lower, 29% of earnings, mostly due to the provisions we have already mentioned. In Slide 6, we have assets and return ratios and efficiency. Basically our total assets grew 6.5% in the year or year-on-year. Our return on assets reached 1.5%. Our shareholders’ equity increased 11.2% year-on-year with return on assets reaching 17.5%. Our operating coverage ratio that is fee divided by costs…

My opinion, we had a good performance in the quarter. We had been doing well in terms of revenues. The NII interest earnings, the fees, and we still have benefits coming from the future [ph] internal process improvements, as we finish off the IT investments and the new IT system that will be implemented. And we have to reduce the cost. As a consequence of this, we reached our best efficiency ratio ever. Then, we only think that’s going to be something that’s positive point to having some evolution, but couldn’t go sharp on the delinquency ratios. Our expectation is that before we restructure the - the accelerating into - of the end of the year becoming for the reasonably stable during 2017 and probably we start to get easily around 2018. I’d like to remind you about our insurance deal that is very important and it has a very strong contribution to our net income. Our loan portfolio net income came from this. Then this risk diversification helped us to reduce the volatility in our part. About the guidance, we ended some that - we don’t need now to modify any guidance that we gave in the last quarter, they now brought up the lines is following our expectations. Then probably I still feel that we continue according the number that we gave you in the guidance. Then thank you for participating in our conference call. And now, we are ready for your questions to answer your queries.

Ladies and gentlemen, we will now initiate the question-and-answer session. [Operator Instructions] Our first question is coming from Mario Pierry of Bank of America. Mario, you may proceed. Mario, you may proceed.

Sorry about that. Can you hear me?

Yes.

Sorry about that. I was on mute. So basically let me ask you two questions, one is more specific. It’s in regards to these corporate clients that you had a problem. If you can tell us, what percentage of the loan is provision? And if you think that you are going to need to increase provisions to this client in the future. Also related to this, how come you decided not to use your excess reserves this quarter? I understand, maybe there is no need for this should reflect a fear that there are more delinquencies in the future and you rather stay conservative. If you answer this question, then I will ask the second question later.

About this corporate client, we in the - risk that we had now, the exposure, we disposition around 70%. Don’t know this is the number that you have now. For the - could be that in the future, we don’t have now. For the - we continue analyzing the risks, which we understand that will be risks that would be our new business, we will do. The decision to use or not the additional provisions, with the - at the moment, there is one option that we have, because we maintain this growth for some stress movement or some - example that we had with this some corporate clients more significant. But the decision will be at the moment. Now, we just have to preserve the number that we have in the balance sheet, because we understand that thing was something that more prudential for the moment.

Okay. So if everything goes according to plan, then should we expect provisions then to be down at least close to R$900 million in the next quarter?

Yes.

Okay, perfect. Second question is related to your much more of a macro. You are expecting GDP to recover 1.5% in 2017. I think this is the same type of growth you had at beginning of the year. But given all of the changes happening in Brazil, I was wondering first, how comfortable you feel about your GDP forecast, if you can get some upside? When do you expect the economy to start to recover? And finally, what type of loan growth do you expect in such environment? What type of growth should we expect from Bradesco or basically what would make you more optimistic to start lending again?

Thank you. There is this one point for 2017, according to our economy department, the GDP calculation, considering the environment that we had in this first quarter they understand that we have now come to reach a discussion. But one solution we had, the things which continue, then probably during the second-half of the year some measures which should be adopted to solve some fiscal problems we got comes up the quarter. And we see the recovery in the economy, more in the end of the year, that the GDP probably will start to be positive. One part of this negative GDP seemed to carry over from the last year we had really some impact of the Laperjat [ph] effect. Then the things will be solved during the year. And we see this one point, probably that’s possible for 2017. According the provincial situation, if we had some modification or not, we can review this number and it could be some R$500 million better if we had some ways or not. Then I think it’s where we reasonable - I think the market consensus. So what they think is little less than 1% is - the opinion of the risk is 1.5% but the market consensus is around 1%, then which is very reasonable possibly to have the GDP positive in 2017.

The recovering loan growth is going to be gradual. It’s kind of a mix of economy improving and more demand for loans. Basically, it’s going to be a gradual recovery next year so that right maybe to the part of our guidance may be 18 - closer to double-digits, something like that. But it’s very pre-mature. It’s going to be a gradual recovery.

Also, just to be clear, then you want this 1.5% GDP growth in 2017. You think that loan growth in 2017 is only close to 5%?

Probably yes, we’ll be more in the high level of our guidance for this year, close to 5% or 6%, considering the information we have right now, yes. And the deposition I think only in 2018 or 2019.

Okay. And how do you see - so in 2017 with a 5% loan growth, how do you see the market share between private sector banks and public sector banks?

I think now we have more normal competition. Then there is no actual modification in the situation but we have in this quarter that one represent what - how the banks are attracting more and more stress then I think that private banks, it can have some space to look over. But over the - being a more gradual, this process, with respect to any stress movements to - now it is easy, we’ll go what is possible to grow each quarter, this is our philosophy. Then it is really conductive, the demand that you have is a very good strategy. You will watch us what we do.

Okay. Thank you.

Our next question is coming from Mr. Marcelo Telles of Credit Suisse. Mr. Marcelo, you may proceed.

Hi, good morning, everyone. Thanks for the time. I’ll limit my questions to only two, not to take a lot of your time. The first question I have is a specific question, I’m referring to Slide #8. We saw a big increase, almost 50% growth in the securities NII. And it looks like two-thirds of the growth that you had in the overall NII from the fourth quarter to the first quarter was actually explained by the securities NII rate, which was up R$230 million. How sustainable is that NII growth? I understand the yield curve shifted downwards. And I believe that part of that might not be recurring that will not be able to sustain that level in the quarters to come, is that correct? And the second point is regarding your provisions. I mean, clearly that is one of the main negative of the quarter. You had a - pretty much running at above the high-end of the range if you analyze the provisions you have in the quarter. Even if it excludes the R$800 million, you’re already running at the high-end, right? And your calculations already pointing to R$20 billion underlies NPL Creation, which already give you above the high-end of the guidance. So my question here, how should we think about provisions for this year, considering that you are expecting delinquency to improve only in 2018? How should expect your provision expenses to evolve, let’s say, in 2017 and 2018? I know it’s a long-shot, but does that mean you should not see declining provision in 2017, given that you only expect in 2018, to show some sort of improvement? Thank you.

Okay. About the sustainability to - for our NII, the growth, we are very comfortable with the guidance that we give, 6 to 10. Probably it would be finishing the year around the middle of the guidance for the total NII. That’s earning portion. This specific goal that we have in the securities and others, here we have the asset liability management. One part of this goal is - as I reach up to our pre-fixed portfolio, that now start to improve a little more the contribution, because the stability of the Selic rate that we have and the movement of pricing our pre-fixed portfolio continue. Then the average spread in this - average rate in this portfolio now start to have a very good stat when you compare with Selic. This movement probably will continue contributing for the next quarters and for the - during 2017. Then this is one part of the fact that you have in this line. But we have another line deal when the credit negation, the repricing of the spread, that for this year we have this one part of our portfolio in the focus of repricing. Next year, we see now stabilization in the effect but in a more high-level. Then for the next year some growth in the portfolio you contribute for the improvements in the margin. Let me talk about insurance fee, normally insurance maintain a very good contribution of the year. Then we see some sustainability in the goal. We don’t have now the guidance for 2017. But we are very comfortable for this year. And for next year we see this positive point that some possibility to have growth in the loan portfolio. And the pre-fixed portfolio will maintain the contribution in a very good level. When we talk about the NPL, the guidance is about expense is, considering this effect that you have in the first quarter, the strategically with you can consider that we finish the year in top of the guidance. And that we don’t need now to modify the guidance here. We mainly talk about expense, which probably through the end of the year some deceleration in the growth of the expense. Then probably you have the guidance in scenario, we are reasonably comfortable. For 2017, then we talk about the - then for the - it could be reasonable similar to this year, it could be little more. But we don’t see a higher growth comparing with the level of this year. Then, now, it’s essential to maintain the guidance we gave and we understand that is very reasonable to maintain.

Marcelo, only to complement regarding NPL creation, this quarter we had a very high level of write-offs. It was due to a specific situation. There was - it was a normal process that we do a concentration of write-offs much higher than the normal. Write-offs next quarter will meaningfully go down. And considering that, the 10 to 20 bps increase in NPLs, we have been talking about maintains, you can get NPL creation drops next quarter.

We follow the Central Bank, we’ve already note, and we didn’t have any additional check [ph].

Thank you.

Our next question is coming from Thiago Batista of Itau BBA. Thiago, you may proceed.

Yes. Hi, guys. Thanks for the opportunity. I have two questions. The first one, it’s related to your Slide 14, where you show your expectation of 12 months net loss. We note that your expectation for losses increased by 40 to 50 bps end of the quarter, when I compare with the last number you provided in the 4Q numbers…

Thiago, sorry, can you repeat? Sorry, I - we cannot understand.

On the Slide 12 - sorry, on Slide 14.

Okay.

You’ve given the chart in the top, in the left side, the 12 months net losses, your expectations, the purple line. Comparing those numbers with the numbers you provided in the 4Q, we saw some increase in those figures between 40 to 50 bps in the quarters in June, September and December for instance. Could you comment about this increase in your expectation of net losses? And then my second question is about credit card loans. And then on the Slide 12 - sorry, in Slide 11, you showed the expansion of credit card loans and your year-over year-growth was achieved 12% more or less. And when I compare with the Central Bank figures, the expansion of credit card was much stronger than the Central Bank figures. So if you could comment your strategy in the credit card segment?

Okay. The first question about the efficiency ratio that we had, when you talk about the delinquency ratio is, the modification is because we had the actualization according the solution [ph] of the green line. The green line is the equity ratings, the types. Then we had an increase in the volume of this type. Then we modified the expectation. Then the expectations following the more actual solution, that we have in our portfolio. Then the write-off that we had is transferred for the real loss. Okay. In this breath we put in the top most our goal in the March of 2015. Okay. The number 3.3 is a write-off that you had in this quarter. So the means that we had over the quarters, in fact that’s one year ago is the rationale. And in the future, we to exceed the green line and the lower line that is efficiency loss that we have. We have a very good collaboration. Then business-wise, we use the green line to trying to anticipate the expectations for the future loss. Then this I think for all results the best way that we have to specify the expectation.

Okay. Just one point there, Angelotti. I could not find that your specific client was the main cause of your increase in the green line. So consequently this only was the main cause of the increase in the net loss expectations?

Yes. This is the rationale that we have for the expectation. This is why we say that for this year will stand up what we will continue growing the delinquency ratio and the provisions will be higher.

That’s okay.

And the second about the guidance portfolio, the growth, here normally you have a seasonal, when you compare with the quarter, last quarter 2016, okay, normally the last quarter you’ll have a huge volume of cards. That we have in the operations. But we started 2016, if we compare with one-year ago with a very good growth really have here some effect, the migration of the tax that continues growing. In fact, to use these cards and they are using less cash in the transaction. In the volume of transaction in the market, you have normally one go, one normal go, then one part of this. We are doing agreements and improving the tax basis in privately to all new cardholders. Then this movement that we - here we have this movement that maintain normal - the normal growth in the average for this portfolio between 10% to 15%, in the last three years this is the average of the growth.

Our next question is coming from Mr. Tito Labarta of Deutsche Bank. Tito, you may proceed.

Hi, good morning. Thanks for the call. Couple of questions also - sorry, to go back to provisioning levels. But just so I understand why you wouldn’t change your guidance. I understand you had the additional provisions this quarter and large write-offs that could potentially come down next quarter. It’s still - you still need to assume that there is no more negative surprises going forward, right? I mean I think even though you had the additional provisions of R$800 million this quarter, you could say that probably [indiscernible] million spent to some extent. So what makes you comfortable going forward given that you don’t leave your recovery, best case, second-half of this year, but there won’t be any more surprises going forward. And I guess along with that, what point would you say comfortable maybe using some of your excess reserves? And then, second question in terms of, what you said with HSBC and integration of that, and if you can give us an update on that? And if you still expect that to be neutral for earnings this year and next year? Thank you.

We did not change the guidance. Basically as we said, we still think it’s feasible. We have a kind of a good view of what’s going on in our portfolio, the trend we expect and basically we still think that top of the guidance is feasible. That’s the only reason basically.

About the HSBC, we are waiting the approval of the regulator guys [ph]. Then after the approval, I think we end up do deciding and conclude the acquisition in 15 days, 20 days. Then our objective is to - after three or four months to migrate it for our yield platform in the bank. Then the benefits of synergies, you can start come probably in the first moment in the use of team-force with reduction in some case like several data process or transport, communication cost. Then this will be probably the first benefit. And during 2017, we expect to receive some of the benefits about the structure that Bradesco has a bank [ph] which suits, then probably with the normal turnover in the bank. We will accommodate the cost of the HSBC. Then the benefits on the personnel and the ability of the cost will be higher. And our expectation is that with the synergy, in two years we’ll have the minimum 30% of the synergies. And with our opportunity in the other side in the revenues when you compare product sales, cards and the checking accounts. We had been conducting - we have more options again to increase the revenues and insurance fee, products. We understand that you had with the portfolio for the two office for the HSBC clients. Then we understand that we - once we talk about the Bradesco for stability, this year we don’t expect to - any effect will be made to effect the acquisition. But after 2017 or in 2018 we incurred some benefits to start to gain from the synergies and we have there to improve the profitability. I think you need to understand that when you analyze that today, we’ll be ahead of the prices R$18 billion or $5.2 billion. Then with the hedge effect, we don’t have more the remuneration in the cash of reals that was basically 13%, 14%. And we had the remuneration in the dollar R$5.2 billion, 2% higher. Then the effects of the reimbursements, we had both the good benefit that was stability and synergies who came with the acquisition. Then we’re very optimistic and we understand that was of one very good opportunity for Bradesco to increase the participation in the market.

Okay. So you say you expect minimum 30% of synergies, was that in two years or three years?

In three years, gradually, probably, I think in 2017 we will have a very good evolution. We say three years, 30% is I think conservatively we probably we could identify little more opportunity and it could be more higher. Now, when you talk about efficiency ratio today Bradesco is running 37.2%. When we join HSBC, together in the first moment, the efficiency ratio will be 45, around 45. In three years, the efficiency ratio when you consider together for us and HSBC is actually to bring for the - close up to a level that we have to be. 38 - then these benefits on synergy and revenues is that will change. We will operate to change the profitability.

Okay. And when do you expect to be able to consolidate that and will that be next quarter or maybe third quarter?

We need to take a decision of coverage. After the decision we’ll be very particularly concluding, May probably, and during June we’ll have how to conclude the provision then we’ll start with the process. But we need to wait the release.

Okay. Thank you.

Thank you.

Our next question is from Jorge Kuri of Morgan Stanley. Jorge, you may proceed.

Hi, good morning, everyone.

Good morning.

I may - the first on asset sensitivity. I see that in your macro forecast you’re expecting a considerable cost to Selic rates to 12.5% in this year and 10.25% end of 2017 versus 14.25% now. Can you walk us through your balance sheet assets sensitivity? Obviously, we saw that partially solve that over the last 24 months with NIM expansion as Selic rates went up. All else equal and I know there is a lot of moving point, but all else equal, 100 basis point caught in Selic rates, what does that mean for your loss in NII revenues?

It’s something around the 1% that we have in Selic. It’s something around - for R$100 million, R$200 million with respect to before tax. Then we are not to - in one year, full year. Then we are not to a higher sensitivity. When you talk about, what about the side-effects in the remuneration topics [ph] what we - when we talk about the provision, particularly you have some benefits on the asset - pre-fixed portfolio that we have - that for this we start to generate more revenues in the future. Then we understand that the decrease Selic will be positive for our balance sheet considering the positions that we have on the total effect.

Sorry. I didn’t understand that. So you said that there is a negative impact of R$400 million that is on the revenues at one quarter. Can you just - I’m sorry, it’s just very hard to listen to the call. Can you explain that again a bit more clearly?

If you consider our office [ph] exactly we have - that you have remuneration with Selic. The effect R$ 200 million negative that we - the effect that we have in the balance sheet. When you talk about only assets that have the remuneration, it’s Selic. But considering other assets that we have with other remunerations, we have the pre-fixed portfolio that brings some contribution above Selic that will improve the profitability. Then on the Selic asset sensitivity that we can say all the, say, assets that we have Selic remuneration is near neutral effect for us, the Selic during the year.

Just to add basically we are - in this moment we are breaking down the assets. The part that is linked to Selic, but we also have fixed rate assets. We are - the R$200 refers only to the impact of the lowest Selic on what is floating rate. There is another part of the fact that we don’t disclose, yes. [Multiple Speakers]

I’m very sorry. I am not trying to be difficult. You have an asset sensitive balance sheet as all banks in Latin America do. The rates go up significantly when Selic goes up as we saw for the last two years. And they come down, as we saw in 2012, when Selic comes down. So would you mind just helping us understand your sensitivity for Selic? So all else equal, if Selic rates go down 100 basis points, what is the negative…?

See, if you join everything we will be positive for us if Selic go down. But we don’t get the number. Okay.

It will be positive…

[Multiple Speakers] our assets and the liabilities, for us Selic go down it’s positive, but we don’t give the number.

Right, so you’re asset sensitive when rates go up and then liability sensitive when rates go down.

Yes.

That’s great for assets.

Yes.

Congrats. Let me ask my second question then. On your provision guidance, sorry, I know every single line item I transaction about this. Let me ask this in a different manner. So if I understand, your view is that you are not changing your guidance and you feel comfortable that you will be able to get to the provision guidance, because you have a good view on what’s going on in the portfolio, et cetera. So let’s go back a year ago, in the first quarter of last year you guys said, NPLs are going to be flat 360 - 3.6, sorry. And if you felt that, for the most part you had a little bit of risk on the corporate sector, SMEs are going to be okay, the consumer was going to be, okay. As we now, the NPL ratio was 4.2%, that’s 65 basis points deterioration. If you look at renegotiated loans, which you had a record year in terms of renegotiated loans, in reality your delinquency went up 120 basis points, which is very different from your view of flat a year ago. So, what gives us and you confidence now that here we are in the first quarter of the year your run rate of provisions is already of the high-end of your guidance? The amount of bad debt formation is way above actually what was mentioned. Your provisions this quarter were up 50% versus a year ago. So what gives you confident that, we’re basically seeing the worst, right, because you’re assuming that your provisions are going to - have to be flat from here vis-à-vis they turn out to be much worse last 12 months?

Okay. When you - if you go back to one year ago, when we gave the guidance, our expectations for GDP, I think it was negative, but 0.5% or 1%. Then the situation in the market we finish the year, which is 3 points - close to 4%. Then when we gave the guidance - consider one scenario that had available, any modification in the scenario, okay, we need to apply our guidance, example. Now we don’t see any need to modify the guidance, because the scenario that we have very similar that we had one quarter ago that when we gave the numbers. Then this is why we only conduct - we can maintain the turnout for this guidance of loan loss expense. Then if we have some modifications scenario for negatively or positively, for this, if we will revise the numbers then we came probably crystallize our expectations. But now the scenario is very similar that we had one quarter ago when we did our calculations, when we - internal calculations for to give you the numbers, right. We are comfortable with the guidance that we gave in our lines and to be used guidance for loan loss expense.

All right, so just so I understand your answer. You’re expecting 3.5% contraction in GDP. So if the GDP is down 4%, which is I think roughly will concern…

Yes.

…some individuals. Some of the forecasts actually have minus 4.5%. So if you end up being wrong and it is of 3.5%, it’s 4% or 4.5%, what does that mean for any provisions?

Oh, that is no change. It wouldn’t change our guidance.

All right, so even if the economy contracts 4.5%, you’re certain that you’re going to meet your provision then?

Yes, so we had reasonable modification in the same ROE, we revise the number, but the small modification we only say that is early to more decide something.

Great. Thank you very much.

Thank you.

Our next question is coming from Mr. Victor Galliano of Barclays. Victor, you may proceed.

Thank you. A couple of questions for me, just so if I can - sorry, to feel like fogging a bit, but also just a quick delinquency provisioning side of things, I just want to check that, E-H ratio that you brought in that Slide 14, going from 4.7% to 4.9%. Was that - and this question might have been asked already but I just want to clarify this. Is that problem, corporate loan, was that already within the E-H bucket at year-end 2015, so just on the 2015 or did it actually join…?

Victor, sorry, can you repeat? I cannot hear you very well.

Can you hear me now?

Yes, better. Shoot.

Okay. Sorry, yes, just focusing on the E-H portfolio. That big corporate provision you made and the problem loan you have there, was that loan already included in the E-H bucket at 4Q 2015 or did it join in the first quarter? That’s my first question.

It was not in the E-H or in the portfolio.

I’m sorry, what was that, could you repeat?

It was not in E-H. One part of this goal is it sits fine in the quarter that’s…

Sorry, it’s a really bad line. I didn’t get that. It was not in E-H at year-end?

It was not.

It was not. Thank you. The other question is really about HSBC. And I noticed that you now actually make that the capital absorption is going to be over 200 basis points as opposed to 190 you had before. Obviously, you have a bigger capital buffer now, but can you just explain a little bit what happened there in terms of the increase in 20 basis points of the capital absorption?

Yes, basically, we just changed the calculation for the base of the year-end 2016. The previous calculations were based on financials of year-end 2014.

Okay. Okay. And you’re saying, you’re still waiting to hear from Carjay [ph] on this, in terms of getting a final sign off from them. But you already have to sign-off from the Central Bank, is that correct?

That’s correct, yes.

Okay. Thank you.

Thank you.

Our next question is coming from Mr. Carlos Gomez of HSBC, New York. Carlos, you may begin.

Thank you and good morning. Let me not ask about asset quality. On the [indiscernible] it was 35.7%.

Feel comfortable.

It was 35.7% according to our calculation. Can you give us your indication for the year and tell us what you’re assuming in terms of interest on capital? I mean, what level of TJLP you are thinking that you will be enjoying. And if you [indiscernible] refer to the risk-weighted assets, when you look at the Page, I think, 75, where you show the credit risk, operating risk and market risk. Market risk declines a lot from R$19 billion to R$14 billion this quarter. I know it is volatile, but I’m just wondering if there was anything in specific for it to be that low. Thank you very much.

Okay. About the TJLP, we didn’t give the total benefits in this quarter, because there are some limitations for calling this. The total profit and we did the calculation about the minimum dividend, then specific according the means of dividend that you have. Then we had some space to have some additional benefits on the TJLP in the next quarters. About the market risk, the big drop, I say, the position that we are revising our strategy department, then this actually will reduce some provisions and this one when we do the calculation we have the EBITDA [ph]. We have– we can say less reaching the positions in the first.

If I jump off after the first question, and so what is your guidance for the tax rate for the year? As I say, my number is 35.7%. I don’t know if you have a slightly different one. Where would you expect to be in the overall year?

We could be running between 36%, 35% of the rate, and through the end of the year. There you have closely - around 35% is more reasonable thing, but…

And again we - okay.

What?

And, again, that is with the current deflation and with no cap on the usage of interest non-capital as was the proposal here, but so it will be using the 7.5% that you work today or possibly higher looking on it?

That is a little more in the future, because these benefits that we didn’t use it. So it will be [real helpful for] [ph] use in the future. But then consider it’s reasonable.

Okay. Thank you very much.

Thank you.

Excuse me, ladies and gentlemen, since there are no further questions, I would like to invite the speakers for the closing remarks.

Okay. And thank you, everybody, for participating on our call. We are available for answering any other questions you may have. Just contact the Investor and the Market Relations Department. Thank you, all. Bye-bye.

That does conclude the Banco Bradesco’s audio conference for today. Thank you very much for your participation. Have a good day.