Hello. 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 fourth quarter of 2022, which we're broadcasting directly from our office here in Avenida Faria Lima in São 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 fourth quarter of 2022. Next, we'll have a Q&A session where analysts and investors will be able to interact with us directly. Now I'd like to give some instructions to make the most of this meeting today. For those of you who are accessing this via our website, there are three options for audio on the screen – all content in Portuguese, all content in English, or the original audio. In the first two options, we 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, just click on the button on the screen on the website or simply send a message to the number 55-11-94552-0694. 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 Mr. Maluhy, who will begin the presentation on the earnings. And then I'll come back with you to moderate the Q&A session. Milton, go ahead.

Well, thank you, Renato. Welcome to our fourth quarter of 2022 earnings presentation. I'll also talk about the 2023 guidance. I'll go straight to the figures, so that I can bring you some more information. Firstly, our earnings in the quarter totaled BRL 7.7 billion, a drop of 5.1% from the previous quarter, and BRL 7 billion in Brazil, which also dropped 5.7% from the previous quarter. A very important topic I'd like to raise at the very beginning, so that it can be very clear to you, is the subsequent event – the credit case that was announced after December. In our balance sheet for 2022, there was an increase in provision for loan losses to cover 100% of this exposure. Therefore, there won't be any negative impact in 2023, only positive impact from a possible credit recovery. I wanted to make this clear at the very beginning. I'll comment during the presentation on some adjustments to make it clear how our performance would have been without this credit event. But it's very important to highlight that the exposure in our balance sheet is 100% covered. If it weren't for this effect, our consolidated earnings would have been BRL 8.4 billion and BRL 7.7 billion in Brazil. Speaking of profitability, already considering the provision for loan losses to cover 100% of the credit exposure caused by the subsequent event, we posted a consolidated return on equity of 19.3%, a drop of 1.7 percentage points and of 19.7% in Brazil. If it weren't for the subsequent event, our consolidated ROE for the fourth quarter would have been 21% and 21.7% in Brazil. Another very robust quarter and very significant from the performance standpoint. To continue on the subject of the subsequent event, I'll jump to the cost of credit. At…

Well, hello, everyone. I'm back. Milton is already here with me. So let's start with the Q&A session. [Operator Instructions]. Now, let's start. The first question is from Domingos Falavina from J.P. Morgan.

I have two questions. Very quick two questions. In terms of provisions, the first is to understand a bit how that additional provision works. The additional one. Well, it seems the balance is BRL 17 billion. I wanted to understand how much is already destined for the segment for credit cards or specific sector of the economy and how much of that is completely free, let's just say, with the use – looking at the subsequent fines of approximately BRL 2 billion, BRL 1.3 billion, the exposure [indiscernible]. So, I wanted to know how much leeway do you have, let's just say? And the second one, how do you reconcile the guidance for the growth, the 20% growth year-on-year with a portfolio that is growing also in 6% to 9%. So it's growing two times the portfolio when the bank is working with a derisk, you're increasing the risk. And this is a provision that is anticipated with the expected loss. And so, how do you reconcile if it's an increase of risk? Or are you going to be more conservative in the guidance? These are the two points.

Let me start with the complementary provisions. The complementary provisions, in fact, we've been looking at these balance for a long time. We do the periodic reviews. I would say monthly reviews on the volume of provisions that we have in the balance sheets, always looking at our portfolio with expected losses. And the bank has the practice of many years of being very careful, very prudent with the level of provisioning that we carry over the balance. So we have the reinforcement of provisions all throughout the previous quarter, specifically during COVID-19. You remember 2020. And those provisions, they're allocated for specific cases where we have some concern that we understand that the level of provisioning has to be higher. Now, we always see the expected loss. We have the effect of the expected loss, which is within the complementary provisions part, is the specific case, it can be a segment, it can be a company, specific business or an adjustment that the bank deems necessary. So, what do we do? Once a month at least, we do a complete review of these provisions. And when you take a look at case by case, what are the expectations for the recovery in the future, if it's improving, if it's not improving. So when we did the 100% provisioning in the specific case, which is a subsequent event, we looked at the balance sheet and we wanted to understand well. Is there any leeway in terms of some change in regards to the complementary provisions case. We decided to do 100% provisioning. That was the decision. We look first if there is an adjustment that has to be done within the complementary provisions. And in the end, we did BRL 1.3 billion going through profits and losses and constituting even…

Now we have another person, Thiago Batista from UBS.

Congratulations on the results. I think that it was very good. Now, I have a question. I have a question, Tier 1 question. The bank went back to 13.5. So there is an ROI of 20%. And then you're working with the numbers aligned with [indiscernible] growth of the portfolio. The bank can pay clearly more dividend payout, in my math 60 and still keep the Tier 1 stable at 13.5. So, that's my question. Are we going back to that scenario that the bank is going to pay all the capital above 13.5? And a quick follow-up on Domingos' question. What changed in the bank in regards to the specific case of Americanas in the legal proceedings? How has the bank evolved with this case of Americanas?

Well, let me talk about the capital here. We are going to systematically and consistently grow the level of capital. If you remember that, we started in 2020, with the provisions for COVID and then we start to recover. We implemented the hedge of the capital index policy and the bank is consistently generating value and financing its activities and having an increase of the capitalization of the bank measured by CET1. Now, my expectation, looking up ahead, there was no scenario of the increase of percentage payment. We have 27%. We maximize the JCB, that's why the payout is above the minimum. We still provision looking up ahead for the level of the payout that is much similar. Yes, we're growing the results of the bank and then we're increasing the dividends, the JCB per share. That's our work. Now, even though we recovered capital, which was a great news, we see challenges up ahead. These are typically two. First, there is new [indiscernible] for the credit risk. And in our first reading, they can be positive for the capital. But there is a public consultation, which is the operational capital, there is a measure in the way that we allocate it for now. But there is a review being done. And this measure might impact the level of capital of the bank. It's very early. There is a public consultation. There are several debates happening with the regulator. We're looking at Basel, several countries delaying the implementation. Our best expectation today, the provision is that, in January 2024, maybe there is a chance that we are going to, in fact, follow up in different geographies, a delay to 2025. So the bank is doing a provision for their capital looking up ahead. We are not going to fall…

And third, now, Gustavo is here. Hi, Gustavo.

Congratulations on the results, specifically given the whole scenario. I wanted to change the subject. I want to talk about the guidance, the fee. Well, at least our understanding is that if we understand the run rating at the end of the year, there is maybe a little bit lower than the bank was presenting throughout the year and that there is a guidance of 7% to 9%. Specifically, if we look at – what do we expect for the mix for 2023? Well, an acceleration of TPV. Maybe there is going to be an impact in the credit card – well, there is an asset management pressure, given the challenges in investment banking. So, I wanted to understand. How do we see this end of the year that is more challenging in this line, the growth is weaker, and you are bringing an expectation much higher than the run rate at the end of the year? So, it would be the insurance compensating for all that. If you can go over the composure, how that guidance is built? Well, in my opinion, it's aggressive given the end of the year.

Okay, let's take a look. And we always challenge ourselves. Whenever we get into a new year, and I'd like to say that we got into 2023 better than we finished 2022 and better than what we started in 2022. Having said that, looking up ahead, there is always a degree of challenge. And any guidance, many times, you have an objective, you have the best estimation. Not everything has an absolute, well designed and defined action plan. And this is part of our dynamic. We need challenges. This is how we like to deal with performance. This is how we like to deal with the indicators looking up ahead in the future. Now, along those lines, it's no different. We have a challenge. That's it. Now, having said that, we believe that, with the information that we have, nowadays, it is possible to capture that growth all throughout 2023, if nothing else is altered. We can see that in different ways. Not only B2B credit cards, there is also the inter exchange. And when we talk about the credit card, we have to look at the fees, which is very important for the reduction, annual fees. Also, the programs for generating loyalty with our clients under the inter-exchange rate. So these effects are contained here. The acquirings, as you've seen, if you look at the end of the year, when you'll have the buyers, typically, there's a growth. Here it's a better mix – we're searching for a focus in the repricing because of the penetration of financial products, interest rates, a management that is much closer to the bank, that integration has worked much more. And the buyer, acquirer, we don't like to look at them as a P&L of a business, but we like to look at…

We have Daniel Vaz, Credit Suisse.

I wanted to talk about how the guidance of the growth of the portfolio, how it's made, do we have retail growing more? Well, wholesale growing below. If you are comfortable with individuals mix that is 48 and then a group with a collateralized credit. So if you can tell us more about the growth of portfolio and the breakdown. The second question that is quicker, is there any changes in the spread that your practice in the wholesale, given the subsequent? Do you think that you're going to do anything for the supply chains involved? That would be my question.

About the growth of the portfolio, Daniel, we open up in the consolidated, the information, for you, but it's important to separate three main messages. Well, the portfolio is going to grow less than the 21, 22 [ph]. So there is a deacceleration of the growth., even though I think that that balance between insured and non-insured might be – there might be a growth in not-insured more than 23 [ph] than what we observed in vehicles and real estate, which has a great growth. So we're going to continue with a level of insured above 50, but there might be an adjustment in the mix, which is a positive factor for the financial margins as well. So, possibly portfolios with more risk. In the adequate populations with the adequate risk profile, we have a portfolio that is very affluent, and we've managed to gain share in the best risks, which is a good sign, but with a mix that is more favorable for more. So, we have a deacceleration in the vehicles, we see deacceleration because of everything that we've seen in the credit card portfolio. We are possibly going to grow in the core. And those segments that we've had a lot of safety, specifically in new clients with the close relationship with the banks where we have more growth. And real estate, the increase because of the interest rate, our expectation that there is a going to be a deacceleration – deceleration all throughout the year. So this is the – how we see the retail. Well, small and medium companies, SMEs are growing, but two digits low. This is something that we can foresee. And big companies. We also expect a growth that is low two digits, double digits, single digit high maybe, this is how…

…comes from Mario Pierry from Bank of America.

Congratulations on the result. Milton, I wanted to focus more in the retail. So, the weight of Americana with wholesale. And we have the companies that are subcontracting the financial advisors to restructure their debt. So, clearly, there is a worsening of the scenario in general. So, we need to understand from you if there is any specific thing that will worry you the most. Also, I wanted to understand when we see the guidance for provisions, how much is from wholesales, how much is from retail. So looking at the previous year, we had a high profitability in the wholesale. So, I think that your ROE is close to 30%. So I wanted to understand what is the capacity of the bank and profitability having a high profitability in the sector? Looking at the records, the profitability might be lower. So, wanted to understand better how are the dynamics and how you see specifically case by case?

In fact, specifically talking about the cost of credit and the evolution for the year and the sector, the segment of wholesale, wholesale for the bank, it's very broad. In the MD&A version and the way that we talk about this, it's very important that we understand there's several businesses here, not only the business of Itaú BBA, which are the big corporations in the middle, there is the whole business of asset management, which is in there. The operation of LatAm is also there, in there. So it's a business that is very complete from the standpoint. So, it's an overview that is a previous one with a wholesale, the retail vision. Well, no. In there, there are several businesses. Some more recently, and some more depending upon credits, some are outside of Brazil, which is the operation of LatAm which had a great evolution in 2022, with perspectives and challenges for 2023. Of course. Now looking at the environment, of course, in a scenario that you're looking at prospectively, a GDP that is relatively low, much below the potential for growth, we're talking about GDP of 1% growth. We are talking about 0.9%. In the premise, I was talking with a bias of high – might be higher, but it's not going to be substantially better. So we are reviewing this scenario and we are going to publish the next phase. First point. Second point, interest rate. Come on, interest rate, 13.75% plus the spread that is charged. It has an important pressure on any company, whether it's a small company or a large corporation. Even though they're very capable of accessing the capital markets, the base rate is much higher. That generates a pressure in the financial experiences. And it makes the company to really take care…

Next question from Renato Maloney [ph].

Congratulations on the results. I want to talk a bit about growth. When we look at the central bank data, specifically for individuals, measures that you and other banks took make sense. But greater reduction than we would normally see seasonally speaking. So I'd like to understand this deceleration and how this can affect guidance risk this year.

Yes, we've seen this portfolio decelerating for the last few quarters, actually. We made adjustments in the third quarter of 2021, and so we're talking about 13, 14 months of consistent, consecutive readjustments. We make adjustments, we see how things are going, make more adjustments. So we're very active in this regard. So this deceleration has happened for a number of reasons, in specific portfolios. Real estate, for example. Interest rates. There's a lower demand. Vehicles, we proactively decided to reduce our exposure. For individuals, I think it's important that we understand where the income is lower in the portfolios. So this is a 10 percentage point in the mix – sorry, this is 10 percentage points, not 10%. So this is a six point NPL, give or take. We're looking at 150, 160 NPL above what we are disclosing. So, this has been proactive. And something we've been doing each month. Yes, fourth quarter there was a deceleration. There is seasonality. Non-financed credit cards is growing. Otherwise, it's falling. And in personal loans, individual loans, two areas were affected. General loans, average balance still is fine. Overdraft and 13th salary are affecting the more expensive lines – recovery in the more expensive lines. Yes, since there's piling up with retail, and we see this over the quarters, when we start to look at the future, we don't see much growth. So, the system across the board has done this to some degree or other. And where we see greater preoccupation, greater risk, we've made the adjustments that are necessary in the portfolios. This includes credit cards, vehicles, and the like. So we've been very prudent. I think we need to be cautious. That's what the outlook calls for us. I think few people look at this with such caution, as much caution as we are. So that's what we're doing. We're looking at a decrease in growth, and managing the portfolios as best as possible. Again, watching how these portfolios are performing over time, and make adjustments to the right, to the left. Again, that's part of what we do. And that's what we do on a day to day basis.

Next, Eduardo Rosman from BTG Pactual.

I've been following you guys for 15 years. I remember how you started compared to your competition way back then and how you are now. A lot of your peers say this performance gap is cyclical. Customer exposure, et cetera. We think it's more structural. Milton, since day one as CEO, you've been focusing on digital transformation, you've been pushing it. And you can see that this has really affected performance positively. Do you think there's still chance for growth here? Can we believe that this difference, better performance for Itaú is structurally better, is based on digital technology because it's better – it's even better now than it was 10, 15 years ago.

Okay, disclaimer. My disclaimer. Okay, I'm going to start with that. Okay, our numbers, our indicators, our bank, et cetera, these have been important. Second disclaimer, I'm not really going to go into performance, relative performance vis-à-vis others. You have the numbers, you know what's happening, you know how to assess this, in fact, better than I do. And I respect our competition. I highly respect our competition regardless of where we are at different moments in time. It's a marathon. And it's an ongoing marathon. There's no end. It's not something that ends next quarter. It's ongoing, ongoing, we're going to run, we're running, we're running, we'll never reach the finish line. Now going back to performance. Our digital transformation has been very critical for the bank, no doubt about it. The speed of change that we have implemented and the features has been phenomenal, how quickly we've changed our systems, how fast we've simplified things, how we've made them interoperable, the cost of serving our customers and the quality of the new solutions, all of this together has been incredible and translates to a wonderful NPS. It's not just digital transformation. It's cultural transformation, this customer focus, obsessed with the customer, all of this has resulted in customer satisfaction. So it's a number of factors that have led to these positive numbers and these positive results. And yield and NPS go hand in hand. You can't have high sustainability, you can't have a product that's not sustainable and then get an NPS. We work with sustainable products, sustainable solutions that maximize yield and maximize satisfaction of our customers. So they work hand in hand together. So I have no doubt that digital transformation has been absolutely critical in the evolution of the bank and how we work and…

We have with us Tito Labarta from Goldman Sachs.

My question, a little bit more macro, but also kind of how it will impact the bank, right? The rhetoric we're hearing from the government seems to be increasingly negative, questioning central bank independence, high interest rates, renegotiation programs using public sector banks to support growth? I don't know if you've had any conversations with them at all. Just how do you think this environment could potentially impact the bank and the way you run the bank, particularly if some of the public sector banks start to lend below market rates? Just any color, your thoughts on the current macro and political environment and how that could impact the bank?

Let me first of all say that, yes, we've been having conversations with the government, with Fernando Haddad and his team. Not only with him. Last week [indiscernible], we had four ministers, they're telling us a little bit more about their plans. Simoni, Esther, [ph], Fernando Haddad, and also [indiscernible] of BNDES. So, our view is that all the discussions we had so far are very positive. Okay? So I think the direction and the concepts are very clear. They've been very open to listen to us and understand our views on this scenario. The noises that we've been hearing recently – in our democracy, the way we've been very polarized, I would say, for the past year or so, it's natural to have some noise as we are seeing right now. The thing is that we have to wait. We don't have all the information. We have the first effort coming from Minister Haddad to reduce the deficit. So this was a positive message to the market, that the deficit is very important for the government and they will pursue to reduce the deficit for 2023 and so. We have a huge discussions about the goals and the inflation target. I think it's an unnecessary noise. So my view is that they have to define as soon as possible the new inflation target and work on that because, otherwise, there is an impact on the prospective inflation, the expectations are going up. So only because of the noise. And this has, of course, an impact in the interest rate curve. And the most relevant information, from my view, and I think the whole market is expecting, is the new fiscal framework that we should understand a little bit more by the end of April. This is what Minister Haddad…

From Santander, Arnon Shirazi.

First, I wanted to thank you for the 2022 results. Excellent. I wanted to know about bank's investments specifically. What do you expect for 2023? What is the outlook? Were you expecting to invest more heavily? And once again, congratulations on the wonderful results.

We're quite satisfied with how our business has been developing, specifically investments. We did our homework, we made the right decisions. We made the right investments. So when we look at maturity, this is three months, six months, depending on the investment, depending on where we're located, where we're investing. We've got B2C, over 2,000 employees focusing on this, with great new platform, great tools. If we look at the platform and all the different products, our products are excellent. It's a very open platform with tons of funds, including third party funds. We also have product solutions that are very specific, that are specific to different customers. This allows us to understand and work through the cycles. So if you want something that's really more focused on your own products, you want something that's more focused on lower risk, we've got that too. So we're able to address these risks. We've been able to balance them out based on what our customers want to offer. Supply and demand has been quite positive. I'd like to stress, our business model today is to encourage our investors, is excellent, excellent. Our performance, our portfolio returns are fantastic. Regardless of the products and how it is for – the most important thing is that it best meets our customers' needs. And this is what we're really focused on. And we've seen excellent results because of that. And I really want to stress that. There has been a reduction of volume loss in the last periods, and that's excellent. Our portfolio is much better structured. Our NPS is much higher. Our consultants are focused – again, interest rates also help. And we've been able to gain market share in investments overall. So if you look at individuals, this is probably one of the best ratios we've seen, individuals with these investments. Are we completely satisfied? No. Have we reached our main objectives now? We have challenges ahead of us. We'd like to improve. I'd actually like to talk about some of the products that really – we really advanced a lot – we had a lot of progress in 2022, but we need to make a lot more progress in 2020. There are some gaps that we need to address. And so, we're focusing on that. So when we look back, we found the right model, we've made excellent progress, we established a really solid model. And so, now we're really seeing this. The pipeline for digital products has been excellent. So there's lots of investment in that. But there's still a lot to be done. So we're happy where we are. But we'll be more happy when we get to where we want to get to. But we're very happy with what we've gotten to so far.

The next one is from Rafael Frade from Citibank. Congratulations on the results. I want to talk about the financial margin. We've seen a stability and then there is a discussion on how that evolution would be. Can you comment a bit more on the mix of the retail? And then, we have spreads a bit below for 2023, but we see that in wholesale, at least the largest level in the historical records. So, I wanted to understand wholesale. We have the product spread. At the beginning, Milton said that there is not a relevant change in spread. So, what explains this margin of retail?

Well, once again, we see an expansion for 2023 that is very subtle. So, we continue to believe that there might be an expansion, but there's going to be in the margins – we've been running at a profitability level that is very good. I'm looking at the consolidated, okay? But we can expect that there's going to be an increase in the line all throughout the time. The guidance is explicit on the growth of the margin. There is a series of effects here. The first effect is that we should have the fourth quarter that has an atypical effect with the payment for the starting salary, the non-financed portfolios have been growing, the loans have been reduced, so that affects the mix of the line. On the other hand, more volumes, we've managed to get some products with regulatory caps. So there is the increase in the funding structure or funding. We have the real estate credit, there is a dynamic of the price of the asset and the liability, the savings, the treasury against the credit. So, we also have the competition. And we see pressure in the spread in a few products, specifically those that have a regulatory cap. Now, on the other hand, since we are a full bank and we have penetration for the – relationship with the clients that is very relevant, we have all the cross sale that also affects the margin, whether if it's several products or transactionality of treasury or cash management products and deposits, and the volume of capture throughout the bank, that generates a lot of returns. In part, also the interest rates that are higher, we also benefit. And I would say on the short term, specifically with better results, not only in our deposit structure saving,…

We have with us Carlos Gomez from HSBC.

I would like to go back to the capital. First, could you quantify the impact of increased operational risk weighted assets whenever it is applied? As you mentioned, earlier could be January of 2024. It could be later. Second, has your risk appetite changed? You mentioned a lot caution, uncertainty. Do you want to operate with a different level of capital? What will be your current capital level at which you are aspiring for your CET1? And finally, related to that, could that affect your investment in XP? And is that something that you're going to keep? Or you might sell at some point also to reduce your risk?

First of all, talking about cap, as I was saying at the very beginning, we still believe we have room to increase our capital base. Just to get your second question, then I go back. Yes, we decided to run the bank with a CET1 – core common equity of 11.5%, which is a little bit below of the 12% that we had in the past. Why is that? First of all, because, in the past, the most relevant negative impact that we could have in capital had to do with the FX rate. Okay? And for two reasons. First of all. the overhedge strategy that would generate a lot of tax credit and withholding tax and capital. And second, due to the operations, we have not only in LatAm, but dollar linked or other currencies linked portfolio, this brings a lot of volatility in our capital index. So, having said that, when we took out the overhead due to change in the regulatory environment and also implementing the hedge for the capital index, we took out all this volatility. So that's why we reduce our appetite, so we don't need to run the bank with 12% of common equity, but 11.5%. That was the most relevant explanation for the decision. But more than that, we are very concerned about our ratings. So, we don't go much below that. We could. Because we want to keep a very good standard of ratings, and are doing some local or international, more than that, benchmarks to understand what would be reasonable for us to keep in terms of capital. So, that's why – so we believe that the most relevant impact for volatility is out of the table now. So, the buffer is more relevant today than it was in the past even with this 50 basis point reduction. Talking on the operational side, this is very early to say. We're not releasing a specific figure. But my view is that we may have something that could be around 100 basis points depending on how it is implemented. So, this is reasonable to expect. So as we see an increase in our capital for 2023, more profitability, the risk-weighted assets growing much less than what we used to be in 2022 and other major/minor impact, we still believe that we will be generating capital for the year end of 2023. Now depends if the operational risk will be implemented or not in 2024, but we are, of course, provisioning and planning the capital base of the banking, taking these in consideration. This number, it's very, very – 20,000 seat information, I would say. Just to give you a sense that, even with that, and with the capital plan that we have, we won't be below the level of risk appetite of the bank. So, we'll still be in a very well position in terms of capital base.

The next question comes from Gilberto García from Barclays. Gilberto García: I had a quick follow-up on the complementary allowances. We thought that the they did increase quarter-over-quarter, but in a much lower magnitude than the exposure to the subsequent event. So is it fair to say that if it hadn't been that – if that hadn't happened, you could have released something like BRL 1.2 billion from these complimentary allowances? And then a quick question on your guidance for expenses, you have a fairly wide range. Is it okay to understand that if – let's say, if conditions are challenging throughout the year, you could delay or hold off on some investments?

Talking about the provisions, yes, to be very precise here, if we didn't have this specific event, we could be in a position to consume part of those complementary provisions, those allowances that you just mentioned. So the answer is yes. But looking to the portfolio, looking name by name, we understood that the best thing to do was to provision 100% of the specific case the way we did at the end. So being very sharp, clear as we could. And talking about 2023, we do believe that we have to keep an eye on the cost of credit, we have to keep an eye on the guidance range that we have, understand how these allowances and complementaries will pursue and how we should approach them. And talking about investments, if I understood right your questions, you mean investments in generally speaking of the bank? We have of course – we discuss investment every single day. Okay? And we decide if we should or not expand some business or some credit, some business line or new business model. So, when we look to our expenditure and the cost of the bank for 2023, what we believe is that we have room to improve our efficiency ratio. And we're going to keep doing that. And also, on the other side, we want to keep investing for the franchise, for the future of the bank. So we don't like at all to run the next quarter, making decisions of avoiding investing in things that we really believe, but the cost of equity is different today, the scenario is different. So we're always more cautious when making a decision investment – investment decision due to the scenario, due to the cost of capital, but we take those in consideration. But another relevant thing that I would like to highlight here in terms of costs, running the bank, we want that the core costs of the bank, and I said that before in the guidance, won't be above 2% year-on-year. With the inflation that is not the inflation of the year, but you have, of course, the impact of the inflation of the year before and also the banking industry inflation is higher than the IPCA, so we do believe that we can keep 2% on the core side. It's a very relevant adjustment that we do to open pace and room for more investments in the bank.

Now we're going to the last question from our analysts. And last, but not least, obviously, the question come from Juan Recalde from Scotiabank.

My question is about the acquirings business. In 2022, the conditions in acquirers, they grew above the transactional value. So what is the expectation for 2023 for the growth of the transactional value? And can we see the revenues? Were the conditions in acquirers growing above the seasonal value for 2023?

Look, the acquirings business is more and more a product within the organization. We closed the capital of Redecard and we've been investing more and more to include this acquirer, buyer in the bank. And we can do it much more faster. And we need to look at this with a grain of salt. I'm going to do a few brief comments. Yes, we have been growing revenue larger than TPV for several reasons. First, the repricing capacity that we've had. So separating those clients that need to be repriced, those clients then have a re relationship of acquiring not just a customer, but more product. We're seeking that penetration of the financial products has been very important. And that has brought very relevant results. So that's why we have a substantial growth. We've been operating more and more with the adequate mixes. So we've tried to serve our clients, but always try to grow in the more profitable mixes. And this is the evolution in this work of the network and the bank has had relevant results. It's a product in a business that we add strength with the buyer for the distribution, to be able to grow in a very profitable segment. The year, if you look isolated, the P&L of Redecard, and this is not a great reading, but remember that our business model, every capital of the business, we isolate [indiscernible] corporation. When we look at the results of several other companies in the market, all the working capital is benefited with an interest rate that is higher. Or the cost of funding too, given that it's zero because it's capital – to do the anticipation operations with the effective lower rate, we price at the margin. So we look at the opportunity cost for funding…

Now finishing the question we received, the WhatsApp questions. I know that we have a short term, but I wanted to ask you at least one, so we can finish. So the questions were from several themes. We've covered cost, NPL, portfolio. But there is one that I chose to finish our talk, which is about what we call beyond bank. So the question is from [indiscernible] and he asks, we have a portfolio that has evolved in the bank with products beyond the financial market. Thinking about the increase of that portfolio, what are the other businesses that the bank foresees as potential for next years?

Beyond Banking is part of our strategy, actually. And we've got to talk to our customers to find out where there are new opportunities. And that's what we've been doing. Itaú Shop is a great example. We're very happy with the progress thus far, it's been growing substantially. All of our iPhone forever, Samsung forever, Apples and all these products, all these partnerships have been wonderful. We've seen excellent results. The results have been great for the bank. And we've been able to offer exclusive products to our customers and solutions to our customers. And we found other profit pools. And these are not the traditional profit pools of the financial system, of the banking system. So this has actually resulted in not just cross sell, but better conversations with our customers, better audience, better interaction with our with our audience and publics. We've got more interaction with our apps, with our super apps. It's been great. So it has been developing wonderfully. We've seen a lot of progress. When we see cash management for wholesale, we've seen a lot of progress as well. This is also considered part of Beyond Banking. There are a number of initiatives. And our role is to be open to this, to be looking out to see where there are opportunities, where there are correlated opportunities, where there are ecosystems that we can tap into. With TOTVS, we saw a great – this is great. We're waiting for one last authorization. We've been able to distribute some of our solutions in other channels. Avenue, for example, we brought this in. These are ways to reach other markets that we weren't operating in. Specifically for affluent customers, those who have resources and funds and international resources, our offers before were limited to personality type. So, we really need to make this access more broad. So we've been able to fill out these ecosystem with new offers, new products. And we've looked to Beyond Banking because we understand there's great synergy for the customer. And this generates value to the customer. I don't have to leave my app. There's associated loans, there's credit, there's the payment in installments, products, there's funding, there's loans, and so obviously this creates loyalty not just with the bank, but with the products that are behind these offers. So, we're really looking closely at these new business opportunities.

Okay. So, we're just going to end our question-and-answer period here. Before we close, I'd just like to remind you that all of the material from this earnings call and the recording, the results and all of this will be available on the bank's website. So please take a look when you get a chance. Milton, thank you so much for your work today, for presentations today. Thank you for presenting.

It's wonderful to be here. I'm sure we'll be able to – we'll have many opportunities to see each other or meet up over the next quarter. I look forward to telling you how our first quarter is. The challenges are great, but we're up for it. I'd like to end by saying we're quite satisfied. As I mentioned at the beginning, we're quite satisfied. We started 2023 much better than 2022. And certainly, better off than we ended the year last year, although it was a very long and difficult year. This month as well. We are very dedicated, very focused, we're very excited, very willing. But we're also conservative, we know what we need. We're aware of the challenges that we face, we're aware of what we need to do. And we are working hard to deliver on what we promised to deliver and to give you sustainable performance over the years. We know the challenges are great. We talked about some of them today. And I hope to give you some updates over the course of the year, over the course of the quarter. See you soon and hope you're all doing well. Thank you very much. Until we meet again.