Banco Bradesco S.A. Sponsored ADR Aktie

Hello, good day, everyone. It is a pleasure to be here with you once again. I am Marcelo Noronha. I'm speaking directly from our studio in Cidade de Deus, our Bradesco headquarters to present our third quarter earnings results. But today, I will start with a special thank you. A special thank you to all of our shareholders. We have just completed our capital increase of BRL 10 billion. And what we saw is [Audio Gap].

So let's move on. And I always talk about the cause and effect. It will be no different today. I would like to have the net income in the last slide. I spoke about this in the last quarter because we always speak about the cause and the effect. One cause is revenue generated by several line items of the balance sheet. And I'd like you to look at the complete release, and you'll see that we grew in NII, NIM and our liabilities, look at our complete earnings release and that contributes to NII. We grew in fee income and also in the insurance group, just the baseline. But when we look at the premiums, we posted significant growth as well. So our loan portfolio totaled BRL 1,150 billion, growing 11.1% year-over-year and in the quarter, growing 1.1% quarter-on-quarter.

And the first conclusion is that we continue to have traction, but we have traction where we have a risk appetite. If we look at the national financial system that has data published by the Central Bank until August, the national financial system grew 9.2%. So if we exclude Bradesco that has a significant share in the national financial system, the market is growing even less. In the quarter, in August and July, we would have about 0.5% growth in the national financial system. But we grew less in individuals, 7.4% and grew more in legal entities, particularly large corporates, growing 14.8%, and I'm going to detail that.

Our expanded loan portfolio. On this slide, I bring you our NIM. Our NIM is explained here. If you look at the third quarter 2025 earnings release, you're going to see this same slide, but with a huge difference when we looked at large corporates, we had minus 3.5% growth in the [second] quarter, it was also dropping. Here, we had BRL 341 billion. Large corporates grew this year more than BRL 50 billion. So how do we explain the NIM? Individuals were growing more, 13.8% and SMEs with 24.8%. This has been growing a lot. So the weighted distribution of our portfolio was different. If we take large corporates, if we exclude them, and you can do any calculation. If you removed BRL 50 billion, you deduct BRL 50 billion, you get to a higher NIM. But I'll tell you, 0 growth in large corporates, even if we had a 0 growth, our NIM would not be 9%. It would be 9.3%. So that is the explanation.

This is the weighted average of NII generated by the portfolio. And you can see the traction that we have. But where do we have risk appetite? Let's look at individuals. In payroll deductible loans, we continue to grow 7.4% private payroll loans. We accelerated after some other competitors in the market has been growing quite a lot, but we grew 102% year-over-year, 13.3% in the last quarter. And I'm going to talk about default in payroll loans, and we can debate that. But in public payroll loans, we've been growing and INSS, we've been growing less. Actually, we posted a decrease, and you know why? For one basic reason. The market continued to operate with BPC, and we stopped operating BPC since 2024. But we are going back to growing also with INSS payroll loans.

Vehicles, with our new platform -- new technological platform, providing -- offering a totally different experience to customers, a new operational and commercial circuit. And the result is we grew almost 27%. And we are accelerating the top line where we have risk appetite. Same for mortgages or real estate, and we are growing 15.2%. For credit cards, this kind of portfolio is a more stressed portfolio. This is a relationship product. We are growing more in high income, but it is a product in which we have controlled risk appetite. And here, personal loans, we don't have risk appetite. We are reducing the portfolio. And for rural loans for individuals, this is the effect of the baseline, but we can see a decrease of 2.2%.

Unlike the wholesale bank, where we have companies with good ratings, good crops, and we are growing quite well with guarantees. So for legal entities where we have more risk, appetite is growing in general 14.1% for companies. And you see here FGI, FGO, 31% growth. We grew nonstop in 2024, '25 and '26. And here, we have a lot more guarantees. This is collateralized assets, but it has other effects, which I will explain in a moment. So moving on to show this risk appetite, as I have been commenting, we see here working capital and without guarantees, unsecured SMEs dropping quarter-on-quarter and year-on-year. If you compare with September '25, we dropped 11.4%. With guarantees, FGI, FGO, 31.5%, as I mentioned. This means capital management, portfolio management. This is the choice we are making. And in rural loans, individuals and small- and medium-sized enterprises in December growing or dropping almost 6%. But for large corporates, growing more than 40%.

Clean personal loans I just mentioned that. In credit card, again, we are growing, but we are growing in high-income segments. Private payroll loans, 102%, 13.3%. In the public, we have a huge portfolio, almost BRL 60 billion, growing 11.1% year-over-year. and vehicles, 27% and real estate for individuals and legal entities, 8% and 2.9%. Another interesting point to highlight and compare in terms of our portfolio. Rural individuals, in December '25, our over 90 NPL was 3.9%. We ended August to compare with the national financial system, 3.1%. The market, 6.6%, increasing to 9.7%. Private payroll loans, Bradesco in December '25, 4.9% in August, again, to compare with the national financial system, 5.4%. But look at the market, 5.5%, increasing to 10.6%.

INSS. Bradesco, 1.7%, 1.8% in August. Market, 1.9% and 2.2%. And when we get global private payroll loans, INSS and public and private, of course, we increased in December 2025 from 2.7% to 2.8% and the market 2.8% to 3.8%. You just have to look at the sequence of disclosure by the Central Bank. They disclosed a series from January to August. And if you look at it attentively, in the last month, the level of NPL grew again to 5%. So if Bradesco has a lower level of delinquency, it means that there are some players, not everyone, but some players in the market that are posting greater NPL than we have. So our portfolio is under control, but we are also affected by the macroeconomic scenario. We gained market share in the national financial system until August, 1%.

And the highlight goes to earmarked loans. And we highlight FGI, FGO, 20% compared to 12.9%. And we have non-earmarked loans where we have much lower risk appetite than the market. And we showed this in the last quarter. And we are managing this like this FGI and FGO influencing more and more over 90 NPL. We're going to detail that momentarily. So it goes to Level 2, it influences Level 3 at a greater proportion. And the expected loss is lower than a clean personal loan, for example.

It is totally different. And if we don't understand this dynamic, we don't really understand what's happening with the portfolio. So you see, okay, our over 90-day nonperforming loan, it was 4.1%, increasing to 4.6%. When I look at the quarter, it was 4.3%, increasing to 4.6%. Where is this coming from? It's coming from FGI and FGO. FGI and FGO guarantees, but the expected loss here is lower because we have very good guarantees. So half of the growth is coming from here. But this dynamic didn't happen only this quarter. It happened before that, and it starts influencing the asset quality. The John Deere Bank that has seasonality in this period from May to now, almost 10 bps. So these 2 portfolios explain the variation of our over 90-day NPL.

Now let's look at some other things here. When I look at SMEs, we have 4.9%, which is the effect of FGI, FGO guarantees. It influences the main curves, and we have the service. And here, we have the effect of Stages 1, 2 and 3. We have write-off, of course, but it's not a write-off of FGI portfolio. So when we exclude the John Deere Bank, we are kind of flat. But we have an effect in Stage 3 of FGI and FGO guarantees. So you see this dynamic -- if we don't understand this dynamic, we cannot really pinpoint what's happening with the portfolio. One more detail. This is Bradesco's portfolio. In August, this index of the national financial system was 5%. So if we look at December to date, we grew 4.5%. And I'm showing you where exactly we're growing. But when we look at the national financial system from January to September, it grew 0.8%, which means that if we exclude Bradesco, which has an important share in the national financial system, we will see that the national financial system has NPL, which is higher than 5% because we are pulling the delinquency of the national financial system down.

Our coverage of guarantees -- I've been showing you this. We look at individuals, 72% secured loans for individuals and the restructured portfolio totally under control. When we look at the level of coverage of Stage 3, with FGI and FGO that accounted for more substantial portion, we see the level of drop in coverage. When we split and separate the portfolio, our coverage is 105%. So sometimes we debate things, but we don't understand the dynamic of the portfolio.

Now about revenues. All of the revenue lines, as I said at the beginning, assets, liabilities, fees and commissions, the insurance group, the weighted average is 8.4%, but our total NII was up by 14% and 2.4% in the quarter, meaning to say that we still have a very strong traction. We grow where we want to grow. Please look at the entire release and look at all of the liabilities and the growth we posted. We posted 4% growth, meaning that we are growing in every line. I mean, fee and commission income, look at the quarter's performance. It's interesting to notice, especially when I break the numbers down, when you look at credit operations, we deferred according to 4966. That's why this will continue to grow. And we see solid growth going forward. And in the insurance business, the same thing. But if we look at the insurance premium, you will also see growth.

Now moving forward, look at our NII. The effect of NIM that I mentioned before. So here, we grew 10.1%. But the effect of NIM is right here because if you look at the wholesale bank portfolio, this will be 9.3%. And if we were still in the same situation we had in the third quarter of 2025, this would be 9.3% or 9.4%. Well, certainly, I mean, the NII net of provisions is almost flat, but it comes from the fact that there was an increase in the cost of credit. But now look at our total NII or NII net of provision is still growing about 5% with the growth of gross margin and almost BRL 1 billion right here. And I've been saying this to you for quite some time that our treasury is constantly operating in a recurring fashion. Okay, I have my client desk. And when do we zero out the positions during trading. So the dynamics, it's quite robust.

We also introduced other verticals like the energy desk being one of them, and we have LLM here, too. So the expectation here is quite positive, but there is pressure on the cost of credit. Yes, in some specific portfolios, as I said, personal loans, something in credit card, in agribusiness credit to individuals and FGI and FGO because there is some cured operations. You're not going to lose down the road, but it follows its own dynamics. But now when we look at fee income revenue, and I draw your attention to the growth, we know that checking account and collection are detractors of growth, meaning it's not growing any further. But then when we look at custody and brokerage services and our IB or investment banking, look at the level of growth. I even posted this 9-month percentage, 15.6%, but then we have 23.8%, 4.8%. But now looking on the left-hand side of the chart, our brand posted significant growth, gaining market share via AUM, assets under management.

And also our consortium is very resilient. We have the largest consortium company in the country. This is a very resilient growth. Now card income. It's interesting to notice the resilience of the portfolio because this portfolio does not only contemplate the issuance side because there is a whole myriad of other things. And the best quarter is the fourth quarter rather than this one, the third quarter, the one we are looking at. And certainly, now we have the insurance group, resilient ROE, 22% in this level of growth of net income. Now look at insurance premiums and revenues from insurance premiums. It's been growing through the entire period. There is some traction, internal distribution through the bank's channels, customer channels and internal distribution and particularly Bradsaude was a big highlight.

The result of insurance operations shows here the highlight being the operating result, which is even more important than the financial result. And with technical provisions of almost BRL 480 billion growing year-over-year. And we -- if you look at the entire release, I mean, the ratio is quite good and very well balanced when it comes to our insurance business. Now moving forward, now operating expenses. some sell-side colleagues, they always ask about when we are going to reduce expenses. We are constantly investing. We continue to invest over and over again. And even then, we posted good growth year-over-year. Look at how much we grew. Then there was a collective bargaining agreement, and then we see the effects of that collective agreement. If you look at the entire release, you'll certainly find many different lines, admin expenses, transportation, and they are decreasing.

I mean, the number -- the growth is negative, I mean, year-over-year. But now processing expenses, that grows because we are increasing our activities. So therefore, what I'm saying is that we are doing everything we need to do to pursue our strategy, pursue our transformation and our -- interest on capital is also growing. We continue to review our footprint all the time. Now BIS ratio. CET1 was 12.1% Level 1, 13.7% with capital increase. So meaning that we are very solid to continue to invest. So I would like to thank shareholders for their trust. I mean, the IOC that we pay, this is my one before last slide because I want to conclude my presentation soon. I would just like to highlight a few things. I will now run over the summary of our transformation because in February, we will then talk about what happened in the fourth quarter. But starting with technology, we had productivity gains with Gen AI, and then we have that tool called Bridge.

Last quarter, I think we had 500 cases. Now that number grew to be over 1,000. And we said that when we look towards backwards in 2023, our delivery capacity in terms of technology achieved 300. I mean, it grew 3x. And now we are saying that it will grow 4x, fourfold, meaning I'm not growing or increasing the number of personnel, but rather this is productivity. So this is a breakdown of the numbers. Now when we look at customer experience, our BIA, it's just been around for 10 years. Well, of course we work with AI. Obviously, the technological base of BIA involves Gen AI, is conversational. It also performs transactions. Look at the level of interactions of BIA. It is part of new Bradesco platform. And you also see that there are new things coming along the way. So we will have new things coming in our Bradesco platform about BIA so as to provide better experience to the bank's clients and also corporate and SMEs.

And now to finalize the slide, I have some important deliveries. Principle, was a very important initiative when it comes to high income. Principle has been very successful. We gained share of wallet in the cohorts that already migrated. In September, we had 93 offices with more than 500,000 clients, and we will have more so in December. Therefore, we are just delivering to the expectations in our transformation journey. It will still evolve. But just think about the amount of investments. We are investing in the team, training, new offices, positioning and so on and so forth. Prime, by the end of December, we have 4.7 million clients. And we will see a good upside when it comes to relationship, changes in the management model and our digital wholesale, the same thing applies.

So we achieved more than 45 million clients. So when it comes February for our next earnings presentation, I'll bring more information. So I will conclude by saying that our net income is resilient. We will continue to grow. We will grow liability, we will grow fee and commissions, and we will grow our loan portfolio where we do have a risk appetite regardless of the macro landscape. And we can only do that because we have commercial traction. I mean, operating expenses, needless to say, I mean, we are gaining efficiency. Obviously, there will always be the baseline challenge. But the fact is that things are happening, and we remain expediting our transformation.

But I would like to highlight that our transformation project is moving at full speed. Look at all of the deliveries. And that's not an easy thing. And to put BRL 45 million on digital wholesale, we are now concluding the delivery of our principle. I think it's going to be 3 years. It's not just 3 years since we disclosed our plan that will be in February when we will then have our results presentation for the fourth quarter. So thank you again for your patience, for joining us. And now I will join my colleagues, Andre Carvalho, our Head of IR and [indiscernible] CTO. Well, they are the ones who will answer all the questions now. Okay. So I think I said it all. So now over to you.

Thank you, Marcelo. Hello, Cassiano. Good day, everyone. I'd like to remind you that Carlos Marinelli, CEO of Bradsaude and [indiscernible] are joining us remotely. If you want to send questions -- you can ask question in Portuguese or English. Send your questions to email [email protected] or you can use WhatsApp (11) 97443-8238 pointing your camera to the QR code First question from Daniel Vas with Safra.

Congrats on the results and on the improvement on the efficiency agenda. I'd like to ask a question about NIM because you explained the effect of the large corporate portfolio that had an impact on the NIM, while individuals decelerated. And I wonder, would this be a trend to be repeated in the next good quarters if you have a portfolio with a longer duration for large corporates, so you can distribute the [TDM] if the need arises. But I don't see a great appetite to grow in retail lines that have a perception to be -- that they are more risky. So the question is, if you have a NIM that continues to decrease with the mix effect, when will your cost of risk start offsetting the effect of the NIM so that you would have a risk-adjusted NIM?

Daniel, well the answer is believe it or not, in the past, we had long duration portfolios in the wholesale bank. But the portfolio, the wholesale bank today, we're doing business with 60 days. It's a portfolio that is very fast. And the long duration portfolio is much more in retail with payroll loans and real estate loans, mortgage and FGI, FGO, they also have long duration. So it's a different dynamic. So here's what I can tell you. We will continue -- like I said, we will continue to grow our NIM. And this is coming from several lines. No concern about that. If the wholesale bank impacts NIM, but increases a lot more the NIM, it's better to have a NIM of 9.3% and lose revenue here? Or is it better to have more gross revenue with a NIM of 8.9%, 8.8%? It really depends on the moment. I just wanted to show you this effect because in the second quarter and third quarter of last year, the wholesale bank had negative growth.

It is possible we'll get to Q4, and we'll settle these short duration portfolios and not rebuild them again. And we would have the effect in the 2 subsequent months. The NIM can increase again. And we can have a slightly different mix. But what matters is the top line. The top line is the result of the bank and the top line is growing, all of it. The cost of risk that you asked about, it is a fact, but it's not a privilege of Bradesco. This is a market effect. I showed you the over 90-day NPL.

Look at the Central Bank data for August, 5%. And I showed you our September number at Bradesco 4.6%. And I said that a good part of that comes from FGI, FGO guarantees. So if we exclude Bradesco in the weighted average, the percentage of the national financial system won't grow. [indiscernible], but some players are under pressure. The market is more pressured for over 90 days. The cost of risk is more under pressure for the whole system. But here at Bradesco, we continue to follow our script, our defined strategy and the commercial traction and I'm improving it in the top line, growing all lines of revenue and we'll continue to grow.

And I'm sure that in the fourth quarter, we'll see a higher NIM as well. But the cost of risk, well, that will depend on what will happen. But my feeling is we have a macroeconomic environment in which the level of committed disposable income of individuals has increased. the real interest rates is astronomical, and that impacts the companies. So it's a macroeconomic environment that impacts everyone. We expect that this environment will improve. It doesn't change overnight in 2027, but perhaps more towards the end of 2027 and 2028. But thank you, Daniel, for the question.

Two quick comments here. What we see in wholesale is that the risk-adjusted return of the wholesale bank is high, and it is increasing. So more business in wholesale adds value to our organization. And secondly, operations with large corporates pull revenues in other areas, for example, service and treasury revenue and market NII. So the more we do in the wholesale, the more business we get in market NII and in services.

Absolutely. You're right, Andre. And also in investment banking origination in the corporate segments and all of the segments we have there.

Next question from Anahy Rios of Santander. Your microphone is muted? No, it's not? Well, we cannot hear you.

Can you hear me now?

We'll go to the next question while we figure out what's happening with your microphone. Pedro Leduc with Itau BBA.

My question is about LLP. We spoke a little about the macro environment, which is impacting everyone. So in retail, will this require some cost adjustment? We see auto loans, for example, growing a lot. And in wholesale, where the LLP remains at the same level, even with all the court reorganizations that we have been seeing, perhaps you'll need some reinforcement for those provisions. So it's a question on cost of risk. If you could give us some color on general trends, I would appreciate it.

Pedro, thank you. It's always a pleasure to have you on board with us. Well, rollovers of auto loans, excellent. We're doing really well here, competing really well in this market. We plan to go into this market strong in a very consistent way, and we are operating where we want to be with a credit policy, which is very well defined and based on our models. We gained competitiveness in customer experience, in deal experience of our managers across the board. So rollovers, good. They're good, very good. So what's putting pressure? FGI and FGO? it will put pressure on cost and over 90 NPL, a clean portfolio. And we are now feeling the effect on credit cards, where we have over 90-day NPL of customers. And I spoke about this in the last call. We have that from clients of 2019, 2020 and sometimes in clients with payroll loans.

So the scenario for individuals got worse in general terms. But we do have a portfolio of older clients who have been with us. And now they started delaying payment. And of course, we speak with them and we negotiate with them. We don't want to have them in delinquency in default, but we have a higher risk in those clean lines, but we have been growing the portfolio in collateralized loans. So we're going to see this effect of FGO and FGI until the day that we have a curve inflection, but we haven't gotten there yet. We are growing 31% in these portfolios with more than 20% market share in 2026 in this market. There are 3 banks competing strongly here for these loans. And I see the cost of risk a little bit more under pressure, like I said, and over 90-day NPL, a little bit more under pressure. But these are specific loans.

I'm talking about rural loans, individuals and SMEs. And I'm talking about personal loans, a little bit of credit card and another loan with good coverage, FGI and FGO guarantees. And we're navigating well, and we are growing in all line items. So I see the top line paying the bill. And in wholesale, LLP remains flat and stable. And you also asked about -- good, Cassiano, you reminded me. You asked about the court reorganizations. I haven't got the statistics here, but we are monitoring that. In the past quarter, I showed you this number. We are not participating in many court reorganizations. We're below the market regarding that. And in the next quarter, I will bring you some numbers regarding that. Thank you very much for your question, Pedro.

Next question. So let's go back with Anahy from Santander.

I think now you can hear me. I think you made it very clear that part of that NPL increase came from lines that were collateralized by the government. So along these lines, can you probably tell me the magnitude of that impact for this quarter? And based on the cohorts, do you have any estimate of how much NPL could still grow in these lines in the coming year.

Well, thank you. I'll ask Andre to answer part of the question. But I told you that we grew 30 basis points. Half of that came from FGI and FGO. But I mean, the composition is growing. FGI and FGO is already one of the -- among the 5 best portfolios of the entire portfolio, individuals and corporate. So it's just natural that as long as we are growing, this will increasingly impact overnight the NPL. I mean the cost of credit is lower when compared to other lines. But even then, it has its own impact because you have the 4966 that you have to comply with. Therefore, it continues to influence until the time when we have an inflection of the curve. So in theory, you might say, okay, the year is over, the curve has been -- like if the cure period is up to 180, 185 days, so probably in the second quarter or in the third quarter, you would see the decline of the curve. The curve will go down. It's just a matter of time. And this is what is impacting it the most.

The second most important when it comes to over 90 NPL has to do with John Deere Bank, almost 10 bps. And this has its own seasonality. We are familiar with that topic. Because if you were to look at the other portfolios in general, I mean, -- the weighted average is very minimal, and it is not enough to cause a major impact. I mean the only thing is the over 90 for SMEs. That's where we see the influence working capital impacted by FGI, FGO, especially in the fourth quarter, especially due to the recent origination in these lines. Yes, over 90% of origination with 31% growth year-over-year. And we are still very traction.

Next question from Guilherme Grespan with JPMorgan.

My question is more like an updating in terms of interest rates. It's very difficult for us because this exposure is very dynamic, not only due to hedging, but the insurance company gained more momentum in your results in the past few years. And I also want to know what is part of your income statement or not because the 4966 most securities were to be carried over to maturity. So what is your best estimate? And what is the bank's sensitivity to any interest rate variations?

Guilherme, thank you for your question or comment. As we've been saying, our sensitivity is on Pillar 3, I would say. But as you said, it's quite dynamic. Our treasury department has been working a lot, especially this year. And we have lots of opportunities, which indeed, I mean, this is a very specific picture of the month because there was the closing of a certain quarter. But the most important thing is that we see the evolution of our strategies, especially with ALM and everything has to do with the market account. You look at the market, everything has to go through that. But the client desk when it comes to the treasury desk, but all of the other ALM, trade flow, the energy desk, all of those things are part of the market structure.

Since we are running around BRL 900 million to BRL 1 billion, I would say that it floats quite a lot. Therefore, we have interesting strategies that can allow us to minimize or either maximize the move. We posted some interesting transactions this year. And certainly, the lower the risk, the better it is. And certainly, this will also benefit the market NII. So hello to Yuri. Yuri Is very provocative. I like his provocation. So all the best.

Next question from Antonio Ruette with Bank of America.

I'd like to focus on the regulatory aspect. To continue Anahy's question. When we look at FGI and FGO, they have been the main contributor of growth to SMEs and the market is discussing a potential reduction of this volume for next year. If that is the case, how would Bradesco react? Would you expect a reduction in growth, a replacement for other unsecured loans for SMEs? Or would you look for other collateralized loans for SMEs? How would you act when these funds play a role? And still on the regulatory side, anything that you expect for individuals in terms of macroprudentials, an anti-cyclical measure, any such things?

Thank you for your question. Well, I'll be very objective to answer your question. Number one, if we cannot work with FGI and FGO, which I think is one of the best governmental programs we have seen because it does benefit the micro, small and medium-sized enterprises with longer duration loan facilities and with much low interest rates and with a grace period. So independently from the government, if I were the government, I would maintain that because that's a fund. Everything you recover goes back to the fund. So you recycle the resources. Of course, there's some effect on the primary level, there's a challenge there. But if there are no such resources, you can rest assured that we are here managing a huge organization, and we have many revenue streams.

And you see the relationship with these companies is growing. And this portfolio has a long duration. It's not settled overnight. So it involves relationship. And of course, the good clients who pay well and have other receivables will continue operating with them. For certain riskier clients, it might not be worth it. But the fact is if we lose any new revenue stream, we will look for alternatives and other revenue streams. But if we have that kind of headwind, it's not just for us. It will be a headwind for everyone in the market. And as for macro prudential measures for individuals, we haven't got those measures yet.

If I tell you anything about it, it's merely speculation. But I don't really believe or expect any hard measure coming from the Central Bank. Well, that's my personal perception regarding that. Did you have anything to add?

Next question from Beatriz Shinye with UBS.

On our end, I have a question regarding efficiency. I think that OpEx was a very positive point this quarter. There was some one-off events. And Noronha mentioned in the presentation. But just to check, looking forward, do you still expect improvement in efficiency? And which would be the main drivers for this improvement in efficiency to continue?

I'll let the guy responsible for the transformation office to answer your question because we have a number of projects there. Cassiano?

Thank you for the question. We didn't have any one-off events. This is an ongoing process we have been working on since 2024. So this has translated into structural improvements and the footprint is one. So we are getting to a more residual level because we're getting close to the optimal adjustment in what we expect to have in terms of service network, branches and offices. And we're doing strong work on procurement. We are revisiting all the major general contracts for the organization.

And this has resulted in great efficiency. And thirdly, contracts and technology licenses. We are using more agents. We are using AI. And more than that, we are improving all of the bank's processing capability because that benefits all our batch processing and our online. And this, in turn, means efficiency. Not all of it is captured. We are still expecting about 40 points of efficiency. And this will be the mix, efficiency, productivity. We're getting to the end of the footprint adjustment and of course, looking at the best technologies at a reduced cost. And this is what we're expecting for the next 2 to 3 years.

Next question from Gustavo Schroden with Citi.

My question has to do with services, more specifically in regards to investment banking. The bank has been very strong in originations, especially DCM. I mean, this year is quite weak. But in that DCM line and even different from what we see from other peers. I would just like to understand the strategy behind it and where you believe that Bradesco has managed to distinguish itself and presenting a different dynamics vis-a-vis the market. And whether there is any possibility depending on the volume of originations, if we have a possible drop in interest rates, whether we should expect some positive results. If interest rates continue to follow -- I mean, to decline.

Gustavo, it's always a pleasure to talk to you. But I'll tell you the following. And I mean, what is happening with investment banking has to do with our management. So meaning, I mean, the team did some excellent work. Bruno is heading that, but Tucci is working on the DCM side. I mean, DCM, it's quite sluggish. But when you look at Andre, what we are seeing is, depending on what happens in the market, we may see a leap in DCM. We are not saying that, okay, I want to be a leader. That's not our target, Gustavo. I mean the strategy is to be close to our clients. We are becoming much more assertive. Our team is much better prepared. We are originating more with all of our corporate segments.

All we want is our fair share. That's what we usually say. I see that people are working quite well. I mean, Global and Agora also posted relevant growth. And we continue to originate more and more. In regards to a drop in interest rates, what I have to tell you is, I mean, not necessarily you have specific gains here because of that. But what we are doing today, and that I think it was a question asked by Vaz at the beginning when we talked about the wholesale bank because the duration is much lower when compared to the past. We have short transactions in terms of receivables from suppliers. And we are also operating in what we call origination for distribution portfolio, OPB. So you put something in our books and then it gets out. So the wholesale bank is circulating it's [indiscernible]. That's why it can go up 10% in 1 quarter and down 10% in the next quarter. And depending on the fluctuation, I mean, that exited OPB is one you find a secondary. And Gustavo, you're very familiar with that. There is a premium for you to leave that distribution in that window.

I would have 2 things to say, Gustavo. First of all, the percentage of firm offering that we had to execute was lower when compared to our peers in 2026. And secondly, in terms of DCM, the new thing is origination for middle market for midsized companies. I think this is quite important.

Next question from Matheus Guimaraes with XP.

My question is about market NII. I think this was another very strong market -- in 9 months, you were able to deliver what we were expecting for the full year. So how do you see this line going forward? Do you believe that this current level should be more recurring -- more recurring level? And how do you see that going forward?

Well, I hope so. So again, this has to do with our good management. And as I said before, our treasury is operating quite well. The team is excellent, very well prepared. And there is a recurrency with Wholesale Bank with the middle mark -- the middle bracket and companies as well. So we are offering different alternatives to companies, and that impacts trading, the energy desk. My expectation is positive for this quarter. And we will continue posting this recurrency in our treasury. I can just add to what I said in previous answers. Our treasury is well organized and well in place. And I think we will post similar numbers in the fourth quarter. It will be around BRL 3 billion this year. And treasury has a very suitable strategy.

We have all it takes to see things happening. I mean, lower interest rates, no matter what is always very good to the organization as a whole and our treasury, of course. And I think 2027 will be a very promising year. It will be a very good year. Maybe in 2027, we will come with more robust numbers for you. I reiterate what Cassiano said, I already talked about our total NII, market NII, client NII, I mean, assets, liabilities, I'm very -- I mean, I have very good expectations for next quarter, including market NII.

Next question from Eduardo Rosman with BTG.

I'd like you to give us an update on the transformation of the retail bank. What do you think has worked well? What has been more challenging since you designed the plan?

Rosman, thank you for participating. It's always a pleasure to have you here with us. Cassiano, over to you because you're responsible for the transformation office. Start answering the question and myself and Andre will add comments.

Good, Rosman. I think the first challenge was when we started the base of transformation along 2024, '25. Those were the foundation for us to bring clients who would go to branches to digital service with BIA, online chat and some resources. For 80 years, we told our clients to go talk to the managers of the branches, and now they started talking with a remote agent. And this was an important foundation in the first 2 years. The challenge for this year specifically was to actually migrate them more. We have 45 million clients already migrated. And that helps the other side of the transformation, which is the footprint, 45 million clients being served remotely. That's very important, more than 15 million interactions with BIA.

In 90% of the cases, BIA answers the questions. Only 10 to 12 of the contact will be migrated to a human agent. This was an area that involved a lot of manual processes at the branch. Now everything is 100% digital. And there are 2 main challenges now, engaging, and we've been doing this really well. We have been opening checking accounts that are more and more profitable, and that's very important. That's the first big positive. Clients are much more engaged using the bank a lot more. And of course, working to have the bank primacy of those clients who didn't really go to the branches, but they had our app, and they prefer our bank.

And now we're offering them the best proposition for these clients. And that is the challenge. We have to make the clients more profitable. Once the cost is right, they have to increase their profitability, and we have to continue to have a more assertive opening, a much healthier opening of checking accounts for the bank.

Here's what I can add, Rosman. If you look at the entire release, we grew our client base also in this quarter. So our people is working on engage to grow, as Cassiano mentioned. And then working on the life cycle of the clients. But in the retail bank, we have digital retail plus prime. I won't repeat what Cassiano said about digital retail, but for Prime -- the Prime segment, Prime was the big giver of clients and managers for the principal segment. So we made an effort, training, et cetera. So people made an effort to migrate clients and the last migration will happen now this quarter, and the process will be complete in December.

So next year is the year of Prime and the segments of business 1 and business 2, which we are improving. So we are also changing the management model for the Prime segment. We ended the quarter with 4.5 million clients and we'll end the year with around 4.6 million. And we are going to have a value proposition, which is different. And now segment focus on what they need to do, a different account loading, a different front end that was implemented, a platform that is completely different. And we'll see Prime taking off because some clients and managers had to be transferred to principal.

Some clients were migrated to digital retail. So Prime was a big giver of people, clients and structure. And now that we are ending the deployment of principal, and that's when we are going to have a leap for Prime. And that was the side effect of adjusting digital retail and high income, which is principal. And Prime was in the middle of this, but it continues to work and to deliver results. And it will take off more and more. But now we are focused on that only. We don't have to work with the other segments of clients, given the whole initiatives that we implemented during this period.

Next question from Eduardo Nishio with Genial.

I have 2 questions. The first, we are in the eve of a very important moment for Brazil in this weekend. And I'd like to understand from you what would the bank be like? How would the lines behave if there is an accelerated reduction in the Selic interest rates? And how do you see the bank navigating in a lower interest environment?

My second question is to understand more the film, the movie than the snapshot. We see client NII increasing 1.5%, but NII provisions dropping. So we have the effect of having a secured portfolio, and we have some companies in the agribusiness going into Stage 3. And there's also the cure that comes later after FGI and FGO. So how do you see NII evolving in the coming quarters? And what are -- it is possible to say when we're going to have an inflection point in NII net of provisions.

Thank you, Nishio, for your questions and for your participation. Cassiano spoke about it. A declining interest rate is positive for the organization in general terms. So that's the first answer for you. The second answer is, in terms of NII, I see our NII, client NII coming from loans and liabilities in market NII growing. Now NII and the provisions, as you mentioned, was under pressure given the cost of risk, and we have to have the possibility to pay -- put that bill. And the cost of risk over 90 days will be under pressure for a while. This is not our privilege only. Actually, our privilege is lower than that of the national financial system. But there will be an impact on the Brazilian market.

And like I said during the presentation, over 90-day NPL disclosed by the Central Bank from January to August grew 0.8%. It's not so little. Ours grew 0.5%, but ours grew concentrated in the FGI and FGO portfolio and with the John Deere Bank. And this is different. It's a difference when you look at the portfolios. There's a higher cost of risk, a higher over 90-day NPL. But again, look at our top line. Our top line is good. We'll continue to grow. And I believe in this. I believe that we are going to deliver a market and client NII that will be higher in Q4 '26. Well, lower interest rates are positive and positive for the whole macroeconomic environment in Brazil because today, the real interest rate is very high. We're talking about almost 10% and lower interest rates drive the economy, drive our clients.

Our clients pay more and better. and it removes costs from the companies. So companies free capital to invest for companies that are more indebted, small, medium-sized enterprises or large corporates, they suffer more and low interest rates impact the cost of risk, but this doesn't happen fast. It really depends on the economy. We're not going to get that bulk of people who have a higher committed disposable income and change that profile overnight. It's a cycle. And in terms of NII net of provisions, we have a guidance, BRL 42 billion to BRL 48 billion in the year. So we are in the lower range and the performance is within expected.

And Andre is correct in what you're saying. But when I look at the NII, I have a slightly better expectation for Q4. as regards to our guidance, but let's wait and see.

Next question with Renato Meloni with Autonomous.

It's very good to see you. And I would like to still talk about client NII, risk-adjusted client NII. You still have risk appetite in segments with lower spread. The cost of risk is reasonable. So it will be reasonable to think that the margin will continue to be pressured going forward. What do you see happening throughout next year that will allow you to grow more? And what will be the inflection point of the margin?

Renato, thank you again for joining us. It's always a pleasure to talk to you. I think you were referring to the NII net of provisions. I mean the internal cost is a bit more under pressure. But look, we are growing in portfolios that not only bring a very high RAR, but they also present a very inviting margin with a good duration. And an example of that is public and private payroll loans. This is a portfolio that if you look at it, I mean, BRL 110 billion, we still have a lot of room to grow more. Secondly, I'm showing you that when it comes to rolling out the vehicle portfolio, I mean, we chose where to operate.

I will clearly say that if we only look at new light vehicles, the RAR is very low. The margin is very low. But we positioned ourselves in such a way that we can capture more margin here with almost 27% growth. That means that all of this will contribute to our next year's margin. By December, we have a very important carryover portfolios that already have a margin that can be carried over towards 2027.

Also, I mean, we are growing the numbers. Look at the entire release and the margins are important. And the funding credit is stable and funding, I mean, primacy, especially among individuals, individual clients.

Well, thank you, Renato. We now conclude our Q&A session. The questions that were not answered will be certainly answered by our IR team. So before I turn the floor over to Marcelo to conclude our meeting, I would like to remind you all that in our IR website, you will find this presentation and also all of the material pertaining to this quarter.

First of all, I would like to thank Cassiano and Andre for joining us. And in particular, I would like to thank you -- thank all the participants of this call. I would like to thank the shareholders that approved our capital raise, all of investors from buy side and sell side, thank you for being with us. And moreover, our clients that join us during this release presentation. But I cannot forget to mention all of our employees, Marinelli and Ney and who are also here. So we will see you again to talk about the results for the fourth quarter of 2026. I wish you all a great weekend, and thanks for joining us.

Good morning, everyone, and thank you so much for joining us again. We are here once again to speak about our earnings results, especially for the second quarter of 2026. We are talking to you straight from our studios at [indiscernible]. Now it's 10:31 August 6. So we are here live and alive and kicking. I mean if I even say this, probably the young generation doesn't even know what it is. So we are here broadcasting live from [indiscernible].

I'm here to present our results. As you've seen from yesterday's publication, we reached BRL 7.1 billion net income in the second quarter and 16.2% growth year-on-year, 3.5% quarter-over-quarter with ROE of 16.2%, I mean, higher than what the market expected because the market expected that we would reach 16% ROE in the last quarter of this year.

So here, I bring a summary of our presentation. I'm not going to elaborate in any of those topics. But loan portfolio is growing with more guarantees with a very good risk-adjusted return. In the past 2 months, our IR department has been talking to investors, and they are asking us about what is happening to the macro landscape and the credit landscape. And I will talk about our standing vis-a-vis revenue. And also, we will talk about our accelerated transformation projects. So

I'll talk to you about cause and effect. This is what I always do. What is behind this result? And why are we growing our loan portfolio? So we posted growth of 11.6% year-over-year, even more than quarter-over-quarter. So the portfolio reached BRL 1.137 billion and even CAGR, we posted 11.7% growth. And why is that? Well, that's explained because we have high penetration, commercial traction. We have a very good and well-equipped commercial team with a lot of intelligence behind it, but also we have digital channels.

So I'll talk about the FGO. We were the first bank to provide a very seamless FGO experience. And this is happening throughout the organization, and I'll go through all of that through my comments. So the cause is commercial traction in all business segments, in all business lines, no exception. And this culminates in the growth of our loan portfolio. And further on, I'll talk about the other items or in line items in our revenue. SME posted 16.1% year-over-year despite the baseline of the same period of last year. So this is a big highlight.

Large corporates grew 12.7% year-over-year, and I'll elaborate on large companies further on. And individuals, 8.4% growth year-over-year. That means that we are growing in different lines in all aspects that we wanted to grow. And we are also growing in customers with good ratings, with good credit modeling and adequate policies in every segment we operate. And I'd like you to remember one number because SME grew 5.1% quarter-over-quarter. This portfolio year-on-year grew BRL 37 billion. So let's bear that number in mind because we will talk about it later on.

And I have some other figures for you here because -- they are in tune with what I said before. Where do we want to grow? Okay, earmarked credit, mostly FGO, FGI, mortgage, including the business plan. So we grew 8.4% -- 21.4% when compared to 12.7% in the market. When I look at non-earmarked, we grew slightly lower than the financial system. And then we have the other unsecured lines that we don't have a lot of risk appetite. We grew more in corporate because we have more secure lines when it comes to corporate. And we are well traction in the payroll deductible loan, and we are also very comfortable in direct credit to consumer. See here, corporate, we grew 14.7% versus 7.9%, which was the market growth. So we are growing in the lines that we want to grow, and we are focusing our teams and our digital channels to these particular lines.

Now let's zoom in into our expanded loan portfolio. All of them have risk-adjusted return. Periodically assessed by myself included. Last week, we looked at two other portfolios. So we are constantly looking at that, and we make finding and make adjustments. We are not saying that we will look at this or that. I mean we are leaders in some areas, but the main focus is to look at risk-adjusted return. So here, I'm referring to the wholesale bank with this level of growth. And where did we grow in the wholesale banking. And we will talk about the agribusiness area, but we were leaders in fixed income origination, also securities, but part of our securities go to OPD portfolio, which is origination for distribution. So we distribute something to the market.

And then we go into the secondary market because you optimize capital, you optimize profit. That's why I say that wholesale portfolio has its ups and downs. It can grow -- it can go up and then it goes down. Here, we grew in the rural area, our agribusiness with M&A opportunities in very specific lines. So I would say that there are two operations that we did, one in agribusiness, which was in M&A with a AAA client. And then another client with very good ratings, but with extreme liquidity. So in these two transactions alone, we were able to post BRL 6 billion in the wholesale bank, but we grew a lot in the [ Plontresario ] or entrepreneur plant. So we grew in different segments in the wholesale bank and also SME. And this is a line that is posting considerable growth.

And we will also focus on the individual segments. But where else? We are the largest funders of aviation leasing. We have 64% market share. Everything that was done in this first quarter in terms of aircraft that were financed to companies and also wealth management is right here, 64%. So we are leaders when it comes to aircraft leasing, particularly among those clients that have a very well positioned and collateralized risk management.

And then I go back to wholesale and SME. I'm talking about individuals plus SMEs in the expanded loan portfolio. This is the [ level ] growth we posted and then here, we are talking about origination. Origination, the average monthly origination in these lines for wholesale and SME, the average origination quarter-on-quarter was mostly in FGI and FGO and also mortgage and also on the business side. In the other products where the risk appetite is lower, there was a decline in average origination by 7.7%.

Now we move on to help you understand all of our tactic and strategic move. Let's look at the mix of our loan portfolio. FGI and FGO origination, this is -- there is a lot of competition in this area by all incumbent. So we were #1 in market share with 21.6% market share. And the same thing goes for the entire year of 2025. In the quarter, our origination was up 52.7% in the second quarter when compared to the first quarter of 2022.

But now let's take a look at retail and SME, the last available data by the Central Bank for those clients that earn up to BRL 2 million a year. And this is something we said since the onset of the plan. We saw a new growth superseding 70% of market share. And our FGI FGO portfolio grew 64.5% year-over-year. This is an extremely secure score by both brands. There are two -- there are five lines of FGI and FGO, and we operate in all of them.

But now I mean, later on, I'll talk about the effects of NPL over 90 and cost of risk. I mean now credit card. You noticed that the bulk of the growth is in high income with lower appetite in smaller income. We are being very cautious here that we might bear in mind that we still have clients that have lower income. They pay on time. They are payroll clients, they are clients from our partnerships. But these lower income, they are losing share in the portfolio in the past 30 months, but they are still there.

But now if we look at credit card delinquencies. So this delay comes from all cohorts. I mean about 80% comes from cohorts from 2019. And most of the time, our clients that have their payroll with us and they were dire straits or they lost their jobs or they face some difficulty. But this doesn't apply to new cohorts, newer cohorts. But there is something else here because this is a relationship product. We want and we are choosing the right clients with the right ratings with a very assertive credit policy. And every time we look at credit cards, we are looking at cost of risk and provisions, but 8x more than what we used to do in the past.

But now let's go down to the next slide, vehicles. We recorded growth of 26.8% year-over-year. So we were leaders in one of our other quadrants of vehicles, I mean, heavy vehicles, light vehicles and semi new or used vehicles. But we were not leaders in new heavy vehicles because the risk-adjusted return here is lower. And last year, I told you that we will start operating in the vehicle segments because we saw some opportunities in some segments, and we thought that we could post growth.

But we completely changed our operating circuit. We changed the platform. We added machine learning, AI behind pricing, risk modeling, credit policy and also pricing for clients and dealers. But that customer experience changed completely. We delivered different experiences for dealers and clients. With that, we were able to increase our share. When I talk about semi new vehicles or used vehicles, I'm not talking about 20-year-old vehicles or heavy vehicles. I'm talking about vehicles that are like 5 to 6 years old, depending on the ratings of our clients. So we gained share where we have higher risk-adjusted return.

If you look at the motorcycle market, our appetite is more moderate. So there are other banks that operate in that line segment. So this also means that when we grow this portfolio, I mean, on average, we say that we had 1% provision. I mean, cost of risk according to the 4966. But with the client that is delinquent, there is always someone that is paying late. Right at start, we have like 12% on top of the balance of that client in terms of cost of risk. So that's why I'd like to explain that dynamic because it's easier for you to understand what it means by over 90% and cost of risk.

Payroll loan was up by 9.3%. If you are curious enough to look at the full year 2025, you will see that in some quarters, we were growing at the pace of 5%. That means that we expanded our growth. But where did we grow the most? Well, private year-over-year, we grew 88% in public. We continue to grow public payroll loan. We are the largest private bank when it comes to public payroll loan and private payroll loans, we are just behind two banks that are government banks and delinquency on payroll loans, I think it's important to say because this shows what we are doing in terms of portfolio management.

So risk-adjusted return and risk control in past. But when we look at payroll loan in general, the delinquency of the market is 3.3% and ours it's 2.5%. When we only look at the private segment, and this has made the news and the headlines the market without Bradesco has an over 90 delinquency of 8.9%, whereas ours is 4.7%.

And now moving on, I'll talk about agribusiness. It grew almost 25% year-over-year. But look where it's traction. In the wholesale bank, I mentioned one M&A event with a large client, and this is where wholesale bank increases with guarantees and secured AA and AAA clients, we do believe in Brazilian agribusiness. We understand that this involves a cycle that is a bit more difficult for one reason or another, but there are many good clients there. Therefore, we chose to continue to operate in this market with good ratings.

But if you look at the agribusiness individuals portfolio, if we look at June and then you compare it to December 2025, there is a decline of 0.6%. And then there is another example. Our over 90 NPL this segment, the market without Bradesco in March, it went from 7.3% to 7.6% and Bradesco went from 5% to 4.6%, meaning that our delinquency is well under control without the John Deere Bank that has higher delinquency, which also affects our NPL 15% to 90%. Our market share in Brazilian agribusiness is about 12%. This is just an estimate. But our share in court reorganization is 3.5%, and we monitor this very closely.

So this percentage is much lower when compared to the market. And this is good to show you how we manage our portfolio. So we manage in terms of risk-adjusted returns and with a lot of portfolio control, choosing being very, very selective in terms of our clients. And here, I comment on secured lines. This is a production chart that refers to the expanded loan portfolio for individuals and SMEs.

Looking at the chart, origination, FGI and FGO and mortgage for individuals and also corporate gained traction in the last quarter. There is also payroll loan here, right? This also contemplates payroll loan. It's not just clean credit. But the spreads -- well, first of all, the absolute number goes down because this is fine-tuning of risk, I would say, new modeling, risk appetite and the spreads in the other lines, they were up 11% once compared to the third quarter of 2025. But now looking at the right side of the chart, we have the guaranteed claim periods from government programs like FGI and FGO. They take 180 days or 185 days to receive payments. So we are within the stop loss because there are rules that apply here. So at FGO, you have 100% coverage and still corrected for inflation. And then our stop loss is foreseen for each one.

So it depends on where -- our risk appetite is. But there are two phenomenon here. The first has to do with the cost of risk because according to 4966, why you wait for the payment period, for the guarantee payment period for companies which maturity in the grace had maturities in grace period. After the grace period, maybe they couldn't pay, they were delayed in their payments, then we call them provisions. It's different than when compared to a clean credit. So we get provisions until the guaranteed claim period, and then we just return with the provision amount.

But there is a second aspect here that puts pressure on overnight with maturities and grace periods. Our production peak of FGI and FGO, I mean, last year, when we became leaders, the period was between March and October of last year. Therefore, now we see maturity peaks in the grace period, even though we are close to 50% of this entire scenario. And then we move to the loan quality indicators like overnight was up 10 basis points. So it's flat for us. I mean, individuals, 10 basis points as well.

But at SME, government lines, FGI and FGO, it happened in the previous quarter in this quarter 1. So it puts pressure on overnight NPL until the curve stops growing, it takes some time. And then we will get normal after the guarantee is paid. So we are not worried about that. Wholesale is 0.2%. And then I move to the loan portfolio by stage. I mean, there is a footnote here that talks about NPL 15 to 90 with 30 basis points of variation. This mostly comes from the John Deere Bank that had some variations in the third quarter. So this level of delinquency was up significantly. But we know that there -- all of the equipment has a chip and there is a recovery time and updating time for some clients. I mean the equipment is sitting there and still operating, then all you have to do is update their payments.

So look at Stage 3. We had 10 bps of variation. That came from a specific client from the wholesale bank because the bulk of the provision came from last quarter, and we did a little bit this quarter. It was duly provisioned, but part of it was derivative and securities and this client restructured himself in the market with bondholders. I mean it's a very well-known client, but we do not comment on the specific cases, but it was that specific case that generated this.

But Stage 2 that has a 0.6 variation was basically justified by FGI and FGO with 0.2 approximately slightly above that. And the John Deere Bank as well that put pressure on this KPI that goes is transferred to Stage 2. And the remaining is diluted in the portfolio, even though our delinquency levels are lower when compared to the market.

Now looking at the restructured portfolio that was decreasingly high. And then we said that we are reaching a balance here. But this variation you see comes from that client again that went to Stage 3 that is obviously here in the restructured portfolio. If it weren't for that one, even with the Desenrola program, we would have let that go. And it's covered today, totally covered today. It's absolutely within what we -- what we anticipate in terms of expected loss. This thing, we did this much in June, and this is open for everyone to see. But what was the impact of this overnight?

I mean, cost of risk in Brazil, that is almost 0. It's no, 0.00 or something else, but almost nothing. I mean this was enforced into July and then it was extended to August. And in the third quarter, we will go back and talk about it again. But our secured portfolio was up to 61%. I mean, 69% secured loans and individuals. This is cause and effect. This is a work of diligent portfolio management. We are working more commonly with secured lines. And in the composition of the mix that increases secured lines.

What is the other effect of the growth of our loan portfolio with the growth of total revenue that reached BRL 37.6 billion, up 10.3% year-on-year. Total net interest income, almost BRL 20.9 billion and fee and commission income, BRL 10.5 billion. I will comment on that later on. And also the insurance group that has been shown great resilience every quarter with good returns at this level of growth of 8.3%.

And here for the second quarter of '24 to second quarter of '26, our CAGR, this is the average growth is 12.5%. So the effect of the loan portfolio which has more guarantees generates this. And I also read some comments on -- of some investors about our client NII and the market NII. I'd like to highlight the market NII. So was BRL 700 million in this quarter, growth by almost 21.7%, thanks to the competent work of our treasury team, working very well in trading, ALM and energy desk, client desk and so on.

And then people wrote that was the market NII that grew 22%. But when I look at the client NII, almost 14% growth year-on-year. But if you look at the figures, this market NII year-on-year was BRL 350 million approximately. So it increased by twofold. Well, it grew a lot. And when we look at the client NII, look at this, it went from BRL 17.8 billion to BRL 20.2 billion, BRL 2.5 billion of absolute growth. But the client NII is not only from the loan portfolio. The liability grew relevantly, and it shows this growth, this total growth of the client NII.

The cost of risk grew, but it was flat in proportion at 3.5% with all those points I mentioned of FGO, FGI John Deere Bank and the client NII net of provision at 4.5%, reflecting, obviously, the cost of risk over here. But the growth is not significant. If you look at our loan portfolio at the end of '23, you will see that we grew in 30 months, 30%. And when you grow, you hold more provisions. So the cost of risk goes up in addition to everything I've mentioned.

Going on to the new topic, which is a consequence of also the traction in the commercial side and client penetration. We grew 1.7% in fee and commission income. We believe that we are within the guidance. I would like to highlight the resilience over here, consortiums and also asset management, growing at 10%. But custodian brokerage services, 26.4%. And I highlight the highest result that we've had with our agro brokerage and agro markets. They are both combined, and they are working in synergy with only one broker services for individuals supporting well and also for institutional clients with their respective teams.

But when you open the whole earnings release of the fee and commission income, you'll see the following. You'll have like nine lines. But strictly speaking, we have a diversification of revenues with [indiscernible] which is at least 15%. I'm not talking only about the credit card of separating the annuity. What I'm saying is that we have other lines that are also coming with equivalents and effective. So we do believe in our capacity to grow.

Over here in capital markets, we have been growing well. It decreases year-over-year because we had a very good second quarter last year and all the adjustments we did in the Investment Bank, and we reached here -- we ranked first in local origination, first in M&A. But the evaluation was negative due to natural reasons because you have a higher baseline in that second quarter. But in our different lines, what we've been doing is BRL 1 billion more in revenue in 12 months when compared to 2023, and we've been doing that with resilience.

For other revenue lines that we have, we have insurance, pension plans and savings bonds, another robust quarter, a growth by 28.3% in net income, reaching BRL 2.9 billion. So we are growing based on the baseline, which is high, reaching these levels that you can see here. And when we look at the results of the insurance operations, we see that the total income had an increase of 8.3% year-on-year, 14% in the semester in the half, but in the quarter, the operating result, the industrial result, as they call, was more than the financial one. And in the first half, the same. So the traction is good. And let me give you an example that in the press conference, they mentioned this topic, and I emphasize it.

In the new platform that we have for autos, for vehicles, what happened? We sell with a totally different experience for the clients during sales and then clients can either choose if they want the insurance vehicles or not. So what happened is that we did the whole production that we did in these two lines through Bradesco Financiamentos in our network in 2025. So we grew almost by 100% in the production of these two types of insurance. The ROAE, the quarterly ROAE almost 22.8% and the technical provisions almost 10% for BRL 167 billion provisions in the largest insurance group in Latin America.

Operating expenses year-on-year growth by 3.4%. We continue reviewing our footprint and investing in our transformation. We haven't stopped doing anything here. gain in efficiency. If you look at the full earnings release, you will find lines like installations with negative variations. And obviously, that does influence our efficiency ratio. obviously, as well of 3.4% is below inflation.

Capital, and I'm -- I'll be available for you to ask me about the increase that was approved by the Board. And we went from this common equity from 0.9%, and we are at 12.2% and this difference of Bradsaude in the next period. This is our expectation that can come to 13.6% and 15.1% in Tier 1 capital. We have a lot of deliverables done in our transformation, and I'd like to call your attention to principles that we will have almost 800,000, and we have delivered that. Prime has almost 4.3 million clients and Bradesco fully digital, BRL 36 million in the middle of the year. We're going over BRL 40 million. I will mention that later on.

And we are delivering a lot of new things for our clients, individuals and corporate with the issuance of NFE, gaining in productivity, delivering more and more intensive use of AI in our organization and of other technologies, too. I will talk about that later on.

Well, we have two screens to end and summarize all of this. We have a consistent net income growth step by step. We continue with that with a lot of resilience and obviously, with great belief in everything that we've been doing. But look at this, the operating result, which is in the full earnings release, we're growing over 14% in the operating results with revenues growing double digits. We are a conglomerate. And this revenue diversification we have, not only in the banking activity, but in the payments and in the subsidiaries like consortium and in the insurance group. So we do have a very huge diversification, which gives us resilience.

The transformation plan is very clear and is generating greater competitiveness across business lines, both in terms of efficiency in expenses and revenues. Portfolio is growing safely with more guarantees and a good risk-adjusted return. This is our bible here. And I also mentioned this, we ranked first in fixed income M&As during this period, vehicle financing and in government lines, OFG, OFGI in consortiums and the insurance group, the largest in Latin America. So that's not the end objective. Our objective is an optimum point of the risk-adjusted returns, obviously, with scale absolute revenue to take decisions in our positions safely.

And we have strengthened our balance sheet to unleash the value of Bradsaude to continue to focus so that the tangible capital of our organization is greater and greater. That's the objective. And all of that in with pragmatic. We were awarded many prices. If you would like to know more about that, have a look at it.

And I would like to conclude with this platform that we launched here in the bank called Meu Bradesco, and it has an important meaning. And why is it called Meu Bradesco, My Bradesco. I'm talking about hyperpersonalization. It's yours. It belongs to our clients. You come first. So he is Meu Bradesco. They are already hyper personalized, but it will grow more and more. And this hyperpersonalization with all the innovation that we've been working on with AI, with the new experiences for clients. But our BIA celebrates 10 years now with a birthday cake with Renato and his team and everyone who works with BIA and everyone has a birthday cake for be a pioneer here in Brazil.

And today, BIA is Gen AI and serves all our clients. She's available to 100% of clients with access. With this level of accuracy, we had 74 million interactions, and it is transactional. And also conversational, you can do your picks through BIA and other transactions, too. And as you will see throughout this semester, other new experiences more technological, but never less human. This is our topic. This is the connection behind our managers, and that is connecting the digital channels with our clients and also connecting the spend in sales with our clients.

So we will see the launching of our market throughout the day-to-day in social networks and in other media, okay, with Meu Bradesco, My Bradesco. So thank you so much for your patience. I know I took longer to explain.

And now we're going to the Q&A, and I'm here live with my friends, Andre Carvalho, IR; and Cassiano Scarpelli. CFO and CTO, to answer the questions that you have here. Thank you so much. Thanks for participating.

Thank you, Marcelo and Cassiano. Good morning to you all. I would like to remind you that Noronha, the CEO of Bradesco Seguros and Carlos [ Marinelli ] from, they are also joining us remotely if you want to send your questions, your questions can be submitted in Portuguese or English. Just use the e-mail [email protected] or WhatsApp 117443-8238 or just point your camera to the QR code on the screen. Andre, if you allow me.

Sometimes we forget to say a few things. I would just like to go back for 1 second, if you give me that chance. I'd just like to go back to our presentation because I talked about the SME portfolio. I just want to mention one small thing. When we talk about SMEs, I think this slide. So keep that number in mind, BRL 37 billion. 10 seconds here, I said that our FGI and FGO grew 64.5%. How much that grew from BRL 37 billion -- BRL 31 billion came from here year-on-year. But what about the rest of the other BRL 6 billion?

Well, it came mostly from leasing, direct credit to consumers. So we finance aircraft, jets and big boats on the wealth management side and the entrepreneur plan. So this is where our portfolio is. So SME growth, it grew mostly based on secured lines, secured credit. I just remember that when I said that. So I do apologize for that interruption. I just didn't want to leave that information behind.

So first question from Mario Pierry with Bank of America.

Congrats on your results. I would like to focus on the capital side. You show that your common equity Tier 1 is 11%. You still have 140 basis points to recognize from the Bright Saudi transaction. I just want to understand why there is this delay in terms of acknowledging that 140. And what else is missing for you to be able to recognize that?

With that, you will reach 12.7% Tier 1. And you just announced BRL 10 billion of capital increase, and this will take another 90 basis points of capital. So you will get to 13.6%. I think you've heard some investors being very skeptical about that. Why do you need to have so much capital now? I think the best thing would be for investors to hear straight from you why, in your opinion, you think that the bank would need such a high level of common equity at this point.

Well, Mario, thank you so much for joining us. It's a pleasure to talk to you, and thank you for the question and the opportunity to talk to investors and all of you analysts about this topic. First of all, let me expand this view. We do believe that strong capital is always very healthy for a banking organization. And we should look at a benchmark because when we talk to the Board, and we talked about that with the Board, [indiscernible] even drew our attention to that point.

We look at JPMorgan. JPMorgan has about 15% of common equity, if I am not mistaken. So having a strong common equity, that's a positive thing. We were questioned about that. We had a very strict capital discipline because when we provide more collateralized credit, you can allocate your capital better. I mean the risk-adjusted return. So we already recognized part of the capital from [indiscernible]. And that difference has to do with the process. I mean, P&L delivery because there is a timing, and that was something very recent.

So we are just waiting for the green light from the regulators. The other issue related to capital increase, that was a decision from shareholders, controlling shareholders that are very capitalized. They look at the bank. They looked at our organization as a whole with returns above the cost of capital. I mean, you have that cash invested at the ongoing interest rate, and they saw an opportunity not only to buy shares because they believe that this could strengthen the franchise. This is just a testimony of confidence in the company. They trust the company.

They trust the administration and everything else the management is doing throughout its transformation plan. That's why we decided to enter at least BRL 8 billion out of the BRL 10 billion. So having common equity above 13% is not a sin. I mean, with all due respect to other organizations that follow different policies, but we certainly have to look at your current moment.

We are going through a very strong transformation phase. We see the possibility of giving bigger steps in this delivery process. So maybe in the future, things might be different. But right now, this is what gives us resilience, and it shows that the controlling shareholders really trust this management and this company. Thank you for your question. I think Cassiano has something to add.

I mean we've been talking a lot to the market, and we are talking about tangible capital. I think we have to bear in mind the concept of tangible capital. These BRL 10 billion, they are strictly related to tangible capital. It also opens other possibilities. It's a much more robust bank. We can work better with our own working capital, tangible capital. This gives us more comfort to work with other macroeconomic scenarios, and we can also leverage our business.

Therefore, we bring additional comfort to the bank with this trust from controlling shareholders because they were asked to come up with up to BRL 8 billion. You can only do that in the financial world, and we can do that through capital raise. We decided to anticipate IOC so that shareholders could strike a financial balance close to what is being suggested in terms of capital raise. So we are comfortable with this level of common equity because then we can control our tangible capital versus DTA and versus the consumption of that. Therefore, I think that this is what embodies this capital increase.

I mean your question is important. Cassiano highlighted, and I mentioned that during my presentation, I mean, tangible capital, we look at it with a magnifying lens. We look at that all the time. We monitor it constantly, we look at tax credit. We also discuss that with our Board members. What the Executive Board...

Says that the reason why we released that before the result instead of releasing it today is for a very simple reason. On the 29th, we had a Board meeting. It is the ordinary meeting when we took that subject for approval because we have to disclose it to the market because on the 31st, we also had the payment of another IOC.

And there are some shareholders that have been with us for a long time, individuals, companies, family holding organizations, and we also have institutional investors. And many of them, I mean, they talk to us all the time. They approach our IR, and they also invest in other portfolios. If we had paid and if we had disclosed it today or at least it today, they could have been telling us that if I am a long-term investor, probably I would have to come up with some money to help raising -- increasing capital. So we were concerned about the shareholders.

So thank you, Marcelo. Thank you, Mario. We have a stronger P&L, better outlook in our revenue with better tangible capital.

Next question from Navarro with Santander Bank.

My question, in fact, it's a request. I want to hear Noronha and Bradesco to tell me more about your experience because maybe we can -- you can help me shed a light on what could happen to the credit landscape this year and next year. There is an ongoing debate saying that this challenging credit scenario is not a cyclical one, but rather structural, meaning that it will remain challenging until the end of 2026 and also into 2027.

In the case of Bradesco, naturally, we know that the bank has a more segmented profile. I mean, individuals, individuals income is slightly lower. So how do you see Bradesco in this current scenario that structurally could be even more challenging? Meaning I mean, as analysts, should we start thinking about slightly higher cost of risk?

I mean, getting into 2027, should we think about a lower growth of the portfolio or maybe I'll start thinking about reducing it lower. This would decrease my possibility of doing cross-selling and the portfolio would decrease. I mean the fee income on banking services will be down as well. So help me understand what we should expect going forward or whether we should start making adjustments for the numbers for 2027.

Navarro, thank you for joining us. It's always a pleasure to talk to you. I will mention a few factors. I think that the average market or household income commitment is such. And with the ongoing interest rates, I mean, yesterday, there was a drop in the Selic rate from 14.5% to 14%. And by looking at the inflation indicators, if you look at IPCE numbers, I can say to you that the landscape is a lot more challenging when you look at the Brazilian credit scenario.

If the EBITDA of companies is lower, it is, therefore, pressured by this interest rate because if the duration was short, the effect could have been different. But this is a fact, this is a reality. But if you allow me, I'll say to you that -- when you look at SMEs at Bradesco, the way you look at it, it's not the correct way to look at it. That's why I broke out -- I mean, I opened up the numbers.

Our SME growth year-over-year was BRL 37 billion. BRL 31 billion out of that came from FGO and FGI within that stop loss. So the level of loss is minimal. That's one thing. Where does the rest come from? The Impresario plan that we do middle market, corporate and companies with good developers. I mean the level of formality is different. So I'll say to you that our appetite for lower income clients is much lower when compared to the past.

So when you look at the portfolio mix, let me give you one piece of information. The clean individual personal loan portfolio in all segments back in 2023, it accounted for slightly above 15% of our individuals loan portfolio. Today, it accounts for approximately 12%. But how come 12% Well, first of all, we have personal loans. Even in the private segment, the rating is totally different. The structure is different. It's not for all.

Therefore, we have -- this is just one example I'm giving you. The mix is totally different. The FGI, FGO total portfolio is close to BRL 80 billion. And with a very robust growth, we are well tracked, and it's a very resilient program. Then what happened when you look at NPL over 90 and cost of risk. Cost of risk increases when you are growing with FGO and FGI due to that guarantee claim period. As I said, it goes from 120 until 185 days. So you call for provisions of that client that went through the grace period and our peak of production that went from March of last year to October of last year, and then we were #1 in origination.

Therefore, we have maturities there, and this puts pressure on the cost of risk. What else could put pressure on the cost of risk? Rural or every business through consolidation, consolidation of the John Deere Bank. If I grow the portfolio, which is the third variable, I also put pressure in the cost of risk at a certain measure. But I look at top line and risk-adjusted return. I put the return that is due to that credit showing traction.

A lot of people ask me, first time I came here, I said if you lose clients, you won't be able to have any traction. But we are showing a lot of traction with payroll loans, SME. Our SME is collateralized, it's secured. We are not granting credit in that intermediary line, we are well collateralized much more than in the past.

The corporate portfolio was up by BRL 70 billion from the wholesale bank as well with secured lines, good ratings and the BRL 37 billion, as I said, from SMEs. Therefore, I see that we will continue to grow -- moving towards the guidance because our wholesale portfolio fluctuates because most of what we do in terms of securities goes to origination for distribution. So we distribute in the secondary market. So there are moments that we are up and moments where we are down, but we grow in other lines.

As I said, we also finance aircraft and our portfolio was up by BRL 1.5 billion in this period. There was a large corporate client from other segments from the wholesale. So I'll tell you that the market has its own risk, we also look at another indicator that was NPL over 90 for private payroll loan without Bradesco 8.9% versus 4.5%.

Since we started doing that in a moderate way until we had all of the data prep model well in place because we have to do that fine-tuning. Therefore, we are very careful in terms of managing our portfolio. But it's obvious that when we grow the portfolio and this thing about FGO and FGI and the agribusiness line and John Deere consolidation will bring cost of risk to a slightly higher level, but we are operating with no additional stresses in my view for the year 2026. If you want to forward look at our guidance, we work from the center of the guidance upwards.

Next question from Thiago Batista, UBS.

My question is about returns. The ROI achieved 16%. You can discuss the cost of capital in Brazil. It's around 15%, 16%. So we can say that Bradesco or your management delivered ROI that was good. And in the future, the next steps, could we believe that the ROI continues to grow step by step? And where do you see the levers for this additional growth? Just a follow-up in terms of capital. capitalization, Bradesco will pay more. And only that? Or will it be capitalized more recurrent? What will be the policy of distribution after this capitalization?

Let me start by the end. Thank you, Thiago, for your participation and for being here with us and an opportunity to talk to you. In relation to the capitalization, we will pay the most we can, yes, of IOE. This was -- this had to do with our controller decision. And in this moment, we don't have any other plan of any plan that is on the desk on the table.

For the future, we have to look at the dynamics looking forward. In relation to the ROE, our cost of capital is below 15% today. I would say that after yesterday, it's coming close to 14.5% with the new Selic rate. And yes, I do see an ROE that continues to grow. Obviously, when we capitalize, there's a greater challenge in relation to the ROE because you increase capital, you have to have greater returns. But we do believe that we are continuing in our step-by-step growing every quarter.

Thiago, this is our horizon, the horizon with this belief. It's not a belief. It's not just faith. It's having your feet on the ground with the plan, with the transformation we've been doing, gaining in productivity, as you've seen with our KPIs. with portfolio management and with a very engaged team nationwide with over 70,000 employees in our organization.

Next question from Gustavo Schroden from Citibank.

Congratulations for the ROI and the cost of capital coming back. I would like to talk about NII. [indiscernible] mentioned that at the beginning that this is strong with clients, but the market NII, let's say, has been surprising even for us. I would like to better understand how we can think of this market NII from now onwards.

There was a change in the perspective of interest rates. What is the hedge policy of the bank in relation to portfolios and what goes to the market NII. If you could give us a little bit of help of how to think about the NII from now onwards, that would be great.

Gustavo, it's great to see you once again. Thanks for joining us. I'm going to ask Cassiano to start answering, and then I'm going to add any comments.

Well, the market NII was surprising. I think it's important to say, but [indiscernible] was very clear. It was very important work from treasury, from the treasury area from all the debt. The commercial traction of the bank helps also a part of the best, which is the commercial best client one, which is perennial. And this has also brought good results. So I think that's an important KPI.

The energy desk is within this concept as a whole. But another important point is the consistent work we've been doing also. We don't have a hedge policy that is defined, and we've talked about that for some time. We do, obviously, the work in our daily work, seeking opportunities to capture the best possible results if there is some kind of uncoupling in the bank. This is an important result. We had many important cases of having a specific policy, which is a slower cycle of what we expected in relation to a drop in the interest rates.

So the commercial and the client side, which has a traction in wholesale and all the operations for the key accounts and also middle energy. These are structuring things that in the long term leaves us at a more comfortable position in market NII. We also achieved the soft guidance. I think it's important to say that. And we believe that it will be slightly ahead, surpassing a little bit the soft guidance. I think you should look at this horizon 1.5, 1.9, there's still some opportunities.

So we are very satisfied and comfortable with the LLM and also the commercial traction in terms of energy. The trading, the exploratory one, specific one is smaller in our ecosystem in the results of treasury. I would like to add the following. We have a good risk management. We have teams, not only one team. We have very competent teams that are working very well, and this is the best answer I have. But with great business traction and helping and supporting our clients and all the transactions Cassiano mentioned of the wholesale bank, of middle market, all that has generated great businesses for us and today, we can say that soft guidance was left behind because we have larger figures coming close to BRL 2 billion. I think that's kind of reasonable. That's my horizon considering the team we have and everything we've been doing.

So next question from [ Safra ].

And congrats on your results. And congrats on your initiatives in the direction of capital management. I would like to revisit NIM and cost of risk when it comes to risk-adjusted return that you call [ RAR ] when you think about your exposure, your guarantees. But if you isolate these two variables, NIM and cost of risk, I think you have liability margins going down due to the average Selic rate.

And since your exposure in addition to guarantees, I don't see any increment of NIM, but I see further stability. And there is another driver that we put pressure upwards has to do with the worsening of the stages. I mean we look at what Noronha said, I mean, 20 bps coming from John Deere and other companies that have some guaranteed claims and 10 bps from Stage 3 on the wholesale side.

So I would like to understand also related to cost of risk, if you think that, that 3.5% level could be increased because of the macro risk, not necessarily means that you're taking more risk, but the macro scenario is a bit more challenging. So my first take is that maybe NIM should be lower and then there will be more pressure and the cost of risk will be the opposite. How can you help me think about this equation?

Well, first, Daniel, thank you so much for joining us. It's always a pleasure to talk to you. But again, I will ask my colleagues to add something after my answer. I mean a lower civic is positive, positive for us. Our liability growth was significant, and it's being translated into cash management and more relationships.

In turn, in the past few years, I think we only had one particular moment when the funding cost reached that level. I mean, that all-time low of our funding costs, and this helped our NII. But then when I look at the cost of risk, you're right. The market is worsening, and I showed some market indicators like private payroll loan, and we have half of NPL over 90. So there are other people operating at higher risk, less so incumbent banks when compared to other banks.

That's my feeling. So we have other effects of higher pressure that are linked to the structural aspect, and I talked about agribusiness and FGI and FGO. So for me, this is a phenomenon, but it's only a timely one. We are growing and this continues to happen, but we will see this curve come down. And so after some time, it will be flat. Therefore, I'm very confident in our NII, I am very confident with our NIM and in this whole picture because Daniel, I will repeat what I said before.

It's not just one line because when we look at financial revenue, we are looking at client NII, market NII and client NII, it's not only asset but also liabilities. But when we look at fee and commission income that maybe had a relative lower growth, we are believing in this higher growth. There are many lines as I said, if you look at the entire release, there are 9 lines. But when you break it down, there are at least 15 lines, and they are quite diversified.

In addition to the insurance group, we have the tailing company, meaning that there are many growth levers, especially with cross-selling. People -- I mean, my colleagues talk about cross-selling. And this is something that is becoming a reality. There is one piece of data that I talked to journalists earlier on. In this new experience of different instruments, they were not a lever for us until we drove a very good diagnosis of the market, and we totally changed our platform because we had two platforms, one for dealers, for our clients. Now we integrated everything.

We gained -- we had efficiency gains. We had commercial improvements. We increased UX dealer experience as well with pricing control to ensure our AR. And we also gained competitiveness in the market. But we embarked in this UX. Also, we included the possibility of hiring auto insurance. It's very simple. It's a great experience.

We are increasing penetration in the card. But when I look at our network of individuals, what we distribute through these segments in the first quarter vis-a-vis the entire last year, we grew about 100% because we delivered what we did last year with a possibility of cross-selling when we deliver good experience and connections. So I have good expectations in different fronts regardless of the macro environment and the fact that it's much more restricted.

So please feel free to add your comments. Marcelo, you talked about the fact that transformation is giving us more resilience and the cost of liability is down in the second quarter. But funding was up by 19% quarter-on-quarter, I mean, vis-a-vis 2025. So we are having more net money, we are seeing the results stemming from this new value proposition, larger margin with lower cost of funding. So we said at the beginning of the year that NIM would be flat at 9% this year. So we delivered 9.1% first quarter and second quarter. So it should be close to that range throughout the year. So this will be very good for NIM.

Next question from Yuri Fernandes with JPMorgan.

I would like to congratulate the Board for this very bold decision and rightly so because in the mid- and long range, tangible capital is a good path forward. I just have a very quick follow-up about FGI and FGO. I know you have the guaranteed claim. Two is impacted by that. And there is a time different until you collect. I mean do we see provisioning on Stage 3? Is there a carryover into Stage 2? And the other question is on current account.

There is another competitor being very vocal in cutting tariffs or fees in checking accounts. There was a 3% drop year-over-year, but this competitor of yours is cutting it to almost 20%. Do you see any pressure to accelerate the cut of this fee line? Or it's just a fine-tuning like you've been doing? I just want to see what you are doing in this regard. help us understand the strategy.

Yuri, it's always a pleasure to talk to you again. You've been provoking us for quite some time about that topic. You even wrote that in your report. And so you also influence the controlling shareholders and colleagues of ours that are in the Board of the bank, and we discussed all that. You and some other colleagues mentioned capital in your analysis.

I read what you wrote, and I know that you wrote something about that. And it is correct. I've always told you that, that was a very positive contribution and provocation. I'll ask my colleagues to help me with that answer. But FGI and FGO, it may spill over to Stage 3. Yes, that's a possibility, but you recover that. Sometimes you think, well, I will not collect for some time, but no, because we get paid every month. So if that 120-day period is over, but then you have the maturity of someone else period because the grace period of that other person is over. So there is a flow. It's in and out.

There is a dynamic of different stages in and out. wholesale bank, I mean, this is public. The dynamic with securities and a piece of derivatives. And you brought that straight to Stage 3. So that could affect, yes. But we are within the guarantee period and very comfortable in terms of what we are doing. Andre and his team and all the management team, they're looking at that constantly. They do stop-loss scenarios, stress scenarios. We are very confident in terms of what we are delivering.

In terms of current account fees, that's a fact, and we talked about that the trend is not to grow, but much to the country. But there is another aspect, which is Bradesco Espresso been posting continuous growth. Eventually, you may see a more significant growth as we did with the number of account holders. There is also seasonality of account fee periods. But I don't think that this line can support fee growth. I think that fees will still come from consortium from asset management, from investment bank.

I mean the brokerage firm was really important to us, quite strong. But credit card that didn't grow as much. If you look at a comparison line, we have a lot of companies, we and Banco de Brasil we have the yellow. And in the case of [indiscernible], we went through a regulation and lost some revenue lines. But even then, the results are quite resilient. We lose a little bit on the fee side, but this will go back to normal. We will see the recovery of these lines over time. But we have a lot of ways to recover in some of the lines.

And Yuri, thank you again. I think you said it all. There is a mechanism coming from Bradesco Expresso current account is also linked to new value proposition for services, not necessarily the traditional banking fees that have been for us. And this will smooth out the a drop in the curve with our commercial strength is mostly focused on digital retail that mostly comes from -- thank you, Yuri.

Next question, Pedro Leduc from Itau BBA.

The question involves the corporate loan portfolio and also securities and DCM companies grew 7% and CDM almost 9% securities and so the origination is strong. [indiscernible] also put the ranking. We didn't see a correspondence in the line of revenues with financial advisory services. So if you -- it is -- the portfolio grows, but you don't see the revenue in the fee and also LLP was lower in the corporate area.

So RWA was pulled by the expansion of corporate, but I didn't see a counterpart and the LLP was a surprise due to the origination. I thought it would be higher. Could you please help us better understand these moving pieces, Noronha, and what we can think about for the second semester?

LLP was not... So lower BRL 400 million because we still had a slight adjustment in the major case I mentioned. But wholesale banks, you might have a specific case that could stress at a specific moment. There is no 0 risk. But we did the provision immediately. We are very precise in relation to that when we see that things are not going adequately and negotiation that is very well known in the market. The growth of the wholesale bank was -- I go back in securities, and it was in also sureties and guarantees in the Empresario plan, we were second in the market with this growth of the [indiscernible].

And in one or other specific lines, for example, we financed more than one M&A with good guarantees. And I mentioned another operation. I avoid talking about the industry otherwise, it's too specific, but it's a net guarantees in terms of provision. But we have a good coverage level. And in relation to DCN, we have fees because the second quarter last year was very strong in operations. That's why there is this slightly lower variation. But the bulk of securities is PD. You will see, Leduc, that they will vary.

They will fluctuate unless we have a demand to replace that. But we will see this in the secondary market, there was an exit from the secondary market. If I'm not mistaken, we once again reached the bottom of the spread with more assets in the market and they balanced and we reached the bottom and people leave with some assets, that's the chance of getting greater margin. You don't commit so much capital. In our business model, which is no different from other banks that practice that, our REM and the segment that did that in OPP, they only check the results of that at the end to simulate that so that we are going to do this movement in the portfolio. We were leaders in origination.

But that's not what we want at the end of the day. We want the risk-adjusted return.

In relation to investment bank or any segment in the wholesale bank, you cannot operate with the RAR that is specified there. I'm going to go from securities to [indiscernible] operations for heavy. There is a client that has a strong relationship with us. We don't look just at that type of operation. And why is that? Because you have specific fee. So the RAR could be lower. But if you have a client with a high RAR, we look at the combination of that because it's a client that gives the payroll, they have cash with me. They've got a great relationship, especially in the private. So we look at the whole relationship, that's logical.

And then I say, okay, I'll do this kind of operation with this client because it removes the RAR from the client, but it compensates the bank adequately.

It's great to talk to you.

Next question from Eduardo Rosman from BTG.

I'd like to go back to the directed credit that you have been focusing a lot on, and we've seen other banks also and also fintechs focusing on the earmarked credits. I would like to better understand the sustainability, not only of the size of the programs because it was impacting the fiscal part and inflation and the cost of capital could go down. But what should be the return to operate in these plans throughout time? Should we expect some kind of pressure on return from now on due to the increase in interest of the participants?

Thanks, Rosman. Once again, it's great to meet you here. Thanks for the question. Let me say the following. The bank has from the very beginning, participated in practically all the lines. We're present in all the 5 lines of FGI and FGO in a very competitive way. It is natural that it will hit the primary. That's why the resources are finite.

But this is a huge opportunity, and it has to do with 2 points or even 3 points. First of all, it's a long-term line, so it's sustainable with excellent guarantee. RAR, the risk-adjusted return of this operation is very high here. If you talk to other players, they're going to say the same thing. If it is within the stop loss, obviously, very well managed. So in the long term. So it is sustainable for some time. And you generate cross-selling.

So you increase the possibility of our AR even more. And third, for the client, for the company, the level of fees in the period of time is very interesting. So you expand the relationship. For us, this is extremely relevant. And what about production? It could be in the short term?

Yes, but the permanent is in the long term also because then you have lines until 5 years with 1-year grace period. And we play this game very well. We were the greatest in origination last year in this semester too. What about the pressure on return, it will not generate, but we will also create as a consequence, a relationship with the client that is quite resilient in terms of payments because it's only the minority that is past due. So I don't see any kind of pressure in terms of new players.

I think we're extremely competitive, and we are showing that the ability of penetration and the FGO contracting, which is extremely good for clients and also FGI. So we do have space in some lines to operate. But obviously, if there is no contribution from now on, it will drive the capacity of the funds to guarantee that in the market in the long term. For '26, I don't believe we might have a pressure at the end of the year, but no deviations from this capacity of production.

And a comment, I think [indiscernible] from [indiscernible] It is one of the best lines promoted by the federal government because it does actually go towards the companies until a specific size, both in FGI and FGO. This is my opinion. In terms of programs of social programs, I think these lines are really the best.

Next question from Matheus Guimarães from XP.

Congratulations for the results. I'd like to talk about the private payroll that long. You reported very relevant growth, both sequential and year-on-year. And the product has gone through some changes. is even controversial for some competitors. It is more difficult for some for others, they continue to operate with it. I'd like you to share with us your vision in relation to the product, considering these new changes and what we can think about this line's growth from now on.

And, you start and then I will add some comments. Thanks for your participation. It's great to talk to you. Andre will start answering, and we will add on some comments.

Matt, this is a product that is getting to be more mature. It was launched in March '25 in July last year, we were making great observations. The risk was lower in that front. And we started defining the filter so that in October, we could accelerate the origination, always keeping the discipline and the RAR. The focus on RAR is very attractive for us.

We showed you that the delinquency scenario is stable, 4.7% in June and the market is 8.9% and growing. So it's a very risky product that caters to lower income people and has a high risk here. So with the right filters, we were able to define the public audience and to lend. So this origination increased a lot, and it has been keeping stable through time. We received additional guarantees recently with FGTS, but they have some restrictions in terms of use, some limitations, which place a low additional value as a guarantee. For us, this doesn't impact so much in terms of origination. But obviously, the more guarantees, the better, but it's a small impact in terms of origination.

I would like to add the following. We were very careful to delay a stronger entrance until we had -- we were very sure about that are. When we felt sure about it, then we did effectively start to operate we have to approve the credit for the individual and for the corporate side. So it's important.

And what Andre mentioned and I mentioned before around the delinquency, the over 90 NPL without Bradesco and how we are doing. So we do have capacity for origination. And in this market, specifically having 14% share in the total of payroll loans. In the private, we only have 7%. So the opportunity we have is of growth. And it's not of loss. It's of growth, and we believe that we will continue to grow.

Yes, according to the filters and Andres mentioned that well, it's a product. If you look at it from A to Z, it's very good. As you increase the sale of the government program, the greater risk for appetite, and we have to be careful with our corporate clients in-house, and this is the cluster we focus on and everything leading to that. So I think there is a good road, but with caution.

Next question comes from Carlos Gomez-Lopez from HSBC.

Andre, congratulations on the results and congratulations on the capital increase. I had my traditional question on insurance. Your guidance for insurance is still 6% to 8%. Your result this first half of the year has been very strong, 14%. Should we expect a normalization in the second half of the year? And if I can add one more thing.

You mentioned that you want to increase your tangible equity which tangible equity metric are you looking at? Is it tangible equity to assets or tangible equity to loans? And what level would you like to have? In my numbers, you have 5.9% tangible equity to assets. You used to have 6.5%, 7%. What level would you like to achieve?

Thank you, Carlos. Good to see you again.

I think we can start with would you like to answer the first question? Expectation is to come to the end of the second half pretty much in line with the guidance. In fact, I'm not saying it's going to be a deceleration, but -- our 2025 base was quite high in the second half, which is business as usual for insurance companies. We had a better performance vis-a-vis the guidance for the second half. But our expectation here, as I said, with a higher base in the second half, we hope to deliver something very close to the midpoint or slightly above the guidance for the year.

Well, Carlos, the intangible capital, I mean, we don't have any specific metric of where we want to go, but the more our own capital -- the more capital we have, the better intangible capital is important. I mean the assumption is to have a very robust capital to face the growth of the bank and to face macroeconomic ups and downs and also when it comes to a balance and the reduction of our tax credit.

This is the main foundation behind the intangible capital and the growth that leads to capital increase, I mean, is this. We don't have a target, but the more capital we have, be it, I mean, Tier 1 or whatever could be put at the disposal of results, which is the case of this capital increase is what will strengthen us for the next cycle and the reduction of DTA.

Well, the main point here is profit, net income. and we want to reduce that gap of tax credit, increasing tangible capital. It's always good to see you, Carlos.

Next question from Renato Meloni with Autonomous.

Congrats on another impressive ROE. I would like to revisit the dynamics in the second half. You said that you're expecting to reach a guidance from the middle to the high level, which would imply in the acceleration of your risk-adjusted NII, like 2% in the second quarter.

At the same time, you said that your portfolio growth should converge towards the guidance, but it's running way above it with NII net of provisions at 9.1%, which is flat, and there are some issues related to provisioning. I would just like to reconciliate all of these aspects that are probably putting some pressure on your risk-adjusted margin.

Meloni, it's a pleasure to talk to you again, and thank you for joining us. Andre, I think you can start.

Well, thank you. Thank you, Renato and Marcelo. Our step-by-step commitment of increasing net income every quarter implies that by the end of 2026, our net income is implicit in the guidance from the midpoint to the top. And that's what I said that is from mid to upwards aligned with step-by-step commitment of profitability increase.

Our guidance consists of 5 lines, and we are very confident that we will deliver all 5 lines within the intervals of the guidance, every line in its proper place. We just said that insurance should be from the center. Upward services close to the top, every line -- I mean, expenses closer to the floor of the guidance. And NII net of provisions would be slightly below the center of the guidance. In fact, this reconciliation is not done line by line, but it has to be thought in terms of net income.

Yes, Melon, I think we are delivering strong traction, not only in the NII, which also carries with it liability NII, market NII, but we will look at this revenue lines from fee and commissions income growing within the guidance. The same thing goes for the insurance line and expenses are under control, as mentioned by Cassiano. And this leads to better results, but everything is within plan, step by step without doing anything crazy and just delivering everything that we promised in our plan.

Next question comes from Tito Labarta, Goldman Sachs.

Just a follow-up on the loan growth. I guess, two specific lines. On the corporate side, rural loans, right, jumped 20% in the quarter. I know you show in Slide 5 there that your market share is much lower and your NPLs have actually improved over the last year, but your larger peers that have much larger exposure are suffering quite a bit in that segment.

Just to understand why you feel comfortable growing there. Also on the individual side, vehicles, you're also showing you're kind of gaining your fair share. But that's also a segment where some of your peers are pulling back a little bit. We've seen some asset quality issues over the last year there as well. So just to understand why you're feeling comfortable to grow in those 2 lines.

Okay. Tito, good to see you again. Thank you for coming. Let me see. First of all, corporate wholesale -- we did some deals that were very important -- especially for M&A in rural credit with AAA clients, AA, I mentioned two operations, BRL 6 billion. One of them with good guarantees with the AAA clients that naturally did an important acquisition to complement their business. So it was complemented in a period of a [indiscernible].

And if they have more leverage in agribusiness, they sell, they remove the leverage and they continue with their business on one side. And on the other side, very -- a lot of liquidity in the guarantee. And so we work looking at the quality of the clients. And if you look at our whole release, throughout these quarters, we have deconcentrating the portfolios of the bank. There was a deviation, a slight deviation in the last quarter, which was above, which very ad hoc in terms of risk appetite.

But if you get the 10 top ones, it continues to drop. So we are deconcentrating the portfolio, looking for good ratings and good guarantees in the wholesale bank, too. In agribusiness, there are very good clients in areas and sectors that are very well known by us. So that's why we feel comfortable because these are specific approvals. In terms of vehicles, that's what we mentioned last year, I mentioned this, I think it was in the third quarter release. We would start to grow in vehicles.

That's another lever for us in time within the risk-adjusted return. And I'm going to divide that into 4 quadrants. Light new vehicles like light used vehicles, heavy vehicles and motorcycles. Motorcycles, our risk appetite is low. We participate by choosing ratings. In heavy vehicles, we are the leaders. And it depends a lot on the type of line and also on the risk-adjusted return because here, the NII is lower because it's important to have an RAR adjusted to the clients.

In terms of light and new vehicles, the risk-adjusted return is lower. So we are not the leaders in the market. We do participate in it. We have good agreements, especially looking at our account holders clients. We -- they have a better relationship with us. But with the semi-new vehicles because if you're talking about a vehicle that is 5, 6 years old or one that is 20 years old, we don't operate at that end.

So here, we made a very deep diagnosis of the market. We analyze the risk, and we work with the modeling the whole time. And we analyzed how the market was operating, specifically 2 players were doing very good work with their clients. So we changed our platform, giving a new experience to clients. to dealers. We had machine learning behind that for the modeling of pricing and also with AI and Gen AI, risk and credit modeling and also policies.

The policies define if you're going to accept a higher or lower risk depending on the time period of a vehicle, which is also a guarantee for us. And we saw an opportunity of having NII. And we saw that the opportunity as an indicator could be smaller than that of the FGI and FGO, but it is healthy. So we saw an opportunity for growth at a specific market and specific ratings. We are not present in the market as a whole, the whole market.

And we are very confident in relation to what we've been doing, Tito. I don't know if my colleagues would like to add anything to it. But thank you so much for your question.

It's great to see you. And also in the insurance cross-selling. Andre remember that very well. I also mentioned about the cross-sell. The cross-selling we've been doing in this example is the best one actually because it is embedded in the clients' experience. So what happened was we produced in the loan insurance and the vehicle, the same thing that we produce with semester as we produced last year for these channels for these kind of clients. So that's something else that brings profitability and growth for us in this market.

So we end the Q&A session. Those questions that were not answered will be answered by the IR team by e-mail. Before giving the floor to Marcelo, I would like to remind you that the material for the release is available on the IR website, and we are available to answer any questions you might have.

Thank you, Andre. Thank you, Cassiano. I would like to thank you, especially those of you who had the patience of listening to us and all of these explanations, I would like to thank our colleagues from the sell side for their questions, for your participation and all our investors who are listening to us, our employees who are also following the earnings release.

I would like to say that we are very confident on what we have been delivering on everything we have been doing, including in the insurance group. Here, we are together with [ Ne ] and [ Marineelli ]. As Andre said at the beginning, Marineelli released results recently, and I would like to emphasize something that he said, some high level of return at Bradsaude, great synergy in the distribution of SME in Bradsaude. And I also talked about vehicle insurance. [ Ne ] reminded us in the press conference.

And I continue confident in all the subsidiaries and affiliates and all everything that we've been doing. What I want to say is I want to just convey a feeling I have. We are very transparent, not judging anything. On February 20, if I'm not mistaken, our market cap was of BRL 240 billion with Brad net equity at BRL 14 billion. So the remaining part of the bank because this is a conglomerate, that's why I'm talking about so many revenue lines in different ways. But most part of the insurance group, which is the largest in Latin America within the BRL 200 billion remaining, these payment companies here and the other participations that we have within our organization here that have a value of BRL 200 billion.

The market is worse. We have the war problem. But if we do a calculation, right, this comes from where I'm from, this expression. But if we make a math calculation, we unleash the value of Bradsaude that has been showing resilience and the results and equivalents of hospitals that was mentioned, it's a great business. It has shown growing results, and it will be like this from now on.

And when we look at that, we listed the capital of this company unleashed a value of BRL 42 billion, and we have a market cap of approximately BRL 182 billion, just to make our thinking easier. And all the rest is worth BRL 140 billion. The remaining part that was BRL 200 million is BRL 140 million. The market dropped.

There's no illusion -- when we list a company and it is below the bank, it could be from another industry. You're still being traded by the same multiples, but I think the discount is good. So I have great confidence in everything that we've been delivering and in the future of our organization. That's just a provocation for all of you.

Thank you once again. Thank you, all our colleagues who joined us. See you next time, and we're always available to talk to any one of you and to every one of you.

Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good morning. I'm Marcelo Noronha. I'm over here once again from Cidade de Deus, the headquarter of Bradesco just to present another quarter of results for the first quarter of 2026. Today is Thursday, May 7, is 10:31. So we are here live from our studios.

My presentation will be briefer when compared to our last earnings release presentation. And after the presentation, we will go straight into the Q&A session. It's a great pleasure to be with you once again, and thank you for joining us today.

I'll start by presenting the numbers and then I will also mention a few issues that have raised questions from colleagues on the sell side and also buy side, questions that were posted to our IR team. So I'll start from what you saw since yesterday because the presentation was available to all of you.

Our recurring net income in the first quarter of '26 was BRL 6.8 billion, up by 16.1% year-on-year and 4.5% quarter-on-quarter, delivering an ROAE of 15.8%. Just as a reminder, in the last quarter of 2025, our ROAE was 15.2%. So that means that we were up by 0.6 percentage points, vis-a-vis our recurring net income.

So what drove this recurring net income? I mean total revenues grew 14% year-over-year, and this is the main driver of profitability and cost-to-income ratio improvement, not only this quarter, but certainly, this will lead to improved results throughout the year. We -- I've been talking about moderate appetite. And I've been referring to that for several quarters with a more conservative guidance. But that doesn't mean that our appetite will decrease when it comes to growing our loan portfolio.

We will continue to grow, but with certain ratings. And maybe we will not do certain ratings or maybe we may not want to go to certain segments or crop. And we want to have more secure portfolio. And then I will show you later on our structure operations. I will talk about the market and so on.

I mean cost of risk has increased. I'll certainly mention that further on. But there is a very specific wholesale case because this is what led to that portfolio. We decided to be even more conservative. And I will talk a little bit about agribusiness. I mean old cohorts that some of them may be on Stage 3 or Stage 2. So that's what we saw here.

We've been operating heavily on agribusiness, but with more secured loans. Our insurance segment delivered consistent results, reaching almost 22% of ROE. And -- last week on the 30th, we launched Bradsaude, consolidating all of our healthcare assets with a positive impact on our capital ratios. But above all, this unleashed value to our shareholders. This is a very important operation.

I think if you look at the capital market, the market cap was BRL 42 billion, which means to say that it brought higher goodwill surpassing BRL 30 billion in our organization. So this was quite an important move in my view, my personal view, this has upside going forward. And our transformation continue at an accelerated pace with increased use of GenAI and high technology. We continue to gain productivity and delivering even more.

I will always begin with my discourse of cause and effect. So I would like to say that this is our recurring net income. But there was also BRL 1.8 billion in nonrecurring expenses related to one fiscal contingency. And according to the legislation, it could have been negotiated. So what happened is that our contingency was around BRL 5 billion. But we decided to pay for that contingency, and we paid in full DTA. This is a very exciting and positive piece of news because, again, I mean, cause and effect, because it was the opportunity to make a move like that. And the effect was that now our balance sheet has even superior quality. And in the past 2 years, we paid for fiscal contingencies amounting to 20%. So that was a good opportunity to do it that gives us better quality because it reduces the risk in our balance sheet and that affects all of our shareholders.

So this doesn't change by no means our recurring net income, but improve the quality of our P&L. So as I was saying, total revenue, almost BRL 37 billion, up by 14% year-over-year. And I would like to highlight the entire revenue line. I start with insurance, pension plans and savings bonds. The indicator is 20.4% growth year-on-year, even surpassing the guidance. But the guidance, as you recall, is annual. So I'm not going to go over that again, but we reiterate our guidance.

And moreover, I must say that my expectation is that we will be in the middle and upwards in terms of the guidance. Like I said last quarter, I mean, our confidence level remains the same. We are in the right track. And again, I'm talking about growth and FX. I mean, fee and commission income was up 6.2% year-over-year in a quarter that is usually the worst quarter for the financial industry. I mean the bulk of the volume is in the fourth quarter.

So in the first quarter, volume is down, fee income is down as well. But despite all that, we continue to grow. And our NII is the highlight. Of course, that we have all of the other lines are growing. But the main highlight is NII. We grew 16.4% year-over-year, quarter-on-quarter, 4.2%, and this should continue to drive our growth over time.

And you also noticed that we have perennial performance and our desk courses are also perennial. There is no change in the desk course, except for Bradsaude's recent announcement, and I'll elaborate a bit more on every single topic.

I mean, cause an effect again. Client NII, market NII stems from our activity. Our activity is quite robust. Our origination capacity is robust. And why is it that we are originating loans? Well, starts with our credit business unit with a very robust loan portfolio management, a new pricing area working with client segments and pricing in accordance.

And we look at all of the cohorts to see to look at pricing intervals. And we are also delivering better experiences for every client segment. And the approach is very individual through our channels, very personalized. And this has made a difference in our distribution. And that's why we are growing significantly on the asset side, on the liability side, on the side of fee income and distribution of insurance products and consortium. And this certainly leads to this margin that was up 16.4%, as I said before, and expanded -- we increased -- I mean, our expanded LLP, cost of risk was 3.5% and our total NII net of provisions was BRL 10.4 billion.

When we look at client NII, our NII was up 4.1%. Our expectation is to have NIM around 9%, very stable NIM. But in addition to growing 16.3% year-on-year that without the calendar effect that impacted this quarter instead of growing 3% quarter-on-quarter, we would have grown 5% quarter-on-quarter instead of 2% growth.

We believe that our NII will continue to grow. I mean this is the line that we expect to see going forward. And I would also like to draw your attention to market NII that reached BRL 600 million. Again, it was an effect. It was not by chance. It grew because of all of the origination from the client desk. And this is also something that comes from trading, energy and ALM.

So we have a very good team of professionals that take advantage of all the opportunity. But our ALM is here. These are not like one-off situations. But in fact, we are maintaining steady deliveries and good treasury deliveries throughout the year. And then I was talking about the calendar effect. And the same thing applied to client NII net of provision. And this impacts the bottom line. It was down by BRL 4.5 billion and BRL 10.6 billion. It was down to BRL 9.8 billion. But excluding the calendar effect that we would have grown 1% quarter-on-quarter, the number would go to BRL 10.3 billion.

But now I'll give you another effect. I mean we have here -- we broke down our provision costs for wholesale, ALM, LLP and mass-market LLP. There was a higher growth. There are some provisions here, but there was one case that represents the bulk of the volume.

So if we exclude that, the NII -- I mean, the NII net of provisions will be higher. It doesn't mean that this is a recurring thing. I mean, the numbers show the fact that we are more conservative, even though there is a negotiation underway, and then we see that we have a good chance of collecting. But also here, I mentioned -- I mean, mass-market LLP, but also if this includes other segments. But look at the indicators. We are growing BRL 500 million -- BRL 300 million, BRL 400 million quarter-on-quarter. And we drop provisions as the portfolio grows.

Our portfolio grows and then we put on more provisions. And this is the effect of the 4966. I mean we have a portfolio, and this applies to the entire market because in the past, in the 2682 in N+1, we were at breakeven. I mean vis-a-vis LLP or the provisions in place. But with 4966, we have portfolios that only reach breakeven at M+5 or M+6. And this is the case of credit cards. We are growing well in auto funding in payroll deductible loan in micro and SMEs.

Therefore, our portfolio is growing, and we will certainly call for further provisions. It doesn't mean to say that, okay, you are provisioning just because the NPL portfolio is increasing. But look at the numbers in these boxes down below, 1.3%, 1.4%, 1.3%, 1.4%. This is what we monitor quarter-on-quarter.

If you look at the full earnings release there, you have -- we have a presentation very much like this with the annual numbers for this indicator. But quarter-on-quarter, these are the figures. So we should grow cost of risk here. So it will continue to perform like this. It may grow BRL 500 million or BRL 300 million, but we are putting on provisions when we are setting up portfolios. And this certainly leads us to this NII.

This is the picture we see. But we are very confident about everything we are doing, and I will also talk about the quality of credit. I mean, our portfolio reached almost BRL 1.1 billion, growing 8.4% year-over-year. However, the FX effect of the appreciation of the BRL had a significant impact as well, especially large corporates and SMEs. But net of this effect, we would be growing 9.5% year-on-year, even if we look at the entire market, looking at moderate risk appetite. I mean, individuals, 9.5%. I mean, cause an effect once again. And this stems from a very good work with clients and penetration and new experiences.

SMEs, 14.4% growth year-on-year. And again, here, I will just elaborate further in a moment. And large corporates, it really fluctuates BRL 10 billion up or down because we have short-term portfolios, and I will draw your attention to some highlights that are part of our plan. And again, I repeat, cause an effect.

We are not growing in auto loans for mere chance. We are growing in auto loans because we had a careful planning. We drew up a very detailed diagnosis of the market where we operate in new quadrants like new vehicles, heavy vehicles. We have a very small stake in new vehicles and semi new and used cars. I mean, used would be much older cars. And semi new vehicles is the largest market in Brazil in absolute terms.

Therefore, we looked at all market possibilities. And we also looked at the experience of our managers, dealers and clients. And we realized we had to change because we had 2 platforms, one for account holders and non-account holders with the dealers. So we changed the platform. And this was part of our transformation process.

We now have a single platform that brings a much, much better experience to our dealers and our managers and above all to our clients. It's much more efficient in operating terms. And it's also much more efficient when it comes to pricing and very quick decision in terms of using the loan machine and pricing. And within this interval of RAR that ranges between 20% to 28%, which is satisfactory to us. Therefore, growth comes because we have commercial capacity, we have a good penetration base throughout our customer base and also with the dealers, but now with a much more competitive platform, where we can choose our risk more assertively. That's why we are growing 7.3% quarter-on-quarter.

So if we keep on growing at this pace and the same thing with other portfolios, I mean, then we have more provisions according to 4966 because we have to back up this intermediation margin over time. And credit cards is no different from what we showed before. It is growing 10.6% year-on-year above all with high income with 18.6% growth our payroll deductible loans.

If you look at the history, you will notice that here in payroll deductible loans, we were growing around 5% year-on-year. Now we posted 8.3% growth year-on-year, 3.2% quarter-on-quarter. And the portfolio reached BRL 470 billion. And I'll talk about the private sector in a moment.

But INSS made different changes and pushed the market down. So it's slightly lower, like at 40%. So the market started to resume production just like we did. That's why here, we're not posting growth in this portfolio. And why? Because we have a very broad portfolio and all of the settlements occur on a monthly basis. But overall, we are growing and we will grow in INSS. But on the private sector, we grew almost 43% year-on-year. And in the past quarter, 31% approximately.

You should recall that we said that we will accelerate on the private sector once we have -- we are totally certain that all of the agreements have been made between the banks and other private. And that's what we did. Also being more selective in terms of selecting clients that are more in tune with our risk adjustment. I mean, our portfolio adjusted to risk. In our case, we are talking about slightly over 4% of NPL overnight. So we are performing quite well in these portfolios.

And in the general payroll deductible loan portfolio, the market posts around 2.97% growth, if I'm not mistaken, whereas we have 2.4% in the overall NPL portfolio. So everything is under control. And also working capital that grew 16.3% year-on-year. I mean, it's here, large corporate and SMEs. But look at this one. Government backed lines, FGI and FGO.

Last year, we had 26% of the entire production, and I showed you that number last quarter of the entire FGI and FGO production. But by the end of the year, by December 31, we start counting our production numbers again.

By the end of March, we ended up the month with 20.6% of production share. So we are market leaders right now. Obviously, we have very big competitors in the market. And competition is good because it pushes further. So competition comes -- and they -- one bank is putting pressure on the other one. And it's a very good dispute. And it is positive for the entire market and also for the companies.

But here, we show you the growth of our portfolio. We grew almost 81% year-over-year, which means that here, we didn't grow too much because these are portfolios with less guarantees or not too secure. We are not obsessed to be leaders. But what we want and what I tell my team and a few days ago, I reiterated that what we want is risk-adjusted return. This is what we want, risk-adjusted return, certainly with scale, scale based on these lines, but we also want to expand the relationship we have with these clients, micro and small and medium-sized companies.

So we are very confident about everything we're doing. We are keeping our appetite with agribusiness. And again, our agribusiness cohorts in 2025 have a lot more guarantees. And the same thing goes for 2024. They are much better.

We are seeing a bit more stress in previous cohorts, especially in the south of Brazil because of the rain and then drought in large companies, small, midsized companies and also individuals, they renegotiated their debt and the banks gave them a grace period in general of 2 years. And this grace period is now over. And then what happens is that once the grace period is over, certain crops are not yet ready or mature enough to pay the debt. That's why I'm saying that in the agribusiness, things are still not back to normal.

Still speaking about the portfolio, our over 90, NPL is flat. And now I'll bring you another fact here. Our Stage 3 goes down to 7.6%. Our restructured portfolio between December '23 and March of '26 was down by BRL 14 billion. But when we look at this problematic asset was down by BRL 15.7 billion, so reaching 3.1%.

You may ask, so how big do you think this portfolio would be? I think that a portfolio around 2.9% and 3.1% would be just a good size for us. So certainly, it will start to be more stable going forward. But down below, we are showing this chart every quarter. We talked about our secured portfolio. So we went from 59.3% in December at the end of last quarter to almost 61% of our entire secured loan portfolio. But look at -- if you look at individuals, it's almost 70%. That means that we are operating quite well, and we are very confident about the quality of our portfolio.

And look at Stage 2. Stage 2 is growing slightly. And why? NPL over 90 is flat, but the gray line refers to micro and SMEs. And where is it growing? It's growing in government-backed lines, FGI and FGO. And why is it growing? Because most companies are paying their debt, but there is a chunk that the grace period is over, and so they are not paying. So even until the grace period ends and for those who are growing the portfolio at the pace I showed you before, 80% growth, it puts pressure naturally -- puts pressure over NPL over 90. So even though with 4966, even though the expected loss is lower, it's still moving on Stage 2.

So what happens here? I mean, FGO, I mean, when you have to start paying is 190 days of grace period and an additional 5 days. So the FGI period is after 90 days, you have to start paying and then you have 30 days and so another 90 days. So there is nothing different and it's flat individuals and large corporates performing quite well.

Another interesting thing is that the coverage ratio of Stage 3 is growing. I mean you have a mismatch between Stage 3 and Stage 1, Stage 2 to Stage 3. So there is a transfer between stages. So I was referring to the former rural portfolio that could be here as well. They are in cured operations. And it could be -- it could just migrate to restructured operations with a bit more guarantees. So you have some movement in the 4966 that we believe are absolutely in line with what it should be.

And there's another download here in the footnote that talks about write-offs. The write-off was up in absolute terms. It was also up in all the quarters. It goes up or down depending on the cohorts that arrive and the mix of the cohort. But there is only 1% in relative terms. I mean, you can challenge quarter-on-quarter because when you have this a better cohort it's 0.9%. When it's a bit worse, it is 1.1%. And when it's flat, I mean, here, and I've told you that before when we adopted the 4966, we adopted the first -- the same write-off criteria we had in the previous system. So we didn't change anything.

So we are very much confident about everything we are doing in our portfolio. And I've been monitoring this very closely. I'm looking at all the cohorts, and I'm looking at that with our team of our credit business unit, with the risk team, and the teams for every customer segment. We have a price rating and also a rating that measures stress level over 3094, which is our best proxy. And all of them are within the foreseen interval.

Well, but you could have had in October like one issue that would escaped a little bit. But we immediately look at all the models, and we make adjustments and policies accordingly if need be. Therefore, we are very confident in terms of the quality of our assets.

And again, I see growth in credit risk, but nothing apart from that. And then fee income, it was up 6.2% year-over-year. And this is a quarter that is not only weak for banks in the financial system, but we are leaders in the consortia business, and that is a very important line. We had almost BRL 4 billion in assets delivered in Q1 '26. And our growth of these fees amounted to almost 20% year-on-year in custody and brokerage services, 15.5% growth. And this is recurring. This is the result of our activity.

It's not at random that this happens. It's a lot of hard work, new experiences that we're offering to our clients. And in capital markets. And we just had a press conference and a journalist asked about market expectations for the capital markets. And they claimed, oh, you grew more than 60% your investment banking activity. But I'll give you more information on that.

We have rankings for investment banking. Our fixed income team grew. We have been originating or producing a lot more, and this is not growing by chance. It's growing because there was a lot more origination and more ability of placement in a very demanding market.

Last year, we were the second bank in origination of fixed income securities in the Brazilian market according to ANBIMA. Last year, we had 14.1% market share. We ended Q1 '26 posting 69% still ranking second, but with 22% market share fixed income origination. So we have a lot of traction across the organization in different segments of clients.

Operating expenses, absolutely under control, 7.8% growth year-on-year, 4.6% increase quarter-on-quarter, and I draw your attention, as we always do, to personnel and administrative expenses, up 5.4% year-on-year, minus 8.8% quarter-on-quarter. And of course, we have profit sharing and payment of variable compensation, and that's very positive.

If you go to the earnings release, you'll see that personnel expenses, the negative bridge split except for variable compensation, which is good, right? And administrative expenses, if you look at the detail, you'll see that transactional expenses, which result in processing because we have high activity that is growing.

Now, freight, transportation of money bills, et cetera, all of these expenses are decreasing quarter-on-quarter and year-on-year. We continue with our discipline of reviewing our footprint in this quarter, 238 new service points reduced.

And then the insurance group. Like I said in the beginning, our insurance business is delivering an ROE of almost 22%, BRL 2.8 billion in net income, 13% increase year-on-year with BRL 29 billion of insurance premiums. And the result of the insurance operation includes the whole insurance activity plus Bradsaude. Bradesco healthcare. The whole insurance group brought us this result, operations growing 20.4% year-over-year. And the highlight goes to the increase in the operational results, 22.1%, practically 2/3 of the result presented in Q1, which is very, very positive for us.

And our technical provisions continued to grow almost 10%, reaching BRL 455 billion. So we're happy and pleased with everything that is happening in the insurance group and other affiliates and payment organizations and what they bring into us. We are not talking about capital, we're representing our pro forma capital Tier 1 growing to 14.5% and common equity 12.7%. So everything is informed, so you can see the movement of Bradsaude, the healthcare business. It brought a positive result, a positive impact.

If you have questions, our team is available. The IR and the finance teams are available to explain all the details regarding this movement we took that put us in a great comfort zone regarding our capital. It did not change our expectation with it or without it, we would continue down our path. As in Q1, there is a slightly greater capital reduction. This was expected. And after that, it will stabilize. And I have seen interest on capital for the year. And here, our transformation moment.

Like I said in the beginning, I did a big analysis about transformation in the past quarter. I won't repeat a lot, but I'll just bring you some more information. I spoke about the new auto financing platform. I'm not going to repeat that. There are a number of innovations deployed with intensive AI use. I don't need to go over all of them.

What I need to stress is that we accelerated in this path and we're investing a lot. This is another tool we have a treasury easy trade for SMEs clients they can connect directly and do their operations using the app. And I draw your attention to 2, 3 more characteristics.

You may recall that I showed BIA for private in the past quarter with a very high accuracy level. Well, that increased to 94% first-contact resolution. So we gain experience, we gain productivity and we improve customer experience. We continue to have upgrades for prime and principal clients.

You can check and compare it with the previous earnings release. In the first quarter, we upgraded more than 500,000 clients, and we continue to open offices for principal, and for prime and digital retail. Last year, we closed with 19 million fully digital clients in June '26, 28 million. And we were pointing to this increasing trend. So we're very confident and we accelerated in the transformation movement, bringing productivity and the important gains to the organization on all sides, on the side of efficiency and on the side of customer experience.

So my conclusions, a strong operating results in Q1 '26. This is what we are seeing. We are very pleased with the results. We're growing almost 8% quarter-over-quarter and growing consistently almost 15% year-on-year.

Technology, I spoke about it, I will not repeat this. The new client segmentation, always bringing NPS up and offering good experiences. Of course, this supports structuring run for bank, risk appetite, like I said in the beginning, with a more conservative approach. We continue to have a more moderate risk appetite. But we continue to have traction. We will deliver our expectations in the guidance. We are competitive. We remain competitive in those lines where we feel this risk appetite. So I'm very convinced about this.

Another thing I'd like to stress is our net income. Not only the bank but the affiliates and the insurance group in general, posting consistent growth with our commitment to gradual and sustained net income growth step by step. We'll continue to improve our competitiveness in the short and long-term. And our Bradsaude healthcare business has the most complete and comprehensive healthcare ecosystem in Brazil, like I said at the beginning, bringing us an important goodwill. It is a brilliant company, a lot more diversified now. And we'll speak more about that.

And just for information, we were very proud with the banker awards, in machine learning, mobile, AI. So we got some important awards that normally awards that are given and offered to international banks about technology.

So I will conclude my presentation, the formal presentation and I will be available for the Q&A. I have Cassiano Scarpelli, our CFO, CTO; and our dear friend, Andre Carvalho, our IRO. We also have Bradsaude. We're now just -- we don't ring a bell anymore. We just press a button at B3. But I have my 2 colleagues online Carlos Marinelli, CEO of Bradsaude, and he was the one who pressed the button at B3. He introduced a new listed company that happened on Tuesday, he had a press call and Ney Ferraz Dias, CEO of Bradseg Bradesco Insurance, replacing Ivan, who moved to the Board of Directors of the bank.

And of course, he is supporting the transition of our colleagues, Marinelli and Ney Ferraz Dias. Thank you both for joining us.

Thank you, Marcelo. Thank you, Cassiano. Thank you, Marinelli. and Ney. Good day, everyone. I would like to say that if you want to ask questions, send your questions by email to [email protected] via WhatsApp (11)97443-8238, or just scan the QR code on the screen.

First question from Mario Pierry with Bank of America.

Congratulations on the earnings results. You have been delivering very predictable results and in keeping with the guidance you provided. Congrats on the listing of Bradsaude. Of course, it improved capital quite a lot. I don't think it's no longer be an issue for the market given its level of capital. But Noronha, I would like to focus more on NII.

In the presentation, you showed a big highlight, the growth of NII. But how do you see this growth continuing given a more moderate risk appetite, and we don't disagree with you. Indeed, the macroeconomic scenario is more uncertain, given the Middle East war. But I would like to understand how do you see NII evolving with a more moderate appetite? And what are the most concerning segments when you look at credit in the next few months?

Mario, thank you for the question, and thank you for joining us. Here's what I can tell you. Like I said during the presentation, our risk appetite is more conservative because we have some models for some segments of clients. We adjust the model. In our credit policy, we can be more conservative in some credit policies, for example, for agribusiness.

Agribusiness is a very important segment in Brazil. We maintain our risk appetite for the agribusiness, but maintaining this risk appetite with a policy directed to agribusiness. And we are looking at certain crops and at certain more traditional clients, but also for others that are potential clients. And we have to see what kind of loan we can offer them and what kind of guarantee we can have.

It doesn't mean we have less appetite to grow. On the contrary, we have a lot of traction, as I showed you in NII and the NII net of provisions will drive our top line. We are piling up credit, but high-quality credit, government-backed lines, payroll deductible loans. I also spoke about credit cards with slightly more restrictions to some client segments as we showed when we presented credit, the credit portfolio. But we accelerated, and we want to do business and post significant growth. It was not by chance that we grew almost 81% in our government-backed lines year-over-year. This shows that we have an ability to deliver. And this has been piling up NII.

So I see NII growth with NIM around 9%, as I showed you. And with greater growth, we'll have a little more cost of risk. That's not important. What matters is to have controlled cohorts. And for each modality, we can have expected loss, and this is our focus and also grow auto loans. This is another growth driver because there's a market and risk-adjusted return is good. And there are some markets that are not delivering this. We don't want to be there. So we are very aware of what we are doing to increase our competitiveness. Okay, Mario.

Now of course, in the middle market segment, in the wholesale segment, yesterday, Milton spoke about a deconcentration. And also here, we deconcentrated our shareholding or our share in the large companies. I think that the top 10 have 13% of our total number. So we have to look at this with a magnifying glass. This is our path. We are all focused on this so that we can continue to make things happen.

I'd like to remind you that our portfolio management department works with a living portfolio. And it points out potential default risks for all sizes of companies, full-time comparing with client segments.

Next question from Daniel Vaz with Safra.

Marcelo, I think that that a step-by-step message. And I'd like to second Mario's words, this has given us a good expectation regarding. You are ROE close to 16% with the cost of equity. So the bank is not destroying value as was the case in the past year. But your messages of step-by-step approach and being more conservative in terms of risk appetite. You mentioned a more conservative approach, more conservative buyers after observing a degradation in some of the credit lines. So what could be better than expected beyond credit? Because credit is receiving more attention so that you can again accelerate ROE step-by-step.

In costs, you're above your peers. And I'd like to understand how and when can you converge to the level of your peers, Santander, Itau, when we think about cost. In your cost trajectory, it is under more pressure in the short-term. When could we expect costs converging to an average close to inflation or less than inflation? What could surprise us in the short-term? And could it be cost in 2026, '27?

Thank you, Daniel. Thank you for joining us one more time. Well, while you were asking the question, I regretted mentioning that we are more conservative because it's just moderate risk. I meant conservative because in certain models, we are shutting down the faucet. With some policies, we have less risk. And this is work we do with the credit business unit. This is what we are looking at all the time.

So we continue to be accelerated on the side of asset. But please remember, we build our NII also addressing our liabilities. We reduced our liabilities cost at the bank quite a lot. I also mentioned our treasury that has been very important, delivering even more than expected. So I feel much more certain regarding what we are doing also there.

The flip side of the story of growth or reduction of expenses is that I think that we are doing our homework really well in terms of cost-to-income ratio. But some line items of administrative expenses have been posting negative growth, a decrease quarter-on-quarter and year-on-year.

So in terms of technology costs and transactional activity, you see, we have very high activity. So these will grow. The cost of the financial system have to pay a couple of things, that increases. But if you look at the complete presentation of this, you will see that we're doing quite well.

Of course, we still have some labor claims, civil claims. And these are contingencies that eventually will converge to a lower number. I don't have an expectation that this will happen now. But for 2027 and 2028, we will definitely see the impact of the actions we're taking now. So I see that the top line will drive us.

Last quarter, we mentioned that our investment in technology is nonnegotiable. Positive OpEx and CapEx, we grew 26% in 2025, investing in technology. So we continue to invest to improve our competitiveness, focusing on different fronts, but primarily on technology, including cybersecurity, but also to improve customer experience, improve our internal controls, delivering our new auto loan platform. Cassiano, anything to add?

I guess that you talked about everything. But I'd like to remind you that we are in the middle of the transformation process, adjusting the footprint started 2 years ago. We still have a footprint adjustment that is still weighing on our expenses, although we are -- we have a lot of control.

So we also had a change in our procurement with guardrails. So we control expenses. So there's also the footprint adjustment that is important.

You mentioned 2 offenders that will decrease, which are civil and labor claims. There are the result of the footprint adjustment and the adjustments made across the bank. So I believe that we have costs that are adequate for the moment because we're not giving up on investing in technology and in formatting all of the segments and in training our managers, so that we can have different value propositions for different segments. And also technological transformation for us to become a digital bank. That's another important side of our transformation.

So I think it's all very adequate to the moment we're living now. Improvements will come. They're part of the plan. We want to achieve a low cost-to-income ratio at the end of our transformation process. We've been talking about that. And I continue to say we are in the right direction.

One last point. And also our effort to consume DTAs. This is very important. We took a stride forward this year. The expected stock of DTAs at the end will be closed by the end of 2025 in nominal terms, which increases the tangible assets and improves our profitability expectation. That's also very important.

Absolutely. I think you raised an important point. Daniel, it is important that you know that regardless of this event, which actually unlocked the value for our shareholders. Like I said, that goodwill. But every month, we study our DTAs and the opportunities related to that.

For us, the greater the capital, the greater is the growth expectation, and we can bring forward the profits. And we always provoked to increase our profits and consume DTAs faster. And we've been doing this with discipline, and we are looking at all of the opportunities we have.

Next question from Pedro Pedro Leduc with Itau BBA.

I have 2 questions. My first question is more like a clarification in terms of the capital source that you said you opened 250 bps. Is this net of tax that you have to pay, or you need any other event? That's my first question.

My second question is whether you could tell me what is part of that BRL 50 billion, is no less potential adjustments. This is just related to capital. I'd just like to understand a bit more about that 250, if it is net of taxes.

Well, thank you for your question. The first answer is yes. The closing was April 30, but Cassiano can certainly elaborate more on the answer. But the answer is yes.

Well, there is nothing else happening. I mean, it became a reality on April 30, and this consists of 2 major pillars. One is the fact that -- I mean, it's the concept of the company. It's a pure holding company versus an insurance holding. So that capital is part of the 250.

And the second pillar refers to generating tax credits and this generated DTAs. And so you have that effect in the sequence. You pay taxes and you offset that with DTAs. These are the 2 basic things we do.

I mean we register the operation at market value. This is not accounting. It's just fiscal. You generate payment through DTAs. And the second part has to do with the potential adjustment because this is a pure holding company. So these are the 2 elements related to the 250. Is that clear?

Yes, excellent. And my second question is more like BAU. It refers to LLP. I'm getting some inquiries from investors. In mass-market, I mean, seasonally speaking, the cost of risk increases a bit. And then there is a corporate case, which is very specific, but we have a lot of news about that. Then investors may ask whether this net BRL 9.7 billion LLP would be up in the coming quarters or you would have any kinds of gains stemming from seasonality in the mass market or whether this is not going to be present in the second quarter if we -- and whether we could see this lighter in the coming quarters?

Well, in terms of wholesale, in terms of the wholesale LLP, I'm not seeing provisions like that. But eventually, it could happen. I mean, wholesale is like this. It's very -- it fluctuates. You could also experience the reverse scenario.

But now in terms of the other portfolios, we showed great consistency, 1.3%, 1.4%, 1.3%, 1.4% consistently and with nominal growth between BRL 300 million and BRL 500 million per quarter, but we are growing the asset, grew the asset a lot.

So with the 4966, you call them provisions. I remember that I said that we have some portfolios that with the 2682, what we used to call initial provision for a new loan, our breakeven was N+1, but now it's M+5, M+6, depending on the portfolio. It used to be N+1.

So the 4966 brings in additional challenges because you set up a little bit more of your portfolio so that, in fact, you can start getting the due remuneration along a time line. Therefore, I believe that we will continue to grow that cost of risk, but following the line that I mentioned to you before, and certainly, it depends on the growth level of our portfolio. If we continue to grow as much, excluding FX, and we grew 9% year-on-year. If we continue to grow, we might grow more and then the cost may increase a bit more and the reverse is also true. It holds to be true because if we thought that we would not grow as much, maybe we would need all of these provisions right on the onset according to 4966. The cost of provision for the year should be higher. But I do not let go of the quality of the portfolio. The quality is good. The portfolio is well managed. I've been looking at all the cohorts. So we are very confident about what we are doing.

But when I am more present in the auto loans, there is an expected loss, and this is natural. I mean for credit card, even for high income and low income, there is some expected loss. And everything has been factored in. So we are growing, we will continue to grow. But at the same time, we will bring more NII, as I said before, going forward, and we are very consistent in that regard. And the same thing like the emergency line. I mean when you have the pressure from FGI and FGO on top of the NPL over 90, when -- according to the 4966, even though expected loss is lower, but between the maturity process and the great spirit, maybe the provision cost will increase. We will grow the portfolio in the sense to grow. But once it becomes flat then it's just business as usual. I mean the cost of risk for the year, if it is 3.3%, it starts higher and then you will converge to 3.3%. It's a natural.

Next question comes from Henrique Navarro with Santander.

Congrats on the results. My question is on sustainable return on equity. Every time we talk to you, and it's always a very pleasant event, the message that you convey and that we believe is that the step by step, the famous not only the step by step, it's a process that goes into 2028. It goes on gradually until 2028, and it's backed on all of the things that we know, cost-to-income ratio, better operating performance, cost of risk, et cetera, et cetera. But as it improves, there is the issue that the effective tax rate tends to increase, and there is also the issue of provisions. It's a pushback that we get from investors. It's not that Bradesco needs to reinforce provisions, but it would be healthier probably to have higher provisions when compared to its peers. So as Bradesco improves, maybe you should be increasing provisions.

The question is, what would be a sustainable return on equity? And I don't want a guidance, I just want your help to understand it better. What would be the optimum level? If I run a weighted average, I mean the number would come to 18%. So my question to you, Noronha, is whether 18% is a number that bothers you or whether that could be a sustainable level for return on equity?

Well, thank you, Navarro, and thank you for joining us. It's always a pleasure to talk to you. We still have the same discourse. You know that I make no promises regarding ROE. I mean, 18% ROE in Brazil, you know that's absolutely feasible. I mean having higher ROEs is also feasible, and we will pursue growth. I do not promise -- I promise you when, but we are moving in this direction, again, step by step, building our path to increase competitiveness and achieving the goal and being sustainable over time. But our plan, as Cassiano was saying, is only 2 years old. We started the implementation process only 2 years ago, meaning that we still have some ground to cover. And I often say that it's -- and until 2028 is not just now or maybe at the end, but during that period. Therefore, we continue to pursue that goal, and we continue to pursue better delivery for all of our shareholders, much better environment to our own employees, better experience and better relationship with our clients. So this is what we are seeking to achieve to build the bank's competitiveness. But Andre, please feel free to add to what I said because I know you are constantly talking to our colleagues on the buy side and sell side.

I mean Navarro's question answered part of the question. We are talking about better efficiency. We are talking about consuming DTAs, I mean, at the same tangible asset, reinforcing our P&L, meaning that we increase profitability and we reinforce our P&L at the same time. When you say that it will be probably desirable to have better or higher provisions, last year, we increased provisions, both on the labor side, civil side, credit side. And this year, we are doing the same thing. We are reducing our restructured portfolio. We are reducing the number of civil and labor losses. We are doing everything, at the same time, we are struggling with everything at the same time. So we are certainly looking at all of these topics.

Next question from Thiago Batista with UBS.

Congratulations on the results and on Bradsaude. I'd like to have a follow-up to Leduc's question regarding impact on capital. There was a positive impact. But we had negative 80 basis points for prudential adjustments and others. What are the important components of these 80 basis points? And should we expect something similar in the next quarters?

And my next question, something that I've asked to other banks regarding the new Desenrola program. Could you give us your view on the new Desenrola program? And will there be an impact on Bradesco? Will the impact to be small given the size of your business? I'd like to have your first impressions about the new Desenrola program.

Thank you, Thiago, for joining us. It's a pleasure talking to you. I think, Cassiano, you can answer the first part, and then I'll speak about Desenrola.

It's always a pleasure to welcome you. There will be no impact, okay. There will be no more impact at this amount in the next quarters. This happened specifically in Q1. But as part of this 0.8, 0.4 would be fiscal losses, as part of the Bradsaude operation. So that's kind of a match. In practice, it's 0.4 as part of the 0.8 as traditional prudential adjustments and 0.4 related to the operation as a whole of Bradsaude. So they balance each other.

And Cassiano, let me add to that and remind Thiago and everyone joining us. You see always in Q1, there's a slightly greater pressure on capital because there are some adjustments already contracted by the Central Bank, for example, in terms of operational risk. But when we pay variable compensation at the beginning of the year, and we've been provisioning 1/12 along the previous exercise, in our provisions, we do not have any type of fiscal impact. But when we pay that fiscal impact is created and that's why Q1 is kind of unique. But in our view, independent of Bradsaude, the health care business, we would recover the capital as well. So I'm mentioning just one event but there are other events causing this. And this happens to all banks, not just to our organization.

Now to your point on Desenrola, a journalist asked me about this. We are prepared. I think we had about 18,000 clients until last night who had applied to Desenrola. But we, just like other organizations, committed to facilitate this movement with the scouts, with lower rate, with FTO guarantee to make people delinquent -- or actually not delinquent. So we are moving in that direction. Now in terms of impact, if we look at what is past due for much longer, the impact could be greater. But for short-term past dues, the impact does not tend to be very significant. That's my expectation, Thiago. So we start with over 90 days NPL. If it were close to 2 years then it would be more significant than short-term NPL because we have a very controlled portfolio with more guarantees. So there are fewer opportunities in the short term.

And the only comment regarding capital, what were we seeing in the previous quarter? The base scenario is at around 11% in 2026, dropping a little bit and returning to around 11% at the end of the year. What is the new scenario? 12.7% pro forma in March, ending the year close to 12.7%, perhaps a little higher. So much more comfortable scenario, right. That's why it's important to say that we have to deduct that 0.4% because that's consumed and we adjusted. It is created and it is consumed in April. It is exactly what you said, at 11.2%, navigated at 10.6%, and we will go back to 12.7% in the operational. That is important.

Next question from Gustavo Schroden with Citi.

Congrats on an ROE above cost of capital. I would just like to congratulate you on the Bradsaude transaction. Well, still on Leduc's question, but more focused now on large corporate. I think we understand that as Marcelo said, there is always the risk of one or another particular case or a one-off case, but I always get questions from investors because this was a known case, very specific case. But usually, you make provisions if it is a known case.

If Marcelo can share with us some information about the coverage ratio for large corporates that you have? Because we've heard many news of maybe other possible cases of "reorganization". And the second question is about balance sheet efficiency. That operation with Bradsaude, I mean, in our reading, the numbers speak for themselves. It was a very successful operation. And then given the number of investees or controlled companies that Bradesco has in the conglomerate, my question is whether this is a path that could be further explored to increase efficiency, such as in the case of Bradsaude, not only that had an impact on the capital but also in terms of the value.

Well, thank you again for joining this conference call. It's always a pleasure to talk to you. We are always looking at other opportunities in terms of our balance sheet. We discussed that extensively among us and with the Board. It's also important to remember that it is the ninth quarter that I am here presenting the results. But since day 1, I mean, I keep saying that the entire organization of Bradesco is very rich, and there is a lot of wealth to be allocated. But everything has its right moment. We have to look whether it's economically feasible or not. We often talk about this. Rest assured that this is part of our homework. And as I said earlier, we are very disciplined in terms of capital allocation and everything that we can do in terms of DTAs.

I also -- I wish I could expedite its consumption, but it is our net income that allows you to accelerate things, and we will do everything we can. But I would like to remind you that the calculation of expected loss doesn't have anything to do with knowing or not knowing the case. I said that I just aggravated. And for us, we are very well covered. But you may have a very specific case that you probably thought that the level of expected loss was X. And then we realized that the company was deteriorating and it could have been X plus Y. And you could also see that expected loss was X, but it was minus X also recovery comes in full. We work with technical elements, expected loss for cases of other portfolios, civil or labor law suits, we use that. That's the mathematical and technical evaluation.

But very specific cases also involve some technical analysis and sensitivity analysis in terms of what can be recovered. And there is another variable. What is the level of guarantees that you have, what is the type of line that is involved. But in no case, it has nothing to do with expected loss because it doesn't matter that your provision was X and then you had to aggravate the provision and added a Y to that X. That's why I said we decided to increase it, to increase provision. And you talked about some other reorganizations. I mean, take a look at it. I'm not going to give an example of a court reorganization, but I saw 2 examples. I think it was last week.

I'll see maybe Andre has that information, and I can bring it to you. I mean I cannot refer to any specific case, so I can talk to you later. But take a look at that. We are not in any of these court reorganizations. So we are out of the majority of them. So we are very confident in terms of what we are doing in terms of our coverage ratio for very one-off cases and also in the wholesale bank.

Our LLP budget for large corporate remains the same, but sometimes you shift LLP when there is the aggravation of a particular case.

The next question comes from Yuri Fernandes with JPMorgan.

And also congrats on your improved capital situation, 12.7% or even higher than that. That was a very important message that you conveyed today. I would like to go back to large corporate cases and exploit that a little bit more because looking at the status and the way you design things, I mean, Stage 3 improved by 20 bps. But when we look at expanded portfolio that also includes real estate, Stage 3 is worse. So that expanded view of Stage 3 worsening has to do with some corporate cases. And then when we look at a proxy of Stage 3 formation coming from the expanded portfolio, your provision that was high enough was not even enough to face that formation.

So my question is, do you think we should look at provisions or whether cost of risk is higher. And because of higher cost of risk, you would probably increase provisions, but maybe no, not because you would say, okay, we have more secured loans. And so probably the first quarter -- and I'm not going to say that there was a peak because you never know in Brazil, maybe we should see better levels of provisions. I just want to get a better understanding on Stage 3 and your provisions in this first quarter.

Thank you for joining us once again. And before I start answering, you've always provoked us when it comes to capital, having higher capital than maybe we would be able to use up DPAs much faster and your provocation has always been in our mind. It's interesting because we look at that every single month. But thank you for your provocation once again. Andre, over to you, and then I will add if maybe.

Speaking about provisions, the idea is that the cost of risk in a year should be close to 3.3%, starting higher and then converging to that number. The issue is that, in fact, we have more LLP right in the onset, and this is a characteristic of a landscape of monetary tightening. And in our agribusiness, the fact that the grace period is over, but this is part of our plan. So nothing has changed. This still remains the same. But as for large corporate, during the presentation, we mentioned Stage 3 of that same portfolio, Central Bank portfolio, which is more restricted. In the historical series, we mentioned Stage 3 of the expanded portfolio. And looking at that, you see the aggravation of what would be sureties, the DTM and that's where we find it.

Why is it that our provision is not higher because there are more secured loans and a lower number of restructured loans. So when we reduce our restructured portfolio to 3.1% out of the total one, we are writing off debt that were heavily provisioned. So here, you have the reversal of this point. And there is also one other point in terms of guarantees, which reached 61%. So when you calculate the necessary LLP for a total portfolio of 61% of secured loans, certainly, this does not require heavy provisions.

I would just like to add saying that, when it comes to Stage 3, you noticed that we increased our coverage ratio. I think it was about 105% and it went to 118%, right? When we look at the older agribusiness cohorts, our provision level is quite significant. It's very high. We are covered for higher risk operations. When we look at lower risk operations, there is an expected loss, which is much lower, we're very comfortable about that. And we've had good performance even in large corporates because we had good guarantees, the structure was well orchestrated. The decision to increase provisions was a correct decision. It was even more conservative when you look at our current stage. I don't know whether everyone else will do the same thing. I mean I didn't look at it. This was merely our decision. And certainly, we are very confident when it comes to our coverage level in all portfolios, and we are growing on Stage 3 as well. Thank you, Yuri. And again, thank you for all your provocations in terms of capital.

Next question from Matheus Guimaraes with XP.

Congrats on the results. Thank you for taking my question, I have actually 2. First about the social security, INSS deductible loan in which you have a 15% market share and this product is going through a number of changes since the publication of TCU decision and now under Desenrola with a potential reduction of limit. If you could comment on how you're seeing this product evolving in the future?

I think Noronha kind of touched on it during the presentation. Origination, he said has been reduced given a number of changes implemented by the social security system, INSS. But it would be good to have an idea of what you're thinking for the future. The second question is on insurance guidance. You mentioned growth between 6% and 8%. You ended last year growing 16% and you started the year growing 20%. So we are above the upper range of the guidance. So if you could comment about the performance. Was it well above what you expected, what you expected? Or did you expect a Q1 that would be very strong, do you expect that the guidance -- that this number will accommodate throughout the year?

Well, it's a pleasure talking to you. Thank you for the questions. I'll start with the second one, and I'll ask my friend, Ney, to answer the question about the guidance. Ney, over to you. And then I'll speak about the INSS deductible loan.

Thank you, Marcelo. And my dear colleague, indeed, we posted a fantastic result in Q1. But for the full year, we envisioned some challenges in the coming quarters. Well, we came from a results base in the previous year that was higher. So in our opinion, we believe the guidance remains adequate for the full year despite Q1. For Q1, we expected greater growth. And then that was factored in for the guidance for the full year. So of course, we continue working, paying attention to loss ratio and opportunities in the market. But we're very comfortable with the guidance that we have, Matheus, for the full year.

Right. Matheus, regarding INSS deductible loans, indeed, many changes, the process of contracting the loan and also portability, the modus operandi suggested created a huge risk for those using portability. And there was a message from FEBRABAN asking for a change, and it seems that they accepted that suggestion. Now in our case, I'll be very candid with you. Things are positive because we had the INSS card, but we don't work with benefit cards. And the card itself has a low penetration, we work with lower rates. And this additional margin that we can have in the traditional product, it is positive for us at least. And we have gone back to growing even with a market pie that was smaller in terms of origination. But yes, we got that resolution yesterday, suspending some modalities. And as of May 19, everything will be released for us to operate with the new modalities. But Matheus, I maintain a positive expectation regarding all 3 lines of deductible loans, private payroll loans, public payroll loans and INSS deductible loans.

Next question from Eduardo Rosman with BTG.

I'd like to go back to tangible capital, which I believe is a super relevant topic. The discussion has intensified in the last few months, and it became more clear with the Bradsaude deal. So one, how did the change in mindset happen at the level of the Board and the controlling shareholders? I know it's not a new topic, but I'd like to understand how did the mindset change, and how did it mature?

Thank you, Rosman. It was a pleasure to have you. Look, what I can say is that the big sponsor and the one who put this on the table is Trabuco, the Chairman of the Board. Trabuco and Samuel who was a Board member up until recently, Ivan now and also the Bradesco Saude teams together with our finance team, the finance department of the insurance group, the finance team of the bank, all of these people participated in a lot of debates, always focusing on the possibility to unlock value in an asset that is very substantial and relevant to us. And things matured over time with us building other pillars.

And I'll ask Marinelli to give us more color on this. Not just regarding the health business plan but also Odontoprev and also talking about hospitals and how many clients we have. So Rosman, I would say that we are at a very positive level of maturity at the organization.

Bradesco was always a very dynamic organization as it relates to acquisitions and always aiming to create value, it will not change. This will not change. And I think that our debate have been very fruitful debate, open debate, discussing different topics. So I am very pleased with the debate yesterday in a meeting with our team, a meeting we always hold in the eve of an earnings call. I have to thank them. In our case, I have to thank Trabuco and the rest of the Board members because they have fully supported all the initiatives we put on the table, just look at the transformation we're carrying out in the organization. I mean, for that to happen, you need to have support from the Board and you need to have full engagement of our employees to do it. Without them, you can't do it. And of course, you have to have a consistent plan to engage everyone. Marinelli, can you give us more color regarding the value unlocked at Bradsaude?

Perfect, thank you, Rosman, for the question. As we normally say, this is something that started more than 40 years ago. We got into health insurance back in the 1980s, and we developed that market in Brazil. Our presence in the health care business has been coherent and consistent. So we started with health insurance and then we evolved for example insurance, it evolved to investments we make in other areas. Now we have a shareholding of Fleury for diagnostics and also technology with the investments we have in Orizon. We have primary care clinics serving more than 1.2 million people and more recently with Atlantica Hospitais e Participacoes, which in a short period of time achieved a mark of 20 hospitals considering operational hospitals and ones in development. It would be one of the top 4 hospital networks in the country. So it's a coherent story that will develop over time, and that led us to an important presence in the Brazilian health care market.

And 2 days ago, we disclosed the managerial numbers of Bradsaude for Q1. But together with that information from Odontoprev and Bradesco Saude. And of course, that provides us with the most complete ecosystem in health care in Brazil. This is a new chapter for the Bradesco organization in health care now with Bradsaude. And we have a lot of business synergies to capture but always taking care -- paying attention and with all the knowledge and experience and expertise that we have developed over more than 40 years in health care.

Thank you, Marinelli. And I'd like to remind you of an additional detail. We have a big partner with Atlantica and we have Rede D'Or, Santa Grupo in these departments, and I see a potential upside that is very important. Thank you, Marinelli, Rosman. Thank you for the question. It's been a pleasure.

I would like to emphasize that in terms of growing tangible assets, it's just like Marcelo said, we are constantly looking at it.

The next question comes from Eduardo Nishio with Genial.

Congrats on the results and congrats on the operation of Bradsaude. That's excellent news. I have 2 questions. The first is on your evolution in strategic plan, which has been very relevant in terms of the footprint. The service network was down 25% year-on-year. However, I would just like to get a better understanding about the trajectory for this year and next year. I know that this is a longer process. I don't know whether you have room for further reductions. And the headcount, which is a bit lower, over 6% year-on-year. So how do you see this line performing in the coming quarters and years and also the impact of efficiency?

And the second question is just to get a better understanding about the impact of the deferred tax assets that have to do with the previous question from Rosman on intangible assets. Looking at your DTAs this quarter, there was a drop of BRL 1.1 billion more or less. And this was the same amount when you look at the full integration program of BRL 1.8 billion. Was there any other impact that we should monitor here? This transition or the transaction of Bradsaude, did it generate any impact this quarter or maybe next? And if it will, whether don't you think that it will be too conservative on your maintenance of guidance in terms of maintaining this balance?

Thank you for your question. It's also a pleasure to talk to you again. I would like Cassiano to answer the question. And then if Andre wants to add to this.

There was no other impact. What you said in the beginning is not PTI, but in fact, is a bilateral negotiation, a direct negotiation with the IRS. I mean we improved the quality of the bank's balance sheet. There was a reduction of a lawsuit that was BRL 5.8 billion and that was down to BRL 1.8 billion, and it was paid within DTA. It's important to highlight that. So that there is no other effect except for this one. And in the case of Bradsaude, it's a positive impact. And so we showed things -- I mean, one of the colleagues asked about the 0.80 and the 2.5. These are the 2 positive effects coming from Bradsaude as a whole. Therefore, we do not have any other further impact. It became effective on April 30. This is our capital, 12.7% CET1. And we understand that from now on, it's just a matter of maintaining it or even improving it further. So this is the major goal.

And what about footprint? I mean it's been 4 years. I think that the initial 2 years, we kept saying that this is where we would have the bulk of the volume and maybe the bulk of the adjustment would happen in the initial years because we still had to migrate clients to our digital bank. Marcelo talked about that at the beginning of the presentation, 28 million to 29 million clients are already digital. We expect to reach 50 million clients already migrating to Bradesco Digital. And this will give us the opportunity to make other adjustments.

But now these adjustments are of lower amounts and just spreading. But then when you look at headcount, you have to remember that we are hiring a lot of people. Therefore, the impact is not so visible because we are doing reskilling, upskilling, both in the loan side, technology as well, bringing developers to the bank. We are reviewing the architecture of the bank. We are bringing in people to work in data and pricing. So all in all, it was -- I mean there was this different in headcount. But in our case, we are moving in the right direction towards improving our cost-to-income ratio, especially in the future.

Great, I think you said it all. In terms of hiring, we already said that we increased our team.

Next question from Carlos Gomez-Lopez with HSBC.

I have 2 questions. My first question is about that extraordinary liability you mentioned you had in the quarter. The original was 5.4%. I just want to confirm, you didn't have any provisions for that or now that you made an agreement. So what are you doing, that you have extraordinary cash and you're using DTA. Can you give me a bit more information about your agreement with the IRS and whether you anticipate further cases like that in the future. And about DTA, the level of up to the end of the year is BRL 119 billion gross and BRL 112 billion net. Is this the percentage of capital?

Thank you Gomez, and thank you for joining us. It's always a pleasure to talk to you. Cassiano and Andre will answer your second question. But your first question, in fact, this is a goodwill we had in the past. And since there was a debate in the council that decides that and that they benefited us with the reduction of defying the decision, even though it was possible, again, possible. They also suggested that we settle that using DTAs. It was a possible contingency. That's why the provisions were not so high. When you have large cases, the lawyers tend to express their opinion. That's why we had a probable expected loss.

The second question, I mean, that is Law 14,689, specific cases analyzed individually. So we can't talk about what may lay ahead because that's the future. I mean it's possible when it's possible. So it does not require provisions.

When we see a possibility of bilateral agreement, you may reduce that potential from 5,400 using DTAs, and that is quite important to us in addition to improving our balance sheet. We should celebrate that. It was a win-win for both parties. And the balance sheet's quality is even improved because you remove future risk of contingencies. And about DTAs at the end of '26, the inventory nominal amounts that BRL 116 billion from the end of 2025 will be almost the same in 2026. Therefore, the inventory of DTAs in nominal figures will be flat since the shareholders' equity should increase, that should increase as well.

Just to add now, Gomez, again, you never lose sight of our DTA inventory. We are constantly looking at the stock of DTA. And now we started paying that amount related to that 1467.

Next question from Renato Meloni with Autonomous.

I just have a follow-up question, Marcelo, on your comment about provisioning and 4966. You have provisioning in your mind. But how do you combine that with your coverage ratio that it ended at 161% in the quarter? And the second question is related to that, speaking about ROAE. When we look at the balance sheet of the bank, the improvement of that sequential ROAE came mostly from increase in leverage, whereas provisions consume this improvement in efficiencies. Are you comfortable with this leverage level? And next question is, where do you think the other levers will come to increase ROAE, assuming that provisioning will remain the same, at least in the midrange?

Renato, first of all, thank you for joining us today. It's always a pleasure to talk to you again. So first of all, leverage is part of our business. We remain comfortable with our level of leverage. We have capital to do it, and it's important to have enough capital to continue on your growth trajectory and stacking up intermediation margin. While at the same time, we expand distribution from other lines like consortium, as I mentioned, but the growth of the insurance group Bradsaude.

So once we added the auto platform, we also added to the customer experience, the possibility of choosing to engage in auto insurance. So we increased penetration of selling auto insurance through our channel. We are also growing here in terms of cross-selling when we talk about all of our business in general. So the levers are the ones that we already know, growing intermediation margin, the continuity of our activity level, growing different lines, the fee income, et cetera, growing the insurance group, and all of the other subsidiaries we have.

So we have a business diversification that is unparalleled and this is also what distinguishes us from other players. So we will continue to grow in all these lines with portfolio that is a very good quality. There is no comparison to what we had in the past. So we are very confident about our portfolio. Cost of risk may grow, but we are growing in other credit lines. It doesn't mean that our provision level is low. And as Andre was saying, there are some moves in the structured portfolio that it puts down provisions.

So you have ups and downs the entire time depending on the stages, in particularly for the restructured portfolio. And as I was saying, we dropped that portfolio by -- from December '23 until March of this year by BRL 14 million. And if you look at the restructured portfolio in red, you see that there was a drop of BRL 15 million, meaning that the provisioning level was also down. So this is what I see.

I don't know if you want to add anything else. There is more -- there are more secured loans, 60% -- I think almost 61% of secured loans in individuals, almost 70%. So our portfolio now is much healthier. So that we are not posting extraordinary margins. That's why we are growing gradually, but at the same time, growing NII and other revenue streams. So thank you again for joining us. All the best.

Thank you, Renato. And to conclude our last question with Tito Labarta, Goldman Sachs.

Just one follow-up question on capital and I also echo the congratulations on the health care spin-off, definitely good to see that boost in capital there and the bank is in a good capital position. I guess one lingering concern talking to some investors this morning, when do you think the bank in and of itself, aside from -- you have the health care and some of the other subsidiaries, the bank can generate capital organically on its own, right? Because Andre, you mentioned by year-end, you'll also be around this 12.7%. And I know it will be a function of ROE continuing to improve, which you continue to deliver on. But just when do you think you'll be at that point? Is it 2027 or 2028? Or what else needs to happen so that the bank on a stand-alone basis is organically generating that capital?

Thank you, Tito. Good to see you again. Andre, it's up to you first, then I can comment.

We are already generating capital organically and this is important to say because every quarter we show our -- the contribution of our net income and this continue to occur. And we're gradually increasing and improving net income. You see a higher contribution coming from organic capital generation. So this is point one.

Point two, it's important to highlight that here, we have some government regulatory measures that were enforced in 2025, but it will last until 2028 and they consume a bit more capital, especially in the beginning of the year, and this will end in 2028. So we will add up a higher organic capacity to grow. And with the end of the regulatory measures, our capital position will be even more robust with 12.7% of CET1. If this level remains the same by the end of the year, we will build a bridge to cross all of the regulatory -- to go over all the regulatory changes, and we will be able to grow and also transform the company.

Yes, you said it all, Andre. You already answered, but there is another point here because, in fact, it goes beyond that 13% if you look at it individually. But we have a very complex conglomerate. Here, we have a large insurance group and there are other financial institutions that are connected to the conglomerate.

And there are different distribution agreements that they are also more efficient to us one way or another. So if I put everything together, this ROE would also be higher, but we have to look at the organization as a whole, and then we can guarantee this return of 15.8% against a cost of capital that should range close to 18%. So thank you for your question. We are moving on very confident in terms of what we are building, not only in the present, but also in the future. Thank you, and have a good week.

Thank you, Tito. And with that, we conclude the Q&A session. Before turning the floor over to Marcelo and Cassiano for their final remarks, I would like to say that all questions that cannot be answered today will be answered by our IR team. And in our IR website, we have all the material related to this presentation. Everything is there for your analysis. And we are certainly available to answer any further questions.

So thank you, Andre. Thank you, Cassiano. Thank you, Marinelli and Ney, who are also engaged here with us. Thank you, all the teams that made this event possible.

I would like just to emphasize something that Andre said before. Our IR team and our colleagues in the financial area are available to answer all your questions about capital or about any other items on our balance sheet. So thank you so much for being so patient for joining us today, and we will see you soon or in our next earnings release presentation. Thank you very much.

Good morning, everyone. My name is Carlos Marinelli, I am the CEO for Bradesco Saude. And here we are at the headquarters of Bradesco Seguro in Sao Paulo, Avenida Paulista. And we are here today to share with you some very good news. Bradesco is consolidating the most encompassing health care service in the country, combining leadership, profitability and knowledge. Maybe earlier on today, you might have been impacted by our press release and the material fact.

But I would like to highlight a sentence from Luiz Trabuco, the Chairman of the Board. By consolidating Bradesco health care operations into a single listed company, we are building the most encompassing health care ecosystem in the country, thought to expand access, quality and efficiency and also supporting value creation to all, combining Bradesco health care management and Odontoprev. We are then creating Bradesco Saude from its inception, combines sustainable profitability, health care, dental and everything, supported by excellence and access, all of that to create a very open and complete ecosystem.

Bradesco Saude starts being big with unmatched scale, BRL 52 billion in revenue, BRL 3.6 billion in net income and ROAE of approximately 24%. Bradesco Saude starts off with more than 13 million beneficiaries in private health care insurance, more than 3 million beneficiaries in Bradesco Saude and more than 9 million people who benefit from Odontoprev dental plan. In addition, there are many other services like Atlantica Hospitals with more than 3,600 [ beds ], and we have a stake in one of the largest diagnostic medicine company with more than 600 labs and with more than 1.5 million patients every month. [indiscernible] a company that combines technology with AI and also data to have sustainable services. [ Med Service ] is a dental company, a very complete one. And many other initiatives like our participation in [ chroma ] technology, [indiscernible] ventures and everything that adds up to this new company, bringing about new opportunities with national coverage with a differential in Bradesco's distribution.

This company starts with a very sound capital structure for focus on growth and strategic diversification and consistent dividend distribution. We start as leaders with Bradesco Saude and almost its 12% market share. We are leaders in dental plan [indiscernible] with more than 28% market share. We are very big in hospitals with Atlantica Hospitals and more than 3,600 [ beds ]. And we have an equity stake with [indiscernible], a diagnostic medicine leader with more than -- I mean, more than BRL 8.8 billion in revenue.

We have scale, capillarity and presence. We offer investors multiple opportunities to create value. We also address the market with more than [indiscernible]. We grow with profitability. In the 4 past years alone, the average growth of this ecosystem surpassed 50%. And we already start listed at B3, generating right pricing and also access to the capital markets.

The mission of Bradesco Saude is to ensure maximization of value to all the company's stakeholders, and we will do that through growth, sustained profitability, a very robust capital structure, relevant investments and recurring distribution of dividend. We will optimize the portfolio for our companies and also the products in the ecosystem. We will expand our maturing business units to allow for sustained profitability, and we'll also build new businesses integrating these businesses to provide top quality services. In addition, we will have easier access to the capital market, attracting new investment, M&A and the development of new business.

Let me call Elsen Carvalho, CEO of Odontoprev, to speak about this transaction structure.

Thank you, Marinelli. Good morning, everyone. Next, I'll show you the transaction summary. Now looking at the opinion 35 of CBM and the bylaws of Odontoprev, we have set up an independent committee to represent minority shareholders. Based on expert opinions and assessments, the committee has recommended approval of this transaction.

And now with the exchange ratio defined, the Odontoprev shareholders will hold 8.65% of the shares of the new company. That, applied to the results of 2025 and the whole Bradesco ecosystem, it brings a 20% gain per share. The company remains listed in Novo Mercado by B3.

Now it's important to remember, this transaction still subject to the approval of ANS, the National Healthcare Agency. We are announcing the transaction now in February, then we will have the general shareholders' meetings in March and April. And after we have the approvals, then we will have the merger of shares and the consolidation of the new ecosystem in B3 Stock Exchange.

So this was my presentation. We will now open a Q&A session. Thank you, all.

Thank you, Marinelli, and good morning, everyone. Joining us today are Vinicius Cruz, CFO for Bradesco Seguros; and Andre Carvalho, Head of Investor Relations at Bradesco Bank. We now initiate the Q&A session of this video conference related to the creation of Bradesco Saude. [Operator Instructions] First question comes from Vinicius Figueiredo with Itau BBA.

I think this is a very material fact, especially in the health care ecosystem. And I wish you all the best and great success in this new endeavor. I would just like to have a better understanding because certainly, you will be now, in the context of Novo Mercado, starting with a free float slightly below the threshold of CBM. Obviously, I know that this would lead to -- I mean, if you go forward a few months, this will lead to a possible capital increase. Not only I'm referring to capital raise, but the cash of the company, the company is fully capitalized. What would be the focus if we think outside the day-to-day operations, but mostly in regards to new investments?

I think that maybe -- I believe you will continue to have a very good performance in terms of what has been already settled. You have now [indiscernible], there is also a minority stake at Grupo [indiscernible]. I would just like to understand whether your main capital allocation going forward would also fit into this JV format or whether eventually there is any other avenue that you may pursue going forward. I just want to get a better picture of the new context of the company and what the priorities are in terms of this capital.

Thank you for your question, Vinicius. I will start with my first comment related to listing Bradesco Saude and Novo Mercado, where Odontoprev is already listed for over 20 years. I mean, this free float is only 8.65% of free float. But in due time and according to the investment projects of the company, this will be further expanded.

Thank you, Vinicius, also for your question. You mentioned this new sector, but this is a sector that has been listed for quite some time. Look at Odontoprev, they have been listed for quite some time. This industry is evolving. And today, we are happy to announce Bradesco Saude, a new ecosystem that in our view is one of the most encompassing ones in the market, most complete one in the market.

Our track record already shows our discipline when it comes to investments. We are talking about a company that started back in the 1980s in the days of Golden Cross that created Bradesco Saude. So we're talking about 4 decades, a company that invested in dental care with Odontoprev. We're also talking about a company that invested in diagnostic medicine with [ Fleury Group ]. And more recently, we enter hospital services with hospitals. And that means that we have a diversification of partners. And in the past, this was not possible, but we did it. And today, we have other investments like [ Aurizon ], a technology company that combines data, technology and AI to provide more sustainability to the industry. And there are also other initiatives.

All these investments just makes this even more comfortable because we acquired a lot of experience, and that experience allows us to continue to invest. Of course, the focus is to grow our current business. They will continue to work, and they are working quite well, but we are certainly identifying new opportunities. I'm certain that the market trusts all of the companies that are part of this ecosystem, and we will be bringing about new opportunities to work together with Bradesco Saude.

Thank you, Marinelli. Our next question is from Mauricio Cepeda with Morgan Stanley.

My first question is, what do you think this moment will do for your strategy? I understand that you made some strategic decisions in the past. I mean you had hospitals through joint ventures, you decided to remain with diagnostic medicine. Also on the oncology side, you engaged in another JV. So do you think now is the time for you to revisit your strategy? We are also getting questions from clients about your previous moves.

And I would like to also add the issue of a potential follow-on, do you think you would need to do the use of proceeds in this case?

Cepeda, thank you for your question. I will start with Marinelli for the more strategic part of the question, and then Vinicius will add on the financial side.

Well, thank you for the question. It's a pleasure to see you again. In terms of revisiting our strategy, I believe that we got this far at this time introducing Bradesco Saude. We got here through a very strategic discipline to grow to be profitable, a strategic discipline to seek for best opportunities, always bearing in mind our beneficiaries, both in terms of dental and health care.

And more recently, as you mentioned yourself, there are the hospitals. We join players that are a reference when it comes to hospital care. And this makes a great difference in what we are doing. I'll tell you that now, it has the time for us to continue pursuing and developing the same strategy. We will continue to improve on our strategy. And this is what we will do, starting with Bradesco Saude.

It's a new moment. Companies will continue to operate business as usual. Today is February 27, the last business day of the month. So we still have a lot of dental plan and health care plans to sell. We have to keep an eye on our sales map. We have to look at our operations, understand how they are performing. We have to be mindful of our clients that are being certified new doctor [indiscernible]. We have to look at new partners to seek for business synergies, meaning after all that, we will enhance, improve our strategy, and we will develop it further. Now the question about the potential follow-on.

Thank you, Mauricio. We don't have visibility, and it's not now the time to think about follow-on. We are just launching this partnership and this opportunity, thinking that after the necessary approvals, we will have to comply with the minimum requirements for Novo Mercado. Our balance sheet is very robust, so we will be able to follow the same strategy mentioned by Marinelli. We will continue to expand our share in this value proposition in terms of the risks, best projects, best geography, trying to mitigate execution risks. And we will continue to be a profitable company, a company that pays out dividends. And the use of proceeds, of course, we will use it when we see new opportunities and new projects to be evaluated with the same guidelines, sustainability and results, looking at dividends and the strength of our balance sheet.

Thank you, Vinicius. Our next question comes from Samuel Alves from BTG.

I have a few questions. First, about the management. Has that been defined? Is Marinelli going to be the project leader? And that's the first question. The second would be about Bradesco, would like to understand if you see any impact in capital indicators after the transaction, for example, BIS? And next, if I may, I'd like to understand if you have a long-term distribution agreement between the new company and Bradesco? And how often do you plan to reassess the current agreement? So congratulations on the transaction.

Thank you, Samuel, for the question. Let me ask Marinelli to answer about the management, and then we will respond to the other points.

Thank you, Pacheco. So thank you, Samuel, for the question. It's a pleasure to see you. Yes, I will be leading the project. I'm highly honored to have this responsibility. It's a new moment for our health care business with Bradesco Saude. We will have Elsen Carvalho as the Head of Dental Plans, Dental division. That is, again, a very strategic role that makes a big difference in the new company we have just set up. We'll have Vinicius Cruz as the CFO of the new company. And our dear friend Pacheco, you all know him, will be our officer in charge of Investor Relations. So right now, this is the management team that we introduced to the market as the team who will interact with you. About the impact on the bank capital structure, maybe Andre would like to answer that.

Yes. Thank you for the question about the impact on the bank capital structure. Well, the main impact will be in terms of unleashing or releasing value. Our health care assets, I mean, most of them are not listed. And now we will have a single company, a single listed company consolidating all the assets and opening up new investment opportunities. This is good for all the stakeholders, especially to the shareholders of the bank. So we have a positive impact on the capital structure.

And this morning, we released a material fact letter where we are explaining this impact. And we will be providing further detail after Bradesco Saude is operating, and then we'll be able to measure the impact more accurately. Samuel was also asking about a potential agreement in terms of distribution between Bradesco and the new company. Vinicius, what would you say?

We already have a distribution agreement established between the new company and Bradesco. This is valid, and it follows the best market practices. So we do not envisage there will be any impact or interruption in terms of the distribution and the commercial synergies we will further capture with Bradesco Saude.

Thank you, Vinicius. The next question comes from Mario Pierry from Bank of America.

Congratulations on the transaction. I'd like to focus on Bradesco view. Andre, you mentioned that this is going to be good for Bradesco capital structure. So I'd like to understand how that could help in terms of DTAs consumption of Bradesco after the transaction? As you said, this is going to unleash more value because these are a number of assets that are not appreciated by the market because they're not listed. And that's on the health care side. But I was just thinking if you could perhaps do something beyond health care in terms of insurance in the bank.

Andre, please?

Well, let me begin by talking about tax credit consumption or DTA consumption. Now we are aiming at consolidating Bradesco healthcare assets in a single listed company. So -- and that will unleash value and that will provide investment opportunities. In terms of tax credit consumption or DTA consumption, as I said 3 weeks ago, while we were talking about the bank Q4 results, we believe at the end of 2026, our stock of tax credit will be very close to the number we had at the end of 2025, that is that will be kept steady even after the announcement of this transaction. So it's a positive impact in the capital structure. We can stabilize our inventory of DTAs or tax credit. And the third question about new moves in terms of listings, other types of insurance. So far, we do not have any plans to do that.

Thank you, Andre. Next question from Flavio Yoshida with Bank of America.

This transaction is quite interesting. My question relates to your strategy. You briefly said that this would be just a continuity of the ongoing strategy. But should we expect anything different? Because today, when we look at the health care ecosystem in the country, it is being consolidated. So I think this transaction just reflects that. And when you look at your own ecosystem, which is now very robust, what is -- what portion of it will probably merit more attention or more investment? I would just like to understand the driving force behind it and what we could expect. Also, I could -- I just want to understand the moment of the announcement. What led you to do the transaction at this particular moment?

Flavio, thank you for your question. The question allows us to elaborate further, both in terms of the bank itself and Bradesco Saude or the insurance company. So Andre, maybe you can mention some previous facts announced by the bank, and then we can export that to the reality of Bradesco Saude.

You are asking me about growth opportunities and what this asset consolidation is bringing to that bank. I would draw your attention to the SME segment because this is a highlight of the bank. We said that the loan portfolio grew 25% in this segment. Bradesco is a leader. We have a lot of market share, and we increased our market share in the past years. We are very far from the other competitors.

And I would like to highlight some important points. It's the synergy between offering our products. Last year, we launched the new app. So you can find many products and services all being offered in the same place, the same channel like [ acquiring ] with Cielo, Pronampe. And we will soon provide insurance services, meaning that the bank is very much focused on this segment. And this will be another highlight for 2026, and it's also important for the other insurance operations of the bank.

How do you see that opportunities for SMEs?

Well, Flavio, certainly, this is something that unite us all. These 3 parts are important for SMEs. SME is a category that really moves the country forward with its capacity to generate jobs, invest and also create new things and move the work environment. It's an important driving force, both for health care and dental care and health care in general. And this is something that is making a difference to the bank. This makes a difference at Bradesco Saude and also at Odontoprev.

And then when we refer to the strategy that I mentioned before, saying that we will evolve the strategy, develop it further -- and I'm saying this because this new ecosystem gives room to many opportunities. And when we talk about Bradesco Saude, Bradesco Saude is starting already as a leader in many segments. And in other areas where we are not leaders yet, we are very robust and have a good breadth for investments.

This market with over BRL 435 billion of opportunities, we are talking about something that we will look for new opportunities. We will identify opportunities. We will carry out all necessary studies. We will mature our ideas. And if time permits, we will make new investments. Whenever we talk about a complete ecosystem, it's because it connects all the dots and gives it the possibility to replicate things. We have more than 1 million beneficiaries as part of the private health care universe.

I mean, you asked us why we are doing it now. It's just a matter of opportunity. It's not an idea that came up yesterday or a day before. 4 decades ago, we decided to invest in the market of private health care insurance. And we just evolved. We invested in dental care, in diagnostic medicine. We invested in technology and hospitals, primary care and technology, of course. So all of that combined allowed us to arrive at this day with a good breadth to develop a new path in health care. So I'm certain that not only this ecosystem starts big and replicable, but it always comes with great attractiveness, and we can also incorporate other businesses that can make this one be even bigger. And certainly, the core of our purpose is quality of life of people.

Still talking about SME, we just released a performance record among SMEs. How do you address that opportunity?

In the last calls -- and I mean, both of us, we've been talking about the company's focus on SME. Odontoprev is growing every year. We are already very big in the Corporate segment. I mean the Corporate segment of Odontoprev has 6.5 million lives. This alone makes us bigger than any competitor. Odontoprev has leadership in the Corporate segment. We always grew, but we have been changing the profile of the company for a customer base that is more turned into mass retail.

And about 10 years ago, 75% of the company's revenue came from the Corporate segment and only 25% from the Mass Retail segment. Today, this ratio is half and half. And the leadership is being pushed by SMEs. And today, with this new alignment, speaking about the bank, health care and dental care. And now with this new format, when we now have an ecosystem of synergic companies, we will be able to boost results and also boost growth.

I would only add that in order to reinforce the point about the strategy, this entire trajectory of movements and expansion in private health care, we will have more visibility on the market because this asset will be listed with more information, and we will be more capable of understanding its value. And we expect -- we hope the market to be able to price all of the assets that are now being presented in a more integrated fashion through Bradesco Saude.

Thank you, Vinicius. Next question from Pedro Leduc from Itau BBA.

Pacheco, it's a pleasure to see you again. And certainly, the health care asset of Bradesco that was already going through a turnaround, having you as an executive talking to the market will certainly help. Congratulations to you all.

My question goes to Andre. Now it's more of an accounting question. I mean, this asset in your balance sheet had a value of BRL 15 billion and the transaction was above BRL 30 billion. Now since this is a corporate event, will it trigger an activation, let's say, of this asset?

And the second question, impact on the capital structure. I believe you are going to give us more color on that in the release of Q1. But I'd like to understand this impact on the capital structure. I mean, if we're going to have a reassessment, if maybe RWA, I mean, with different weights? I just wanted to understand what's in your mind. We don't really need numbers, but at least the drivers. Of course, if you want to give us the numbers, of course, that would be welcome.

Thank you for the question, Leduc. Now the impact on the capital structure, as I said, it is positive. So it's important to keep it in mind. Secondly, yesterday, we published Bradesco Saude earnings. They are available in Bradesco Seguro's website. And there, you can see these assets, they are priced according to the accounting level, PE of BRL 15 billion. And as Mr. Trabuco, our Chairman of the Board, explained earlier this morning to the media, one thing is the accounting value. Something different is a price as it is marked by the market. That's why we said the transaction will unleash value.

We've only just announced the transaction. Our focus will now be in the extraordinary shareholders' meeting of both Bradesco and Odontoprev and then wait for the approvals by the authorities. With that and all of the official opinions, then we will see the new value of this asset, which will be the basis for us to calculate the impact on the capital structure. So we still have to go through a few more steps to get to an accurate number. We still cannot announce the number. But as soon as we announce our earnings of Q1 2026, we will certainly have more information about that.

That's great. So the asset is going to be revalued?

Well, the impact will probably be seen in our reference net worth. So because it is no longer going to be this accounting value, it's going to be a market priced value.

Thank you, Andre. The next question comes from Gustavo Miele from Goldman Sachs.

Congratulations on the transaction. It is great to see this transformation in health care, which is the area we cover. I have two questions, one more about strategy, the other one more financial. I'd like to hear from you about the commercial implications the transaction may have in the portfolio of the group's health care plans. I mean, we have seen recent moves by Bradesco, so investing in health care providers. And when we look at your capital allocation, we may see a bit more growth in this segment. I'd like to understand if you expect a more verticalization, that is, you would be bringing more products in your own assets, I mean, as a restricted benefit? I mean, actually, this is something we have seen in the last few quarters. So I'd like to understand how your product is going to be redesigned in the next few years, commercially speaking?

Now the second question, I mean, whenever we see these new [ codes ], we always have a discussion on the buy side about what would be the fair multiple of the new [ code ] that is just being set up. So a question on this would be for us to try to break down the pro forma profit of BRL 3.6 billion that you've shown. So let's think about BRL 3 billion, adjusting by Odontoprev. So what would be the contribution of health care plans, I mean, in this BRL 3 billion profit? What would be a breakdown of this profit you've announced? That would be helpful. And again, congratulations on the deal.

Thank you, Gustavo, for the questions. Let's begin with Marinelli talking about the commercial side of your question, and then Vinicius will respond about the financial question.

Thank you, Vinicius, for the question. I'd like to begin highlighting our focus is not to have more vertical operations. We don't work as a vertical operator. We are, as we said, an ecosystem. We are an open ecosystem. So there will be business opportunities in this ecosystem, and these opportunities will be open actually also to all service providers, all players on the market, including Bradesco Saude.

So the design, I mean, our strategy in terms of product design, the investment we made in [ Novamed ] clinics or Atlantica Hospitals. These assets, they have as patients or as customers coming from other health care plan operators. I mean, so we want these businesses to operate at the highest level of competence. Not only for us, not only for Bradesco Saude, which is also a relevant player, a relevant customer, but also providing services to the whole society through other health care plan operators. We want to be an open ecosystem.

So I would say that, again, we are reinforcing this role we've had. We've just mentioned about SMEs. We want to design products that will respond and provide more access to these clients to SME and but also having a commercial design whereby we can optimize a few assets. We did that recently. I mean, last year, we launched a regional product for the city of [ Goiania ]. So that is an economic growth engine in the country. So we now have a more efficient network of service providers in that city. And the pricing is adequate for our customers in that region, mainly SMEs. And all of that backed by our strategy, backed by our branch network, our capillarity and the way we care for our beneficiaries.

We did the same thing with [ Fetivous ] product in the capital city. We're now leaders in health care plans there. And so we launched this program last year also in Porto Alegre City. So what the company has been doing and only in Q3 and Q4 at Bradesco Saude, we've attained additional 140,000 or 150,000 lives that is nearing 4 million lives in our portfolio. So we have to look at how the industry is evolving, focusing on maintaining our differentiated service level because we have a lot of respect for the beneficiaries and we want to protect our reputation so that our health care product is an aspiration by our own beneficiaries and by beneficiaries of other health care plans who would like to have access to our services.

So our strategy is maturing and evolving in this sense. All of these elements, they help us look at our portfolio, thinking about the new opportunities, but we will maintain our growth curve. We want to maintain our differentiator, That is, we have a top level reputation. We provide high-level services. And -- but also we want to tap market opportunities with more efficiency, competitive pricing, which helps us have more access to the addressable market. That is why we've said this ecosystem, I mean, by merging Odontoprev and Bradesco Saude, we already have more than 13 million lives.

Thank you, Marinelli. Would you like to talk about the BRL 6.3 billion profit?

Yes. Well, looking at Bradesco Saude, I'm sure the market will be able to price the new company as more information will become available to the market, and we will be able to identify the level of maturity of each one of the deals that help set up Bradesco Saude. We have mature companies that have a well-known level of profitability, but we are complementing this offer with more emerging businesses, which are now growing and expanding their operations.

Beyond all that, we also have a few initiatives that will help us gain efficiency gains in technology and also a few initiatives in terms of venture capital because they will help us gain more efficiency in the whole ecosystem under Bradesco Saude. So we're speaking about a number of initiatives that have a different time line, a different movement of bringing results, but all of them have a great potential to open up new opportunities which we do not yet see, but we'll be able to tap them in time.

The example Marinelli gave us of having a specific network of service providers in a limited region is something we can do more, activating different possibilities because we already have a critical mass. And we want to open more opportunities to our partner hospitals, trying to combine the best possible solutions and profitability. So with subscriptions, earnings to all stakeholders and benefits to the beneficiaries. These are the motivations we have to expand Bradesco Saude.

Our last question comes from Caio Moscardini with Santander Bank.

When you look at the company in the midterm, what would be -- I mean, the ratio between the insurance company and other businesses, particularly in regards to profit. Where do you see the greatest growth potential? Would it be on the side of the insurance company or the other providers like hospitals, diagnostic medicine clinics, et cetera? So that we can have an idea of the multiple of the company and how that will evolve since the businesses vary a lot in terms of their valuation.

Thank you, Caio, for your question. It's good to see you again. We are talking about assets that -- clearly, we see that they have different sizes. So whenever we talk about profit sharing and net income, we can look at it on the relative side and on the absolute side.

At Bradesco Saude, net income is very important to look on absolute terms. But now in relative terms in regards to growth, there are many initiatives that have great growth potential. So the relative participation may not be so big. But the beauty of this ecosystem is that we can bring with it lots of possibilities. With Bradesco Saude, we have an open and complete ecosystem. And with that, we have the possibility to deliver best-in-class services while at the same time, we can work with new opportunities that will merit investment and care so that in the future, they can grow and become even bigger. When you look at the portfolio of companies that are part of the ecosystem, you will always see leading companies, companies that post significant net income. But they have different maturity stages, and there will be different avenues of growth in terms of absolute and relative growth.

When we look at the midterm, certainly, growth is the buzzword, but growth with sustainability and profitability. And this will come in different forms in the portfolio. As an example, there is [ Aurizon ]. [ Aurizon ] is a tech company. They work with data and AI to provide sustainability to the system. And their portfolio today has more than 160 different clients, but this could grow even more. And we will boost [ Aurizon ] to help them grow to support our ecosystem. We have [ Mildvamer ] this past year, they serve 1.2 million people. But throughout its track record of about 3 years, they served 3 million people. You already -- you can already envision the growth that can come from [ Novamer ].

We are talking about the growth of the [ Fleury ] Group. They are proving that they can really grow in diagnostic medicine. We have Atlantica Hospitals, a company that in less than 5 years, they are already seen as an isolated company with more than 3,000 hospitals, and they would certainly be the fourth largest hospital company in the country. Our capacity to start big and to have applicable scale in the midterm, we will be able to nurture business -- this business in a different way so as to bring growth, and we will be able to post impressive results and dividends.

Thank you, Marinelli. We just have one last question from Andre Salles with UBS.

First of all, congratulations on this transaction. I think your focus on SME is very clear. This is a topic that was extensively discussed at Odontoprev. And in order to help us understand and elaborating on my previous colleagues friend, I just want to see how these moving parts evolve in time. Can you give me some color on the penetration potential of the dental care product? Within SME portfolio, Bradesco, how do you see this opportunity and whether you have any particular objectives that we could use in our future modeling?

Well, that's a great point, Andre. In fact, SME accounts for an even bigger addressable market when compared to the corporate portfolio. But how do you see our excitement with SME? We've been talking about that for quite some time. And we mentioned that in our previous answer. I mean, contrary to the corporate market, this is still a blue ocean, I mean, referring to [ BMS ] -- SMEs.

Curiously enough, it's not a matter of competition, but penetration in our customer base. We have a strategy that the competitors cannot replicate. We find competitors, but we have a very specific channel that serves a gigantic customer base. They are scattered all over the place, and we have the channel that serves these clients. So the strategy is not applicable by the competition. So it's more a matter of execution than penetration.

But when you talk about market, speaking about Bradesco customer base, we have a good combination in the Corporate segment because we deal with large accounts. So every major account or large account is an important account. And then you have a combined tactics when you want to operate with corporate accounts. But in the segment of SMEs, we have a huge potential because we can work systematically with this segment, with KPIs, with governance, with method, just like we do with sales when we talk about penetration in the customer base and utilization. I think our challenge is to retain clients, how can a dental care product can help us also in the health care segment.

There is a myriad of topics that we could talk about. So today, we are already doing it, but I think we will be able to do it much better with KPIs and governance. We see a huge potential. I mean, we get a lot of provocation all the time. We are introducing an ecosystem of companies that share a lot of synergies. We will even be more integrated and certainly, we will be able to post even more robust results.

I would also like to mention the bank's ambition to expand the SME customer base. We want to reach 2 million to 2.5 million SMEs. And we announced that when we released our transformation plan back in 2024. We -- the 3 of us are aligned together working at Brad Seguros, we will operate in a much more enforceful way.

Well, before moving to our final remarks, I would like to turn the floor to Marinelli and the colleagues for their final remarks.

Well, first, if we want to talk about history, this is a landmark in the capital market, in the health care market. And I feel highly excited because right now, in this moment, we can see we have the capacity to do more and better than we've been doing in terms of developing new business, designing new products and especially building new journeys for our main stakeholders. Our customers, our beneficiaries, our customers in HR, brokers who are also really important for us. So now because everyone has been integrated in the same ecosystem of companies that share lots of synergies, that's going to help us move forward much faster than now. Odontoprev is a leader in dental care products. Bradesco Saude is a reference in health care plans. So as I look at the future, I feel highly confident.

I would say that enthusiasm or excitement is the word that defines this moment. I mean, in this announcement, all of us have had this feeling from the first moment we discussed about this idea and then tracking all the evolution up to the moment when we closed the transaction because our industry unites us all. I mean, health care is something we all need. All of us, all of us here, all of you, we want to take care of our health, our health and the health of those we love. I mean, we're always concerned about the health of people we love.

So now as we launch Bradesco Saude, as we announce this new ecosystem, we feel highly excited because we'll be able to do more and better and more efficiently and providing more access to health care, attracting more people to our ecosystem so that they can also receive these benefits. If not all, at least some. This is our commitment to provide access to health care.

And the final point, we have this team -- I mean, this team of executives working at the bank, [ Odontocare ] and now Bradesco Saude. But also, we have thousands of people working behind the scenes as we speak to bring these products to more people, that is, to provide these services, these top quality services to more people. And these are the people who make the difference. These are the people who have helped us come this far. These are the people who have made this happen. And these are the people who have allowed for us to be here announcing Bradesco Saude and feeling excited about the future. Our company is made of people, for people. And caring for people and providing better health care is part of this commitment, our commitment and the commitment of thousands of people who work with us every day. Thank you.

Thank you, Marinelli. Thank you, Andre. Thank you, Elsen. Thank you, Vinicius. We're now closing this Q&A session. The questions we were not able to answer, our IR team will reply them later on. In our Investor Relations website, you will find a copy of this presentation and more information about the setting up of Bradesco Saude. In addition to further information, we wish you all a great Friday, and have a good weekend.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

[Interpreted] Good morning, everyone. I am Marcelo Noronha. I'm here live from Cidade de Deus, the headquarter of Bradesco for this earnings release presentation related to the fourth quarter of 2025.

And why not saying of the full year of 2025 today is February 6 and my watch shows 10:31 a.m. I'll start with presentation saying that all of this material has been released last night after the market closing and I think you had access to it. And I start with our recurring net income, BRL 6.5 billion growing 20.6% year-on-year, and BRL 24.7 billion for the full year 26.1% growth and however, with an ROAE of 15.2% exceeding our cost of capital for the first time in this quarter. And that's why we say that we will continue to grow our ROAE for the coming quarters and years to come.

Here, I have all of the operating highlights. I'm not going to go over each one of them because I will show -- I will certainly change a little bit today's presentation, and I would like to bring you some elements related to our transformation plan that in fact was published February 7, 2024, so less than 2 years ago, it will the 2 years as of tomorrow. So that's when we released the plan. And I would just like to remind you of what we did back then.

So we started with a diagnosis at Banco Bradesco the Brazilian market, and also, we drew up a worldwide benchmark with all of the relevant aspects like technology. Out of the diagnosis, we drew up a plan knowing all of our strengths. The plan -- the bank has several strengths, and the organization as a whole for that matter.

Back then, we said that we have 70 million clients. We also said that we were leaders in SMEs. SMEs understood as a segment defined by the Central Bank because every bank has its own format. These are companies that grows up to BRL 300 million a year. We also said that there was high penetration in the high income segment.

And certainly, we have the largest insurance group in Latin America, in addition to having a stake in many other companies. And we also said that we will work on our strength to create a new position with the clear goal to increase competitiveness in the short and long run. But it's important to remember that we put a deadline of up to 5 years. It wouldn't happen overnight. And it hasn't even been 2 years. When we presented the plan, we came up with this [ mandala ] with all the main topics, the 10 main items that were carefully looked at with more than 200 new initiatives. I will go over some of them, I will not talk about all of them or all of that, otherwise, we will be here for 2 hours, and you will be really tired.

But our IR team and the transformation office, everybody is available to give you further clarification, especially those that want to talk to investors, to discuss some particular area of this [ mandala ] -- and if you have additional questions, we are certainly at your disposal.

So I'll briefly cover some of the most important highlights and then I'll go back to the core numbers, and we wrap up the presentation. So then after the presentation we have the Q&A.

Well starting with digital retail. We haven't been bringing a lot of elements for you, but after this period at year-end, we came up with 19 million clients fully digital. They are fully assisted through the digital channel with our BIA GenAI with the level of resolution, which is very high. So BIA is retaining 90% of all calls that comes through digital retail, but it's also important to look at the engagement level.

Our efficiency in this client life cycle that allow us to -- I mean, I'm not going to get into the details of every topic. But I would like to draw your attention to this item here down below. The direct cost to serve to all of these clients in the digital platform that was reduced by 40x.

This is an important number. And what we envision for 2026 vis-a-vis our digital retail. First, we go from 19 million to approximately 40 million clients between account holders and non-account holders. And certainly our objective, not only for 2026, but going forward is to reduce the cost of -- cost to serve and to continue growing our customer base.

The second topic is affluent clients, and we are talking about principal and prime segments. We promoted an upgrade to more than 3.1 million clients with a new value proposition. And at the same time, we introduced a new position in this segment of clients. Prime ended the year of 2.3 million clients. We trained 3,500 managers, we focus on that training. But notice the level of accuracy for BIA team. It's accuracy was 93% at BIA customers, and then i go to Principal.

You may recall that we launched principal in November 2024, with 3 offices, one in Faria Lima, another one in Campinas and the other one in Leblon in Rio. And then we started the expansion process.

In fact, I invited sell-side and buy-side clients to look at our management model rather than just the business model. So we are just going through this phase in other segments. So we launched a new segment in November of '24. By the end of last year, we had 62 offices and 36 municipalities approximately 320,000 clients in this segment with this current level of NPS, so a new value proposition.

And this created this new differential. And what do we expect to see next year out of these 2 affluent segment. I mean, new upgrade with more than 1.5 million clients reaching 4,700,000 clients. And as for principle, we will open almost 50 additional offices in Sao Paulo, reaching 70 municipalities, and we will have almost 800,000 clients by the end of the year. But you might recall our target because it's not something that we change overnight because this is gradually build. So we will expand our share of wallet, and this is what you see down below when it comes to the affluent segment.

And next comes SMEs. As I said at the beginning, we were market leaders. We had approximately 14.3% market share in SMEs of almost BRL 300 million a year. But notice what happen here. We've built a much more robust segment with a new digital model with a new value proposition. So mostly digital and remote service and also companies and business segment. This is a segment where we introduced 150 new branches during 2024, and we changed the segmentation of the business segment.

The configuration of the management model for managers, we delivered a new Internet Banking an new app for companies and look at what happened to our NPS. These are numbers that were not disclosed before. We went from 56 to 74 points. So I'd like to say that nothing happens by divine order, it happens because we work hard in the backdrop and we execute based on the plan.

But I will draw your attention to say that we have more than 5,000 managers in this segment. And we are present in 2,100 service points, and this adds value to clients. Regardless of having this level of evaluation in metrics with a robust capacity to serve clients because they can't do self-service and at the same time, have a very good experience. But we can still serve these clients in the physical channels. But I would like to draw your attention to something that I said at the beginning.

We had 14.3% share. We are leaders in this market, but what happened up to September 2025. We gained market share. We reached 16.6% market share, and we continue on the right track in terms of this segment. Our purpose, not only for 2026, but for a more distant future is to increase our penetration in these segments. And we believe in this was stated in the diagnosis that in this segment of up to 300,000 a year of SMEs, it's a segment that tends to increase its share in the financial system in the next coming years up to BRL 300 million a year.

And I mean, payments and cash. I'm not going to get into many details, but Bradesco Global Solutions with global cash, and obviously, our goal is to increase the share of wallet and customer centricity through time. I mean credit we introduced a credit view. Of course, I will talk about cause and effect, because as I said, things don't happen by divine chance. We introduced the credit BU at the beginning of our plan, and we thinned this business unit. We introduced a portfolio management area. They are working on different client segments. And they are also operating in the life portfolio, be it in Wholesale and Retail bank, Customer Finance, et cetera.

So within this business unit, we also introduced a new pricing area to serve all segments and businesses, all the verticals I mentioned to you before, and all of them to generate more risk-adjusted return, and this is a very important part of our strategy. But when we put this together I told Andre that we wouldn't get any lack of resources. There will be enough resources. So to that end, we hired 250 professionals and we gave them full technology support to enhance the models for all customer segments, also to manage the portfolios.

And looking at the time line of credits and loans that are not only decided on prediction models, but mostly decided by human judgment, and then support all of it, and the consequence is -- that this SME growth level is still the same that we have with payroll loans. And if we hadn't put this together in the way it is, certainly, we wouldn't be growing SMEs the way we've been growing today and the way we grew in 2025.

And what do we expect in terms of our objectives. This unit together with the clients segment. We want more competitiveness in some lines and segments, but growth with quality and moreover, a very strict risk adjusted returns. We have also many other initiatives. Maybe there is one that will take longer to deliver. But our clear objective is not only to have back office and front office.

But moreover, having an end-to-end experience that we really boost our productivity. I mean, model culture, in addition to the area led by Silvana, which is people -- they are contributing with up-skilling, re-skilling. And despite everything we are doing including new variable compensation KPIs, et cetera, we conducted a new survey new engagement survey, 84% engagement when compared to 74% postpaid in the survey of 2024. And that's why we are focused on keeping a very engaged team and fully committed to everything we want to do with the capacity to change as well and adjust.

People are crucial, competent teams and teams that can certainly deliver and change as we go so that we can deliver more competitive goals in the short and long run. So organizational structure was the first thing I showed during the plan. So we reduced layers. We reduced the span of control -- I mean we increased the span of control. And -- we brought C-levels and Directors to different areas.

I talked about the credit area more recently, but we also promoted inorganic growth. I'm not going to get into the details, but in the Insurance company as well with the hospitals. And what do we expect out of this organizational structure. To gain more efficiency and agility, when it comes to decision making.

Technology. This is a chapter that I've been talking about all the time for investments in AI. For us our culture is AI first. AI first and AI is not just GenAI, but it's machine learning for our mathematical models, but also multi-agents who have been working with a number of initiatives on the slide, I spoke about BIA client with that level of retention using GenAI. But we have the BIA Core, BIA Tech and BIA Client so on and so forth.

So what happened in these 2-year period. We gained productivity. We reduced lead time and the consequences was this that I mentioned before. With a base of 100 of delivery of apps for clients internally for review processes, and gaining productivity of a regulatory points we ended 2025 with 300. We grew our capacity by 3x over -- less than 2 years. That's when we started this whole move. We invested and we've invested in cybersecurity.

We have -- we improved our second and third lines of defense for cyber, and we expect greater productivity gain. More and more intensive GenAI use, but more competitiveness, and innovation and time to market. And I'd like to mention some other things here because I'm going to get to the numbers in a minute and we'll speak about guidance eventually.

But we invested last year, invested heavily in technology. Investment in technology grew in 2025 compared to 2024 by 22%. And if you look at our guidance, which I will refer to in a minute of those about 8% of growth approximately, about 3% or slightly over 3% come from the investments that we will continue to make. We will not give up on investing.

I see technology is a big driver of our productivity and our ability to deliver a lot more to tech clients with hyper personalization, which we have been doing, and during the Q&A, we can speak more about that.

Synergies and Innovations. We had a number of actions with Cielo. Tap-on-phone, D+0 receivables discount all invented in our corporate app. In Bradesco Financiamentos, we also gained investment with new hiring, not just efficiency in the unit cost, but commercial efficiency of Bradesco Financiamentos. And what are the next steps, we expect -- well, with the next step to increase our share of wallet, increase growth, productivity and innovation with different verticals that we have in our organization.

And now speaking again about profitability to give you more numbers. I mentioned that before, and feel free because our team is ready to talk with you and explain this in much more detail. If we look at the net income. I always tell my team, this should be the last slide and not in the first because again, we speak here about the cost and effect and this is the effect.

Effect of what? Effect of a plan that is been executed and that is showing how our capacity revealing and improving, the strengths that we talked about, but strengths that were driven by actions of the plan and we have a growing number. 8 quarters delivering always a little bit more and step by step, we don't change these strategic plan overnight. You correct of course. You correct the tactics, but there is a strategic continuity, with execution discipline. And this is -- it called also discipline, we are showing this with our the team in the transformation office.

Moving to total revenues. We are growing in all revenues. NII, we see here, the growth in NII and fee and commission income. When we remove the Cielo tender offer, the growth is 5.5%. Insurance investment plans of 16.1%, another robust quarter and growth expectation.

But why is all the revenue growing? Again comes into the effect. It's not by divining profit. It's by increased penetration, credit trading traction in NII, a reduction of liabilities cost better liability management and so on and so forth. With all the initiatives adopted. Looking at our loan portfolio almost BRL 1.1 billion in December 2025, and the previous quarter, we were at BRL 9.6 billion and now BRL 11 billion.

The highlight goes to micro-small medium-sized companies growing 21.3%, and that's why we're gaining share. And by looking at all of the portfolios, we are growing in all of them. Again, why are we growing? We are growing because we have a client base. We've grown because we have high penetration in all client segments, and in the verticals that we work with, and so when this supported, because we have an engaged team. A team that was supported by client management systems, GenAI, a better offering for clients.

In a nutshell, it is a set of measure that we improved over this period. And looking at the portfolio, and the loan quality indicators they are all flat over 90-day NPLs totally easy. Over 15 days, if we look on the slide, it's absolutely flat, we structured our portfolio with the BRL 10.5 billion in 2025. BRL 20.5 billion reduction of problematic assets.

Look at our stages. Stage 3 dropping quarter-after-quarter. Stage 1 increasing quarter-after-quarter with the evolution of the secured portfolio. So we are totally at ease with our loan portfolio and with our ability to continue to originate even more and particularly with some levers.

Net interest income 14.9% increased and the client NII up 17.4%. Again, this is we see 17.4% to growth, in here, this hits the bottom line, BRL 4.8 billion to BRL 10.3 billion, growing 22.6%. Cost of risk, absolutely under control and quite and market NII delivering our expectation -- expectation of our treasury.

Fee and commission income grew at the proportion that I mentioned before, but please note I should highlight 3 card income 14.4% increase in high income 25%. Construction management. There is a lot of traction, growing 17.3%. When we look at loan operations, we have a lot of traction as well. Why is it not growing? Because part of it has been deferred because of the Resolution 4,966. But look at what happened with capital markets. 29.2% increase full year '25 compared to full year '24. This was not divine providence again, this is investment.

We changed the structure with Bruno's team and the whole team, we created the agribusiness segment. We changed our investment banking structure to broaden Bradesco's team and capture a lot more in DCM, M&A and other line items such as project finance. The result is this level of growth. We have a DCM share, that we had in 2022. So we grew, we're doing well in the rankings, and we continue to grow. But there are 2 offenders here that do not help these levers, which are checking account and collection, which normally in this market pull the results down.

But overall, we are delivering and we're delivering well. Operating expenses, 8.5% increase. I told you and I will repeat it. Investments in technology. We grew 22% of technology investments in 2025 compared to 2024. And we will continue to invest in technology. But if we break our expenses down into personnel and administrative, where we grew 5% in line with the average IPCA.

POR is one of defect on expenses with our profit sharing patent, this would be 2.5%. We continue to reduce our footprint -- if we look at the complete period. 2,800 points, and if we exclude EloPar and Cielo as we have been doing in past quarters, growth of operating expenses would be 7.2%. But in the Q&A, if you want you can ask and we can debate administrative expenses, but overall growth was negative.

We have personal expenses with this variable that I mentioned, the profit sharing program and investments in technology, in transformation. For example the whole implementation of the 59 Principal office almost 50 more will be added next year, so we continue to invest in reviewing our footprint and focusing on the necessary investments in each one of the departments to help us grow.

Our Insurance growth, another strength of our organization. ROE 24.3%, but in the full [indiscernible] 22%, spoke about this already. We are growing in all lines with a lot of balance. Client base growing. I was checking this with Ivan earlier today. The result of insurance operations exceeding the guidance of 16.1% and growth in operating results, and not necessarily in financial results, with technical provisions of 446% (sic) [ BRL 446 billion ] growing more than 10% year-on-year.

Moving to the end of my presentation. When we'll look at this capital discipline. We have year-on-year growth, if we look at December 2024 compared to December 2025 in Tier 1, 12.4% to 13.2% and the quarter there is a slight reduction of 20 basis points in common equity in Tier 1, but if we look at common equity we also posted growth year-on-year up 0.7 percentage points and this is something that I mentioned with all of you with the sell-side, with the buy-side. I spoke about this that we have this under control.

And lastly on guidance. Well we delivered at the top of the guidance impacting all items in expanded loan portfolio we were growing 9.6% in September and we ended up with 11% good, because of our traction and the ability to execute. We start 2026 with even more traction. Insurance operations 16.1% beyond the guidance and we have the guidance for 2026 listed here. I am here and I'm ready to discuss this with you and now I will sit down with my colleagues Andre Carvalho IR Officer and Cassiano for us to start our Q&A.

But I would end my speech saying that we have heard comments since last night, when we released the results, post the results, some positive comments regarding the 2025 numbers. I didn't hear anyone saying bad things, negative things, but the expectations were much higher for our 2026 guidance.

Our share between December 31, 2024, and today is Feb, 6 had increased 106%. Appreciated a 106% -- so it is only natural, its part of the game of sell-side, buy-side to have price adjustments. Not 29%, it's 27.5%, of the middle of the guidance, it's up to you, but we will not loose sight of our horizon because the shares have to be adjusted by 5%, no problems.

Can you imagine today with the level of conviction that we have, with the level of the delivery that we have, I am super confident in our organization. I'm happy. I had the meeting yesterday with our leadership team with the level of engagement we have in our company. So Andre over to you. Thank you very much for joining us in this call.

[Interpreted] Good morning, everyone. Thank you, Marcelo and Cassiano. I would like to let you know that Ivan Gontijo, CEO of our Insurance company is joining us remotely. To start the Q&A session, I would like to present 3 alternative for questions.

[Operator Instructions] The first question comes from Pedro Leduc from Itau BBA.

[Interpreted] Good morning, everyone. Thank you for the presentation and congratulations on this wonderful year in your trajectory. My question is related to how you see the underlying business trends? So we could look at the NII guidance, less LLP.

I mean I think you're going to grow low 2-digits, slightly above the portfolio. I just want to understand what's behind it when we think about NII in isolation or LLP, I think these 2 things have to talk to one another, but to understand what is part of it, so that I will have a good idea of your views about mix, spread, credit quality as you know, the year is just beginning.

[Interpreted] Okay. Pedro I will start, Cassiano will start as well. It's good to see you again, Pedro. Our NII remains focused on our standard. We changed our mix for 2025. Secured products remains our main lever. Obviously, the quality of our credit BU allows us to work in any credit line secured and unsecured we're very, very comfortable with the quality of our portfolio and the way we are operating it. The average rate should be maintained until the end of the year. And our LLP should grow in line with our operational. These are the main drivers of our NII, and we will maintain it with a very high degree of engagement.

[Interpreted] Okay. I have a few things to add. It's important to say and highlight what you just said. Portfolio mix, spread level, always focusing on risk adjusted return. This is the goal, and I also talked about pricing. The pricing area comes to reinstate that point.

I mean we have some very important levers that go through different segments like payroll loans in all of its lines I'm talking about public and INSS and private. We have approximately slightly above 14% market share. But I would like to remind you that we have the lowest market share on the private side. So we have a lot of opportunities, and we already saw this level of growth.

And I would just like to add that we are I mean, we are placing our hiring offering. It's 24/7. And this is hyper customized with microseconds, that go and come and already respond, give us a response about the risk of the borrower, the company and pricing, which is adjusted to risk, it's risk-adjusted pricing.

Therefore, I'm saying that we will grow in payroll loans. We see a lot of traction coming from the clients. INSS has its own challenges, market challenges. It's not all ours, but in previous quarters, year-over-year, we were growing 5%. And now in this past quarter, we grew 6.8%. But this is payroll loan, SME, we are still growing, and we will continue to grow in lines with secure lines backed by receivables, be it direct receivables or some lien, et cetera. So we will grow with auto for companies and individuals.

We are very optimistic in terms of future growth with the credit quality that it's absolutely under control. I do not see any deviations. We are not concerned with that, because certainly, you know that we did our homework, when it comes to portfolio management and our modelings team. And then you also mentioned an important aspect. You talked about NII growing slightly above the portfolio. Well, this has to do with the mix.

We are a wholesale bank, we can fluctuate as it happened this quarter on the positive side, but it could also fluctuate on the negative side because we do the turnover of the portfolio.

[Interpreted] And the next question is from Mario Pierry with Bank of America.

[Interpreted] Congratulations on your results. We understand that a lot has been done in the first 2 years, but you still have a lot more to do going forward. But what you have already demonstrated is that you are on the right track.

Right. I have 2 questions. You had an additional expense of BRL 700 million. You spent that to restructure and the structure that is suggested for 2026. And this is almost twice as much in terms of provisions you posted last year. So could you please highlight where these restructuring will focus more, whether it has to do with the number of branches?

And we understand that we are getting a lot of questions from our clients. Your guidance says that you will grow expenses by 8% at the top you said it's 3% relates to investments and technology. This also means that the rest of the bank will grow or is growing 5%, in line with inflation.

And just like you said, you already reduced -- 2,800 points in the past 2 years. So how come expenses are not growing below inflation? That's why the consensus, I was hoping for a number close to BRL 20 million rather than BRL 27.5 million. We thought that the bank's core expense should be growing below inflation?

[Interpreted] Well, thank you for your questions. If you look at our admin expenses, and if you look at some of the lines in our full publication, you will see, okay, third-party services, maintenance, conservation, lease, all of these lines were down and transportation, transportation of currency. So what are the detractors here?

I'm just summarizing, there are some that are very positive. But technology, I mean, it grew 22%. And when we look at it, it will continue to grow. We will continue to invest, to increase our competitiveness.

Second, I mean, profit sharing, we increased profit, and we paid out more. And the third detractor. I'm not going to refer to small lines. We had some changes on the advertising side. But we found 3 good opportunities at the end of the year, and we decided to invest like when we launched Principal. And that's when we did the coverage at the airports. It's out of what we expect us to do at that time.

And thirdly, there are other expenses that also go through some lawsuits, we have a very good provision coverage. We've been working a lot based on this root causes. And when you work in that root cause, you do not expand the incoming, but that is coming down with time. So I believe that these lines will be below 27%, 28%. And this is what you look at when you look at expenses or other expenses in addition to expenses with technology.

And talking about investments in restructuring, I would tell you that, first of all, we continue to review the footprint. We were doing less than -- less than what we would do in 2025. And so we will do more than what we did last year. But we will open, as I said before, about 50 offices earmarked for Principal.

But we are also refurbishing some physical stores with private, meaning that we continue to invest in this transformation, making footprint adjustments also increasing our capacity to invest more and reduce cost to serve, in Retail and Digital. So our cost is 40x lower.

[Interpreted] Well, thank you for your question. There is one more thing I would like to add in addition to the 3% you mentioned in terms of technology investment. 5% is only related to human resources. Well, that's important to remember, in addition to profit shares.

You will see that our expenses are very much under control. There is one more thing because you said that was twice as what it was last year. If you look at 2024, it's very close to the number that we posted in 2024. Maybe the difference is about BRL 100 million. 40% higher on average or greater than average.

There is another point related to efficiency. Our efficiency ratio was down by 2.2%, from 2.2% to 50%. So our ambition is to reach 40% by 2028, meaning that the trend is downwards in 2026, and this drop will be even more accentuated in '27 '28, when the top line grows a lots, it's just natural that some OpEx to see growth with OpEx. And our top line growth will be almost 10% in 2026. Also, as you increase transactional, certainly the variable cost I mean it's different even with scale.

Next question is from Gustavo Schroden with Citi.

[Interpreted] Congratulations on resuming ROAE starting from 10% to 12% now over 15%. I would like to think a little about the investment cycle, more specifically and linking with operating efficiency and efficiency ratio.

Marcelo you're very clearly showing, and I heard an interview you gave, when you said that you won't stop in investing, but the focus is to maintain competitiveness. And is that you're thinking about the future of the bank in a sustained fashion. So I'd like to understand, what part of the cycle would you say the bank is in? Particularly in terms of technology investments or investments in new product or segments?

And should we start thinking -- should we start thinking about the benefits coming from operating leverage operating efficiency, and reducing efficiency ratio, thinking that in 2026 revenue should continue to support the step-by-step ROAE improvement, so that in '27, we'll start seeing the benefits of operating efficiencies?

[Interpreted] Gustavo, I would say that we are in the middle of the cycle. We are not at the end of the cycle. If you look at our plan, we spoke about stretching this until 2028. And along that period, some things are quick wins. You capture the benefits in the short term. Other things we invest in and you're going to reap the fruits later. We'll continue to invest in the whole renovation of the bank.

Look at some U.S banks and Asian banks and what they have been seeing in September, I was in Asia I had an opportunity to talk with CEOs of other Asian organizations and to speak with peers of that region, and everyone is investing again in AI first, we see opportunities to improve efficiency and to gain competitiveness in our relationship with our clients.

I will not stop investing. We want to improve our infrastructure, our architecture constantly in terms of technology. So efficiency doesn't come only because we're going to invest less -- and I'm going to give you my opinion.

In the opinion of all world banks. I don't see anyone stopping investing in technology. Technology will require growing constant investing over time. That's my opinion. But we're going to gaining in other lines. For example, loss expense and areas, where we are going to have a reduction not only in 2026. So we have to have efficiency gains, and we will have these efficiency gains -- but this will be driven to the top line.

Gustavo, you can ask me, if I don't deliver the top line, but I want to deliver the top line. Increased penetration continue to grow and delivering ROAEs even better than what we currently have. My colleague yesterday said an airplane will never fly backwards. We are not going to fly backwards. It was 15.2% in this quarter, and we expect it to increase, if we can deliver more and more, which was the case of the loan book in the past quarter, we will do it.

Next question from Daniel Vaz with Safra.

[Interpreted] Congratulations on the results and the delivery, since the beginning of the strategic plan. I think it's -- we can see how dedicated the management is in readapting the bank and improving the whole quality of the portfolio while still growing.

My question is focused on Cielo. Cielo is a strategic asset of yours. You're talking about integrating Cielo, particularly in SMEs, integrating Cielo even more. It's already partially integrated. But in terms of TPV, Cielo had a big difference compared to the network. So perhaps we're thinking about those big accounts, not SMEs. This is an important difference in trajectory. So I'd like to hear from you what is the strategy for the large accounts? Perhaps there's a loss of profitability and you don't want to change that?

And in SMEs, you advanced a lot also in terms of governmental programs, and that's an important liquidity for the system. But the Cielo part in terms of strategy, the strategy is not so clear to me in 2026, '27. I'd like to understand what is the integration stage we're at.

[Interpreted] Well, thank you, Daniel, for the questions. #1, regarding Cielo. Cielo has also been undergoing a process of transformation, which is rather significant. Over there, we created separate teams for the 2 partners. Today, we have a connection at different sites with the Wholesale and the Corporate Retail segments.

And we worked with them in a plan and so that we'll be a lot more connected in a verticalized way. Talking about cash and talking about affiliation, more than having a segregated company, where I would originate something and they would work with it.

No, they have to improve logistics. They did. They had to deliver tap-on-phone. They did, deliver. They had to deliver a whole new pricing system for D-0, they did. They needed to deliver a connection to our app. We delivered it together. So all of that is done.

But you're correct. I think that there were 2 or 3 cases, I don't remember, 2 or 3 of large accounts. And the similar team went to the limit and took it to the limit and decided to give up the TPV, which was important rather than losing profitability. So we see an ability to grow and grow a lot because we are very accelerated and tractioned in SMEs, and we reduced the attrition with our distribution channels.

And this is an army of more than 5,000 managers in addition to all of the digital offering that we have. So we are going to move forward. You can rest be assured of that. But we are not going to throw away money with margins that are effectively very reduced.

Regarding SMEs, our SMEs, we are growing not only in government clients, our expectation is to continue to grow. With a very similar number that we had in 2025. Indeed, we haven't got that final number, okay, Daniel, the final number regarding government or total government programs. But we have an estimate. And the estimate is that we had 26% or 25% to 26% market share.

We were the bank that operated the most government clients last year. We have an initial estimate, our own estimate, not market estimate, but let's wait for official data, but that's kind of that level. We have good traction, but we can only do all that because of the kind of structuring we have in the SME segment and also because of our technology deliveries, our ability to hire through our digital channels, the whole modeling of the Credit BU portfolio management.

So we are not granting credit just because we have a government guarantee. We have a lot of criteria, and it's always about RAR, risk-adjusted return. We have a program to price each one of these government programs. So, we have a lot of traction. We ended the year with high traction, and we believe that we will continue to deliver good results and Marcelo?

[Interpreted] This is one of the important pillars of technology this year. We created our app for business with a totally different technology embedded to it. And this is a very important reinforcement for this. Yes, we're migrating 500,000 clients to this new experience that Cassiano just mentioned. So that's another important information. We are increasing our competitiveness with Cielo being integrated.

Next question from Yuri Fernandes with JPMorgan.

[Interpreted] I mean, your long-term view -- your long-term view, I mean, I know sometimes it's not easy to invest in the future, but you are delivering improvements gradually. So congratulations for it.

I mean my question is about capital. I mean CET1 is very close to 11%. I think this quarter was 11.2%. But for 2026, there might be some challenges. There are some prudential adjustments going forward, 49.66% operating risk. So can you please elaborate a little bit about the capital outlook, whether CET1 should remain at 11%? Or maybe possibly it will be slightly lower and you would just gradually increase it.

And in addition to that prudential adjustment, my other question has to do with your portfolio growth. I mean, you posted a very positive growth message. And like you said, the bank is well tractioned. But this 9.5% growth in the portfolio with retained profit, the retained profits in the middle of the guidance also might imply some capital consumption. So going back to my question, will it remain at 11% or it will go slightly above? So if you can tell me something else about CET1, I would appreciate it.

[Interpreted] Thank you. You were constantly provoking us about this topic, and I really enjoy your provocation. So thank you again for joining us today. I would like Andre to start answering your question, and then I will follow through.

[Interpreted] Thank you, Yuri. In terms of CET1 of around 11%, that's what we expect to have throughout 2026. We are here talking about loan book growing at 9.5%, and we look at full CET1 of 9.2% in the first quarter, going up vis-a-vis what it was in 2025. So interest on equity that was BRL 14.5 billion last year, it will go up this year for above BRL 15 million. Our capital absorbs that portfolio growth increase in interest on equity. And here, we also have DTA, like you said. So CET1, it's around 11%.

In the first quarter of the year, we know that we have the regulatory measures, operating risk, the Resolution 4,966 issue. So everything has been computed whenever when we mentioned CET of around 11% for this year. There might be some fluctuations, but it will be around the 11% number, but our baseline is 11%. But there might be some fluctuation for the reasons already explained by Andre, but it will be around 11%, and this is important.

[Interpreted] Yuri, I would just -- I'm not going to repeat what they said because this is what we expect to see. But 2 years ago, we told you that we have a lot of discipline when it comes to capital. And every year, we review our DTA or tax credit horizon for 10 years, meaning that we are constantly monitoring that. And we also evaluate all of the opportunities as you put it yourself.

Therefore, we are constantly looking at that. And back then, we said that we would have enough capital. But look at our allocation in our loan portfolios. Turnover of the wholesale bank therefore, everything we are doing is very well planned and coordinated.

So I can even go further. I think we can surprise you more than anything else just in terms of our CET or common equity. And of course, net income will grow and our return as well. Obviously, [ 14.67 ] is a challenge more for some banks than others. But it is for the period of 10 years, but there is an intersection here, which is '26, '27 and '28 are the heaviest years. But after that, when the horizon may change. Therefore, we are very confident about everything we are doing and in terms of the capital that we are allocating. Well, thank you for your provocations.

Next question from [indiscernible] with Santander Bank.

[Interpreted] I would just like to revisit the payroll loan. I think you said something about it, but if you could elaborate a bit more about your appetite and expectations for payroll loans and more specifically private payroll loans? And I know that on the public side, you gained some important and relevant market share.

[Interpreted] Well, we are very, very well positioned to grow. Gain market, of course, that depends on the competition, but I think we are well positioned to gain market share. Well, we gain market share on the public side, INSS that involves a lot of market discussions and things related to the management of INSS, when it comes to payroll loans. But we are also very well positioned with INSS.

But on the private side, we tend to increase our share. And as I said, we deploy models that are highly competitive 24/7. We are growing. We've seen that in the past quarter of 2025, the last quarter of last year, and we will see the same things happening throughout the year. Therefore, I'm very optimistic in terms of everything that we are doing to grow and to gain share.

[Interpreted] Next question from Renato Meloni with Autonomous.

[Interpreted] I'd like to second my colleagues and congratulate you on the deliveries, since the plan was announced. I think that the results show the whole work that was done. Over the year, you showed a lot of ROE expansion. But when we look at the guidance at the midrange, ROE similar to that of Q4. So I'd like to understand, do you expect 2026 as to be a year of accommodation of settling or the uncertainty regarding the elections made you be more conservative in the guidance?

Now moving to 2027. If we have this scenario of accommodation, I think that in 2027, we bring ROEs to more reasonable levels. What would be the levers in revenue to increase profitability?

[Interpreted] Renato, thank you for the question. I'd say that I don't see a year of settling for us. I think it's part of our plan. Again, we will improve step by step because we'll continue to invest to increase competitiveness. I don't want to be repetitive, but this is our mantra. We focus on this all the time.

Regarding the ROE, again, it's kind of an internal joke. Yesterday, we were laughing about this. An aircraft will not fly backwards. So there's no chance that we'll do less than 15%, 20%. Actually, Andre, you might witness and Cassiano as well, I said a year ago, I'm more optimistic. I'm more pointing to the upper range of the guidance than focusing on the lower band of the guidance. Of course, this year, I'm a little more optimistic.

So what we actually saw, Renato, is that the market somehow started bringing the expectation of our net income to BRL 30 billion, BRL 31 billion. And the role of IR is to correct the course. You don't have a 30%, 40% leap year-on-year because we continue to invest in our transformation. Remember that. I see a higher and growing ROE.

Indeed, you mentioned the macroeconomic aspect. It is true. We should have a little more volatility in the second half because of the elections that is only natural. But I am optimistic regarding what we are doing and our ability to compete in terms of the expectation of our economists we'll have the GDP growth and unemployment rate very balanced. So we have a lot of opportunity for growth.

With the interest rate cuts, they happen a little faster. This will help some companies regarding their costs, if they are a little bit more leveraged. So of course, the macroeconomic environment does have an influence for all players in the market.

But I see us with a lot of opportunities to grow the ROE. And if we can deliver superior absolute results, just like the loan book that grew 11% when in September, it was growing 9.6%, we will do it. We're not wasting time. We're not wasting space or losing space.

And please remember what I explained here, Renato. We are well aligned, increasing penetration. I spoke about Principal segment, SMEs, Corporates doing well, the Insurance company. I mean, they are delivering a lot. And there are several verticals.

Earlier today in the press conference, Ivan spoke about the continuity of growth in pension plans, active distribution there. So I see 2026 with optimism. I think that there is some a structural issue in Brazil. In terms of the fiscal aspect and the public debt. But if we're able to look at the public debt regardless of the presidential candidate, if we improve that for 2027, '28, we'll improve the market expectations. And he asked about the levers to increase profitability.

[Interpreted] Renato, I can say that it's almost everything, credit. We're growing it with the right drivers. But we are not operating in the higher risk segments for credit card, mid-income and high income.

In lower income, our risk appetite is lower. Credit is a big driver. Liability management, the liability management we've been doing and the growth that we've been posting and we've posted a lot of growth. Fee and commission income, the main levers and the detractor. So that's another line. The insurance group again.

And in the other areas, payments, our consortium business at full speed, the ability for auto loans in our own channels and external channels and so on and so forth. So I see a lot of opportunity because our organization is diversified. We have different revenue sources at different moments. And this year, we will review the channels, and this will increase cross-selling a lot.

We spoke about Bradesco Expresso, distributing a lot more consortium, operations, insurance, payroll deductible loans, but also Bradesco Financiamentos selling more insurance. So we have a number of opportunities for cross-selling. Our business app that we'll have Cielo will soon have insurance, dental insurance. So it's all part of operating leverage for us.

[Interpreted] Next question from Thiago Batista with UBS.

[Interpreted] My question has to do with what you just mentioned, good performance of the insurance group. In recent years, the share of the insurance group was about 20%. It got to almost 50% in 2023, and it was dropping. But in recent quarters, it became relevant again.

I think that in consolidated income, a much higher percentage came from the insurance group. This is due to an ROE of 18% post to that. But in the sister banks too a bit under pressure. So 2 topics, 1 is the relevance, when I think about the midterm in 5 years' time, how much of the results should come from the insurance group? And #2, is the power of the organization hurting the consumption of DTAs of the bank. In 2026, will DTAs start dropping or not?

[Interpreted] Thank you, Thiago. Well, the insurance group is not getting in the way in terms of consumption of DTAs, and that is important to mention. What we have been saying in terms of DTAs is that this is a year when we will try to neutralize the nominal portion.

We'll see a reduction of DTAs in 2027, '28. And this is part of our plan stretching until 2028, as Marcelo mentioned. And that is super important. And I think that we've had the best allocation possible in managing the cost of capital, and it has to do with the tax credit. What was the second part of the question?

Well, a comment to make periodically, the insurance group also pays dividends to the controlling shareholder. So we declare it and repay it. So you see the insurance group is a strength to us and not the other way around. It is diversified. It is the biggest insurance group in Latin America.

We have a huge traction in the bank's channels to distribute insurance, but we also have external distribution of insurance, reaching out to other clients, which were not necessarily reached out by our internal channels. But we don't hope that the insurance group will do less. We want them to do more. We have an expectation of growing even more. This is what we are seeing.

The bank is investing a lot. We're investing in technology, 22% in 2025 over 2024. The bank is investing in technology. And sometimes, we capture the value considering BF consortium and so on and so forth. So what I see is, over time, we should have 2/3 from the bank, 1/3 from the Insurance group. But if this means that the Insurance group will grow a lot more and have a bigger share, I'm happy.

I want to deliver more. And this is our expectation. We are very pleased with the results there and with the other related companies. So you'll see that we will be taking off in our ROE and absolute profit.

[Interpreted] Next question from Matheus Guimaraes with XP.

[Interpreted] Congrats on the results. I would like to revisit the SME topic. I think Andre talked about market share, and that was a relevant information. And historically, this has been the bank's strength in SMEs. But we've seen some competitors, even new bank talking about SME. Of course, the concept of SME varies in terms of the size of the company. But what would we expect for 2026 in that portfolio? Because given that this is a very relevant portfolio for you in terms of growth and even in terms of growth going forward.

[Interpreted] Matheus, thank you for your question. We are very pleased with our position. In reinstating our position, I must say that I've been working directly with Jose. Jose is the VP in charge of that area, but I've been working with all of my colleagues, [ Alexandre Pinheiro ], Mario [indiscernible] Marcelo, the entire corporate team or company team and also wholesale bank with Bruno, et cetera, and the middle market team.

First of all, we always look at what places the Central Bank in terms of assets, companies up to BRL 300 million a year because this allow us to draw a comparison. Competition in this area is very fierce. We always knew that. But our distribution strength is very important. We delivered a lot in digital channels. We hire government progress through digital channels.

The journey is very efficient. And we continue to invest. If there is a place to put money, it is precisely in SME, micro and small and midsized companies. The levers continue to be government lines, but also, we provide funding to company vehicles and other investments that have even sounder guarantees, prepayments to suppliers, all of that, it's part of our journey.

But then when you look at the digital need with the new Internet app, I mean, a new app when we are migrating over 500,000 clients. The retention rate has been enormous and great growth opportunity and the commercial team in the back office is supported by GenAI and new tools. We just deployed Salesforce back in 2024 for the company segment.

And now we are expanding that with the entire business segment and the previous platform we had so we can manage this whole set of things much better with more than 5,000 managers in 21 points of sales. I am very, very pleased with the results. So look at the level of market share we have and see all that we were able to deliver in terms of our loan portfolio.

And that was not by chance, but rather because we implemented in new tools, new segmentation, new tools to our clients, new experiences and certainly with business unit models and products that are much more suitable. With SMEs, Matheus, not only we reduce the risk, but we increase penetration, and this is what we have to do.

AI is here to help us. There are things that are a lot of -- involve a lot of machine learning and other things involve Gen AI. So there are things that we do to manage our portfolio, some predictive default models and engagement to grow, this means the client life cycle of a client totally connected to our analytics via CRM, which has also been revisited.

Therefore, we are sticking to our position. I mean, going from 16.6% to 17% or 16.4% that's not what changes the game. We have to continue to grow and at the same time, reaching our fair share of everything that is important to us. And I'm very much aware of our potential and the growth that we can post for either corporate and individuals.

[Interpreted] Next question from Carlos Gomez-Lopez. Now I'll turn into English.

Congratulations on your second year of -- under the new management. I had 2 very brief questions. The first one is about the absence of cockroaches, as you call them, bad corporate cases. We haven't had any this quarter?

In your guidance for the next year, do you expect corporate defaults to stay where they are? Or do you incorporate some deterioration? And the second is, could you comment on what tax rate you expect for next year?

Carlos, the answer is no for the first question.

[Interpreted] But Andre, you can just start answering on the tax rate, and then I can add if necessary.

[Interpreted] Okay. The tax rate that we are working is between 16% and 21% and 18.5% or 19% to calculate fixed net income. And why is it that the tax rate was 20% in 2025, and it dropped a little bit. First of all, because we anticipate higher payment of interest on equity, like I said, BRL 14.5 billion in 2025. So I'm saying between BRL 15 billion and BRL 16 billion in 2026.

Certainly, this is a number that certainly depends on interest on equity to be announced by the government. It's not a fixed number. This is just the best estimate, but we anticipate growth in IOE, so that we can take more advantage of the embedded benefit.

And secondly, is what Marcelo said, part of our investments bring about competitive gains. And like consortium. We've been highlighting that almost every quarter, we could also talk about auto financing that had posted a good performance in the past 3 months. We have several examples, even with BBI.

All of the companies are posting very strong performance, and this helps reduce the rate -- tax rate. That doesn't mean that this is operating weakness. But on the contrary, this is very well distributed. And this year, in particular, the tax rate will drop a bit. I mean, depending on the company, the rate is different. The insurance business has a lower tax rate.

I think this is the answer. And we have no concerns when it comes to the wholesale bank. So thank you, Carlos.

Next question comes from Tito Labarta from Goldman Sachs.

You may have just answered it, but just wanted to make sure, right, because on the -- if we do ROE on a pretax basis, it's actually been a little bit more stable throughout the year, right? And I think on the guidance, our tax rate will be a little bit lower.

Just because of the tax benefits you have, I think as your profitability generation improves, I would expect that tax rate to go up. And I think you mentioned the insurance tax rate is a bit lower. But just to understand, in terms of the underlying sort of earnings potential of the business, do you think that keeps improving? Or do you think this tax rate sort of remains low because of the tax benefits that you do have? Just to kind of think about excluding the tax rate, the ROE of the business and how you see that continuing to evolve?

[Interpreted] Tito. Regarding the operational results of the group, the operational results of the group before taxes grew 27% in 2025, very strong. Secondly, looking at 2026, the answer is no. Yes, we will post strong operational result growth. And it's not about a weaker operational and a lower tax rate. It is all well distributed with Insurance, very strong consortium, very strong Bradesco Financiamentos, very strong. It's a very big group with several companies. When we consolidate it all, we see a small reduction of the income tax rate.

Let me stress this Tito. We spoke about this in the other question. The insurance group has a smaller tax rate. If you go to other affiliates as well, for example, in payments, it's the same thing. We consolidate it all. And sometimes in one channel, for example, the complete connection of Bradesco Financiamentos with this one single channel for checking account holders or non-checking account holders.

So I have -- it's a different situation sometimes. It's not the case of the tax rate, but there are other companies that have different tax rates, which is the case of Cielo. You see there is a mix of tax rate. And you should not forget that sometimes in the end of a period, there are some fiscal aspects, a certain law here and there.

For example, insurance group benefited from that in the past quarter. They benefited from one law that affected the tax rate. So this is kind of what explains it, nothing different, as Andre mentioned.

[Interpreted] Next question from Eduardo Nishio with Genial. Still no sound.

Let's move on and the question comes from Andrew Geraghty from Morgan Stanley.

Congratulations on the great results. I know you have discussed at some length credit growth and some expectations for payroll loans, secured loans. I was hoping you could maybe elaborate a bit more on each of the different segments and how they fit into the loan portfolio guidance of 8.5% to 10.5%, kind of where you're expecting better growth, maybe where you're expecting some weaker growth and where there could be some upside by segment, if possible?

[Interpreted] Well, actually, as Marcelo mentioned, we start 2026 stronger than we started 2025. We had a positive surprise in credit in Q4 2025. So we start the year already with a lot of traction. So we see a continuity of that movement. So what do we see in terms of trends? Very strong SMEs followed by individuals and then wholesale, wholesale competing with the capital market funding.

As Marcelo mentioned, sometimes very high tickets making a difference. In Q4, positive difference for us. That doesn't happen all the time. But I think that the expectation, the prospects for the segments would be this, SMEs, individuals, wholesale, we have traction across all fronts, and we are ready to capture all opportunities. Right, but Andrew, there are some different situations, when we speak about the affluent segment.

In Principal, we have relationship products such as investments, the credit card with a value proposition that is unique for these clients, totally different experiences for these clients. The same goes for Prime, which is different than the relationship for INSS retirees. For that audience, we offer deductible loans. And when we get to Prime and Principal, mortgages. So we have these mixes of products that sustain in these segments. And this is just to mention a few major.

And in terms of companies, legal entities, we have a huge mix of products growing in small and medium-sized enterprises in different lines, by the way, increasing our penetration there. And with the wholesale bank, we are recycling the portfolio, and what we call OBD book origination for distribution, which is the case when the capital market spread was very crushed, we can compromise risk-adjusted return.

So we don't work looking at that. So it is better to distribute than effectively keeping it in our books. And we have a set of fees, which are also important for us, in different lines of business. And there's also cash management. It is a super important platform for small and medium-sized enterprises as well as for the wholesale, we have a new technology platform, which over the year will bring us important improvements. That is another key point to improve profitability.

[Interpreted] Let's see if Nishio is back. We still cannot hear you. Not yet. Maybe if you remove your headset, maybe it will be better. We cannot hear.

We're receiving a question about mass income. Okay. Tell me a little bit about the mass income portfolio?

[Interpreted] So if you need any more information, I can add. Okay. Mass income is probably one of the major transformations of our banking cycle, since the beginning of our track record, our history. I think we are bringing some good news. I think Marcelo mentioned it quite well. 90 million clients are already fully digital in the mass retail with a totally different value proposition.

But again, it's much easier to operate, not only they use BIA GenAI, but there is a specialist that can help with a customized sale, which changes the paradigm of having an individual physically present in a branch. The second relevant aspect is the engagement, our capacity to serve that client with Gen AI tools and integration tools that are very important to boost sales. And I think this has been a major evolution.

We anticipate BRL 45 million. So throughout the year, we will be fully digital. This will be our mass retail bank. This is a very important aspect. And today, February 6, we already have 25 million digital clients because every week, the numbers are growing with zero resistance, zero friction with clients.

And this has been a very pleasing experience, very good experience. And behind all that, all of that is supported by a very good technological platform for individuals, and this will encompass all the individuals. And I think we've been telling you about that in the past quarters, and this will certainly grow or help us decrease cost to serve, which has been significantly reduced, and this has an important correlation to our footprint adjustment.

[Interpreted] Well, [ Nishio ], thank you very much for joining us. I know you had a that problem with the sound. But thank you. We are always available to talk to you and also to welcome you here at the bank. And the same thing goes for our IR team.

I think Cassiano gave you a good backdrop. Well, you saw more than BRL 40 million at the end of '26, starting with BRL 19 million, but engagement is increasing and improving. And certainly, we are able to reduce direct cost to serve by 40 fold. We are very committed to what we are doing. And there are still people that look at the physical space in the physical world, and we are testing different models all the time with our Bradesco Expresso, so that we can address these topics. And this is a challenge.

In fact, I said that I went to Asia last September. And I heard comments from some banks, they have the same challenges we have when it comes to footprint adjustments, cost to serve and consumer. Therefore, an issue, we are sticking to our plan, and we will bring this year, and in particular, in the second half, more information about this digital retail. And thank you. Thank you, Nishio.

And with that, we conclude the Q&A session. Questions that couldn't be answered right now will be answered by our IR team. And before I turn the floor to Marcelo to his final comments, I must say that this presentation and the full material of this release is available in our IR website.

[Interpreted] Well, thank you, Andre. Thank you, Cassiano. -- and I extend this thanks to all of our team, who helped us in this video conference. And thank you, our audience, for your interest and for the time that you spent with us.

Its what I said -- I mean, this is the summary of our transformation, 8 quarters in a row, delivering good numbers with the focus that I said, without losing sight of the plan that we set up for ourselves step by step, but delivering improved ROE and improved absolute net income with a very engaged team with clients and with the Bradesco team.

So thank you once again. And our team is entirely available to give you more details, not only about this earnings presentation, but also about our transformation program. Thank you all very much, and thank you for joining us.

Good morning, everyone. I am Marcelo Speaking, straight from Bradesco's headquarters to present some details on the results for the third quarter of 2025. I think you've had the opportunity to read the results that we published last night. I think you had the opportunity to read it and just see a few things related to our results.

So I'll start by saying that our recurring net income was BRL 6.2 billion this quarter. That means that it was up 2.3% year-on-year was up 0.1 percentage points, posting 14.7%. So we had a very sound consistent results considering everything that would be [indiscernible] to you in the past 7 quarters. This was after our transfers.

So basically, here, we are talking about profitability. So ability maintains gradual growth and secure growth with operating consistency. All you have to do is look at all the lines. Revenues continue to grow in almost all lines NII and NII net of provisions, fee and commissions income, the insurance group and other related companies and the highlight goes to client NII.

Delinquency rates remain under control. The restructured portfolio comes down, as you will see further on. And our secured portfolio rose quarter-on-quarter, reaching almost 60%. Operating expenses are in line with expectations and very much [indiscernible] Expenses are under control, and I will elaborate further on that topic.

And we also anticipated our footprint adjustment and the numbers are higher than expected. And once again, we were able to deliver a sound performance of the insurance group with ROAE over 21%. This slide brings a bit more details. Our total revenue was BRL 30 billion, up by 13.1% year-on-year. Total net interest income almost nice I mean, almost 4% growth, fee income, almost 7% growth, and the insurance group grew 13% year-on-year.

That shows continuous -- so what -- when we attribute this growth to, I mean penetration in the customer base, I will revisit this slide further on because if we didn't have any penetration in our base for individuals and corporate with consistent improvement of customer experience in all business segments we wouldn't be able to post constant growth in all of these revenue lines as you could see from this slide.

And now moving on to our loan portfolio. Remember it was BRL 1.34 billion, again, consistent growth, 9.6% year-on-year. Now here without going into a lot of details, but further on, we will give you more specific details. So growth, both in individuals and corporate are more related to secured lines. You will also notice that the highlight is with micro and SME almost 25% growth year-on-year, and this is a very well managed portfolio with a lot of collateral because this is what will allow us to grow consistently over time.

So next slide zooms into some specific credit lines because these are growth. What can we tell you about this? I mean very sound commercial traction in all lines. If we didn't have a good customer base and penetration in that base, we wouldn't be grow and the other element is the credit modeling in the business units that created including portfolio management, which you can see in the down -- the bottom part of gross life with a lot of machine learning, improved models.

We hired more than 200 people to our credit BU. We did upscaling. And what we are noticing is that there is a constant evolution in all segments, not only individuals and SMEs but also the retail base, I mean the wholesale bank was all of the balances that this requires. And now I would also like to highlight a few points. I mean, for [indiscernible] payroll loan ended the quarter with almost BRL 102 billion. Our share is approximately 14.2%. Among private banks, we are the largest one.

We lost in this commercial disputes to public banks but our public portfolio 15.4% share. Social Security, first of all, was 15.4%, public, 14.3%; and private 7.5%. We were very conservative in terms of granting private loans. But then further on, we can elaborate on this. But we put together a more restrictive credit policy at the very beginning because we didn't want to run into many risks.

So our policy is to work with the companies that we use [indiscernible] in the past, and for the employees of these companies that were at least employed by the company for a year. So in the first case, the level of delinquency for lack of payment was 12%. So this number is coming down.

Operationally speaking, the market is oil in the wheel. So on average, I'm not referring to any specific organization. But on average, the delinquency level in this particular portfolio for these new cohorts, is around 11%. And ours, it's 3% we did grow I mean that portfolio decreased on the private side year-on-year. And then year-to-date, as well. But then when we look at the third quarter, the Central Bank just released the numbers for this portfolio for September.

And then I think you can look at it. So we are resuming growth on the private side, our policy is now a bit more open, but we are also growing on the public side. I am [indiscernible] with all of the changes that were done in the first half of the year went from a market production of 7.5 billion to $3.5 billion. And shortly, what is happening here since this was the largest portfolio among private banks.

Our monthly [indiscernible] is higher. If you look at the Central Bank numbers, you want to see that there was a drop of the INSS portfolio, and now we start growing again, meaning that we accelerated portfolio. And the expectation is to grow next quarter and to grow next year consistently in all these lines. So security, public and private and look at our share.

So we don't have anything to lose. We always have to gain more. So this is the outlook. And credit cards, if you look at the numbers, we grew substantially in the high income line -- in terms of real estate, our share is about 20% per 3 or 4 banks whose market share is slightly higher. But in the last quarter, I mean this entire year, in general, we preserve margins.

Now we see opportunities with also some modifications accelerate real estate again and real portfolio. So the portfolio of the bank loan grew very collateralized or secured SMEs, we are growing consistently quarter-on-quarter and year-on-year, almost 25% and when we released the plan we anticipate that we would struggle to remain that leadership position.

I'm talking about companies that have revenue and banks and had revenues up to BRL 200 million a year, and we gained share with SMEs as well. This is just to say that we will continue to grow. We will continue to grow our loan portfolio. And as a reminder, last year, we had a write-off of the restructured portfolio of almost BRL 10 billion and large corporate growth.

And if everything were to remain stable, if there were no write-offs and this large corporate portfolio had not declined, our loan portfolio would have grown even more. So we are well positioned. We have our desired clients. We have demand, and we will continue to grow and we expect to gain market share in the payroll loans. We will continue to grow real estate, SMEs because we gained market share.

So we are -- we have a very good commission track and as a consequence total NII grew almost 17% in the total NII net of provision year-on-year. But when we look at client we grew 19%. But when we talk about client NII net of provisions when you are balancing that portfolio with cost of risk we grew 18% reaching almost BRL 10 billion.

And the expectation is continue to grow.

Now speaking about expenses with LLP and we just had a press conference to join us and they asked about this 500 million of variation on the cost of credit quarter-on-quarter. There are 2 cases that justify this. First, there is a one-off case in our wholesale bank because we make provisions I mean, obviously, I cannot names, but if you look at the full publication and look at the provision phase, you will see that we have cost of credit for mass retail and wholesale.

For when you look at wholesale banking, it's about BRL 200 million every quarter or BRL 300 million. They're certainly regular and this one goes from 200 to 500 approximate. So it was a one-off case. However, we could also credit in them, which is also part of the wholesale banking. But once you offer certain you also have to call provisions before he is natural seasonality. But where do we exclude that and also what was added to the [indiscernible] Bank this would be perfect.

So the coverage level that we did for them put us on -- still in a very comfortable position. This was a one-off case. And so we've decided to make the necessary provisions just to move on because we want to continue to grow. Given that, that is flat to the average cost is 3.2 rather than Therefore, no new -- no worries here because our portfolio is far -- this slide after long conversations with Casciano.

He's already here and [indiscernible] likes to say, okay, this slide this screen only comes with good news. I see a lot of good news here, but I would also like to comment on a particular issue because I got a question about it.

If you look at this numbers down below it goes from 7 points. It goes down from 7.9 to 7.7. And state growth and that is the portfolio with better quality. And this takes us to the restructured portfolio. There is a drop of almost BRL 10 billion year-on-year, which is quite significant because if you go back the early months of 2024, above BRL 12 billion and even on the loan portfolio improved.

Look at what happened, the number is dropping in terms of our total portfolio. And another positive number is the level of secured portfolio. Almost 60% was the number that we reached. Therefore, we are doing a lot of things to come up with this kind of performance. delinquency is flat. There is a foot here that. I mean over 90, there was a slight deviation, and this was also related to the John Deere Bank.

I don't see any issue here because they have other ways to finance their equipment in every business companies. This affects because to consolidate all the numbers. But if you look at the portfolio, it's absolutely under control and this will certainly help us make things go forward and generate more revenue.

Now fee and commission income, if we do not have commercial traction, and if we cannot [indiscernible] experience to our customers and good and adequate relationship, we could never post a good fee income that grew almost 7%, and the highlight comes from credit cards, almost 14%. And Consortium management, we grew 22.1% year-on-year where this product comes from customers at different levels.

I mean, mostly corporate our rates are about 15% of the [indiscernible] rate. So it's very attractive. Asset management with these levels of growth if you run is a highlight. It reached $1 trillion of assets under management. And if you look on the right side, I will draw your attention to loan operations.

I mean we are still tracking and I'll draw your attention to our investment bank investment banking shows a drop of because the baseline of the previous quarter was a growth of 75%. Therefore, if you look at year-to-date this year, it is growing 24.1%. And this is not the line work because this involves growth on our own teams, engaged teams.

Certainly also, this involves pipeline generation coming from all different segments of the banks like wholesale middle market. In addition, to custody and brokerage services, which also posted growth year-on-year. Now operating expenses before coming to that, I would like to mention an adjustment to our footprint.

We are moving even beyond what was anticipated for our footprint. This year was BRL 1,269 a year ago, 1,600 points. That means that we move forward, which is quite positive. And we are doing that thanks to the talent of our teamwork with a lot of intelligence backing it up, and this will be an ongoing trend. And when we talk about the guidance, then for 2026, we will tell you what our expectation for next year.

Expenses are growing 9.6%, but also look that somebody asked me about that. Personnel expenses and admin expenses grew 5.5% year-on-year. we were to eliminate the effect variable -- higher variable compensation. Our growth will be 2.5%. Our expenses are absolutely under control, and I would like to draw your attention to one item.

Without [indiscernible] it would be 8.5% rather than 9.6%. Let me give you some additional information. And this is also posted in our full publication. I think you can find that on Page 21. That's when we talk about operating expenses. So looking at operating expenses. This is where we consolidate everything.

That mean expenses year-to-date and year-on-year negative growth, meaning that there was a decrease. But if you had the chance to -- have the chance to look every single line, you will see that some expenses grow and some other decrease. Like transportation decreases. But there is a line that refers to technology that technology didn't have any quarterly variation, we would decrease admin expenses in the quarter.

But also this quarter, absolute growth was BRL 140 million. I would like to draw your attention to one particular figure. So when you look at our balance sheet, we consolidate all of the associated companies. So when I take [indiscernible] the growth of admin expenses is higher than 20%.

So here it goes up BRL 140 million. I can tell you that a good part of that comes from these 2 companies because the effects due to the equivalent. So expenses here are pretty much under control. Now personal expenses had no impact in the quarter when it comes to admin expenses. But then when I move to personnel expenses, posted growth of about 7%, slightly over 70% in terms of personnel response.

But if I am to variable compensation, we look at fixed compensation, which appears in the first line of operating expenses. You will also note that personnel expenses would fall to a number probably the low 3% if we were not doing that equivalence with [indiscernible] Therefore, you have to take a snapshot and just think that we have consolidations that were also posted in the numbers. So I can certainly say to you that our expenses are very much under control.

Certainly, there was a higher impact in this result. This is, in our view, a positive expense and there is another factor here because you have to adjust all your provisions when you have the collective bargaining everyone, which is higher than undersense it's very hard to index look at personnel expenses. So we've seen expenses absolutely under control going forward, right?

So now the insurance group that I had mentioned in the first slide, the net income is consistent. We continue should bring very good profitability when we look at year-to-date at 11.4%. -- year-on-year, 6.5% growth with an ROE above 21%, as I mentioned with you and may I attract your attention to the operating results that guarantee the consistence of the insurance group's earnings with the total earnings growing.

At this level, year-on-year, 13% operating results, 10.2%; financial, 18.3%. So that's a very consistent growth for the insurance group. And this is also not divine intervention. All of the customer segments and pretty much all lines have been growing, delivering positive variations year-on-year. But not only in our customer segment, but also in all distribution channels that the insurance group has for the brokers, digital channels, an event pointed at that -- now in our press conference.

And the technical provisions reached a level of BRL 235 billion with growth of 5%. Now moving towards the end of the presentation. Capital, even with the growth of the loan portfolio, Common equity grows 3% to 11.4% and C1 growth 0.4 percentage points, as you could see.

Now our guidance. I talk a little bit about this literally, if you look at that, we move -- in the year, when we close the quarter to fall within the guidance. But at a higher interval in all items, including expenses. So considering everything that I told you about. So the loan portfolio, for example, from 4 to 8, we're growing at 9.6%.

So if you go there to our earnings presentation of the fourth quarter of '24, you see that through the portfolio quite well, BRL 981 billion. If you look at the portfolio, that's 134 today and you put 16 billion. The baseline takes us to 7.9%. So I'd say that we will grow between 7% and 8%, a little bit more maybe but with consistent growth in here. Also, NII net of provisions in the upper levels of the interpolation for each 1 of these items.

All of them in a falling in the higher end of our guidance. So we'll deliver guidance at the end of this quarter. A review of our transformation process, we will have a detailed view when we close the year, but we have been evolving very well in all of the aspects of individuals in each 1 of the segments for this principle, close September with 41 offices and expanding still growing, and I'll talk more about that.

I talked about the footprint we launched the Global Solutions and enable the platform to 100% of [indiscernible] clients for our cash management. We have more than 11,000 people working with enterprise agility in our organization and also advancing quite quickly and with everything we've been doing in IT and the intensive use of Gen AI, our productivity in terms of development grew this year 109%.

Looking forward, the next quarter into the next year as well, what we have here or 0.4 topic without getting into the details of each one of the items of our Mandola. But first principle we should close the year with 300,000 clients approximately 62 offices in almost 40 cities in Brazil, and Prime has been evolving from proposition, we'll already have 3 million customers, maybe slightly a little more than that.

We have more than million customers that are fully digital would no longer use physical point of service. They're also being supported by our Bradesco Expresso. Which grew and has more than 39,000 bank correspondent throughout Brazil in every city of Brazil and more than 5,600 municipalities in Brazil.

In SMEs, we saw traction that we have last quarter, I talked about the new app. We've expanded the app for small and micro companies -- they can hire loans from promoted directly on the app. It's a new, very streamlined experience. And obviously, all of our segmentation process has been proving effective with growing penetration in this segment.

And I would also like to here at the bottom about our culture. So Bradesco, I am Bradesco last year, we saw that we had the survey with 74% of participants with high engagement levels. This year, we had 84% of all of our employees being engaged in answering a survey showing the evolution that we have this aspect as well as all the other initiatives that we have in all of these different areas.

Pieces of information to conclude the presentation and to move on to the Q&A I've been talking a lot about now I said, I'm not going to talk about this anymore. I keep talking about this in all firm that I go to earnings presentation. So let's get beer to talk to you. And I had surprise when they drop in the video because they had an Evita that is the last time you're going to see this, okay?

Next quarter, I will bring a new one that will be a lot nicer than the 1 that's going to talk to you right now. It's about a minute long. It's a very brief video. So let's have a look at it and I'll come back for the conclusion. So please. Digital transformation through enterprise agility and the massive leverage of NAI is generating impressive results.

Look at this. I can highlight 4 fronts of progress to you. First is the increase in productivity, hyper personalization risk management and customer engagement and journey. We've already reached the productivity increase of 109% this year. And we built income model with a drastic reduction of 95% in the time to create and express increase in trace at the same time, we increased security with sophisticated biometrics, and we offer hyper-personalized experience. And customer service has full engagement with 90% retention rate on chat and innovations such as fixed by volume.

Here, Bradesco Gen AI goes beyond technology. It is part of our transformation the service of our customers and our business. So that's it. Thank you very much. Now it's back to you on the studio [indiscernible]

It's a tough one, right? But next one will not be this advertiser. We're going to have another one. So I'll hedge my conclusions here, restating what I said at the beginning of the presentation about our commitment to increase profitability. We are getting close to -- the return on cost of equity, but step by step, as we said since the beginning of our plan, revenues is the main driver of profitability increase, expenses under control, credit portfolio with a balanced growth always prioritizing risk-adjusted return.

Risk appetite that I said at the end of last year remains moderate. But the delinquency rates, portfolios vintages are completely under control. So we have a lot of traction in the brand bank, change the bank and we're confident that we will have a good quarter at the end of this year and we will also have good quarters next year 2026.

So now I invite you for the Q&A with my colleagues, Cassiano Scarpelli, CFO; and our colleague, Andre Carvalho, IR Director. So Andre, over to you. Thank you.

Thank you, Marcelo, Cassiano. It's a pleasure to be here with you. Good morning, everyone. I'd like to remind you that our CEO of the insurance group, [Operator Instructions] First question Daniel Vaz. Daniel, please go ahead.

Thank you, Andre. Good morning, Norona, Casciano, everyone so I'd like to talk a little bit about past and this overview of the footprint that you accelerated a lot over the last 2 years -- so closing a lot more service points that were expected, both in 2024 and '25. I think you accelerated even beyond those targets. So my doubt is about. Should we expect the same pace of closing? Or is the trend going to change focus to operating efficiency to move towards that of 40% 8 down from 48 when you were announcing the strategic plan?

And then the second question still on cost. You mentioned Elo and Alelo growing 20% year-on-year, even more so than cost. So we can imagine that this is level that will be maintained going forward. Is there any one-off situation that would cause you to accelerate cost in these 2 companies

So we'll start with your second question. Thank you, Daniel. What I have to say is they do not grow in personnel expenses. So it was on the other way around. I only mention that to say we have different dynamics.

But they have been growing in terms of volume, revenue earnings, and they have been investing. So naturally, when you increase customer base, you also increase cost and this type of cost, it's natural to see an increase. The expectation is that it will grow indefinitely at a level of 20%.

I don't see that. But they're doing well. They're balanced. They're bringing retires when we sold the transformation plan, we mentioned was that we have a plan to reach that level of efficiency that's very important. And we're pursuing that and having a very strong control of expenses with a fine-tuned execution and a lot of discipline, Daniel.

But now if I tell you that I have an opportunity to spend BRL 1 billion to make BRL 2 billion, we will not flinch will not hesitate to move forward and make adjustments because life is dynamic. So the opportunities came up, and that's how we do it. That's not what we expect to have very well controlled expenses. But once you consolidate you may look and see, but shouldn't it be going down or you may see a deviation here and there.

As for the footprint, we talk about 1.6 we review in the last 12 months, the expectation going forward, if you look at 12 months, would be to a smaller adjustment Dan. We're closing this number according to our transformation plan, but it should be below 1,000. That's the expectation for the next year.

So just to add to what Marcelo said, once we anticipate the footprint adjustments, of course, we have more provisions for labor and that shows up in our OpEx line. When we actually reduced the footprint adjustments, we should see a slowdown of the labor provisions, and that should be clear from now on.

I would also like to add to Daniel, we can have to remember investments that's there, but the depreciation, the strong investments we've been making naturally in technology for the bank overall, as a whole and depreciation on the site. So there's a little bit of that. In theory, they are offenders, but actually, they are what boosts the new level of efficiency at the bank.

Of course, also competitiveness, right? Because in what we're seeing and we have a more conservative guidance at the end of last year, but we will make it a point to make any investments required in terms of competitiveness. So thank you, Daniel.

Moving on to the next question. Pedro Leduc Itau BBA.

Cassiano, Andre. Taking using you've already answered actually this high level of labor provisions that we see this year is like building inventory that may be normalized next year. So I think this is a very clear that was a big offender of the results.

But the other question would be on the [indiscernible] quality. We see a slight increase in over 90 NPL for individuals so I'd like to get some explanation about this a little bit, maybe the [indiscernible] side, if that's been done or is common provisions and also and B, that's curious, it's been going down. So congratulations, but I would also like to understand this a little bit more, maybe the relevance of government lines going up.

If you can give us an order of magnitude, if it 100%, 30% of the SME portfolio, how is the performance of these government lines as they come out of the grace period and if there's any major concentration that we should look at. And at the end, what I'm trying to understand is if this increase in the cost of risk that we saw in this quarter is a trend going forward or not.

Thank you, Pedro. Good questions. So thank you. It's a pleasure to see you. So first, so individuals, delinquency, it was driven by [indiscernible] So we don't see any other issues. Our portfolio is very and good vintages. And you will see a good quarter on the fourth quarter. In this aspect, now for the wholesale bank, that's the case that we had. So going back actually to one that you asked.

Look capillarity is a large greater and smaller or larger fundings depending on the size of the deal and the agribusiness side. So it's natural. It's not breaking with any history of what we've seen, and there's a recovery that comes over time. That's what we saw there.

So that affected a little bit because of the consolidation, but it doesn't keep us up at night and it doesn't discourage us with the [indiscernible] business and our growth in agri business, both in the wholesale bank and directly at the retail companies and individuals as well. We are excited with this industry.

Of course, we're very cautious we've been working with collateral always here in this type of line. We do not have any deviation in our portfolio. Rural about the wholesale bank now, that provision that I met there's regularity there in a specific case one-off that was a little bit outside of the market rationale because the market so we decided to provision for that with a good coverage ratio now.

I don't see any other issues here. I see the cost of risk being very well balanced if you were to remove that as of the use Bank and the deviation that we had from the year, it would have been flat Leduc. It would be flat. So the order of magnitude for you about this case. I can't give you the specific number, but it's around BRL 200 million more or less. BRL 200 million that we had. So we're very comfortable with our portfolio.

As for SME why did it go down? Obviously, we have enumerated denominators here that we're warming up well, but we're growing well with collateral so we choose mortalities and FTI FGO, remember that I said we had a share of around 18%. We were #2 last year. The closing is site the beginning of this year.

And I said that this year, we would be a leader and with more than 20% market share, and that was what led us to grow with quality. because the models take into consideration those intervals so that there may be occasionally a break with those thresholds that are accepted by FGI FGL. So we are doing very well, delivering very good quality creating a huge culture of cost of risk in our company segments and our business of the company is of up to BRL 50 million a year in revenue.

So portfolio is under control with no hiccups. Of course, wholesale bank, there may be here and there like something different, but it is worth noting, remembering what I said in the presentation, this corporate. That's the middle segment that starts at BRL 50 billion and goes geographically. It's a larger extension of BRL 2 billion.

And there, depending on the expected loss or the modality we operate, you have a little bit more provision upfront because of expected loss. It doesn't mean that the delinquency didn't see the movement of Stage 3 nil because it's there on Stage 1, it's good, but you have that expected loss for that type of target you're working on but always with that risk-adjusted returns, and that goes for everything.

SMEs for the wholesale bank for vehicles and everything for all of the. Thank you, Pedro.

Next question from Mario Pierry with Bank of America. The floor is yours.

Congrats on the results. I have 2 questions as well. My first question clearly a publication you're saying you that credit cohorts are performing well. NPL is under control. But at the same time, we are expecting a decrease in credit. I would just like to understand why we're so cautious about credit.

If you anticipate that things are performing well, why are you making that move? The second question has to do with your market margin and the increase in the sales rate. How do you expect NII performing once you expect to [indiscernible] rates to go down.

I would like I'll ask Cassiano to start answering your question, and then I will talk about that acceleration.

Good morning, Okay. Market NII, we did some very important work. I think it's the first time we acknowledge this year work done from our treasury and the balance, I think we still maintain that BRL 1 billion of soft margin. And I think we referred to that increases occasion. So we do have knowledge that work, and we understand that this will be globalized until the end of the year, making up a total of BRL 1 billion certainly with the lower it next year, we should see an improvement.

And so right now, we are looking at the budget we may bring you some us next year. But certainly, this is a good possibility of any improvement in the market NII for next year. Well, thank you, Mario, for your question and your propagation.

We should have a positive outlook in 2026. But starting in the second quarter I mean going forward after the second quarter of 2020 in terms of ALM. But as Cassiano said, the other lines are performing well. To your point about deceleration, I would say that it has changed. If you look at the Central Bank's relief or think it was released yesterday. Looking at it, I talked about the private payroll loan. Private payroll loans there was a drop year-to-date. We also experienced a decrease year-over-year.

Now we are -- it's beginning to go out and we -- it's picking up. And we will just follow the market growth. So that doesn't mean that we are decelerating in the country. And in the other portfolios, public and INS, INSS portfolio is still dropping, but it's picking up again. And the public portfolio, traction is good. We are growing. We will gain market share -- the other one, we are doing well with SMEs. We are not decelerating, but of course, that you have to deliver the right line to the right clients.

The same thing the market dynamics, I mean I'm referring to Central Bank data. I'm not releasing any privileged information. But if you look at -- in a year, we would grow slightly below market growth. But in the quarter, we surpassed the market growth. So that means that we have a good risk appetite I may even be, let's say, let's say I am bringing credit with a little bit more risk.

But the important thing is NII net of provision. So you have risk-adjusted return that is adequate perfect. Therefore, I can tell you that we will be fighting for this market, and we will continue to grow. I am by not pessimistic. We are cautious because we don't want to venture into like lines that have higher risk don't want to do -- so I want good clients, with good rating, control expected losses in segments that eventually may bring this slightly lower margin, but at the end, it gives us sustainable assets.

That's why we have a sound portfolio. I mean the restructured portfolio is good. So your provocation -- to your provocation, my answer is yes. we are cautious, but we are that on the accelerator, whatever we see opportunities for penetration. I mean we grew 25%. I mean we grew more than the financial system. So our appetite remains sound.

If we I mean, any drop in the large corporate portfolio, we would have grown more than 10% year-on-year.

Next question comes from Thiago Batista.

The main question going back to the strategic plan, I mean, you released that in 2024, that has been almost 1.5 years ago. And back then, you talked about Tier 4 KPIs. One was something about 2 and 2.5 efficiency over 200 bps and then you talked about [indiscernible] Some time has passed but can you tell me that considering your initial diagnostics, how do you see the market more challenging, less challenging cost of capital, cost of equity.

Are you going to deliver numbers very close to what was anticipated. Cost of capital and ROE. I think you address that efficiency maybe you didn't get there yet. What is more challenging and what is more comfortable related to your -- when you talked about Real estate. Looking at Bradesco today, the bank has about BRL 112 billion in mortgage and 20 million of savings and [indiscernible] any possibility of issuing more LCI after the transition.

So how do you see this change in funding of real estate

I will start with your second question about mortgage loan. I mean our portfolio has over BRL 140 billion once you also add the corporate side, but the was positive. It's an opportunity because it makes sense. It makes sense to reduce the plus -- the savings -- I mean, the reserve requirement of the savings account, we have preserved margin, as I mentioned during my presentation.

That's why we stepped on the brakes a little bit, on the other hand, we have the demand of capacity to resume growth and we will resume growth. This will be more by the end of the year. We have enough capacity to grow more I also think this is positive for the system because there are no that have higher an -- when we look at the regulation it comes with some I know that you're familiar with it, but starting in 2027, what we have to look at in terms of the release of the reserve acquiring new regulation is that there might be a decoupling in the long run because you remove that 15% of free resources.

So in that they say that every year, this will be reviewed. So certainly, there might be some degree of flexibility that will allow us to make adjustments. Otherwise, there will be no appetite or maybe the incentive -- we're going to be the opposite direction. I mean, we have an appetite to do it. And this makes more loyal customers because they are more profitable, of course.

I mean we have a lot to do. So higher interest rates challenges mortgage loans -- so the first thing. Second thing, I think that in terms of challenges I want to talk on a [indiscernible] to my comments. First of all, you said we are -- we're getting there right? In terms of cost of capital. That was a challenge why we presented the plan on February 8 of 2024 we were talking about it 13.5 customer if I'm not mistaken that the numbers has gone beyond that.

That was a number. We're getting close to. I'm not promising anything but it is a right ahead of the us. This is the first -- the second thing, a growing customer base. active savings account holders because it makes more sense to include nonactive customers and we don't want to bring nonperforming clients. Therefore, we are working and paying attention to that.

We are looking at the profile of clients, clients that are more digital and so on. There are challenges. And this applies to the entire country when it comes to massive clients which are struggling to make ends meet. But our growth level for this in I didn't even refer went to you.

Probably in our next earnings release presentation, we will talk about the growth of the individuals [indiscernible] and bring some more -- we are seeing a lot of good things happening with our principal segment, primate, SMEs, wholesale banking obviously there is also structural growth because the GDP is not growing this interest rate levels all mid-sized companies, and that's why we try to operate on secured lines.

Maybe going forward, we will see more opportunities to deliver some KPIs. Yes, we will certainly bring it to you when the right time comes. Sorry, I think I called you

[indiscernible]

One thing that probably looks like ancillary but We have the engagement of our team. I am Bradesco. This is part of our culture. Marcelo, so that 84% of our people answer the survey. And this is important because they are very much engaged in the virus transformation at first seemed challenging, but I think this was one of our positive surprises.

Obviously, the macro environment was based on the strategic plan -- that was a totally different plan. We didn't have high interest rates. The GDP was growing the cost of capital -- despite all of that, we continue to and an important part of that we have to mention in addition to people with technology, we invested in technology reskilling the different trials, the concept of restructuring our infrastructure, the upskilling of the team as a whole and our intensive use of Gen AI led to greater productivity.

Together with other footprint in this new growth levels. Of course this also involves higher patient -- we would get closer to 50 and 52. The plan it's a 4-year plan. We are heading to year 2. So there are lots of challenges, but we are on the right tries and in our next earnings release, we talk more about share. We are growing in areas where we trust we can increase penetration. SME is a clear example.

And you might recall that I said that we wouldn't light goal of our leadership position. We are doing so. we are delivering better results [indiscernible] we have a challenge to increase efficiency of capital requirement is something that is a constant year because come year end of 2026, there will be new requirements related to operating risk and other elements.

I think the number is 30 additional UPS or required capital need is something that is very peculiar to our industry.

Next question Yuri Fernandes JPMorgan. You should have a sign. We saw a sign that you were on the line, and then I got confused I apologize. Thiago again.

I would like to talk about client NII. It's one of the good surprises of the year. something on spread.

We've been seeing your line very well with the 9% that you presented -- so I'd like to take your view I believe this is going to go up? Or is it more going to remain stable, if it's going to improve.

What do you think will make your NIM improve the second question inspired by Thiago. I know it's hard to talk about medium to long-term ROE. But I think that the market believes that Bradesco will start generating returns above cost of equity. And there's some expectation that this is going to [indiscernible] in the quarter, we understand there have been corporate cases that plays kind of against it. improved quarter-on-quarter.

And that's kind of time. But when we look at the detail, the insurance companies who brought most of the agreements the bank ROE goes down quarter-on-quarter. So again, going back to Jake's question, what could we expect in terms of utility of this ROE improvement. It's true that it will continue to grow, but I'd like to understand from you if you can if you're comfortable bringing or medium or very low numbers to understand how you see the improvement in profitability for the coming quarters?

Andre, you can begin and I'll conclude.

So I'll start with the ROE question. Actually, what we see this year is that the revenues have been surprising every quarter with the commercial traction, proximity to customers. And that has been allowing us not only to maintain the decision at the beginning of the year, preserving investments, but also to accelerate the footprint you just mentioned, strengthened the balance sheet.

We saw in the third quarter the increase not only on LLV, but also the labor provisions with a clear effort to strengthen the balance sheet. On a one-off measure. And we were able to do that because the revenues were very strongly. So we delivered the separate improvement in profitability in the quarter.

We decided to advance, and we are having a very accelerated transformation plan. So I think that gives us more confidence in the medium, long term that we'll be able to grow further in this process. So the idea here for ROE improvement we've been seeing today, it basically depends on revenue -- and from now on, it's going to be the efficiency ratio that's going to be our focus.

The combination of revenue moving now and expenses are still very much under control that leaves the efficiency ratio to drop 10 percentage points in the next 3 years it's '26, '27 and '28. So I think that's the main or driver that's still not price but it's one of the very important aspects for us to highlight in this discussion. Now on NIM, our NIM go to 9% now in September.

Were promising this 9% for December. So we were able to deliver slightly early. And we are still expecting 9% in December, some stability in the fourth quarter. That's the base scenario as variables that help us going forward. And this for example, the cost of the funding margin are still improving a little bit not so much due to the quick wins we saw in '25, but to cash management.

Measures of funding and things that such mature with time Marcelo pointed global solutions. We have other measures here in cash that help other measures that help NIM, for example, the restructured portfolio going down once we've introduced the restructured portfolio in particular, the problem assets in our loan portfolio, we increased the share that yield interest and that also improves our NIM and as Marcel Whenever we have the opportunity with a good RR, we will go after it.

We will accelerate and that ends up helping us in our profitability, and then it would be net NIM.

I'll be bold here. I think Andre gave you a good overview about this spread. So I'll dare in telling you is that NII is the traction and I am for this quarter. I have no expectation of variations Well, now next year, depending on our network that we are still discussing in the light of the plan and the budget and how fractioned we are, we may even surprise you. I would not call it out

I'm not making any promises, but I would not rule it out. And when you talk about the ROE in the medium to the long term, of course, here, we're seeking to deliver ROE and the cost of equity and then take another stand. But when we had a diagnosis Brazil, depending on its positioning, we are an organization just like others or the conglomerates here with about 80,000 employees, Capilarity with a specific model of an universal bank. There are others with the different business models.

So here in Brazil, we have a market that offers long-term ROE between 15% to 20% depending on your position and we see that in the long-term horizon depending on the position of each organization, it's not only Bradesco, but the market and I think that we have such a large market there's plenty of room for you to have a set of organizations as we always had in Brazil dividing a share in different customer and business segments.

Henrique Navarro, Santander.

Congratulation on the earnings. 2 questions. The first about the corporate specific cases. We know that due to the sequence and the protection we cannot comment. But if you can give us some color within whatever is possible, this BRL 254 million. Is it 1, 2, 3 specific cases the largest one we imagine. How much does it represent of this hole? And was it 100% provisioned. The idea is to understand what would have been a clean balance sheet, so to speak, even though losing as part of the credit business, but what would have been in balance sheet?

And also to understand if there is anything remaining in terms of provisioning for those specific corporate cases for the fourth quarter. That's my first question. The second, for the guidance, you're running above the top of the guidance in many items very good, but why not review it now for in the third quarter.

Because that would give us some rights to have the better idea of the number for '25 and imagine what we'll see '26 especially in insurance that you're running well above the top of the guidance.

Thank you, Navarro. It's a pleasure to see you. But that case that we have in corporate. We provisioned significantly. We have no expectation of additional provisioning for this case going forward for the next quarter. That's the answer I have to you. And that case is get bigger deviation in our situation. They're smaller cases, specific cases as well as the of the corporate portfolio that, as I said, the middle market in here.

So we do not expect to have any other provisions for that. And in terms of the guidance review, since we're seeing that we will fall within the guidance. The guidance is an interval. We see ourselves in the upper band of the guidance. But pretty much for all of those items. I mentioned loan portfolio between 7% and 8%, maybe slightly closer to 7%, but all of the others within the upper band of the upper range of the guidance, that's why we decided not to review it because we will soon to talk about the guidance for 2026.

I don't know if you want to add.

No, that's exactly -- that's perfect.

Next question, Gustavo Schroden from Citi.

Congratulations for the results since the presentation of the strategic plan. I have 2 questions. And the first question is related to capital and tax credit. Maybe the question should be addressed to Cassiano there was an evolution of 11.4%. There is also the age of profit. But looking at the explanatory notes, I think that it seems to me that there were some changes in the tax credits.

I would just like to understand is part of capital improvement comes from the reversal of deferred or DTA for tax credit? And what is the bank's policy in terms of these assets, whether you have a plan to accelerate this going forward.

The second question for Marcelo. It's been a while since we talked about Cielo and Marcelo talked about fences of LPR and CM. I remember that when you were presenting the strategic plan Cielo especially SMEs also, that was a very important part of the plan. So could you give us an update about [indiscernible] strategic plan, particularly after the captive reorganization, I mean restructuring.

So can you tell us something about Cielo's strategic producer.

So I'll start with capital Okay. Well, you're very familiar with our policy -- as part of our assumption to make better allocation of capital in our company. So this is a relevant aspects related to this change in the additional capital also including tax losses that you saw in that explanatory now. Even though our tax credit increased, there was an improvement in some lines.

We reduced the tax losses and the tax credit from had a traditional increase. So this mix of things is what led to this positive effect in the capital numbers as well. Certainly, we are working towards further reductions we are very -- we know that there should be differences in the tax credit because of everything we are doing.

And I think this is part of the virtual which was cycle going forward. In this particular case of this quarter, it has to do with this change between tax credit, from LLP, DTAs, and this should have a lower effect once you draw in average. That's why we had a [indiscernible] adding to the answer, I would like to say that our common equity that was 18.4% come December, I think it should be around the same level.

So by the end of next year to be closer to 11%, which is where we would like to keep this optimization process. We will refer to the balance next quarter. as I said before. about individuals and share. But there is a whole set of initiatives Cielo to gain competitive. We've been working with specific teams in both banks and together with Banco Bradesco on the wholesale side pick energy means as a mean, meaning that we have teams working together with sociologies.

There are several initiatives that contemplates customer experience in the bank's channel significant improvement in logistics when it comes to delivering equipment and also adding new solutions to come. We've also noticed the expansion of newcomers, which is much more fluid and has to do with our commercial teams and CLOs.

I will give you more information about it later on in other events, there is a time line because this week, I was just reading on revisiting our time line because there is a plan that we monitor very frequently, we look at our growth rates, and we will also tell you about other initiatives of the bank next time we meet.

But we continue to work on our transformation plan. And now we are very much connected more so than in other occasions. We are working together. And not only that, we are delivering renewed experience to customers with a higher competitive expense everything integrated in the SME app

Next question from Bernardo Guttmann with XP.

On the bank's results my question is about private payroll loan and your appetite. You said that we were very conservative on the onset of private and now you resuming growth and our NPL is way below the market. So what allowed you to do that? Can we say that the bank already has a scalable risk model for this new type of favorable loan now private.

The answer is yes. Our process is working like clockwork, so we have good risk appetite mainly due to the approval. So you go to a more open market and everything has to be in place because you approve credit for companies and for employees of our company. So you should that everything will be approved -- the appetite has increased. We changed policies.

We are now increasing the pace. As I said before, we were declining year-to-date and year-on-year. Now the members are increasing. And certainly, this quarter, there will be an acceleration, particularly in terms of private payroll loans. And this is a great opportunity for those who are so important in this market, but we will accelerate both INSS and public for -- so in terms of payroll loan, we will show good growth going forward.

By telling the -- it is yet to be seen as well will -- what impact this will have in the budget. But everything we're doing, we are doing with modeling and intelligence is crucial if we want to succeed in we were not very certain in terms of the processes in the past. There are some deliveries like top or some deliveries that were posted and some others will only be delivered in 2026, but that's not a problem because doesn't change your appetite on the contrary things will be better going forward.

But we see major growth opportunities will grow, and we will gain share. I'm talking about everything, not only I'm talking about INSS, public and private portfolios.

Thank next question from Renato Meloni.

It's good to see you I have 2 questions. First, about the individual mass retail, you've been growing a lot in the high income. It's a right strategy for this year, but I'd like to understand whether growing again and gaining relevance in the mass retail will be a relevant part of the strategy looking for the coming years.

And what indicators are you expecting to be comfortable again to take risk and grow on that segment? And the second question, just a follow-up about what you said about SMEs. I'd like to understand if you see any limit being reached in the lines that were authorized with government and whether you think you could continue to grow at the same pace that you presented in the last quarters.

Thank you. Okay. So about the mass individuals mass retail, we have more than 4 million customers that are mostly or almost fully digital. And what are the challenges here? It is to have a very well-adjusted models because the cost of risk here is a lot higher [indiscernible] know that. And we are investing testing and making things happen. But we've been working with this level of engagement in the customers' life cycle.

No, the next best offer and the different that goes to high income. It's worth valid for both high income and this more digital segment as well. And we have been testing the channels with different alternatives and different value propositions within our physical world as well because you have clusters that would be a lot more connected to the segments due to the level of profitability they have to offer, but they still have the need for physical in-person service and we've been testing all of that with our Bradesco Express.

When you talk about a country with the size of Brazil, it's not trivial to think that everyone will -- is here to fully digital. We have a lot of essential levels and different profiles, different personas in this group of people. And we've been working with all of that to be able to have the best to serve and the ability to continue growing with this public.

But now with the proper adequate safety because here, it's smaller income levels, and there's a certain degree of reality that's natural. So to be able to provide certain lines of credit. But we've been learning again a few lessons that we knew in the past and that we brought to the model with a lot more intelligence behind it.

So everything about machine learning, AI, all of that support what is managed and what is not management that is mostly digital is being used with a lot of talent by our teams. So we will continue to evolve. And at the right time, we will bring more elements about the mass retail segment.

For SMEs, there may be a limitation of lines that will be determined for next year. I think we've been have been a good year. I said that and another question that we had, both at FTI and FTO,we are actioned are doing well, but there may be more limitations of the lines.

But this is have to wait naturally for each one of these programs to be convinced. I can only answer I mean I cannot tell you if -- it will be or won't be a. Thank you Renato for your questions.

The next question comes from Carlos Gomez-Lopez from HSBC.

Hello, Andre. So I had every 2 questions. The first one is about funding that we have talked about. And in particular, we saw a big decline in demand deposits and saving deposits, is that, in your opinion related to the reduction in footprint? And what do you think your current market share is in those 2 lines in the mine deposits and in saving deposits.

And second on insurance, again, to continue to deliver very, very good results. And I'm going to ask one more about the sustainability of the results, specifically in health insurance, where your earnings are now twice the level that you had last year?

Thank you, Carlos. Andre you can start [indiscernible] subject of deposits right.

Start talking about the deposit. We've been acting here very significantly this year to optimize the customers' resources. And one of the measures was to reduce our LCR that was in the past of around 190%. We brought it down to 150%, the minimum regulatory requirement is 100%. So we still have a lot of room to move -- but we like all of extensive resources, especially in wholesale.

And that does lead to a reduction of funding, but that was a decision. A strategic decision we made to continue to reduce our cost of funding to improve the funding margin and to optimize the customers' resources. Looking forward, I believe we have these cash management initiatives that translate into 2 important platforms: one, 4 financial solutions for SMEs and another for wholesale companies that we call Global Solutions.

And both of them are measures that can greatly improve the payment experience. They can also improve our performance in funding and become a structuring favorable measure for our funding margin that starts to have an impact and this impact will probably increase in the following years.

So funding starting next year, counting on the cash management measures to help us I would just like to add a little bit, if I may, Carlos, thank you for your question. about the footprint, whether it has a relation with maybe the impact on demand deposits and savings, we believe it does not because most of customers are mostly digital.

14 million are already working remotely, and we see that we continue to work and look at principality both on demand deposits and savings there was no drop in terms of the footprint reduction, quite the opposite. We see more opportunities working on the MBO for those customers to bring the best offer for the low-, medium- and high-income customers.

So somehow, the footprint has this relationship to bring a reduction in those points that you mentioned Carlos and there's another question about insurance, right? Ivan is with us, I believe, is online. Ivan, do you want to answer that part of the question that he asked about the sustainability of those results?

So in terms of the sustainability of the results of the insurance group, we looking retrospectively, we will find in the last 3 quarters, consistently and in a linear way, we see growth not only in our operations, but also in our results. So there's no oscillation or variation even up or down. And that makes us comfortable to look prospectively also under a very positive light.

On the last quarter, we had growth in-house of 9%. In this last quarter, we also saw growth in life insurance, close to 10%. And the pension plans with all of the challenges also grows, especially VGBL and portability of VGBL as well as the products that we created, adding the risk of the premium, and that has been making a lot of difference for our growth.

Now in the business line and real estate and equipment we grew close to 15%. And that makes us confident as well to look forward and say that we should continue or maintain the same level of growth reaching the top of the guidance that we committed to at the beginning of the year.

Now in terms of the house, insurance, the underwriting discipline, checking on the improvement clients, we increased about 75,000 net lives this quarter. And in October, we already see the same growth level and the same base that we've been addressing in the recent periods. Regional products developed specifically for the region.

From the health company also gives us comfort in terms of the growth, considering that our product is a product that all Brazilians want to have both for themselves and their families. Growth was mostly in operational lines. And obviously, the foster the sense adopted to find abuse or fraud makes us confident for this claims ratio that the Bradesco the health care insurance group has reached this quarter. These are my comments. Thank you, Carlos, for your question.

Thank you, Ivan. And that's well noted. Our Bradesco Saude, it's a premium insurance. Very good, Andre.

Next question [indiscernible]

Andre and Marcelo, Cassiano. My question is about the credit cycle more focus on SMEs and individuals, which guys I would like to hear your comments on these 2 lines. We saw very good performance of SMEs, both in terms of and growth like one help the other. That's the effect -- so the question is whether you still see room for further improvement of SME delinquency and also looking on the individual segment, looking at your peers despite the true your NPL is still higher when compared to your peers but the question is whether you see room for increment.

And what phase of the this cleaning up, you find yourselves and whether you think you're already going towards -- heading towards growth, I mean the cycle of 21 impacted both SMEs and individuals. If you lean up the portfolio. Are you ready to grow more? Are you still feel that there is more room for improved delinquency further.

Thank you, Nisi. So first of all, over 90, it was 4.1% in September. The base scenario is 4.1% in December. Slight deviations, I mean Base just natural, but the basic scenario shows stability of our NPL in aggregate terms. SME, Marcelo is insisting on that point. First of all, we were very cautious to concentrate our business in the secure portfolio discount of receivables, we were credit with guarantees or collateral.

So the new cohorts are showing good performance. And this is what is bringing NPL down fall a little bit more. But the base scenario is for a certain stability given the economic stability that we anticipate going forward. So I think this is an important aspect. When it comes to restructured portfolio, as Marcelo indicated in 12 months, the troublesome part of it by almost BRL 12 billion.

That was an important possible proceed with it derisking of our credit thank you for your questions.

I would just like to add to what Andre said, I still see SME. Light in place in a line that will decrease in NPL. Everything was under control. But if I look at individuals, if I look at a further horizon going towards 2026, it depends on the mix that you have I said in the year, the market more than in vehicles. But in the quarter, we grew more than the market.

But if you draw the mix may even have been higher NPL. But eventually, I'm not saying it's there, but if you change the MIB like auto and you grow more than payroll loans right and in this case, you could strive to balance in 2022. Always return will be adjusted to risk returns.

So I don't see one problems with the likes of NPL, but I see some decline with the SME portfolio this quarter.

Next question comes from Tito Labarta from Goldman Sachs

My question, you talked a little bit about our growth and you're growing in some segments where you feel more comfort, particularly 1 of the secured lines and the other segments you're not growing, but you may increase your risk appetite going forward. Marcelo, if you go back after you became CEO, part of your strategic plan was to potentially increase market share and loans from the 14% to maybe 15% to 19% since our market share is still relatively stable.

Just thinking how important do you think it will be to increase your market share in order to keep improving profitability? Or should the focus be more maybe focus on the segments that are more profitable where your overall market share maybe matters less. Just how should we think about your ability to gain market share from here? And how important that will be for you to improve your profitability going forward?

I said it was commercial to me. I have much start I'll follow I'll head. Yes, about the plan. Go ahead, you start.

When we announced that mission of increasing market share by 14% in that range of 15% to 19%. That was February last year. That involved a 5-year plan, right? And in these 5 years, we have to take into account the economic landscape. Back then, interest rates were down. And what came next was increased. I mean increase in the [indiscernible] rate to 15%. And now we are seeing the deceleration of the Brazilian economy as a consequence of this monetary squeeze.

So considering the economic landscape now is appropriate to keep your risk appetite under control. I mean the financial situation of companies and families will improve the time. So naturally, the risk appetite of banks and companies will get better. And then if that happens, we can look for better market share.

At the time, we are very cautious as Marcelo was saying, we -- our approach is very segmented when we see that there is opportunity to gain market share, we will certainly go after all I mean, high RAR because what we want is to increase our share. So all the lines that we see opportunities will certainly grow market share Short time is not the main goal.

The main goal is to increase profitability consistently.

I would just like to add something else Tito. Thank you for your question. Looking ahead, our mission remains the one of gaining share in that interval that I showed you in the plan. What do I see in a shorter period of time, we had good growth. If we didn't have, as I said during my presentation, -- if we didn't have an issue in the large corporate portfolio, we would have come down over 10% year-on-year is paying capacity where do we have more track payroll loan of individuals.

It accounts for approximately 15% of our total portfolio, and we will gain share right there. Mortgage loans, you may have run or another bank that will get a little bit market share, but we will also gain share here in mortgage. On both sides for preside individuals also keeping a significant amount of that because I think we have close to 20% of share. Now [indiscernible] we see opportunities there, too. Obviously, if you look at the whole picture. There are some different areas to have new vehicles and you look at individuals, you have people with more appetite than rehab go after these lines.

And the same thing goes for -- but looking at rural clients with some levels, we do have a correlation, so it's in a good appetite to do the same thing with individuals in corporate side. There are different categories. These lines of FTI and FGL, we performed well so far this year still see that we have enough room to gain more share.

I can even say that we are gaining share with SMEs, as I was showing during my presentation. So there is room for us to grow in SME. With this working capital with collateral on the business side of allot same heavy in passenger vehicles, the same thing line so far our priority line, and they are a good focus for us. The idea is that at the end of 2028 we will be in that interval that we presented when we introduced our transformation plan.

But we're doing everything the right risk appetite, pool management in growing areas that can be traction and penetrated most of it through digital in the physical world. And we will just go forward because the idea is to gain more share with just a return. Again, I insist on that point. I would say that we were growing above market in the portal but always with [indiscernible] return.

We now conclude the Q&A session. The questions that could not be answered at this time, our IR team will then answer your questions after the presentation. And before I turn the floor over to Marcelo for his final remarks, I would like to say that this presentation is available in the entire material related to this earnings release presentation is available in our IR website.

First of all, I would like to thank you very much, Andre, Cassiano and all my colleagues are always here with us in our studio, I would like to thank the entire team of Badesco all of our employees and the ones that are constantly engaged every day looking customer engagement, looking at everything that happens in the bank, including the insurance companies, so the consumer finance area of the bank.

And most of all I would like to thank you, sell-side analysts. You are always interested in participating in this event. So we have an IR team very much engaged and ready to talk to you about the results. And the buy-side guys is we clients that are with us as well. So again, thank you very much. And I reinstate the trust we have in everything we're doing. I do apologize again for the Avatar because they were asking for me to do something and they put my Avatar but I promise the next time I won't have that avatar.

Let's move on. We are certain that next quarter, we will certainly deliver great numbers. Thank you all and have a very nice week.