Hello. Very good morning, everyone. And thank you all for joining us this morning to our Second Quarter Conference Call. I am Gustavo Sechin, Head of Investor Relations of Banco Santander Brasil. Here with me are our CEO, Mr. Mario Leão; our CFO, Mr. Angel Santodomingo, and our Investors Relation teams. Speaking first today is Mario, our CEO. He is going make some comments regarding our strategy, and he will be followed by Angel, our CFO with comments over our quarterly results. After that, we are going to open for a Q&A session. Just a reminder, this presentation is available in our website, and please refer to disclaimer on it. At this time, I would like to turn over the call to our CEO, Mario. Please go ahead. Mario Leão: Thank you very much, Gustavo. Thank you very much all for joining. It's a pleasure to be here again for second time. So I'll kick-off with strategy and then Angel complement with the numbers and then we'll jointly cover the Q&A. So, I'll basically kick off with an update on the precautionary measures we have taken since September 21. And then I'll reinforce some of the strategic priorities I have outlined in the first quarter and for the remainder of the year, upon which we are already working on as a group. So our ability to anticipate trends is resulting better vintages as expected. And as they start to gain relevance inside the portfolio, that should translate into a more controlled asset quality. The delinquency ratios remain stable quarter-over-quarter with total delinquency at 2.9%, still below pre-pandemic levels. Also incorporating new variables in risk models allowed us to increase the origination of secured loans, contributing to the maintenance of a strong balance sheet. We will give you more examples later,…

Okay. Thank you, Mario. Good morning, everybody. This is Angel Santodomingo. I will start in the Slide 15 where we detail our P&L. As you can see our net profit amounted to a little bit more than R$4 billion, R$4.1 billion with growing 2% in the quarter and almost flattish in a six month period comparison. I think the important point here is that core revenues best represented by customer NII and fees continue to perform strongly, reflecting the transactionality, and growth that Mario has commented. While as I have anticipated to you during several quarters already, market NII and provisions remained under temporary pressure due to the yield curve and the macroeconomic environment. Let me go over a few of our key figures for the quarter. On the revenue front, total NII was stable on a cumulative basis with market NII offsetting, as I said, the strong positive performance of customer NII. Fees, again, another good indicator about transactionality rose by almost 6% over the quarter, that’s an annualized more than 20%. Here the expansion of our customer base and more robust activity translated into a stronger revenues from a wide variety of items including cards and insurance. And on the expense side, provisions grew by 60% in comparison to the first half of last year, which is consistent with what I have been stating since third Q of last year earnings call. On the other hand, you will see that arrears ratios are flat. I mean, balance sheet ratios are flat in the quarter for the first time in a long series of quarters. Also, general expenses increased in nominal terms more than 8% due to the collected by gaining agreement and inflation. We continue to be efficient, focused and we manage to deliver a solid quarter-over-quarter performance,…

Thank you, Mario, thank you, Angel. We will now open the Q&A session for our investors. As you many know, will start with questions primarily sent via webcast, our platform. So, at this moment the first question that we have, the group of questions come from Flavio Yoshida, Bank of America; Daniel Vaz, Credit Suisse; Thiago Batista from UBS; and Tito Labarta from Goldman Sachs. Thank you guys for your questions, It’s related to the NPLs. So, the NPL is already showing some encouraging signs in your the first bank to become more selective on loans originations. Should we already expect some loans acceleration this quarter? We also have a complementary question from Thiago from UBS. They have requested some information about the difference between IFRS and BR GAAP.

Okay. Thank you, guys, for the question. Let me try to elaborate a little bit on the different things. As we have been sharing with you and as we said in the presentation, we started to take a measure on the production of loans September ‘21. This has been shown during different quarters with a slower growth rate of our loan book, both in fourth Q and first Q, we will see now in second Q. And it is clear that we were taking those measures in advance of what the sector has done. And I’m taking that from the public figures that you know and that are shared with everybody. Now, what are we seeing? The first thing we are seeing as the question was mentioned is that in balance sheet ratios, we are -- for the first time in two years, we are flat. That means that all these measures that we have been sharing with you are starting, these are green shoots, are starting to be reflected on these ratios. Obviously, this is something that theoretically will be represented or will impact positively the P&L in the future, right? And that future is the question of how quick, et cetera, this is another discussion. But the first signs, you see it on the ratios on the balance sheet, which is where the arrears start to be flattened, both the 1590 [ph] to the over 90. And then, you see those effects coming into your provisioning level in, as I said in future moments. So, that’s the difference in between why you see one thing on one side and the other thing in the other side. At the same time, as you show in the presentation, we increased coverage ratio to 224%. So again, also for us, this…

Mario, let me know if you want to make some comments. Mario Leão: Yes, just a quick reinforcing here. So, last quarter, we mentioned that as soon as we saw signals, we would resume expanding the portfolio. So, that’s a very important question. So, we appreciate that. There are some portfolios, as I mentioned last time in wholesale and in the larger part of the team’s business, we had no concerns since late last year and this year. That remains the case. And I’m happy to comment again that on the wholesale part of the business, we did expand this quarter again, obviously FX played a role, but it was in excess of the FX effect. We did grow our wholesale portfolio. But also on the payments business, which is obviously very important for us, not only for NII but also commissions and more and more investments, that piece of the business has been having a very strong performance. So, in that side, our models are basically open. And we continue to expect good growth in the mid and upper part of the payments pyramid, but more and more in payments in general. In individuals, as we mentioned, our secure portfolio is a big focus for us. It’s not to say that we are not going to land to unsecured pieces of the portfolio, but we will continue to expand more rapidly in the secure pieces of the portfolio. And with that, we expect, yes, in the second quarter -- third quarter and fourth quarter, so in second semester as a whole, to have a continuous performance growth in the asset side and therefore NII. One final comment, we -- given the big focus we are having on investments, we continue to focus a lot on the investments NII, on the liability NII on customers. We have a big business in investments in the wholesale. We want to expand that much more in retail. We want to make retail the biggest piece of our investment portfolio. And that will bring also stable and obviously risk free NII to our revenue mix.

Thank you, Mario. So, our next questions come from Pedro Leduc of Itaú BBA. Great job on OpEx. We can see especially in the personnel expenses line with remuneration down 10% Q-on-Q. You didn’t let go people and seems more related to verbal compensation adjustments. Your report in net income is down, however, year-to-date, more like flat. Can you help us to reconcile this drop and how we should think about it going forward as we think about talent attraction limitation? This looks like a fine line to walk. Thank you, Pedro.

Thank you, Pedro for the positive question. It is true. I mean, you know our way of working here. It’s in our AVM. I mean, we have been focus on cost for a long time, and we are not going to change that because of whatever happens externally. So, the focus on efficiency, the focus on growing costs below inflation, I said that on the first Q, but I have said that in the last, I don’t know, 7, 8, 9 years and continues to be a top issue at the top management discussions. And that continues fight against inflation. Now, as you said, on the quarter, we are down 2% on total cost, 4% in personnel expense, and flattish in administrative terms. And on the year-on-year, we are almost 400 basis points below inflation, which shows that what I’m saying is a fact, it’s not a willingness. The discussion is how you do that. I don’t buy too much that this costs talent. It’s on the other way around. The more efficient you are, the more capable, the more quick, the more everything you are with clients. So, the experience is -- improves, is better and you attract more talent. And in fact, if I may say, the general situation of liquidity, both worldwide and locally, should offer additional talent to those that are performing with profitability. But, I wouldn’t link it to talent because at the end of the day, it’s, as I said, how do you do this? And we have shared this with you. I mean, we have, for example X, which is a kind of a proactive selling call center that we have taken out of the bank to another type of company or First, which is our technological subsidiary that also has been taken…

So, our next question comes from Eduardo Rosman, BTG; Marcelo Telles, Credit Suisse; Thiago Batista, UBS; and Flavio Yoshida from Bank of America. We have two tops, NII. First, what’s the impact of M2M on market NII? Second, how can we think about the market NII for the second half this year and the next year? Is there any expectation of the recurring level of market NII going forward?

Okay. Thank you, guys. Yes. As I explained, on the NII, you have both, you have the customer NII, which is performing strongly, both on the asset and the liability side, and then the market NII, which reflects that narrative sensitivity at the balance sheet level. The reality is what I said to you and I think I said that throughout 2021 that given that sensitiveness 2022 was going to be a negative year on the NII market part. And this is what is happening. So, I would expect this. I’m not saying anything new to you. I would expect this to continue being negative. The level of negative is going to depend obviously on the deal curve and how it moves. But I wouldn’t expect a positive number there in 2022. Now, looking forward, is this going to be less intense? Obviously, as the Qs evolve and they close in between the production and the cost of funding, that number will tend to close and be more than offset or being offset -- pardon me more than offset -- be offset in an improving way from the NII from clients. That’s our view here. So, my message is it will continue to be negative. It will be -- the NII of clients given the growth that it has and will have, will be in offsetting power to that negativeness. And I’m not saying anything new to you because this is exactly what I have been saying during the last at least that I remember three quarters, if not more.

Our next question comes from Eduardo Rosman from BTG. Santander has been much less active than Itaú in M&A over the last several years and Santander is the only increment -- who may still make some relevant acquisition. With the strong correction in asset price, are you seeing any opportunity?

To be honest, I don’t want to compare ourselves in that part of the business with anybody. And I don’t follow that ranking, nor internally or externally. What I can set with you is that we have that -- probably you don’t -- you haven’t noticed, but we have done 15 operations in the last 18 months, M&A operations, and that includes store room, mobiles, it includes cockpit, it includes, curtain, it includes solution for fit, it includes Apê111. I mean, I can give you the full list. I don’t think it makes sense. But we have -- and this has been something structural during the last 5, 6 years. We have been continuously completing the offer, as we call it internally the ecosystem with the smaller or bigger planets that we tend to -- it’s too wise, the objective. First, completing the ecosystem; second, creating planets that in the future will be large planets, as has happened, for example, with return, that was almost something in existent. And today, we plan -- we have an activity that will probably get closer to 400 million profit by year-end, or [indiscernible] that we acquired last year. So, that is the way. I mean, on top of that, will there be transforming M&As in the next, I don’t know, 3, 4, 5 years? Well, to be seen. I wouldn’t say yes or no to that. It will depend. What it is obviously is that if anything arises, we have the fiduciary jury to look at that. So, we will look at that. We will have, as always, the strategic discussion and the financial discussion and going through them, as we have done in the past. And you remember cases like HSBC or Citi here. We will decide to go forward or not. So, we are active there, but we are with that type of a strategy that has been successful so far.

Thank you, Angel. Our next questions come from Gustavo Schroden, Bradesco; and Pedro Leduc from Itaú BBA. Renegotiation continues to rise, which we also see as a risk management tool. Could you give us more details on what type of portfolio you are in negotiation? Should we expect more going forward? Are your in renegotiation activity portfolio or written off?

Okay. Thank you, Gustavo and Pedro. Let me give you some insights on this. First, the renegotiation part of the business is obviously a core part of it and specifically in moments like the ones we are living. Okay? Renegotiation goes across products and clients. I mean, we don’t have any specific policy or concentration, et cetera. So, it goes across the different -- the full kind of range of products and services or clients and products, which we tend to optimize. You know, and we have served with this, we launched, for example, in January a campaign called [indiscernible]. So, it’s like a un-leverage in Portuguese, which is a way of helping, but being realistic about clients. We are not putting the problem in the front of us. We are trying to really solve it. And this is the general policy of the Bank. Let me remember you that that part of -- that portfolio, the renegotiation portfolio, let me give you two numbers or two ideas, which are very important. First, 50% coverage. Okay? So, something that is pain and is not a problem, we already have a 50% coverage ratio there. Second idea, for your information and this is important because I think it’s a differentiation, at least, as I can see from Santander Brasil compared to other place. We include there clients that are paying and the clients that are not paying. So, the active clients and the non-active clients. And this kind of enlarges the number a little bit, when you look at it. But we prefer to be conservative in how we present the numbers to you. Mario Leão: Just to add to what Angel just mentioned. Two important messages here on renegotiation. One is that we’ve developed a omnichannel or multichannel platform to…

Thank you, Mario. Our next questions come from Tito Labarta from Goldman Sachs. Do you expect any further reduction on CET ratio 1? Do you need to build up capital from here? Will this impact the dividend payout?

Okay. Thank you, Tito. Let me clarify several things here on the core equity Tier 1 capital ratio. The first one is I have -- and I think we have repeated this for a long time also. We have the idea to maintain our core equity Tier 1 ratio between 11 and 12. And this is where we are. Last quarter I think was 11.7 or 11 point something. Now, we are 11.1. We have some mark-to-market impacts and we will -- next quarter, we will be, I don’t know, probably closer to 11.4 or 5. We haven’t done that calculation, but we have the plans to be in between 11 to 12 continuously. So, that’s the first idea. So, do we need to build capital here? No, we generate enough capital, more than enough capital, in fact, to maintain those levels of ratios in which we feel more than comfortable. In fact, we feel that we have a little bit of excess capital there. And the last point, which is even that’s important one, we have been quite active. I mean, two ideas here. First, the pay-off ratio, as you know, comes from a conclusion of how much is our profitability, how much are our risk weighted assets growth, potentially with all those two variables, where do we want our pay ratio -- pay-off ratio to stand. We are at a 20%, 21% return on equity, we are growing risk weighted assets depending how we do accounting, but high-single, low-double. So, that gives you a pay-out ratio around 50%. Good. How are we paying dividends this year? We have already paid a quarterly dividend of 1.7 billion, which compares very favorably with what we used to do pre-pandemic, because during the pandemic, as you know, we had a cap on the ratio, then we had a maximum -- trying to offset what we did not pay in the past, et cetera. So, but going through those kind of extraordinary years, we are increasing substantially the level of -- amount of payment per quarter, which gives you the idea or the assurance that we are comfortable, both with the capital ratio and with the level of dividends that we are paying those R$1.7 billion, which is by far, much more than we used to pay. This is up to the Board, I am part of the Board and Mario is also part of the Board. We discuss this on a quarterly basis and our plans obviously are -- once the Board discusses and approves to maintain those levels of remuneration to our shareholders, which by the way have thrown the largest or one of the largest, depending how you compare with ratios in terms of dividend yield during the last year. So, we are a high -- we are a growth equity proposal with a high dividend yield payment structure.

We have another question come from Gustavo Schroden, Bradesco; and Tito Labarta from Goldman Sachs, related to corporate lows. There was an increasing corporate lows in the quarter, particularly trade finance and agribusiness, should this trend continue, do you expect to slow down consumer landing? Mario Leão: I’ll pick this one, Tito. Thank you for the question. I covered briefly the portfolio mix, so I’ll highlight a bit further where we are. So, we are expanding all portfolios where we are very comfortable in expanding and we’ve been comfortable in expanding wholesale as a whole. So, what we call the corporate business and our corporate and investment banking business, those two portfolios expanded in the quarter, which is obviously positive that had not been the case before. Late last year and this year, those portfolios were flat to actually down. And in the second quarter, we recovered. We will keep expanding those portfolios. Yes, for sure. FX played the role as I mentioned, because those portfolios have a strong component in trade-related financing. Santander is a big trade finance player in Brazil, and we’ll keep being so. So, FX plays a little bit of a role here, but the portfolio ex FX increased as well. In payments [ph] in general, particularly [indiscernible] those two portfolios we want to expand more rapidly as well, given that we feel those are extremely well controlled based on our risk models, the back packs and everything. On the lower payments, [ph] we keep monitoring, together with individuals. Those are the two portfolios, which we have cut more our risk models since late last year, early this year. We want to resume expanding more rapidly in those portfolios as soon as we see first signals. We are monitoring closely our -- I’ll repeat what I mentioned in the first quarter. We believe we will have in the second half of this year much better signals and then we’ll be able to resume expanding more rapidly those portfolios. So, it’s not that we’re going to slow further our consumer landing. It’s just that we’re not going to expand consumer landing as rapidly as we will in the corporate side. However, in the secure portfolios, in the three main secure portfolios, we have autos, mortgages and payroll deductible. Those portfolios, as the market grows, we are going to grow hopefully at a faster pace, given that all models were adjusted and we’re very comfortable with those three portfolios.

Thank you, Mario. Guys, the conference call session, Q&A session is over. We know that we have a couple of more questions here, but due to the time, we will try to answer all of them lately. And also again, I would like to remind you that we are fully available here for any further question. Thank you, guys. All have a nice day. Mario Leão: Thank you all very much. It’s been a pleasure.