Good morning, everyone. I’m Renato Lulia, Group Head of Investor Relations and Market Intelligence at Itaú Unibanco. Thank you for participating in our video conference to talk about our earnings for the third quarter of 2022, which are broadcasting directly from our office here on Faria Lima Avenue in Sao Paulo. This event will be divided into two parts. In the first part, Mr. Milton Maluhy Filho will explain our performance and earnings for the third quarter of 2022. Next, we’ll have the Q&A session where analysts and investors will be able to interact with us directly. Now I’d like to give some instructions for good participation in this meeting today. For those of you who are accessing this via our website, there are three options of audio on the screen, the whole content in Portuguese, the whole content in English or the original audio. And the first two options will have simultaneous translation. To choose your option, all you have to do is click on the flag on the top left of your screen. Questions can also be forwarded via WhatsApp. To do so, all you have to do is click on the button on the screen on the website or send a message to the number +5511-99-148-4308. The presentation we’ll make today is available for download on the hot side screen and also as usual, on our Investor Relations website. I now give the floor to Maluhy, who will begin the presentation on the earnings, and then I’ll come back to you to moderate the Q&A session. Milton, go ahead.

Good morning, everyone. Thank you for participating in our conference on the earnings for the third quarter of 2022. I’ll go straight to the figures. And then during the presentation, I’ll bring in some information that I consider relevant. So the first good news is that we posted a very robust recurring managerial result of BRL 8.1 billion in the quarter, up 5.2% from the previous quarter. And in Brazil, we posted a growth of 4.8%, reaching BRL 7.4 billion. Consolidated ROE of 21%, an increase of 0.2 percentage points. And in Brazil, we’ve been able to maintain a very high and stable profitability level of 21.6%. The consolidated loan portfolio grew 2.5%, reaching BRL 1.1 trillion. And in Brazil, it reached BRL 900.3 billion, up 2.7% from the previous quarter. The margin with clients also posted a very positive increase in the quarter, growing 6.4% to BRL 23.4 billion. I’ll provide more details later on. When we look at Brazil alone, it grew 5.5%, reaching BRL 20.6 billion. Speaking of delinquency, there was a very small increase in the NPL ratio of 0.1 percentage point in the consolidated figure. And when we look at Brazil alone, it grew 0.2 percentage point. I’ll provide more details later on. On the capital ratio, we have good news. We were able to increase our capital base, which grew 0.6 percentage points, reaching 11.7% of core equity in the quarter above our risk appetite. There’s no good financial performance without our clients. So I decided to include a slide here to show very briefly what is behind the figures we deliver. There’s a lot of work and dedication. There are a lot of tools. But the central message here is that we’ve been for some years now working with the Net Promoter Score…

Milton has just arrived, so we can start with our Q&A session. And it will be bilingual. So we will answer the question in the language of the question. And if you want translation, we have the option for English and Portuguese, you can select it. Please remember that you can submit your questions via WhatsApp. And for that, the number will be +5511-99-148-4308. Well, we have the first question now. Yes, first question now from Flavio Yoshida from Bank of America. Hello, Flavio.

Hello, everyone. Good afternoon. I would like to congratulate you for the excellent work and the very good results of the bank in a scenario that is very challenging. And I would like to understand, in your opinion, profitability for the future, at least for the next year 2023. The scenario is challenging, the visibility is low. However, most of what you’ve done all throughout this year will be, let’s just say, you’re planting so you can harvest next year. So from that dynamic, are we expecting a good result next year? And also I wanted to understand the dynamic of the credit portfolio, what we’ve seen was an acceleration in the second quarter. Now there was a bit of a deceleration year-on-year. And I wanted to understand what can we expect. I know that you’re still going to publish the guidance for next year. But what can you give us as a feeling for the growth of the portfolio for next year?

Hello Yoshida, thank you for the question. I think you’ve concluded very well. Well, since it’s the first question, I don’t want to provide any information that is not correct, but we are still working with the scenario of 2023. We have a lot of uncertainties and a lot of points that we need to refine. We are in the final points for the issuance of the budget. In the first call of the next year with the results of the fourth quarter, we’re going to talk about these points. But the message here is sustainable growth. That’s the central core point. And that’s what we’ve been working for over the last few quarters. There is a review of the guidance of 2022. Well, we haven’t really reviewed it. Of course, there are ranges for the lines. But we understand that within this geography, we can deliver the results of the bank and reaffirm, therefore, the guidance for 2022. The expectation, therefore, is that we will see a growth that is healthy. Well, there is a small -- there is a decrease in the portfolio, there is inertia for the portfolio next year. There is a way that the interest rates still impact our business. And the way that the bank does the hedge of the working capital, the deposits. So there is always an integral that we have to see observed. Well, there are challenges such as the investment bank, how the activities will unfold, and we have to keep an eye on this. There is challenges in the cost of credit. We’re still careful in the follow-up of the risk of the bank and very cautious. The scenario inspires cautious -- and linking to your first question -- well, second question actually, there was a decrease in the…

Thank you, Milton. We have now the next question from Thiago Batista from UBS.

Hello, Milton, Renato. Congratulations for the results, very strong quality good portfolio. My question is about margin for your customers. And here, I’m focusing in sensitive operations to spread. If we look at the rate of spread of this spread, we are seeing a growth quarter-on-quarter, but still much lower than what was pre-COVID. Pre-COVID was -- now it’s 8%. It was higher. Now can we imagine that market will converge because it was pre-COVID or not, the change in mix was so large a mix of customers, clients, and products were so changed? Why do we come back to those levels then? And the other alternative is the margin post-revision. That is 200 bps below to the pre-COVID so it’s 5.6%. It’s close to 7%. Can we imagine that the margin is destripping or the pre-provision will go back to the levels of the pre-COVID? That’s the point.

Okay. Thiago, thank you very much for your question and for analyzing the results. Well, first of all, things are much more different than the pre-COVID. A few of the information that is key that we have to pay attention to the evolution of the margin. The first thing, the -- our guaranteed portfolio has grown 5 percentage point increase the capillarity of 5 percentage points. And of course, that brings a mix to an accounting less risky, but with giving less margin, of course. And there is an effect at the beginning of COVID, which was a cap of the regulatory cap that had an impact in the profitability of the profits of the product. We had the risk line, so with a drop in the portfolio that was growing and that had an effect on the margin. Well, there is a mix between guaranteed and non-guaranteed, it changed. That’s an important information, for example, bank over trusts. So look, our wholesale portfolio, if we just go back three years, it’s something that grew 55%. If you go back three years down in the past, it’s a portfolio that has -- that is very horizontal. So if you have more wholesale less, well, we have more guarantee and less clean. That’s the second phenomenon that has an impact on the margin. And the third aspect and this is very relevant for the period that we’ve seen an interest rate increase until the 13.75%. The speed has been very, very high. And there are some products that are impacted. And in the flow, we’ve really increased the rates. But in the portfolio, there is more impact when you compare retail and wholesale. You have the overdraft, the cap, the real estate and mat 4, we have a dynamic of spread postpaid. So on one side, you are benefiting from the benefit of the savings account and on the other hand, you have an impact in the credit, and you have the two effects that you leave the spread in the credit and the liabilities in the front line. So there are several other effects. My vision is that we should not go back to what we had in margins and pre-pandemic. We are still seeing our margin stabilizing with maybe a bit of an expansion, but stabilizing above the levels that we are seeing here. This is our best estimation thus far.

Thank you, Milton. Third question online, Gustavo Schroden from Bradesco BBI.

Good morning, Milton. Good morning, Renato. Thank you for the opportunity. Congratulations on the results, very strong. I want to ask a few questions. The first one is asset quality. Part of the correct wording is appetite for risk. I’m going to use that phrase for a lack of a better one. We see delinquency and the individuals it’s growing. There are some different dynamics between the players. In fact, it has been growing for everyone. My question, Milton is regarding -- well, not trying to predict the future if the NPL will stabilize in the next quarter or in the first quarter of ‘23. But up until what do you believe that we can maintain, let’s just say, that appetite for risk in those riskier lines, how much do you accept of deterioration in the NPL that we can continue still going along with this rhythm? We see a deceleration in the growth, specifically credit cards is growing, but there is a deceleration also vehicles or cars financing. Well, what is your limit really looking at detail-rich I’m not even thinking about if we stop this quarter, next year, we’re going to start -- you’re going to stop. It’s very difficult to estimate, but I wanted to understand your risk appetite in those lines. And the second question is quicker. It’s about dividends. I think that the capital is replenishing itself. There is a level of ROE 2021 with a dividend of 25%. The trend really is to exclude FX -- extraordinary effects, the trend is the capital to go back. So do you think that the dividends are going to go back to 40% next year?

Gustavo, thank you. It’s a pleasure to see you once again. Thank you for the comments about our results. Let me address delinquency and individuals, natural persons. First of all, let me speak in Portuguese. Well, we actually understand the complete portfolio. Well, our operation for individuals is very diverse. We have the account holder and all the segments that we have, the Uniclass, Personnalite all the products, we have our operations, monolinear, credit, real estate, we have vehicles and we have the operation of credit cards. The two portfolios that feel like you say, the cycles that we’re observing with the increase of inflation is a portfolio of credit cards or open ocean as we’ve talked. And our appetite is to create value. So our appetite hasn’t changed. It’s dynamic and it depends on the conditions of what we see in the prospective scenario, what we are observing. -- the reality, the result of these crops, you say. So we’ve had very relevant adjustment in concession. We reduced rigorously. The concession in certain products, credit cards, open ocean is one of them vehicles. We’ve done -- as you commented, the portfolio of vehicles at the margin, the total portfolio is reducing, and that shows that we’ve been able to adjust to the necessary adjustments. And now the important is that we are always expose, the X before and then we react feed this model. These -- this is within our epitope. You have the vehicles, it’s already fitted. So the credit card is more volatile. We are doing a very active management of the portfolio, very entrance. The portfolio is very relevant, as you know, and it is subject to more volatility, but we’ve been able to absorb this in this period. All the account holders given the profile…

Now Milton, we are going to go Rafael Yes. Sorry for the false start. Now it’s your turn.

I think that I was going to have us answer about your dividends, your policy of dividends. Well, good morning, everyone. Congratulations on the results. There are two questions here. I think that Milton has commented on that on the previous event even on the over-offering, maybe there is an over offering of credit cards in the open hand. You’ve commented really on that issuance. Could you give us a readout on what you understand that happened in the market, specifically in that segment that there was an excess of offering? And the second question, still were not trying to get a guidance, but just to understand your dynamic of delinquency. Milton already mentioned, that if everything else is constant, maybe delinquency will be stabilized in the first quarter. Well, what are your expenses with provision? I mentioned that the expenses were provision are going to go to the fourth quarter. Would it be reasonable that it is a percentage -- as a percentage of the portfolio would be maintained in the same levels from the fourth quarter, so there is a stability and then the provision for the percentage of the portfolio, we have a trend in the evolution in the same rhythm let's just say, or there would be any variations. How do you see this?

Hi Rafael, thank you for the question. Thank you for your initial comments. Now let’s talk about the operation and the credit cards. Now we always talk about the benefits, the benefits of competition, more players, more digital players, more competition. Certainly, that brings benefit. The client is benefited the experience changes and then makes the bank having to reinvent ourselves every day, so we can deliver a better value proposition and experience for our clients. Now if you add a series of effects, and I’m talking about regulatory effects, and I’m talking about the whole scenario issues. Well, we have the lower interest rates are negative in some places, the phenomena of the abundant capital for fintechs and new companies that are growing. And the greatest driver, it was growth. We’ve always heard about the growth, the base. Those were the drivers. And now we happen a lot of these players started their operations based on credit cards that was their main product, we’re maybe the only product at that time. So at that time, the investors had grown robust increase your base of clients and reduce your acquisition cost. Many of them had journeys that were incredible for the clients, but they are growing with a lot of effort. The second I expect is that the growth was given in an unbalanced way unbalance. What do I want to say about that their products, they don’t have any fees. They’re free with a digital experience that is very good. And detonates an unbalanced economic imbalance between the client and the organization. So first point -- today is very easy, and it was very easy. Any client would acquire a product of credit cards. So whether it would be through the digital channels and the fact that they didn’t…

Very good. Let’s go to the next question. We have a long list of questions today. Next one, [Renato Melone]. He is on screen.

Hello, everyone. Hello, congratulations on your results. Can you expand a little bit more on the adjustments that you’re doing with the credit concession? For example how much was digital the cutoff on the limits? Well, how much of the drop in approvals? Also, well, with these reductions, do you -- are you going to continue next year? Or are you at the correct level for the scenario nowadays?

Renato, first of all, I say that the adjustments that were necessary was already done. Of course, there is always a space on the margin, and this is a dynamic agenda. If we are in a common scenario, then we can do adjustments, we can look at the history, how the model is performing, and there is always a prospective vision. Remember, we’ve been working with our models not only that look at the expectation of the bad rate of this client with time but also what is the macro perspective. So there is some macro variable. And the cutoffs well, on open ocean was very relevant, but not only per channel. We did really adjustments that are relevant in lower income. These are the incomes that are impacted the people that are impacted more in this process. So there was a decision that was made for many -- for a long time, we’ve been managing this sharing. There was a reduction in 10 percentage points in the period, our share with this public just to give you the relevance of the adjustment that we’ve done. And we grew in public that have a risk level that is better given the income that are suffering less in the cycle. So there is the guaranteed products. So we have the guaranteed products. And we’ve increased them 5 percentage points in the capillarity of these products in the portfolio as a whole. For the things that we’re analyzing. And based on the information that is available, the adjustments that were done. If we look at the future, there can always be an adjustment, additional adjustment. But the big -- the sharing already happened. If you look at vehicles and the cuts in production very relevant in credit card, we cut 90% of what, 90% of open ocean 80% gives you a dimension of the size of the adjustment, whatever the volume, 90% of adjustment shows how much we’re seeing these harvest with more volatility, and they are not connected to our appetite. And the central point is that we’re quick and dynamic. We interpret the data. We have the deviation, we work surgically and our models allow for this.

Next question comes from Tito Labarta from Goldman Sachs. Good to see you. Thanks for joining.

Great. Thanks for the call and taking my question. My question, a little bit on the capital, but more specifically, given the macro and political environments. You mentioned, I think, core Tier 1, 11.5%, 12%. You’re right around there, good improvements this quarter. Just given the scenario that we’re going into, do you feel that you would need to hold maybe more capital. Asset quality is deteriorating some uncertainty on the fiscal situation in Brazil. I don’t know what you’ve heard on potential movements from the government. Just what we heard is like increased use of public sector banks, potentially renegotiating some debts. So any color you can provide on what you’re hearing from government potential programs? And would that make you more cautious to want to hold more capital?

Okay, Tito. Thank you very much. So I’ll answer in English to respect the language of your question. So the topic is just going back when we define our risk appetite and the levels of Tier 1 that we were expecting for the bank, we were seeing about 13.5%, and this is what we use for the dividend policy of the bank. At that time, if you remember, the largest or the biggest impact that we could have in our capital base was related to the FX, the valuation, held the valuation. And why was that? That was because we have a huge portfolio, not only in Brazil, in other currencies, but also the banks that we have abroad, especially in Latin America. So you have to take this in consideration. From that time, when we look today, there is a second huge impact that was due to the FX devaluation. It was the overhead strategy of the bank that whenever we had a real depreciation, it will generate tax credit, and this would have a huge impact in our capital base. So there is no more overhead. So there is no revenues, but there is no risk for capital. And second, I think, successfully we implemented by December of last year when we announced that we were implementing the hedge of our Capital Index. That means that there is a cost, this BRL 400 million, BRL 500 million per quarter. But when we look at full year, there is no volatility due to the FX. So even though we had some appreciation at the beginning of the year, we are seeing some devaluation and our effectiveness of the hedge has been perfect. So that is very good news. That means that the buffers that we had for this type…

Thanks. And the next question comes from Jason Mollin, never sure which language you’re going to ask your question, but I’ll leave that up to you.

I’ll ask my one question is for question, and I’ll do it in English since you have all -- everything set up to do that. Well, first, I’d like to repeat the congratulations on the solid results. Itaú Unibanco is living up to the very high standards in a challenging environment, in my opinion. Most of my questions and operational performance have been addressed. So let me ask this. In the management commentary report, you started with the statement that Itaú Unibanco’s digital and cultural transformation agenda continues to evolve. And you have provided strong digital metrics and customer satisfaction through MPS. But if you can provide a recap and update on how the cultural transformation is evolving, have there been challenges? And how have you been facing them, I think it really differentiates the...

Great. Good to see you, Jason. Thank you for the compliment. It’s a pleasure to have you here with us. So I think someone the other day was asking me how many of my time I spent with the cultural transformation. And I answered 120%. And why is that? Because culture transformation is something that come top down, and we have to do that every single day. Every single decision every single promotion, every single discussion every single moment you need to walk the talk the new culture. So the thing is that last year, we worked very deep in defining the territories of this new culture. And we had discussions internally with many people from the bank. And I would say that 90% of our employees, more than 4,000 people in this survey said that they would expect a relevant digital -- relevant cultural transformation. And this was just to like to know that we still have a very fertile ground to invest. So then we started to discuss in the executive committee with the Board of Directors saying what are the possible movements that we can do, and we were bought at the end of the day. We really think that we have a lot of good things of our culture that never change the ethical thing, client thing, profitability, performance, sustainable performance are things that won’t change in the coming years, but we still have to modify relevant things in our culture. So we did that. We’ve been working a lot of workshops, internal workshops. We’ve been discussing with all the managers since the executive committee just to let you know, I was part of four workshops with the Executive Committee, where we had very, very deep discussions about the new culture because we have to keep…

Thank you, Milton. Thank you, Jason. And now the next question, we have Rosman from BTG Pactual.

Hello. Pleasure to talk to you guys. I have a very quick question for you. I think that a lot of investors are surprised with the difference of the results of Itaú for their private partner -- well, the other ones, Santander and Bradesco. Well, you talked about the [Poltor] transformation. You -- since you took on in CEO, well, how -- if we had to look at the difference in performance to your peers, how much do you think can be explained by more cyclical issues. It depends on the cycle of the client that the bank operates the high crop, the more the companies and the individuals are to have more money. How much can that explain the transformation? Maybe that would be the structural thing. I’m not trying to get a number, but I wanted you to give us a guidance how much can we see. And if thing that you’re seeing will continue and that will mean a gap in the return for Itaú compared to its peers.

Rosman, thank you for the question. I want to do a statement before -- before I answer first, I have an enormous respect for our competition, enormous. So as I’ve always said, Itaú is what it is because Bradesco exists because Santander exists because Banco do Brasil exists all of our competition has an enormous value. They’ve done incredible things all throughout the years, and these are long-term journeys. We cannot just look at one quarter, one year. We have to look at the long term. That’s the first statement. Second statement that I want to give you. Maybe I should talk more about the bank itself I don’t want to do comparison, relative comparisons. I believe that you have data information capabilities to get your own conclusions I want to talk about why I believe that we are having a performance that is sustainable, predictable, and quality based. There is no single answer. I cannot attribute all this exclusively to one element or the other. There’s a series of factors. There are said the factors from the long term, from the external factors, internal factors, I’m going to try and talk about the strength of the bank. First of all, the fact that we are in a universal bank, strong that plays a role in the quality of our results. What do I mean by that? If you look at all the businesses, we’re investing that we have a competition. We have had highlighted performance. We have really wholesale participation that is relevant in Latin America. We’ve done a great catch-up. That is great. When we look at wholesale, and I apologize before it was retail. Well, wholesale, we have credit. We have in the every business in the cash, services product, the distribution sales. We’ve had performances that…

[indiscernible]. Thanks for joining. Good to see you.

Thank you. Hi everyone, and congrats also on the great results. My question is on operating efficiency. I think you’ve said little about it, and I think you’ve done a lot on it. And I think that’s a big part of what has driven your results to be so resilient. So you’ve gone from 3.7% expenses to assets five years ago to 2.7% today, and I’m looking at expenses to assets just to clean out the volatility of the net interest margin with the volatility in rates. If you want to think about it on a cost-income ratio, you’re at 40%, how much more can you do? When you think about the next three years and next five years, could we see another four percentage point come out of expenses to assets over the next five years, can you run the bank with 1.7% cost to assets? Can you run the bank with 30% cost-to-income ratio? And what is needed to get you there?

Okay, Jorge, thank you very much for your comments. As we say, we like to underpromise, overdeliver. So I think in efficiency, we’ve been doing that for a while now. My view is that as the name say or the definition say, it’s an efficiency ratio. So we look for cost, but we look to revenues as well. So it depends a lot on the scenario. We are in a very favorite moment now. If you see we’re in the lowest level when we look this year, finding the lower level of efficiency ratio. So there is a lot of operational leverage that we can do, as you can see, when you look and compare to our assets. We can grow the bank and we can keep the costs under control. The other point that I would like to highlight is that we are not -- we are investing a lot in the future of the bank. So for cost, it’s very easy if you want to take a cost-only cost approach that you make wrong decisions and you decide not to invest in your franchise, not to grow the businesses, not to sell product. And you can do that, you have a much better cost ratio by the next quarter, but you won’t have a strong franchise in the long term. So our decisions here are long-term based. Even if we have to invest, we’re going to do it because this is the way we keep growing the bank, keep expanding the business that we do that we have. So my view is that we still have room to keep doing the efficiency agenda. We are always discussing that cost, you have to do every single day. This is part of our strategic agenda, and we are focused on…

Thank you.

Thank you very much, Jorge. Good to see you. Now, we go back to Portuguese, and we have [Mathias Lobato from Banco Inter].

Congratulations on the results. The question is regarding credit cards. You have demonstrated an increase in the overdraft fees, and I wanted to understand what is the level that is healthy for this rate. Is there any action plan for reducing the delinquency?

Thank you for being with us once again. In fact, during the pandemic period, if you -- we cannot just look at a snapshot. We have to look at the picture, the whole picture. What is the lockdown less expenses, less people purchasing stuff and we have more payment and less expenses in the credit card fees. So our portfolio dropped in the credit card predominantly. And remember that JPY 126 billion of portfolio, we have EUR 12 billion is the -- without the interest rate. So EUR 26 billion is the interest rate portfolio. So yes, we saw a reduction during the period of dynamics and where people were spending less. And of course, with more delinquency in some portfolios, we see the empire in the open ocean. Before the decline goes delinquent, they go through the interest rate. They go for paying the installment paying by installments and maybe they do the agreement. So part of delinquency goes through that previous step. Yes, we’ve done a series of actions reduction in the margin. There is a portfolio that is installed, but the bank has the capacity to be very active in the management of the limits of our clients, whether they are -- they have the benefits of the capital. And those clients also that are given signs for difficulty. -- is part of the active management of the bank to communicating with quality and to do the necessary adjustments. There are several initiatives. -- adjustment in the crops, the concession, the structural limits adjustment and to try and understand up until when these portfolios. So when I’m talking about the projections in the individuals, natural persons. The increase, the big sensor was to bid the credit card business. So when I say that we are expecting a stabilization with the information nowadays, that portfolio will be -- has a tendency to stabilize, and we’re working strongly for this. This is contained within the individuals, the universe -- natural person, university.

Thank you, Mathias. Next question, we have Henrique Navarro from Santander. Hello, thank you for your presence.

Congratulations on the result. My question is regarding the coverage index. If we imagine that you have 250 something like that. Imagine 2023, the risk of the portfolio should be lower corporate portfolio. So if you think about your records, that is something closer to 200%? Imagine that also we consider the way that you provision. The provision criteria, you do it a bit before and then you can revert that provision down the line. And then you mentioned 2023, the regulatory risk, the taxes over dividends, and even the increase in taxes where the bank is more interested in the income. So considering these profits, these hypotheses can we work with 200 to reduction in the coverage index for the year ‘23? And those assumptions that I mentioned. Some of them do not make sense. If that make sense, can you comment?

Yes. Henrique, thank you for this opportunity. Thank you for the compliments. Well, I think it’s reasonable to think about a certain stabilization throughout time 200% ballpark, we don’t have a goal. We don’t have an objective. We do not manage the bank through a coverage level. Since we are operating with an expected loss, we are always anticipating through the modest coverage index is a consequence of the decision-making process. But this is a great indicator. So I think that, yes, the bank should remain with the coverage index that is reasonable throughout this period. When I look at -- when I look at retail, yes, we are confirming coverage, but is still above the threshold of 15% to 19%. We’re still operating 20 percentage basis points above what we are operating in a period of 15%, 19%, which is great news. So we are keeping a portfolio that is well covered. And there is an element in that portfolio that has to be taken into consideration with a lot of care, which is really the wholesale portfolio. This is an advanced portfolio. What do I mean by advance? The coverage index not necessarily -- it’s not an excellent metric for the wholesale portfolio. I like the coverage of provisions over the total portfolio. There are different outlooks that we can take. So any event of anything that is already provisioned by expected loss that we already had expected liability that is anticipated. It takes on the coverage. So that’s why we need to separate. We have to look at wholesale, isolatedly, there’s going to be volatility in retail. So before you have a delinquency before that, you have restructuring where we have the legacy it’s because of a stress situation that is much stronger, and then the client will take the provision with them. So it’s reasonable to expect that we have good coverage levels. There are some challenges for the future. So I would say to the bank as well perfected. We’ve been able to navigate with some buffer in our relationship with coverage against provisions, regulatory provisions, we’ll give you -- if you look at that, we’ll give you a good idea on the protection of the balance sheet, and it’s reflected on how we mark those coverages for segment, and this is reflected in the coverage index, I’m not going to give you a number because we do not project it that way, but I think it’s reasonable to expect a certain stabilization above all, in the total coverage. In retail, there’s probably going to be some usage because as I commented, we’ve observed an increase in the NPLs. And remember, even though we provision above the NPL formation, you’re still fighting against an indicator of 200. So any time that you in the margin you do that, you take your indicator to a lower level or lower threshold.

Thank you, Milton. We’ve got three more questions down the line. And now we have Marcelo Telles from Credit Suisse. You are unmuted.

I was waiting for that moment. Can you hear me now? Sorry, I had an issue here with my microphone. First of all, congratulations Milton on the great result. Clearly, it gets It’s different threshold, a different level in regards to the other banks. This is really impressive. And now I wanted to -- well, most of my questions were, of course, answered, but I wanted to ask you more about given the fact that you are super important in the credit card market, how do you see the growth of PIX picks the transfer? How do you think that PIX can substitute? Do you see it as a threat to the credit card business, our business, we see an increase in the use of PIX here in Brazil, in the B2B and the transfers. And Milton, what is your opinion on that type of transaction, the PIX transaction? And what is that you were doing to be able to capture part of this value chain?

Thank you, Marcelo. Thank you for the question. Thank you for the comments. I, first of all, would like to say the following. We were all in on PIX. As soon as we got the discussion of PIX, if we said it, this is good for the experience. If it brings a great experience, 24/7. We already didn’t charge the tariff for the internal transfer inside of the bank. So the client to transfer from one come to another, they always and the freedom and it was on cost. -- it was 24/7 for the account holder EBITDA when they did a transfer for another account holder of it will remember that PIX universalized that. So our footage process was to get PIX in front of any product. There was an impact in the revenue. But of course, since our agenda, our culture is on the client, it’s the best product. The best product is the one that is focused on the clients. So that was the first decision to really focus on PIX from then on, we’ve been working diligently, and we’ve been working with the evolution of PIX a receivables at payment. How is it doing what type of payment method is dislocated. We’re keeping a great market share and volume transactional that we have at the two ends in the receivable and the payment, the orders of magnitude of 20% of market share. So I think that these are very relevant numbers given our size. So we’re still looking at the packages of the accounts of the -- and thinking about the suitability of the clients, they have a package of services at a certain level of offers. But they’re not using it. They’re not -- they’re not using what they hired. We’re doing the adjustments. So…

Perfect. Thank you. We have with us, Nicolas Riva from Bank of America.

Good to see you, Renato. And thanks so much, Renato, Milton for the chance to ask questions. So I’m going to ask on your AT1 capital on the purpose. So a few weeks ago, you said you’re not going to be calling the six and 18 in December. You said it was basically based on the economics. And I guess on the difference between the coupon reset, which should be right now about 8% on the refinancing cost. But you can call every six months, and you said you’re going to continue monitoring market. So my question is, if there is a certain premium in terms of coupon research versus refinancing cost that you would be willing to pay in order to extract that call option where it’s, for example, 50 basis points, 100 basis points? Or any color on that? And then second, we have seen some Brazilian banks access the domestic market in recent years. Banco Brasil in the third quarter raised BRL 2.3 billion in a private placement in AT1 in the domestic market. So there, my question would be, how much do you think you could raise in the domestic market with AT1s to refinance some of the global purpose? And then finally, on capital, just going back to the question that Tito Labarta asked about capital. I just want to make sure I understood correctly. If your internal targets remain 13.5% Tier 1, 12% CET1, and if you’re going to be making decisions on dividends based on those targets.

Okay, Nicolas. Good to see you again. Thank you for your questions. Let me start talking about the AT1. As you said, we said to the market on a formal basis that we wouldn’t be exercising the call the difference of the repricing and the recap looking to the prices that we should tap on market were very relevant. It’s more than 200 basis points. So it didn’t make any economic sense to exercise that call. That was the decision we made. And I think we were very transparently, not only communicating before the exercise date, but also much before that, I was saying this in conferences, we were saying to investors that this would be the definition that we should move. The second thing is that there is no price that we define before saying that this level of premium we’ll be exercising the six months call. But I would say that 50 basis points, we would discuss, but it’s not automatic that we will say that if there is 50 basis points of whatever premium there is, we won’t be exercising or we will be exercising. We will evaluate the alternatives that we have, not only offshore, but also local. And just to go back to your second comment, we raised Capital One locally as well, the same way Banco do Brasil, we did the same. But there is no dip. There is no -- it’s not a very deep market in where you can change or you can refinance the size of AT1s we have issued offshore in the local market. So we can do up to a certain level, and it’s very competitive. It was very competitive in terms of price, even swapping to U.S. dollars. But we don’t have the same size that we have…

If I can ask a follow-up. So your comment about the 50 basis points. Basically, what you’re saying is that right now with current rates, if you think you wouldn’t be able to issue a par below 8.5% then you would then call your global purpose and issue, at least in the global market. And then of course, the question would be precise.

Yes. The thing is we’re going to be looking to the price for the yield that we have at that time. If there is 50% -- 50 basis points more expensive, we will have the discussions. But again, the decision will be on an economic base. I’m not saying that there is 50 days we exercise the call. I’m much more safe. I have to make the decision today, I wouldn’t exercise the call because we discuss on an economic basis. But below that or above that, we won’t be even discussing. So just to give you a good idea of you have to compare the level of price, the repricing of the Tier 1 that we have and compare that to a new issue premium and understand what are the premium that we have embedded. So this is the 50 basis range that I’m mentioning here.

Thanks very much. No, thank you. We’re getting towards the end. And for the last question, I’m going to ask you because it’s WhatsApp is from Rafael [indiscernible], I’m going to read. Well, we perceive a deceleration in the business of issuance of the credit cards through the back presentation. In parallel the whole industry has seen a raise in delinquency in credit cards. And do you plan to have a more harsh measure to decelerate credit in these segments? Reviews of anything?

Well, first of all, thank you for the question. It’s a shame that you can’t join us through day. I think that we go back to the previous question. I think that we’ve done relevant adjustments. The market as a whole is suffering the readjustments happen across the board. This is not specific for Itaú Unibanco call. But of course, what is necessary is -- has been done, and we’ve taken the necessary measures not only in the review of the limits but also in the adjustment of the concession and this is what we still have opportunities. So it’s important to mention that every time that you face a situation such as this, we need to separate where do we want to do the derisking of the portfolio -- and where we have the opportunity to actually continue to grow and invest in the franchise. And the credit card product is very transactional of the day-to-day of decline with the bank. So I mentioned a long-lasting relationship with other products doesn’t make any sense. So there are opportunities that we are still taking. But wherever necessary, the adjustments will be done. So we’ve seen the deceleration in the market, the feeling from the market is that they are all doing relevant adjustment in the concession.

Thank you, Milton. And with that, we will finish the Q&A session. And also, we will finish our results for the third quarter earnings in ‘22, Milton, if you can do the closing of our earnings.

Well, thank you, Renato, for conducting this. I would like to thank you all for your participation and presence here in our event. For us, it’s a great pleasure to be able to share with the level of maximum transparency, our agenda. We’ve shared the information quality quantitative. It’s always a pleasure to receive your questions. Your propagations are also welcome. And I would like to say that we are facing scenarios that are challenging, I have to -- well, you’re in the market, you know it. And the challenges of ahead, the bank will continue to operate with the cautious with the care that is necessary, making the necessary adjustments because our objective is to create long-term value, predictability and sustainability. This is our agenda, and this is why we prepare ourselves and we work every day. Once again, thank you very much for your presence. Thank you all for the comments. And to say on our side, we are very humble. We are very respectful. We are down to earth, not only with our competition, but also the market as a whole, and we will continue to play our role working hard with a lot of passion from what we do. Thank you very much. And we will see each other soon. Thank you.