Good morning, ladies and gentlemen. Thank you for standing by, and welcome to Itau Unibanco Holding Conference Call to discuss Second Quarter 2013 Earnings Results. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. (Operator instructions) As a reminder, this conference is being recorded and broadcast live on the Investor Relations website at www.itau-unibanco.com/ir. A slide presentation is also available on this site. The replay of this conference call will be available by phone on 55-11-4688-6312, access code 3921256 hash tag. Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Actual performance could differ materially from that anticipated in any forward-looking comments as a result of macroeconomic conditions, market risks and other factors. With us today in this conference call in Sao Paulo are Mr. Alfredo Egydio Setubal, Executive Vice President and Investor Relations Officer; Mr. Caio Ibrahim David, Chief Financial Officer; and Mr. Rogerio Calderon, Corporate Controller and Head of Investor Relations. First, Mr. Alfredo Setubal will comment on second quarter 2013 earnings results. Afterwards, management will be available for a question-and-answer session. It’s now my pleasure to turn the call over to Mr. Alfredo Setubal.

Hello. Good morning for those who are in the US, in Brazil, in the America zone. Good afternoon for who are in Europe. Welcome to our conference call for the second quarter. For those who are following through the Internet and through the slides, we start in slide number 2, highlights of the quarter. The first one is the results R$3.6 billion, means an increase of 3.1% when we compare it to the first quarter of this year and R$7.1 billion for the whole semester. The second point is our recurring ROE. With these results, the ROE was 19.3%, a little bit higher than the first quarter at 20 basis points even considering that we had a drop in our results from the financial margin with our client in a total of R$329 million when we compare to the first quarter of this year. So this is a good operational banking result for this period considering this drop that we are going to talk more later. Another highlight of our performance is the credit portfolio; the growth was 2.5% in the quarter and 8% when we consider the 12 months. We continue to reduce our current [ph] finance portfolio. So we had a reduction in 12 months in the portfolio of 20%. If we consider these reductions, our portfolio in 12 months which had – grow around 12%, more in line with the financial system when we saw the data that released by the Central Bank. Financial margin of clients, we grew 3.4%, the totaling R$11.3 billion, reversing the trend of the last four quarters, it is important with the first quarter that we are able to roll this line. In our view is the turning point that probably will continue to grow slowly this line. I think most of…

Ladies and gentlemen, we will now begin the question-and-answer session. (Operator instructions) Our first question comes from Mr. Daniel Abut with Citibank. Daniel Abut – Citibank: Good morning, Alfredo. I have a general question on your trends with respect to the ROE. As you correctly explained, we saw already an improvement this quarter even though there were some particulars about the quarter like your lower than normal financial margin with the market. And you also said that you expect this trend of improving the contribution from the financial margin with client that started this quarter to continue going forward. So if I read between the lines, those two statements, it seems to me that the ROE should continue to improve from the 19.3% as we go forward. So where do you think the ROE is getting, where do you think you can sustain it going forward as this trend continue. And in particular, if you confluence [ph] that with the page for that you show that the ROE of the insurance operation is 35%, the ROE of their banking operations 20.4% but there’s a drag on your overall ROE coming from their excess capital, which is producing only an ROE of 4.2%, is there anything that could be done to address that excess capital over time either via an increased dividend or via – put it into working acquisitions that could diminish that drag going forward and also favor the re-rating of your ROE?

Hello, Daniel. Thank you for your question. I think the trend that we are seeing in terms of margin in our case as I said we are almost done in terms of reducing and adjusting the credit portfolio in terms of risk especially in the car financing. So this is, probably, this quarter we are going to see some reduction also but it is almost there. The spreads are stable in some lines, in some products are even higher than in the past, so we see and [inaudible] that is growing up again and the lower pace of economy probably we’re not going to see much more pressure in terms of spread in the financial season in Brazil. So altogether, we see that this line will continue to grow and we will continue to have good numbers in terms of provisions for loan losses as I’ve said and I showed in some slides. The delays are very low, so this is a good sign that probably the provision will continue to reduce in the coming quarters. The profile of credit portfolio is much better now than it was in the past. So everything goes in line and then also the control of expenses, I think, will continue to show numbers of growth [ph] of expenses below inflation. So when we consider all these together, we see that they are really of the operation of the bank as showed in slide 23. It is above 20% already if we analyze this quarter, standalone. It was 21.3%, not considering the market operation. So I think it’s something around 20%. It is feasible to achieve. Of course, it will be very difficult to make provision predictions and so on to the treasury operations especially in this environment that we are here in Brazil…

Excuse me. Our next question comes from Mr. Carlos Macedo with Goldman Sachs. Carlos Macedo – Goldman Sachs: Good morning, gentlemen. Congratulations on the strong results. I have a couple of questions. Both are generally related to credit. First, your new guidance for growth has – loan accelerating from around 6%, you’re now to – on the bottom end of the guidance, 8%. Does that mean there is a greater appetite for loans at the bank or is that just the reflection of a much easier, basic comparison at the end of next year. And the second question is regarding your provision expense guidance. You did lower your loan growth guidance but did not touch your provision expense guidance, given the level of improvement that you’ve seen in NPLs, what is the likelihood that that guidance is really a little bit too conservative and that you actually will end up tracking not only the lower end of that guidance, so really below that guidance. Thanks. Rogério Calderón: [Inaudible]. So first, regarding our growth expectations, we don’t intend to change anything in terms of our risk appetite, credit risk appetite. We see some accelerations in the second half of the year. This is related to the maco scenario. It’s also related to some level of acceleration in the car loan that is still behind what we had at the beginning of the year in terms of expectation, but marginally improving from the first half of the year. So altogether, we see some acceleration in the second half of the year but it’s going to be in between 8% to 11% as we mentioned. Carlos Macedo – Goldman Sachs: Okay, just one follow up question quickly. Previously, you had mentioned that the target for the BMG partnership was to reach R$12 billion in loans at the end of 2013, and you’re at R$3.8 billion at the end of the second quarter. Does that target still remain? Rogério Calderón: Yes, it still remain, and if we are – base it on the pace we are right now, eventually, we may be over that figure in the periods we were mentioning. It was in the – by the end of 2014, remember it is the two-year periods when we mentioned this targets. And we are a little bit ahead of the schedule on this implementation. Back to your second question, I think it’s fair to say that if conditions are kept at the current circumstances we have and you highlighted that most of the – most or all of the indicators regarding delinquency are behaving very well, so if all the conditions are kept, it’s probably likely that we are going to post our total expenses on loan loss closer to the low end of the guidance. Carlos Macedo – Goldman Sachs: Okay, thank you, Rogério.

Excuse me. Our next question comes from Mr. Philip Finch with UBS. Philip Finch – UBS Securities: Good morning everyone. Thank you for taking my question. Really to do with the slide decks of your presentation which shows the evolution of your loan portfolio mix where we’ve seen in the last 12 months the SME and the auto portfolio shrinking quite a lot. I guess, the question really is, from where you are today, how much more – how much further change could we see in that mix especially in regard to the SME and the vehicle segments? Thank you. Rogério Calderón: Yeah, so specifically on vehicles, it’s a long story actually. What we are seeing now is worse than what we had at the beginning of the year. So we were expecting inflection points in this credit portfolio by the second quarter. And now, we don’t expect to see the inflection points or the beginning of the restarting growth in the year 2013, probably just in 2014. What it means is that by the year end, probably, our total portfolio on auto loans is going to be around R$41 billion, R$42 billion. When looking at this, it means we see marginally an acceleration from now on and the figure that we are posting now that shows a negative growth close to 6%, 5.7%; it’s probably to be much lower if not positive by the year end. So growing from now on but not growing because of any change in terms of our risk appetite, but related to the fact that we expect some acceleration in the economy, not a huge one but a positive trend in the second half of the year. Also, and back to the vehicles loans, we do believe that the performance in the second half tends to be better than the performance in the first half but not enough to make the credit portfolio as a whole to restructure growth, it’s balanced [ph]. Philip Finch – UBS Securities: Okay. Thank you. So just to summarize, can we say that the current mix [ph] you have today is close to the optimal mix that you would like to have? Rogério Calderón: It’s closer but not [inaudible]. Probably, we have advanced maybe 70%, 80% of the total change of the mix portfolio because we still have and this is not only regarding Itaú Unibanco but the whole market probably. We still expect mortgage to outgrow, to outpace the other lines of credit in this country. Philip Finch – UBS Securities: Okay. That’s very clear. Thank you very much.

Excuse me. Our next question comes from Amit Mehta with PIMCO. Amit Mehta – PIMCO: Hi, thanks very much for taking the question. I just really wanted to get more color on your margin trends – Rogério Calderón: Excuse me, Amit, we cannot hear you. Amit Mehta – PIMCO: All right. Can you hear me clearer now? Rogério Calderón: Much better, thank you. Amit Mehta – PIMCO: All right. Thanks. I just wanted to get more color on your net interest margin trends. I know you highlight a lot of the derisking of the book has occurred, but is there a lag in the margin trend that we might see going forward, and also is there anything that you’re doing specifically on your financial book where you think you can get a stronger performance going forward compared to the depressed quarter we’ve just seen. So, if you could just elaborate on those margin trends from here, please. Rogério Calderón: Okay, margin – our net interest margin with clients is, we do believe that the compression tends to decelerate further on and we expect to see net interest income is likely improving from now on, and probably such line [ph] at the interest income, two post growths in comparison to same periods last year is from the fourth quarter, so a better thing. We expect that by the fourth quarter this year, our net interest income should be outperforming a year ago. What is not happening now, we said last conference call that we were expecting net interest income to accelerate, to grow, to restart to grow. As on the second quarter, this is what’s happening. It is still timid in terms of movements. We expect some acceleration by the fourth quarter; we are going to be in a point that…

Ladies and gentlemen, as a reminder, if you would like to post a question, please press the star key followed by the one key on your touchtone phone. Our next question comes from Mr. Marcelo Cintra with Deutsche Bank. Marcelo Cintra – Deutsche Bank: Hi, good morning everyone and thank you for taking my question. Well, look, during the Portuguese conference call, you guys mentioned the focus on the credit card business which is also in line with the recent transactions that the bank did. However, when we look at the transaction’s value growth of the credit card issued by Itaú, we see a deceleration over the past two quarters and transactions grew only 9% in the second quarter while the industry is growing close to 20% and your main peer is bolstering [ph] stronger growth sequentially. So I just would like to better understand if you guys are seeing a steeper competition on the segment and if this could represent a concern for us and what’s your overview for the following quarters for the credit card industry specifically? Thank you.

This does not represent any concern. The trend in this business is a positive trend. We have fully committed to serving this area. It’s very much related to the strategy we have defined that is related to the payments industry, more services fees added to our revenues. So everything that is related to acquiring [ph] business as well, the movements we made regarding Redecard [ph] the recent movements you mentioned, Marcelo, related to the acquisition of credit card and [inaudible] and also the Uruguay and operations of Citibank that has an important portion of Redecard in that market. So this is very much related. The fluctuations you saw in the balance sheet are much more related to the seasonality of this product by the year end and beginning of the year as a consequence of the movement in the fourth quarter. We don’t see any measure or any issue regarding any concern on our evolution in this business. Marcelo Cintra – Deutsche Bank: Okay, thank you. And just a follow up given that you mentioned Redecard. I just would like to have more color on the integration of Redecard business and if the bank is already offering like some bundled products of acquiring and also banking product and if you guys still expect to keep accelerating transactions growth on the acquiring business. Thanks.

We are at full speed in that strategy. We have explained it to you. That is posing together the benefits of operating under a single bank business that also has an acquiring business. What it means that when Redecard is dealing with a client’s – it’s not dealing only as a front, supplier but also as a channel. What it means, that the bank business operations or the produce could be actually offered by this channel as well. This is under full implementation. Actually, we are also increasing this strategy engaging more SMEs in this business and it’s pretty positive. This is an strategy that allow us to keep or even increasing our market share without the damages [ph] in terms of margins or prices. Marcelo Cintra – Deutsche Bank: Well, that’s perfect, thank you very much.

Excuse me. Our next question comes from Mr. Daniel Abut with Citibank. Daniel Abut – Citibank: Just a quick follow up, Rogério, if I recall correctly. In the last quarterly conference call, you did say that although it was early to give any guidance in terms of loan loss provision for next year, you could see a scenario where 2014 becomes a second consecutive year in which the loan loss provision on an absolute amount base is declined again, although not as much as in 2013. You are trending as Alfredo said towards a R$20 billion level for this year although it could be even lower than that, closer to a 19 bordering over the guidance [ph]. Last year was R$24 billion. Do you still see a relative scenario where 2014 could be below that R$19 billion to R$20 billion that you may end up booking in 2013? Rogério Calderon: Yes. We have the same picture, Daniel. That means that we expect loan loss provisions to being a lower nominal amount in 2014 than in 2013. Of course, this is related to the growth and we believe that at the level of growth that we are expecting right now, it’s possible to pose a lower figure total amount in loan loss provisions in 2014 than what we are doing right now. I’m referring of course to nominal amount of loan loss provisions. Daniel Abut – Citibank: Right. So in 2013, end [ph] in R$20 billion for the sake of argument, it could be below R$20 billion. Rogério Calderon: That’s right. Daniel Abut – Citibank: Okay. Thank you, Rogério. That’s very useful.

Excuse me. Our next question comes from Mr. Amit Mehta with PIMCO. Amit Mehta – PIMCO: Sorry. I mean, slightly related to that same question asked by Daniel. I’m just curious. How do your account for your loan loss assumption given the risk of rising unemployment situation? We’ve seen a recent turn in the employment data. I’m just wondering, a, what your expectations for that trend when you kind of give that confidence in guidance, hopefully? Rogério Calderón: We consider all the movements in the macro data when we make our models to have the final figure on loan loss provisions. You mentioned the unemployment level. It’s actually pretty stable right now. There is a possibility that we keep – if we keep with decelerating the economy, it’s possible that we have an increasing unemployment. However, this is still pretty light and we don’t think that is going to have any major impact. Anyway, it’s very important to remember that our credit portfolio now, based on several quarters under a more selective approach is actually much stronger against any slight movement. So we are less dependent on this no movement such as this one, the level of collaterals in the operation that certainly [ph] brings much more quality to the asset. Anyway, it’s always considered in the model and keep in mind that our models are based on expected losses. So it’s not based on what is incurred in the past, but based on what is expected in the future. What it means is that every time we have any concern or any movement negative, this is considering now our models to come up with a final figure. Amit Mehta – PIMCO: Okay. I appreciate that comment, so then maybe you can just quickly elaborate one more step for me.…

(Operator instructions) This concludes today’s question-and-answer session. Mr. Alfredo Setubal, at this time, you may proceed with your closing statement.

We thank you everybody for participating with us. I think it was a very good conference call and we were able to show you the stronger results that we released and the strategies showing the results both in terms of ROEs and in terms of losses, provision losses. So I think we are in a good trend. Thank you for your time and we expect to have you all again for the release of the third quarter. Thank you.

This concludes Itau Unibanco Holding Earnings conference call for today. Thank you very much for you participation. You may now disconnect.