Itau Unibanco Q2 2025 Earnings Report

Itau Unibanco EPS Results

• Actual EPS: $0.18
• Consensus EPS: $0.18
• Beat/Miss: Met Expectations
• One Year Ago EPS: N/A

Itau Unibanco Revenue Results

• Actual Revenue: $7.14 billion
• Expected Revenue: $44.75 billion
• Beat/Miss: Missed by -$37.61 billion
• YoY Revenue Growth: N/A

Itau Unibanco Announcement Details

• Quarter: Q2 2025
• Date: 8/5/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, August 6, 2025
• Conference Call Time: 9:00AM ET

Itaú Unibanco Holding S.A. offers a range of financial products and services to individuals and corporate customers in Brazil and internationally. The company operates through three segments: Retail Banking, Wholesale Banking, and Activities with the Market + Corporation. It offers current account; loans; credit and debit cards; investment and commercial banking services; real estate lending services; financing and investment services; economic, financial and brokerage advisory; and leasing and foreign exchange services. The company also provides property and casualty insurance products covering loss, damage, or liabilities for assets or persons, as well as life insurance products covering death and personal accident. It serves retail customers, account and non-account holders, individuals and legal entities, high income clients, microenterprises, and small companies, as well as middle-market companies and high net worth clients. The company was formerly known as Itaú Unibanco Banco Múltiplo S.A. and changed its name to Itaú Unibanco Holding S.A. in April 2009. The company was incorporated in 1924 and is headquartered in São Paulo, Brazil. Itaú Unibanco Holding S.A. operates as a subsidiary of IUPAR - Itaú Unibanco Participações S.A.

Itau Unibanco Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Our Q2 net income of R$11.5 billion rose 3.4% sequentially and 14.3% year-over-year, driving a consolidated ROE of 23.3% (24.4% in Brazil).
• Positive Sentiment: NII with clients grew 3.1% quarter-over-quarter and 15.4% year-over-year, while consolidated NIM hit a record 9.2% (10% in Brazil), with risk-adjusted NIM at 6.3%.
• Positive Sentiment: Our total credit portfolio expanded 0.4% sequentially (1.3% excluding FX effects), led by a 5.4% increase in finance credit cards and 17.2% mortgage growth, with NPLs stable at 1.9% over 90 days.
• Neutral Sentiment: We updated full-year guidance, raising NII with clients growth to 11–14% from 7.5–11.5%, while adjusting our effective tax rate range to 28.5–30.5%.
• Positive Sentiment: Over 10 million clients have migrated to our OneItau platform (99.3% conversion, 80 NPS), driving 25% higher Super App usage and strong adoption of new features like Cofrinho.

Presentation

[Gustavo Rodrigues, IR Director & Investor Relations Officer at Itaú Unibanco]

Hello. Good morning everyone. My name is Gustavo and it's a pleasure to have you with us for our 2025 earnings video conference. As always Milton will soon walk you through our performance and afterwards we'll open the floor for a Q and A session where analysts and investors will be able to interact with us directly. But before handing over to Milton, I'd like to share a few instructions to help you make the most of today's event.

[Gustavo Rodrigues, IR Director & Investor Relations Officer at Itaú Unibanco]

For those accessing this video conference via our website, there are three audio options available on your screen, the entire content in Portuguese, the entire content in English, or the original audio. The first two options offer simultaneous translation. To select your preferred option, simply click on the flag icon in the upper left corner of your screen. Questions can also be submitted via WhatsApp to the number displayed on your screen. Today's presentation is also available for download on the HOT site and as always on our Investor Relations website.

[Gustavo Rodrigues, IR Director & Investor Relations Officer at Itaú Unibanco]

With that, I'll now hand over to Milton, and I'll see you again shortly for the Q and A session. Milton, over to you.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Good morning, everyone. It's a pleasure to be here with you once again to discuss our second quarter twenty twenty five results. Today, I will present an executive overview focused on our results and provide a brief update on our guidance. I will also share with you an update on the Wanitau initiative as I promised on our last quarter earnings video call. I will comment on our migration agenda and on the bank's digital acceleration process.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Finally, will share some key figures and wrap up with an invitation to all of you. Let's move on to the numbers. As you can see, we're presenting the same key indicators as always: Recurring Managerial Net Income, Recurring Managerial Return on Equity, NII with clients, NIM, NPL over ninety days, and Common Equity Tier one ratio. Starting with our results. This quarter, we delivered net income of R11.5 billion dollars representing a 3.4 increase over the first quarter and a 14.3% increase year over year.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

These are very strong results, stemming from a solid performance base established over recent years. As a result, our consolidated ROE reached 23.3%, expanding both quarter over quarter and year over year. In Brazil, ROE was 24.4%, a robust return also showing expansion over both comparative periods. As always, I would like to note that if we were operating with a capital ratio of 11.5%, which is roughly in line with market practice and our Board's approved risk appetite, our consolidated ROE would be 24.7%. And in Brazil, the most comparable figure would be an ROE of 26.1%.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

This is detailed in the slide's footnote. How did we achieve this result? First, it was a very strong quarter for NII with clients, with a 3.1% increase over the previous quarter and 15.4% growth year over year. I will provide more details on NII shortly. NIM also expanded significantly, both sequentially and year over year, reaching 9.2 on a consolidated basis and 10% in Brazil.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

We had not reached double digit NIM in Brazil since before the COVID pandemic, in other words, since 2019, underscoring a significant margin recovery for the bank's balance sheet over these years. Delinquency rates remained well behaved. Consolidated NPL over ninety days stood at 1.9% and reached 2% in Brazil. This indicator is stable quarter over quarter and is down year over year, indicating that despite some first quarter pressure in short term delinquencies, we performed very well this second quarter in long term overdue loans a very positive development for the portfolio. The Common Equity Tier ratio posted another solid increase, up 50 basis points quarter over quarter already adjusted for IOC provisions and some risk weighted asset effects, but that were immaterial.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Thus, we see a 50 basis points expansion in common equity quarter over quarter and flat year over year. This is excellent news for capital generation, and it shows our ability to generate capital organically another very positive sign. Moving on to the loan portfolio. I want to highlight that the individual loan book grew eight point zero percent year over year and 0.7% in the quarter, with a notable 1.6% quarterly increase in credit card loans. More important than total credit card loan book growth is the finance credit card portfolio growth, which I will address specifically.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Regarding personal loans, it's crucial to break down this number because it includes products like unsecured credit lines and overdrafts as well as debt renegotiation products. Breaking it down is key to understanding the quality of growth and how each credit line performed in the quarter. I will provide more detail on this shortly. Payroll loans underperformed this quarter due to multiple factors. The payroll loans for INSS beneficiaries dynamic was impacted by both the cap on interest rates and funding costs, as well as by a process change in originations.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Private payroll loans are advancing gradually due to ongoing product process improvement. I'm positive that there will be questions on this in the Q and A session. In auto loans, risk management is key, and the portfolio continues to perform very well. Both credit card and auto loan portfolios are outperforming market benchmarks for the national financial system. Effective risk management discipline is essential here.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

The mortgage loan book grew 2.1% in the quarter and 17.2% year over year, further demonstrating our capacity to expand such an important credit line for our clients. The SME's loan portfolio grew 0.8% in the quarter. I will provide more details on the quarter growth and on the performance of what we classify as small companies in a little while. The large companies portfolio grew 1.4% in the quarter and 6.4% year over year. It is worth noting that the loan book in Brazil grew 1%, while in Latin America, the portfolio declined 2.3%, a clear effect of the appreciation of the Brazilian real against other currencies.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

The total credit portfolio grew 0.4% in the quarter and excluding the FX impact, it would have grown 1.3%. For large companies, the 1.4% quarterly growth would have been 2.3% excluding the FX impact. This breakdown provides an insight into the impact of FX fluctuations. In previous quarters, we have noticed the impact of the Brazilian real depreciation. However, this quarter, the Brazilian real appreciated versus other currencies.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Those are the main messages. Let me provide further details on the loan book performance. The finance credit card portfolio grew 5.4% in the quarter and 6.1% year over year. It's worth highlighting that 100% of annual growth came from the Uniclass and Personality segments. There are several reasons for this, some of which I will detail later, but primarily it's about new products and solutions in cards that have supported the expansion in the financed credit card lines.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

For personal loans, breaking down the figures is critical, as I've said. Unsecured credit portfolio, including installments and overdrafts, posted a 1.1% quarterly increase and 12.1% yearly growth, and 83% of this growth comes from Uni Class and Personalite segments. Mid- and high income clients with great credit quality. Debt composition, in terms of an analogy, would be the bad cholesterol, while unsecured credit would be the good cholesterol. Debt composition or the bad cholesterol posted a 3.8% reduction in the quarter and a 12.6% annual drop.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Thus, tracking this breakdown is essential to understanding the personal loan portfolio dynamic. Moving on to SMEs. We see that small businesses grew 5.4% in the quarter. Government programme volumes grew 21.7% in the quarter with very sound credit quality. Over recent months, we've become highly skilled in operating these programs, generating positive results and expanding net financial margin for the segment a very positive outcome as well.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Now let's talk about NII and NIM. First, focusing on NII, then on annualized average margins. In client NII, we exclude the working capital effect, which was BRL4 billion last quarter and BRL3.8 billion this quarter. I would like to remind you that last quarter there was a significant additional dividend distributions, which reduced the shareholders' equity and explains the difference in working capital margin. What's most important is that all core margin lines contributed positively.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

The average volume contributed by BRL200 million. Product mix and segment mix added another BRL300 million. Spreads and liability margins are posting very strong results, with our investment franchise delivering extraordinary results. The calendar effect of one additional day also contributed positively, and Latin America and others added BRL100 million in the quarter. This resulted in core margin expanding 4.5% in the quarter, or BRL1.1 billion, a very positive performance.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Moving on to NIM. The first message is that NIM continues to expand sequentially, reaching 9.2% this quarter, the highest in the historic series. As we always say, it's important to analyze risk adjusted NIM since the hard figure may be misleading. On a risk adjusted basis, NIM reached 6.3%, a significant expansion in the quarter. In Brazil, NIM hit double digits this quarter, a level we've not seen for many quarters.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Risk adjusted NIM was also the best in the series at 6.9%, showing that we've managed to expand margins while maintaining strong credit quality. In summary, net financial margin this quarter posted the strongest and most solid expansion to date. Moving on to market NII, let me take a moment to focus on this slide. We posted very strong results in the quarter, exceeding our expectations. It's always challenging to forecast trading results, which were outstanding this quarter and contributed to a very solid overall outcome.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

On the other hand, the cost for hedging the capital index, which is easier to forecast, is expected to increase in the coming quarters as we mentioned last quarter. This is the impact of the interest rate gap. The 2025 guidance for NII with the market is a range between BRL1 billion and BRL3 billion. Thus, BRL2 billion is the midpoint of the guidance. In the first half of the year, NII with the market reached BRL1.8 billion.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

It is still hard to forecast market NII performance, especially in trading, but we've seen very positive results so far and we're reaffirming our guidance as the range fits our best estimates. If there are any updates, we will discuss it again and I will provide more details when addressing the guidance framework later on this presentation. The cost for hedging the capital index is expected to continue expanding over the coming quarters. Moving on to service fee income, I would like to highlight a few lines. Card issuance revenues are growing 4.5% year over year, with TPV performing well, directly impacting interchange revenue.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

In the Asset Management business, I want to emphasize the growth in revenues from BRL1.7 billion to BRL1.9 billion. We had a very strong and solid performance fee, significantly better than last year, leading to a 17.5% annual increase, a sound result. In Advisory and Brokerage Services, revenues declined both quarter over quarter and year over year, mainly explained by DCM activities. Last year, in the same quarter, we experienced the best DCM quarter in the Bank's history. Although we maintained significant market share and a strong position in the rankings due to lower activity and fewer transactions, we naturally captured less revenue.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Another noteworthy line is the Insurance, Pension and Capitalization businesses, which grew 8.8% in the quarter and 17.3% year over year. This shows that our operation has delivered very solid results, more than doubled earnings over recent years, and is keeping growth at a robust pace. I will provide further details on this shortly. In the Asset Management business, a positive highlight is the net inflow of R47.5 billion in the 2025, a 30% increase compared to the 2024, an outstanding result. Itau Asset was the leading asset manager in terms of performance fees this quarter.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

We are growing not only through distribution capacity, but also through value creation, delivering sound performance to our clients and improving performance fees, a very robust outcome. Moving next to Insurance. Earned premiums are up 14.6% year over year, with significant expansion in the quarter. Recurring insurance income grew 7.7 in the quarter and 25.2% year over year. Our core insurance operation, Bancassurance, continues to expand at a very favorable pace, with growth concentrated mainly in personal accident and credit insurance, underscoring the recurring and solid nature of these results.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Moving on to credit quality. I will first address short term delinquency followed by long term delinquency. Short term delinquency indicators are very positive, showing delinquency is well controlled. Overall NPL fifteen to ninety days posted a slight 10 basis points decrease and so did the indicator for the Brazilian operation. In Latin America, we had only isolated cases impacting the quarter with very low volatility and no further concerns.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Alongside, we have the indicator including corporate securities in compliance with Resolution four thousand nine sixty six, which we will continue to monitor closely. The chart contains extensive information, but this is due to the limited historical data available under the new regulation. I expect that within another quarter, we will be able to provide more comprehensive insights for monitoring. The direction remains consistent with the main change being in the information level, particularly in Brazil, where corporate securities are more relevant. The short term delinquency ratio for individuals in Brazil dropped 10 basis points quarter over quarter, and there is no corporate securities effect in this portfolio.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

For SMEs, the credit quality remains healthy, and NPL was flat in the quarter at 1.4% considering the credit only portfolio, and flat at 1.2% when adding corporate securities to the credit portfolio. So the trend is the same, but the absolute level changes. I would like to remind you of some information I shared last quarter. A significant portion of the growth in the SMEs portfolio came from government sponsored products. Most of this portfolio is currently under a grace period, which benefits the denominator with the loan portfolio increase, while the numerator is not impacted by the amount of overdue payments, since under the grace period no installments are due yet, resulting in a temporary indicator benefit.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

We expect this to normalize over the coming quarters in both short and long term overdue loans with no cause for concern. Therefore, a slight uptick is expected for the SMEs portfolio, which shows remarkable credit quality and no credit risk concerns. We have reaffirmed the cost of credit guidance. The main reason why we are highlighting the expectation of NPL growth is to be very transparent regarding our expectations going forward. Analyzing long term credit quality, the news is equally positive with very well controlled indicators.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

We did not experience significant rollovers from the first to the second quarter, which is typically seasonal. In Brazil, despite a slight increase in NPL creation, loan portfolio growth resulted in stable indicators, which is very positive. For SMEs, the earlier comment regarding gradual normalization over the coming quarters applies. As short term overdue loans mature, they will eventually impact long term delinquency ratio as grace periods expire. Another credit portfolio indicator that we are monitoring is the loan book by stage and coverage by stage for both Stages two and three.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

In stage two, there are no material concerns as movements largely reflect the mechanical rollover from short term overdue loans in line with expectations and without any significant issues in either loan portfolio or coverage. Stage two is expected to slightly decline this quarter. This mechanical rollover impacted Stage three for individuals. There is a dual effect. The coverage ratio drops in Stage three for individuals since loans recently entered into Stage three tend to be provisioned at a slightly lower rate compared to those exiting it via write off, even though provision is made by expected lifetime loss.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

As there were more entries than exits in this stage, coverage mathematically drops. For the large companies, the opposite trend was posted. Coverage increased because we sold a credit portfolio in Stage three at a lower than average provisioning ratio due to its strong collaterals. This sale removed the loan with lower provisions from the portfolio, improving overall coverage as the remaining loans have higher average provisions due to their credit risk profile. As a result, we have seen a significant reduction in restructured loan portfolios.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

We continue to provide ample transparency regarding renegotiated and restructured portfolios. This is a relevant figure to monitor, as it demonstrates our progress and ongoing evolution. There was a BRL1.1 billion reduction in the quarter, driven by both restructured and renegotiated portfolios. Credit and Securities renegotiated portfolio decreased from BRL40.1 billion to BRL38.8 billion, posting a healthy trend in both renegotiated and restructured categories. The combined effect of all these indicators is very well behaved cost of credit, with only a slight nominal increase as the loan portfolio grows.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

We should analyze the cost of credit growth compared with the loan book growth. The annualized cost of credit over the loan portfolio remained flat at 2.7%, which is a very healthy portfolio with an indicator far below historical average. All in all, we are growing the loan portfolio with high quality assets, resulting in a robust credit performance across all segments, a highly positive outcome. Regarding noninterest expenses, we posted an 8.7% increase in Brazil when comparing the 2025 to the 2024 and a 9.2% increase on a yearly basis. Personnel and transactional expenses remain very well controlled lines.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

The Bank continues to deliver solid and growing results, which impacts many of these lines, whether through higher transaction volumes or an increase in variable compensation. In terms of technology expenses, we continue to invest heavily in business, technology, products and solutions to meet client needs and make the bank increasingly efficient and modern. This has been the prevailing trend. And most importantly, all of this was delivered 100% within budget, meaning every initiative was fully aligned with our financial planning. This underscores our ability to forecast and manage the Bank's cost structure with discipline and precision.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

When we look at the half year comparisons, we observe another positive evolution in our efficiency ratio, which declined to 36.4% in Brazil in the first half of twenty twenty five compared to 37% in the 2024. On a consolidated basis, the ratio was 38.5% in the 2024 and now stands at 38.4%. This represents another relevant improvement in our efficiency levels, demonstrating that the tech CapEx continues to translate into efficiency gains and solid and sustainable results. Moving on to capital. Net income, already adjusted for the full provision of interest on equity, which alone would imply a payout ratio of approximately 32, generated a capital increase of 60 basis points in the quarter.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Risk weighted assets had an immaterial impact during the period, so we expanded our CET1 ratio to 13.1%, with AT1 at 1.5%. Although our AT1 is structurally higher, Basel regulations cap our AT1 contribution at 1.5%. We just announced the call option on two perpetual foreign currency debt instruments. Totaling approximately US1.5 billion dollars in two tranches of US750 million dollars each alongside our second quarter twenty five earnings release yesterday, due to this call option, our AT1 ratio should converge to approximately 1.3%, which remains fully aligned with our capital appetite. This was feasible because of our liability management.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

We issued approximately BRL5 billion in perpetual debt in the local market, which enabled us to exercise the call option on these instruments and repurchase them. Again, the notice to the market on this was released yesterday. Moving on to our 2025 guidance. We are reaffirming our expectation for credit portfolio growth, NII with the market, cost of credit, fee income growth, and non interest expense growth. However, we are updating our expectations for NII with clients' growth since we are posting stronger growth than originally expected.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Accordingly, the range previously set was between 7.511.5% and now has been updated to between 1114%. The lower end of the new guidance is nearly equivalent to the top end of the previous range. This is a very positive development for NII with clients. On the other hand, given the higher earnings, the benefit from interest on capital is diluted, resulting in an increase in the bank's effective tax rate. In addition to that, we've been posting a higher share of earnings coming from banking operations versus non financial entities.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Together, these effects lead to a slight upward revision in our effective tax rate, from the previous range between 2729%, to a new range between twenty eight point five percent and thirty point five percent. These are the two updates we are making to the 2025 guidance this quarter. Last quarter, many of you asked me about the performance of Juanitao and whether we had any data to share. As I've mentioned before, we are in the midst of a critical migration phase and our focus remains on executing this transition carefully, ensuring a smooth and client centric experience. We now have solid data to share, not only from the One Itau initiative, but also from our broader digital acceleration agenda, including product delivery, solution development and clients' problems resolution.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Over 10,000,000 clients have already migrated to the OneItau platform, with an NPS of 80 points and a conversion rate of 99.3%, well above expectations. Notably, 54% of these clients already hold three or more products with the bank, reflecting our successful transition from a monoline offering to a full bank proposition. This shift has led to a 32% increase in engagement among this client base as they adopted the full bank offering. These are very encouraging results. We are enhancing the user experience in the Super App and improving results.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Over the past eighteen months, we have launched 19 key products and posted a 25% increase in Super App usage per client. This has significantly boosted frequency, activation and engagement across our digital channels. For example, our recently launched digital savings feature called Cofrino, or piggy bank, reached a balance of BRL13 billion in less than ninety days with an NPS of 93 points. It's important to highlight that most of these funds came from a deeper client relationship. Our expense tracking tool, launched less than ninety days ago, already has 1,800,000 active users and an NPS of 85 points.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Interestingly, 57% of users were unaware of their largest spending categories, highlighting our ability to address client pain points and promote financial education. This drives engagement, strengthens relationships and increases long term client lifetime value. We now have 15% of our UniClass and Personalite client base using PIX Credit, which is a very positive development. This functionality has contributed meaningfully to the growth in our finance credit portfolio. Over R13 billion dollars in credit limits have been reallocated across cards, allowing clients to define their preferred limits and products.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

This flexibility has led to over 20% transactional growth in the past three months. Once again, this demonstrates how well designed digital offerings can radically improve product adoption. Digital origination of loans, including personal loans and payroll loans, grew 31% compared to second quarter twenty twenty four. This emphasizes digital origination is improving significantly. Origination of daily financing such as PIX Credit overdraft limit, paying bills and credit card installment plan grew 72% versus second twenty twenty four.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

These results reflect the impact of our investments in technology and modernization. These are very positive results and we decided to share them with you. On the AI front, we've deployed over 500 internal use cases focused on efficiency and productivity. We've launched PIX via WhatsApp for our entire client base powered by AI and transactional capabilities, enabling self-service through intelligent automation. We are making significant progress in both investments and PIKs.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Transactionality is key to scaling our models. If you're a client, try it. You will see the results yourself. Regarding investment advisory, we've launched a 20 fourseven AI powered investment specialist pilot already serving 10,000 clients. As results evolve, we will expand this solution to a broader base.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

This is a fully scalable advisory model. As I always say, having good AI technology is necessary, but not sufficient. What truly matters is combining technological know how with deep expertise in investment products and solutions, which has always been a core strength of the bank. Our investment front has always been robust. Our understanding of client behavior, economic cycles and solution design is what powers what we call Itau Intelligence.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

Technology alone, without domain expertise, does not deliver outstanding results. And I believe we've been able to do this in a differentiated way within the industry. To wrap up, I would like to invite you to Itau Day, which will take place on September 2 from 9AM to 12PM, Brazilian time. This is an event we host for clients, investors, employees and competitors, where we share more about our journey and strategy, and all members of the Executive Committee join the event. So there's our invitation.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

And I hope to see you soon. We close another quarter posting very solid results, strong across all lines, with high quality, and most importantly, with a long term view across the balance sheet. We truly believe in long term management. We must continue to follow our mantra: capital allocation, portfolio management, resilience, and consistency. That's what underpins the numbers you've seen so far.

[Milton Maluhy Filho, President & CEO at Itaú Unibanco]

It's a highly entrepreneurial environment where people are energized, results are growing, and we're building remarkable things. I am very excited about what we've been able to accomplish without ignoring the challenges ahead. Let's talk more about this. And now I will join Gustavo for our traditional Q and A session. Thank you for your trust and for being here. See you soon.

[Moderator]

Good morning. We're back and directly from the studio for the Q and A session. Before we start, I'd like to remind you that this is a two language session. We will answer the questions in the language that you asked the question. And if you need support for the translation, through our platform, we continue to give you the option to choose the original audio, English or Portuguese.

[Moderator]

And you can submit your questions via WhatsApp on the link that is on the screen. We have Milton here and Gabriel. He is here, the CFO. Welcome to you both. And let's go to the first question that comes from Daniel Vaz from Safra Bank.

[Moderator]

Daniel? Congratulations on the results. Excellent cash generation. I think that the bank is very well positioned for the distribution of dividends for the shareholders. And there is a capacity, I saw the headlines.

[Moderator]

But anyway, I wanted to discuss another thing, the network. We see the interest of our capital growing 7.5%. We see the issuance number and the issuance of Itau closer to five, Bradesco and Santander as well. Very close. So we can see the deference of the market that you're gaining market share over the last few months.

[Moderator]

I wanted to understand that strategy. Where are you what is the direction? How can you be more competitive? And how can you achieve a directed offering for a specific client so we can try and capture that strategy. And once again, congratulations on the result.

[Moderator]

Thank you, Daniel. It's a pleasure to have you here. Thank you for your initial words. Well, network, we have less we haven't talked about the results in an isolated way because we integrated Rede network into the strategy of the bank. It's flow overview.

[Moderator]

The TPV of the market of credit cards and TPV of the flow, the market of credit cards is 4% of the TPV of the flow. So for us, it's much more important to see the full offer, the vision of the client. And this is the overview that we have here. Evidently, we see the other indicators, but the result of Rede is distributed into the results as we publish. We blocked the paid and receivables, and we have the result of Flex and MDR, which is what you see here, the rental but result of REV and the cost the financial cost of REV is in the margin for decline.

[Moderator]

So the result is always difficult to try and understand how the take rate, the result is with this overview. The market share for us is not an objective. I always reinforce this issue. Market share a consequence of everything that we do and everything that we believe in. Because once we focus on the correct client with the correct price and the holistic vision of the relationship as a whole, the consequence is the market share.

[Moderator]

So we don't do a management where we've seen a few cases where you get in with a result of the margin contribution margin that is negative, but actually, that's rental of the market share because our market share comes from big names, but it doesn't reflect into the result at the end of the day. And sometimes it's a detractor of this result. So we have, by consequence of everything that we've done, we are leaders, but we don't have to be the leaders. That's not an issue for us. The cost of the volume for market share to be concentrated on the big numbers, the big names where the contributions are much lower, the margins are very tight.

[Moderator]

And sometimes we see contribution margins that are negative for the operation. So we continue with this strategy. Integration is a success. We are happy with the results. The way that the commercial teams are articulate on the acquiring business, acquirers is nothing more than the additional receivables of the other ways that the client has to receive.

[Moderator]

So this is the way that we manage the business, and it brings a natural result, such as the flow creates value. And we continue to be very focused in our share of cash, penetration share of payments. That's how we see the relationship with the client. Now let's go to the second question. Renato Meloni Autonomous.

[Moderator]

Good morning, Renato. We do not hear you. Hi, sorry. Congratulations on the results once again. Thank you for the opportunity to ask a question.

[Moderator]

Well, I wanted to talk about the portfolio of finance credit, which is growing. It's very interesting. It's growing beyond the total portfolio of credit cards, and you're focusing more on the personality and unit class base, and you're improving the profitability of portfolio without increasing your credit risk. So I wanted to understand, which are the initiatives of these new products that you're developing and deploying in this segment? And thereafter, if I want to understand if that's a relevant contribution for your clients in this quarter?

[Moderator]

And does this continue throughout the year? Thank Thank Renato. Thank you for the opportunity to have you here. We've seen a healthy evolution in this quarter, specifically with the margin with the client.

[Moderator]

We've seen an important contribution. It's a set of factors, the margin of the credit card, the finance credit card is a component, but it's not a single one. So that's why we want to open the personal credit card portfolio to see that the rotation credit is doing well. There is a seasonality because when you see the expenses over the last quarters and the rollouts from the first to the second one, there is a propensity to the higher financing. This is an aspect.

[Moderator]

Second aspect is everything that we've discussed on the evolution of the journey of our clients. So when we can penetrate these segments such as Uniqlo, specifically in Pepsonalite and this product, it shows how can we, in the context of the journey and the transaction of the client, give life to digital products that are very important. The client is facing a purchase. Sometimes it's a short term transaction. They can get a discount because they're going to pay in PIX, and it's important for them to finance that purchase in competitive conditions.

[Moderator]

And we have the rates according to the profile of the client, the segment. It's more of the profile than the segment in a way that we can personalize the offerings for the clients. So this is what we've seen. Yes, there is an expansion of the PIX credit within the credit card. We understand that this is the best chassis in the context of the journey of the client.

[Moderator]

And so this is a set of initiatives. It contributes for the margin of the clients. But when you see that breakdown for the clients, there is average volume contributing, there is liabilities contributing. When we see exclusively the part of mix of products distribution, certainly, there is an impact. There is an impact as well in the rotation, and there is an impact positive impact for the mix, which is the growth in the retail in regards to the middle, which we published in the MPME.

[Moderator]

These are the three that contribute for an important margin with the client. And I think that we have a maturity level that is good in this quarter and probably we're not going to see the same growth level for the next quarter, given that we've got to a maturity level that is very important this quarter, specifically with the margin with the client, it's expanding. Your question, we've seen an evolution, but there is a series of positive factors. The rotation of credit, the growth of the finance credit card, the growth of government, which has an expansion in the net margin. We had another business day, which is another impact.

[Moderator]

We had an anticipation of results of operations of wholesale that are structured and we would imagine that they would materialize in the second quarter and they anticipated. So there is a set of positive factors. Up ahead, this acceleration that we are observing in the quarter, it doesn't come with the same intensity. But regardless, the guidance was seen again, and we can fulfill at the end of the year a stronger result than originally planned. Thank you.

[Moderator]

Thank you. Let's go to the third question, Mario Pierry, Bank of America. Good morning, everyone. Congratulations once again on the results. Milton, what really impresses me is you're delivering the results, generating a lot of capital, but the management is still not satisfied.

[Moderator]

I mean, you're always trying to improve. What called my attention was the extraordinary expenses that you had in this quarter, BRL600 million approximately in the restructuring. So could you explore more? What are the measures? What are you thinking?

[Moderator]

I imagine that this is more for the reduction of the physical distribution of the bank. But would you be able to anticipate to us a target, a goal of efficiency? Thank you. Well, Mario, thank you. Thank you for the initial words.

[Moderator]

I think that this point that you bring to the beginning is our culture, is a lot of the DNA of the organization and this intensity of wanting to do better every day. We are never satisfied. We celebrate good results, but the celebration is short term. The challenges are big. And we are looking to the future to try and overcome our expectations.

[Moderator]

We have to extract and operate in pockets of credit that with a lower efficiency index, you can absorb more risk than what we can absorb in the status quo. So I believe that we've done a provision for the structuring of the in the past, it's non recurring recurrent. It's important to make this point drive this point through. If we will see in 2019, we're talking about 2025, if you do a provision with this characteristic, these provisions are done when we look at a scenario up ahead and we see that we are in a period of adjusting of the harvest of the investments that were done in the past. It's non recurrent, it's extraordinary, certainly, but we will continue to evolve in our digital agenda.

[Moderator]

And a bit of the information that I brought to you, the evolution of One Itau, which is a relevant embryo, so we can advance more and more with the super app. The results are incredible. All the evolution of the digital acceleration allows us to be more ambitious in the plan. And this is what we are discussing. We're looking at efficiency.

[Moderator]

We you'll see that we are getting to an efficiency level that is very competitive. We can see some volatility in the efficiency level in the quarters up ahead because it's resulting naturally from revenue and cost. But directionally, we have to have an index of efficiency in businesses that we need to be more competitive. There are businesses that we are a global benchmark for efficiency, specifically in the wholesale operations. And in retail, we see an operation we see an opportunity to evolve in the efficiency level.

[Moderator]

While everybody has their homework to do, it's not a challenge of one segment or the other. We have different proportions. We have evolved in this agenda. Greg Gabriel, he has been the leader of this effort in the organization. It's not an effort just to finance.

[Moderator]

It's an effort of the whole organization. It's not just a project of one area. It's the work of everyone. And every now we are in the phase of execution that is very strong. We've been for many, many years in the period of investment and now we are in a relevant phase of discussion and we've expected that we are going to advance in these restructurings over the next quarters and the next years.

[Moderator]

We don't give you a guidance of footprint because the footprint is a consequence of what our clients are demanding. It's natural that the flows are dropping. And well, we continue to adjust the footprint. There is a reduction in the adjustment, and we will adjust as necessary. So we can understand the sustainability of these models, the value proposition and the model of service for the client.

[Moderator]

This is what we focused and certainly we will work and we'll continue to work in this provision is an implementation that is the clearest example of that to continue moving forward with our plans and the implementation of this project. Thank you for the question, Mario. Now we will continue with Yuri Fernandes, JPMorgan. The floor is yours. Good morning, everyone.

[Moderator]

Congratulations. Thank you, Gustavo. Another result that is very good on the capital. I'm going to ask on physical, which is another variable of efficiency. Well, the only line of the bank that is more weaker, the digital, but I understand the logic.

[Moderator]

I think that we have the revenue of the checking account, it has been dropped, is dropping. So how much stabilization should we see in the checking account? This is a line that is weaker. You have some nice data on the well, the consortium is doing well, the insurance is doing well. So I wanted to understand the improvement of efficiency in your plan, the stabilization in the line of Fizz, sorry.

[Moderator]

And in retail and wholesale, well, the opposite of what I thought, I thought it was weaker. There is more wholesale than retail. So if you can comment the trajectory of this line, it would be great. Thank you. Thank you, Yuri.

[Moderator]

Thank you for the words and taking part of our call. I believe that here we need to break down the answer into a few chapters. The first one, transactionality. We see in the retail that transactionality is still very strong. I've discussed of the good cholesterol, the bad cholesterol.

[Moderator]

We see transactionality occurring in the issuance and the acquiring and the engagement of our products in the digital channel. So we are increasing the volume in a consistent and important way. There are two lines that I would say that they directly they fall throughout time and that's why we changed the way that we publish. So when we have tariffs, the checking account, we are talking about tariffs and packages. We are re signifying the packages.

[Moderator]

It doesn't tend to zero because as you create value in the packages, we can do that. There is a charge for a package. It's a different way to service a client. But directionally, we highlight that first relevant of this line in the quarter. And secondly, I think that it will continue to drop little by little when we look up ahead, and we will re signify the packages.

[Moderator]

But the deltas, the millions of reais for all the completion of the revenue of insurance, it's not that relevant. The percentages are higher because we're talking about smaller numbers. So what is the variation in this revenue? The percentages are higher. So when we look at credit card, it's always important to remember that here you have revenue of exchange and you have the revenue of the invoice.

[Moderator]

And we see that this is less relevant and we see the strategy. We have to be careful because every time that you have the growth of tariffs that is relevant, you are seeing this client. And you have an adverse result in your base because the good clients that have access to good offerings will migrate. If you have a good transaction with the bank and a good relationship, you end up bringing the clients that are willing to pay for something that is not necessarily a capacity to increase the cross sell and engagement for the bank. So this is we have to be careful when we look at the long term.

[Moderator]

So yearly rates are dropping, and we are working. Royalty program is still relevant because we see the credit card, we need to see it in the context of the relationship. Then when we look at payments and payment and receivables, then you have the companies. You have the revenues, you have rate, you have payments, you have the revenue PIX within the company's universe. There is another logical relationship, it has to do more with the flow, and we've seen positive results.

[Moderator]

So when we look at the wholesale, there are two separations. The economic consultancy, the result is weighted because we had a second quarter that is weaker because we had a second quarter that is historical in the past with debt. So we need to be very strong with that. So there is less volumes in the market. And this quarter, we've seen there is one operation that is more relevant that has the characteristics that are our own and the general volume is dropping 20%.

[Moderator]

So that affects naturally this line. On the other hand, if you discuss the administration of resources, consortium is doing very well, important growth year on year. And the second aspect are the profiles that we're doing very well. So we have a better profile in the market in the second quarter and the added value. And our best expectation is that in the fourth quarter, we can deliver good profiles.

[Moderator]

But once again, it depends on the market and all the expenses that this brings. So when we look to insurance and the social security, we have great results, solid ones, important volumes that are growing the volume, and we need to see the performance fee, which is very solid with the added value. And insurance, insurance is growing very relevant year on year 7%, 7.7%, and we see in the quarter on quarter. So we see an expansion, but it has to do with the activity. As we see a smaller activity, the data of the share of this business, naturally, we can feel more of what happened in this quarter.

[Moderator]

The rest, we think that we are performing very well in the lines. It's important to look at the performance of the line, but also thinking about the lifetime value of the client vision. So it's not just growing in the line. If you had a way of showing that we are growing in the rates of the checking income in natural persons on the or the yearly rates of credit cards, so we would not be satisfied. So we wouldn't be understanding the change in the market and the added value to improve the value proposition of the client and increase the engagement and the completeness of the relationship.

[Moderator]

So congratulations, Gabriel, Gustavo and Milton. Congratulations on the results. Now my question is the ROI per segment. The profitability of the wholesale went over the retail for many, many years. So how can you think about and decompose these reversal in terms of segments that contributed the most for this operation, more of a spread efficiency or even the improvement in the risk profile?

[Moderator]

And how does the bank see the profitability of this differential of ROI, specifically considering the competitive environment and credit environment that is more selective in the second quarter. Thank you, Bernardo. Thank you for your kind words. I think that in the 2022, when we got to 16.4% of profitability in the retail, I said that we were not happy with that profitability. We were coming from a credit cycle that was tighter, was more difficult, but we would do a catch up all throughout the next quarters.

[Moderator]

So here, there is a lot of work. There is a lot of effort. There is no silver bullet. Naturally, credit and the derisking that we've done in the portfolio throughout the period. All the portfolio management focusing more and more resilient clients in longer cycles of the digital journey of the bank, the delivery of value that we've shown, the evolution of the digital acceleration of PAD, everything that we achieved.

[Moderator]

So when we look at retail, we look at expansion of the net financial margins. Specifically, we have finance credit card that is evolving. We have the rotation of credit evolving the funding in the next quarter. We see more pressure with the cap products, the cost of credit, it normally drops. So when we look at retail, you can see that we expanded the financial margin with the client, dropping the cost of credit in a nominal way.

[Moderator]

So the net financial margin is expanding. This is the main driver. Our vision is that we think that, there is a sustainability at this level of profitability. There is some volatility as natural that it occurs. We've had a quarter that we have the alignment of the start, so to speak, but within a profitability threshold that is very comfortable.

[Moderator]

The retail of the company is evolving and a great catch up that was done was at the natural persons that we in fact changed the threshold of the we create value for the organization. The more volatile products, we don't do the management product oriented, but with profitabilities that are very high, creating a lot of value. So here is a set of values that went to the same point, and this is the result. We have an important driver for the profitability on the long term. We are very focused on this.

[Moderator]

And in the wholesale, we don't do the breakdown, but I'm going to mention it because I think it's relevant. When we think about Brazil and LatAm, we see that in Brazil, we are changing with the profitability center in this. It's the sum of WMS and Itau BBA. When we highlight LatAm in this vision, we have an ROI of 15.8, close to 16. So it creates a lot of value in that sense.

[Moderator]

And so it's very interesting to see that even though the retail has done the suspension, the wholesale has delivered solid results, about 30% in Brazil and all the businesses that we are working. So the advantage of having a portfolio that is diverse, relevant and that we can naturally navigate through all on wholesale and retail performing with great profitabilities is the great advantage of having a new universal bank that is deep in all the businesses and has a market leadership in a great deal of the businesses that we work with. Thank you, Bernardo. Now we have Enrique Navarro, Santander Brasil. Congratulations on the results.

[Moderator]

My question is about the portfolio of corporate. We've seen some headwinds, the IOF in this quarter, the dollar. And even though you got some important growth in this portfolio. So my question is where what is the DNA of this growth? Is it capital markets?

[Moderator]

Where does it come from? Is it more aggressive policies? What can we expect for the next quarters? Thank you, Enrique. Great to see you again.

[Moderator]

Here, the effect of the exchange rate that you commented is very relevant. The portfolio has a lot of sensitivity to the foreign currency. The growth here also has a boom of operations that we put in the portfolio without changing the appetite. This is very important for the long term vision for the strong portfolio management on the long term. And we have inside of Itau BBA, several segments of clients and companies.

[Moderator]

We've grown the portfolio by our per quality and all of them removing the foreign exchange effect. Of course, here we have agribusiness, which has a performance that is very highlighted. We've seen the middle, which has an effect of a foreign exchange, but when we see as foreign exchange grows, even though the companies grow, the SMEs grow, there is no silver bullet. All the segments, have penetration that is good and with the right price. We have a discipline of price that is very strong, prices in the sense of capital allocation for the return of capital allocated capital.

[Moderator]

So we see the accesses in the market, they occur, but we'd rather lose share than lose money and lose profitability. So we've been very disciplined. We don't see difficulties. We continue to grow this portfolio, the right price with the adequate profitability level and with the completeness of the relationship that we have with the clients. So the growth is very diversified, no big concentrations and no changes in the appetite.

[Moderator]

This is the most important thing. And that's why we've decided to be more aggressive and taking more risk. No, it's the opposite. We're more cautious. When we look at the challenges up ahead, the interest rates and the activities.

[Moderator]

We continue to be very careful as needed. Next question, Eduardo Rosman, BTG. Morning, everyone. Two questions that I believe that are interrelated. First, about the credit business.

[Moderator]

We've seen that they generated value through this period. ROI is above the cost of capital. And if I'm not wrong, historically, you've always indicated that the ROI had to be closer to cost of capital and the excess of return should be coming from the other lines. But the business of wholesale of retail is changing in the high income. So we would expect that this number would go up.

[Moderator]

And now what happened? And along with this question, if with the future in the future with the improvement of efficiencies that you are indicating that are possible, your risk appetite would increase, Would we see more opportunities of growth? And even in the future, we can reduce the payout, so we can reinvest more and grow better with higher ROIs. Well, you, Rosman. It's a pleasure to see you again.

[Moderator]

It's nice well, in fact, it was a good quarter for credit because of the reason that I just commented. The expansion of the margin, it was very good. The cost of credit, very well behaved. In the retail, we've seen the cost of credit that is nominally dropping. So this is a very relevant point.

[Moderator]

We've seen a few doubts about the formation on the quarter. It's important to remember that we work with the expected loss in the bank. So the main effect for the provisions is the short term delay for the last quarter. When it goes through the long term delays, the provisions have been already done. So that's why the coverage level is not under delay.

[Moderator]

And we had a provisioning on the formation of 120% and it's even below 100% in the retail, it's 98. So the expected loss and the short term delays, that's why I say opening for the short term delay delinquency because it's what's expecting it's what directing the expected loss of the balance sheet. Anything differently from that, you're operating in incurred losses and unexpected losses. So I just wanted to clarify that. And even though we see the formation aligned with the portfolio that we observed and within the volatility that is expected and seeing the seasonality in this quarter, first quarter from the first to the second, the rollout of the short term to the long term delay, then it normalizes later.

[Moderator]

So I wanted to clarify with your question this aspect. This quarter was very solid in net financial margin. The credit is performing very well. In fact, the cost of capital, if you see, it's closer to 15%. So since we are looking at an average ROI and cost of capital, it creates value.

[Moderator]

If we operated with 15 in the average in the whole quarter, we would be slightly below in the cost of capital. So here, you're always running against the cost of capital. So it depends on the interest rate cycle in Brazil. It depends on the COI, cost of equity of the bank on the long term, and that's what's going to determine. With all the agenda of efficiencies, and we still believe that working close to the cost of capital is the ideal so we can achieve naturally penetrate with the relationship with our clients.

[Moderator]

And of course, it varies from segment to segment, but it's has to do with what we produced of credit over the last years that has been very good quality, positive for the value creation. So the positive trend for the creation of credit as well. About the efficiency level that you discussed, I certainly, when we adjust the efficiency level index, It's going to open for space for credit operations that do not have the necessary profitability. So we can, in fact, get into different public sector that we don't get in because of that reason, because of the limitation of the efficiency level. So this is the direction that we're headed.

[Moderator]

Our objective is not a big payout. Our objective is to reinvest the capital of the bank in adequate profitability and distribute the access that we shouldn't use. So with all the migration of Bonito and all the advances that we're doing in the Natural Person specifically, and all the expectation of the expectation of the efficiency level, this will allow us to get into pockets that we explore very little in clients that we subservice or we cannot service at all in an integrated way. So this is a great opportunity for growth. Juanitao is bringing that.

[Moderator]

We are advancing in the efficiency level, certainly, and we're going to have space to grow in these portfolios. Next question with Thiago Batista, UBS. I'm going to do a follow-up on the question of Rosman and Mario on efficiency. Are you comfortable that today your app, not one point zero, but the retail app is state of the art to the point that the branches are secondary to the relationship with the client. So it's a question about asset quality.

[Moderator]

And you're very comfortable with the evolution of the quality of the portfolio in the second quarter, potentially until next year. Do you think that that's a specific factor that is just yours that you could focus in more in better clients? Or for the market as a whole, would you think that this is the same for the portfolios or the asset quality? It's not a niche thinking about the second semester. Thank you, Thiago.

[Moderator]

Great to see you again. I'm going to start by the second one, and I'm going to answer both. But here, about the cost of credit, that has to do with the clear strategy of the bank of doing a portfolio management with a long term vision in the wholesale and retail. So we see very little hiccups and volatility in the numbers. And when you see the management for the long term cycle, you can have a better control for the quality of credit.

[Moderator]

You define the publics, you can clusterize the base, you can define the frontiers of the appetite for clusters. And in that sense, you're going to navigate in a less volatile way and in a more consistent way. The worst thing that can happen with the credit relationship is the stop and go that you offer, and then you have to stop abruptly the predictability of the client and the bank and the results. I'm going to give you two indicators of the market. And I'm not doing any sort of qualification of what we are seeing.

[Moderator]

But I believe that the performance has two indicators that I follow of delays, which is the system publishing, the credit card and vehicles. We've seen in the last quarter, the long term delays on the credit card growing 100 points in this quarter. There can always be a discussion that the change of criteria of write off, ours grew 20. So when we compare with the performance of the market, and we haven't seen any change of criteria in the write off, we've seen a performance of the industry that is different from what we observed. And ballpark 20%, when you exclude Itau from December, you'll see that the impact is more relevant than that.

[Moderator]

For vehicles, it's no different. We see that, well, vehicles can be a change of write offs, policies of write off. No, the short term delay of vehicles is coming stronger than what we observed. Short term delay doesn't have any relationship with the policies of write off. So we continue to be very consistent.

[Moderator]

We have gained shares with the clients, and we published targets for the organization. We've penetrated in an important way. We've grown two digits in this public. This is a management strategy. I believe that every bank has their own strategies, their own policies, own criteria.

[Moderator]

Ours is this, and it has been very consistent. Specifically, when you allocate capital in an incorrect way with the transactions, then you see profitability with the capital allocation. So this has been an important driver. Now the first point I wanted to highlight, I think that all the investments that we've done with the super app, the digital journeys, with the completeness, taking off transactionality. We don't wanna make the client go to the branch.

[Moderator]

They go if they wanna go. So all the digital transformation was necessary. If they want to stay in the super app or if they want to go to the branch and talk to the manager of an on-site or remote agent or a consultant of real estate or insurance, we it's a decision of the client. We cannot oblige the client to use one channel or the other because of a lack of offering. So we try to offer all.

[Moderator]

We are very satisfied with the evolution of the super app, and we are looking at the NPS absolute that is it's drastically we've reduced the digital that had a higher NPS. So we are in the same arena, competitive arena for the cost of quality and with opportunities to continue to evolve. And to launch new products, we launched 19 new products, and we've shown the results of some. And this is a new normal of the bank. It's not a project.

[Moderator]

It's not that we delivered a product. And it's engagement, it's activation. It's better penetration in the relationships. And this is the new normal of the bank. We're going to have a new bank, digital bank for the client.

[Moderator]

We have 70,000,000 clients. And within this public, we have different profiles. We have those that prefer the physical branch. There are the specific publics that have four specific publics that demand remote service. So this is the advantage.

[Moderator]

We can service the client in all of the context. And I am certain that the super app that we've done is going to be a facilitator for the evolution of the efficiency level of the retail segment. Well, now we have Gustavo from Citibank. Floor is yours. Hi, Gustavo.

[Moderator]

Thank you. Thank you, Gabriel. Congratulations on the solid results. We've discussed the strategy of the bank and about the private consignado. So we the payroll loans, the private payroll loans.

[Moderator]

I wanted you to evaluate how you see the evolution of the product and how Itau wants to position in the Consignado Privado private payroll loans. Well, thank you for the words and the participation in our call. Well, I believe that this is a product in evolutions. And we've seen this is a great idea. It makes a lot of sense.

[Moderator]

We see the portfolio as a whole of the product that is growing in the market. And we're trying well, we are growing in a BRL 40,000,000,000, but it's limited to specific associations. We always had 30% of that market. And so it's a market that we have a relevant participation, but it's a small market. It's a market that is growing.

[Moderator]

So we see an evolution of portfolios all throughout the last months. At the beginning, there was more activity than because of operational issues, risk aspects. We've seen a deceleration. Just to register. When we talk about platform and organization, the capacity, technological capacity, I believe that we are the first banks along with Banco do Brasil, specifically mentioning another one to get into this product of the big banks in this product because of a sensitive reason.

[Moderator]

It's the capacity to adapt to the changes that were done. That's why we're here. We are right from the inception. And the advantage of taking parts since the beginning is that we learn from this evolution of platform, not only the operational challenges, but we could define very well the strategy. Our strategy is very robust.

[Moderator]

We focused on the clear matrix of publics and that we want to service in which way we're going to grow. And we have the we've grown with quality. There's weeks that we had 30% of the share of production. I think that in the accumulated, if I had to give you a number, it would be 11%, 12% of market share of production. And once again, focusing when we look at the target products, Publix, it's higher market share.

[Moderator]

There is a lot of non people that don't have a bank account. And so the portfolio is growing. We've grown with adequate prices. If you look at the curve of prices in the market, we have the most competitive prices. This talks about the quality of the clients that we penetrated with the product that we're migrating from the old to the new product.

[Moderator]

And we're getting to production levels that are very good with a new product. And so there is a ramp up that is demonstrated in the period. And today, are very well positioned, and we're very well structured, and we're very satisfied. We've seen two problems. Credit, which we've seen a level of delinquency that is higher the full portfolio as a whole, not in our case, so it's tight.

[Moderator]

And the way that we structure ourselves, we have the breakdowns. We have two installments payment and we we saw breakdowns on the payments from the first to the second one, where we found a mechanism to advance even in these relationships, given the profile of the client that we're working. So we are excited with the evolution, I believe, and there is still a long ways ahead with the market, with the clients, with the companies I have to adapt, Dataprevis, CTPS. Everybody is doing their homework. Nonetheless, I see a positive result.

[Moderator]

It doesn't really move the needle in a relevant way, but directionally, we are down the right path. Thank you, Milton. Now the next question with Marcelo Mischari. Bradesco, floor is yours. We don't hear you, Marcelo.

[Moderator]

Hi, everyone. Thank you for the opportunity. My question, I wanted to go back to growth. And I understand the message. Really, when we look at the line to line, we've seen several lines with weaker growth than what we've seen in the previous quarter in the natural persons and the credit card or the vehicle portfolio and even the rhythm of the growth of SMEs as a bills, it's a bit slower.

[Moderator]

So about the guidance. And when we look at the guidance, I think that the only line of the guidance that seems more at risk is the growth of portfolio. So I wanted you to tell us. You've reviewed the guidance, so it's stable in growth. And I imagine that having the level of trust that you have in regards to the middle point of the average, so we can understand what we can expect in the next quarters and what is the portfolio that should help in this composition of the guidance.

[Moderator]

And now to continue with this question is the issue of the dividends. It really gives you the impression that the payout, the percentage can be higher in this year than last year. I don't know if it's early to say this, but I wanted you to share that. Thank you, Marcelo. Thank you for the question.

[Moderator]

It's a pleasure to see you again. I think you're right when you look at the realized and the projected. And in fact, when we do a review of the guidance, we do a review line per line. So we revisited all lines because if there is an information that is better available, then we want to correct whenever necessary. But in fact, when you look, apparently, the biggest challenge is in the portfolio.

[Moderator]

You're right in this vision. And even so, we reaffirm the guidance. So the best information that we have today has the effect of the foreign exchange that is important. The real is is gaining value in regards to the other currencies and that plays against. So it's a guidance of consolidated of the portfolio.

[Moderator]

So the currency can explain a piece of the of the behavior. It's difficult to project the foreign exchange rate for the second semester if it's going to impact the growth of portfolio or not. But we continue to believe that all the segments and the way that we plan for this year and we've done the guidance, we'll be able to deliver what is predicted in the guidance. We don't give point guidance. I don't give you I'm not going to tell you if it's the middle point.

[Moderator]

We give you a range, and we still believe that the range is the best information, our best expectation for the growth of portfolio. Anything different from that, naturally adjustments will be done, but we continue to be trusting that we can deliver the guidance with the information that we have. Now it depends on scenario, it depends on cycle, it depends on demand. So we've seen a demand that is weaker with higher interest rates. So there are several factors that affect.

[Moderator]

And also, it's well distributed. There is no specific segment. We continue to believe that we continue to grow in the natural persons. We grow healthily in the companies, in big companies as well in all the segments with lesser degree, with varying degrees, but there isn't a specific segment that will perform better than the other. So I believe that today, we are within our expectations, initial expectations. This is the first point. Second point. On the payouts, So we don't give you a guidance of payouts. So your question you asked if it's earlier. Yes, it is earlier. But directionally, what I wanted to tell you is the following. We've grown capital with a lot of quality.

[Moderator]

We've expanded the CET1 and 1.5, 0.6% adjusted by the provision of the interest of our capital. So we are with a rhythm of cash capital generation that is very solid. So the second semester is to the future, we are going to expect to see how we're going to deliver the results for the next semester with the micro and macro scenarios and delivering solid results. We have to sit down and see the projection, what we expect of the growth of portfolio, the opportunities of investments. Naturally, we're going to see our appetite.

[Moderator]

We've seen 12 of CET1 plus for the distribution of interest. And we have regulatory impacts, the operational risk and credit risk that we paid the first installment. We did the four times four payments without interest rates. So in the next first quarter of the next year, there is some effect with those projections we can collaborate well. The objective is not to retain the access.

[Moderator]

It's no longer extraordinary payments, so it's additional payments of dividends. So it's a recurrent as we generate a good base of capital, and this is the best expectation. And we're certainly going to have an additional payment with the same mechanism, with the same modeling that we've used for the payment of this year from the standpoint of logic of distribution. And next year, with more information we can detail to you. But we are positive in regards to that.

[Gustavo Rodrigues, IR Director & Investor Relations Officer at Itaú Unibanco]

We're going to switch to English as we have Tito Abarta from Goldman Sachs with us. Tito, the floor is yours.

[Tito Labarta, Vice President at Goldman Sachs]

Great. Thanks, Gustavo. Hi, Milton. Gabriel, thank you for the call and taking my questions and congratulations on the strong results. I guess my question is in terms of your maybe longer term or sustainable profitability, right?

[Tito Labarta, Vice President at Goldman Sachs]

I mean, is very strong. You have excess capital, which you can return. You have room to improve efficiency. So I mean, we continue to extrapolate what you've been doing, ROE could continue to go up, I don't know, 4%, 25%, and cycle can change, interest rates will move. But just to think, how do you think about the sustainable profitability?

[Tito Labarta, Vice President at Goldman Sachs]

And I say that in the context of thinking about the competitive environment, right? I mean, you've derisked on the lower income side. We have some very strong competitors there. A lot of the competitors are trying to get more into high income where I think you have a bit of a competitive advantage. Given this sort of changing competitive landscape, you continue to produce strong results.

[Tito Labarta, Vice President at Goldman Sachs]

What do you think is a right level of sustainable ROE, at least from a high level, just given all these moving parts that you have? Thank you.

[Gabriel Amado de Moura, CFO & Member of Executive Committee at Itaú Unibanco]

Hi, Tito. Thank you for your initial words. Good to see you here. Thank you for coming. My view is that even though we don't guide ROE for the long term, we never did and we keep thinking that this is the best way to give you a right assess about the way we are seeing the future.

[Gabriel Amado de Moura, CFO & Member of Executive Committee at Itaú Unibanco]

We believe that there are a lot of elements as you said. So the macro is relevant, the level of activities is relevant. At the end of the day, the cost of equity is relevant because if there is a change in the long term in the cost of equity, we might see the ROE somehow behaving in a different way, but always looking to the capital gains, value creation that we have as our mantra here in the bank, the way we manage the organization. So I believe looking for this year, I think it's not so tough to say what I'm going to say, but the 20 plus is reasonable to expect. This somehow is implied in the guidance that we just adjusted.

[Gabriel Amado de Moura, CFO & Member of Executive Committee at Itaú Unibanco]

But we think we still have the capabilities and the levers to keep delivering good profitability for the bank. It's of course, it depend on competition and competition is tough. It's always tough in all the segments. We know we have a lot of very good banks working every day trying to grow in the segments when somehow we've been leading. But we believe that we have the capabilities, we have the teams, we have the structure and all the investments we've been making throughout the years to compete very strong and to keep delivering a good position in all those segments where we are.

[Gabriel Amado de Moura, CFO & Member of Executive Committee at Itaú Unibanco]

So I don't see reasons why today with the informations we have to see the profitability going under the levels that we've been delivering. I'm not guiding return on equity. Please don't take me wrong. I'm just saying that this level of profitability so far is sustainable. Let's see the coming quarters what are the challenge we have for Brazil, for the macro, for the micro, for competition, for interest rate, for activity, all of them have a relevant impact in the level of profitability.

[Gabriel Amado de Moura, CFO & Member of Executive Committee at Itaú Unibanco]

But I don't foresee up to now a reason why we cannot keep delivering good level of profitability.

[Tito Labarta, Vice President at Goldman Sachs]

Yes. No, thank you. That's very fair.

[Gustavo Rodrigues, IR Director & Investor Relations Officer at Itaú Unibanco]

And we're going to keep the discussion in English as we have Nicolas Hiva from Bank of America with us. Nicolas, good to see you. Please go ahead.

[Nicolas Riva, Director at Bank of America]

Okay. Thanks, Gustavo. Good to see you as well. And also Milton and Gabriel. So Milton, I have a question on the AT1s.

[Nicolas Riva, Director at Bank of America]

And I think that you alluded to this a bit in your initial remarks. You announced that you're going to be calling both of your $1.81 s. My question is, I kind of I assume there's not going to be $1.81 issuance at this point to replace the 55 basis points of capital, but please let me know if that's not correct. And then the second question, on the announcement you mentioned so you say the impact on total capital is 65 basis points from calling both of these AT1s, but you distinguish between an impact on Tier one on AT1 and on Tier two capital. And I wanted to ask what's the reason for the impact on Tier two if you're calling both AT1s?

[Nicolas Riva, Director at Bank of America]

And my understanding is that the AT1s count 100% as AT1 capital before and after the call date.

[Gabriel Amado de Moura, CFO & Member of Executive Committee at Itaú Unibanco]

Yes. No, it's completely right, Nicolas. There is no impact in Tier two. So to be very clear, what we did is a liability management as we are seeing a good opportunity to issue in Brazil. So we did almost BRL10 billion in issuances in this first semester.

[Gabriel Amado de Moura, CFO & Member of Executive Committee at Itaú Unibanco]

I would say more recently R5 billion dollars in local AT1s, very good market, deep market in a very good conditions. So as the level of the capital of the bank is R13.1 We don't think we need to be full power in '81, 1.5. So we are very comfortable to go behind it. So after all those calls, the $700,000,000 and the $750,000,000 bonds, 81, we should go below 1.5. Our best estimate is to be 1.3 and we are very comfortable with that.

[Gabriel Amado de Moura, CFO & Member of Executive Committee at Itaú Unibanco]

So in the short term with the market conditions we've been seeing, we don't anticipate going to the international market to do new issuances for AT1. Of course, if there is opportunity in Brazil at a good level of price, we may issue more always looking to the restriction we have that is 1.5, Even though we fulfill today with 81, we have almost 1.9, 1.8 in 81, we only we can only use the 1.5 that's why we released the figures the way I just made the presentation. So this is the way for the other ones that are maturing in Tier two that we have options and call options by the year end. It's still too early to anticipate what we're going to do and we are going to take in consideration that the level of capital utilizations in the Tier two, it's a relevant information to make the decision either or not we have to call those bonds. Of course, when you are decreasing the level of capital utilizations in the two.

[Gabriel Amado de Moura, CFO & Member of Executive Committee at Itaú Unibanco]

So there is no impact in Tier 100% AT1 Tier one level one capital and this is what we've been calling and announcing today, yesterday with the results figures.

[Moderator]

Now we go back to Portuguese with Inuardo Nicchio from JANEL. Nicchio, the floor is yours. Congratulations. Thank you for the opportunity, Milton, Gabriel, Gustavo. Congratulations on the results.

[Moderator]

I have two questions. First, in regards to your mention of new pockets of credits, probably in the low income. And with the improvement of the natural persons, you see the indices improving a lot throughout the year, the improvement of One Net Au rollout, reduction of footprint, are you revisiting the strategy of the Massified? And we what are we expecting? What are we what is the reduction of cost?

[Moderator]

What is missing in this segment for you to move forward? And the second question is in regards to delinquency. We see in the industry a worsening. It's been a while, six months, half a year that has been consistent in the industry, and you have numbers that are very good. You expected a normalization throughout the year, but the natural persons is still very low.

[Moderator]

So I wanted you to know what is the main cause of this improvement vis a vis what you had before? Do you think that you improved? And can you stay a lot of time with this discrepancy in regards to the industry? Can you keep if the new harvests are still good enough for you to keep such a higher gap in regards to the industry? Well, thank you, Nishio.

[Moderator]

Pleasure to see you. Thank you for the initial words. Now let me start by the second one. We don't see any reason with the information thereby available to have discontinuity on the credit looking up ahead. We're very comfortable with delinquency level.

[Moderator]

I talked about SME. The expectation is that this normalization can be ten, twenty basis points in the indicator of delays looking ahead, but within expectation. It's a mechanical issue of not having the delinquency and the portfolio growing. It produces a better indicator, and let's just say artificially, when it normalizes, it goes back to the parameters that we expected before. But Brazil is cyclical.

[Moderator]

We need to look at the cycle, the activity. So with the information that we have today, we kept the guidance of the cost of credit. We understand that this is the best information. We had an expansion in the net margin, and we've grown with quality. We don't see a reason that we shouldn't grow with quality.

[Moderator]

All the harvests, no deviation of what we have as a target audience. So that portfolio long term vision is determinant, so we can continue to perform. Of course, volatility can always come. That happened in Brazil. We've seen it many, many times.

[Moderator]

I believe that our portfolio is much more resilient than what we had in the previous period. Given the diversification, the portfolio management, all the way that we've managed the portfolio in the wholesale and retail, it's a more resilient portfolio, less volatile than what we observed. And we have a great penetration in credit cards that we are market leaders with a position of highlight in regards to the second place. And even though we have products that are more volatile, we've grown with quality and the target audiences in an important way. And here, we will not forego of a very aware, conscientious, balanced management to have short term results just to have short term results because then you pay for this cost of credit for two, three years.

[Moderator]

We want to have the decisions that are positive, and this is the way that we manage the balance of the bank and that we are comfortable. Retail, wholesale, this is for everything. There is an interest in agribusiness, some doubts on the performance of agribusiness. Well, this segment, just to give you a zoom, I see that this is a segment that in the last few years has suffered. The price of commodities, tighter margins, climate issues that are never seen before in some regions, cost of capture with the Selic rate going up.

[Moderator]

This is a sector that from previous years had extraordinary years, very strong years and over the last few years, difficult years. What we've seen and we've heard in the market more volatility in our portfolio. This portfolio our portfolio from the management standpoint is very balanced. We are in all the agricultural, all relevant, very well selected agricultural distribution with big clients of agribusiness, the rural producers that invoice higher volumes with higher invoicing, very well defined agricultural monocultures that we should be present and we are resilient. And we've managed to perform our indicators show in a very healthy way, regardless of the challenges.

[Moderator]

And we have an agribusiness portfolio that is about BRL 130,000,000,000. So when we look at the percentage of the RJs that we have in the market, our market share is 5%, with 130,000,000,000 in portfolio. So we've managed to perform with a portfolio management that is very active and very careful with good penetration of guarantees in the segment and adequate cultures. So I wanted to clarify this out about agribusiness. So the portfolio is very resilient and always subjected to changes in the scenario.

[Moderator]

That's it. About your first question, about the new pockets. Well, we're going step by step. Our objective is not just to open the credit. There is an evolution to capture in the efficiency level.

[Moderator]

The Juanita is an embryo of this public that we can observe, and we can work with more emphasis. But this is a very qualified public of Juanitao. We have uni class, personalities clients. It's not just low income in the old concept. These are incomes that you have this public included.

[Moderator]

We did a de risk in the portfolio. We reduced the position in more vulnerable publics. It reduced the volatility as you have more comfort with the right efficiency level. And we are evolving our credit levels, artificial intelligence, machine learning, everything that is modeling of high level, we have volume to simply when we have the opportunity, we can evolve. And in a consistent and careful way, we are not we don't want to rush.

[Moderator]

We want to do this long term vision very well.

[Gustavo Rodrigues, IR Director & Investor Relations Officer at Itaú Unibanco]

Now we're going to sit you back to English as we have Carlos Gomeslopis from HSBC. Carlos, good to see you. Please go ahead.

[Carlos Gomez-Lopez, Head - LatAm Financial Institutions at HSBC]

Good to see you and thank you for making the time to take all the questions. Really appreciate it. So two brief questions on two areas we haven't touched. One on the corporate spreads. You mentioned how the market has been quite receptive to your AT1.

[Carlos Gomez-Lopez, Head - LatAm Financial Institutions at HSBC]

And in general, the Brazilian market seems to be operating with very low levels of corporate spreads today. Do you think they make economic sense? Do you expect them to increase in the future? And second, could you comment on one area of the portfolio that we don't talk too much about, which is the mortgage portfolio? I think it is the one that is growing the most right now in your individual segment, 17%.

[Carlos Gomez-Lopez, Head - LatAm Financial Institutions at HSBC]

How are you doing it with these high interest rates? Thank you.

[Gabriel Amado de Moura, CFO & Member of Executive Committee at Itaú Unibanco]

Thank you, Carlos. Thank you very much. So yes, you're right. So the spreads in the DCM market, especially for the big corporates in general, the market is very tight and the companies that have been accessing market have been able to do at a very competitive level of prices. The same way for us when we go to the market and access for AT1s as you were saying and mentioning.

[Gabriel Amado de Moura, CFO & Member of Executive Committee at Itaú Unibanco]

So this is for everyone. Let's see because we still have a lot of demand with this level of interest rate, a lot of flows going to the credit industry and that's the reason why we are seeing this level of prices. Let's see looking forward if the credit scenario keeps delivering the way we've been seeing. If there is no volatility, we believe that this is possible that we will keep looking for this level of prices. But will depend a lot in volatility and in the credit market.

[Gabriel Amado de Moura, CFO & Member of Executive Committee at Itaú Unibanco]

If there is any volatility, we might see some changes in prices, but this is not what we are foreseeing right now. And the market has been very active even though the volumes have been lower than what we saw last year. The level of prices are still very, very competitive and companies that have a long term liability program or infrastructure investments are taking the advantage to go long and issue with this level of prices. So this is what we've been seeing. And the second one on the mortgage side, although I think all the industry it's over subscribed, would say in the levels of what we call the saving accounts.

[Gabriel Amado de Moura, CFO & Member of Executive Committee at Itaú Unibanco]

We look to the capability to make price combining what we have in terms of saving accounts. We are in the private industry, we are number one bank in terms of volume. So we still have less need even though we do have needs to access the market with other instruments, the letter of credits and things like that. We've been accessing market before the instruments, let's say, LCI and others to make that good composition to the funding. We've been very disciplined in price, which is important.

[Gabriel Amado de Moura, CFO & Member of Executive Committee at Itaú Unibanco]

But at the end of the day, we still see a lot of demand from clients for the good segments, the segments where we believe there are more resilient, more affluent clients. So that's where we've been able to do good growth. In terms of market share, we've been able to do 45%, 46 of market share on the private banks. And we know that this product is very important for the relationship with our clients, long term relationship. And we have the edge of having bigger saving accounts amounts, which make us more competitive in general to access those clients.

[Gabriel Amado de Moura, CFO & Member of Executive Committee at Itaú Unibanco]

So it's a good growth, very solid and consistent and we still believe there will be opportunities to grow especially on the retail. In the wholesale where we still have capability to produce transactions, we've been very cautious here taking care of the clients that we have, but avoiding credits that may be more riskier. We see the market underwriting some risks that we don't believe are sustainable in the long term. So we've been very disciplined with the real estate, for on the mortgage side.

[Moderator]

Great to see you again. Great to see you all. I'm going to mention my question has to do with capital. And a lot of it well, you and search confused. Another point, because you mentioned that you cannot have over 150 basis points in AT1s, I always understood that Itau thought that it was a level optimal to have, but that you could have more than 150 basis points.

[Moderator]

Banco do Brasil already had it. So I just wanted to clarify with you. Is there any change in the regulation in Brazil that now you cannot issue more than 150 basis points of AT1? Hi, Natalia. Thank you for your presence.

[Moderator]

There's no restriction. We can have the volume that we want and issue the volume that we want, but Central Bank only allows that we use PASILEIA with maximum 1.5 of capital index and 81. We have, by different reasons, we have a liability management that has been done. Imagine that we issued BRL 10,000,000,000 in the first semester of perpetual LFs. The calls come after.

[Moderator]

So there is a temporal lack of you have an excess of AT1 during that time. And you cannot use more than 1.5 by legislation. So that access that you have has a higher cost is a cost of AT1, but that you do not use it for AT1 purposes. So there is the temporal mismatch of the issuance and the exercise of the call. That's what happened.

[Moderator]

We invaded, we advanced a little bit, nothing wrong. But what we've seen as a capital level that the bank is running 13.1% with the capacity of capital generation at the core, there is no need that we run at 1.5%, 100% all the time. So we are very comfortable because it doesn't affect the appetite of risk of the bank and much less the policy of dividends. Having more or less AT1s is not a limitation for the distribution of dividends. We always do the planning on the core equity.

[Moderator]

So the logic is to do we saw the opportunity of exercising a call? It's an economic decision based on price, and we are comfortable on running less than 1.5. So first, we don't have the appetite to be running. We're going to run at 1.5 if we understand that there is an opportunity for capturing at the local market that would justify us anticipating a capture. If that's not the case, then we are very comfortable running with 1,300,000,000.0 or less than 1,300,000,000.0 if we understand that there is an opportunity, given the level of capital that we have of core equity.

[Moderator]

And we can have through the cycle the utilization of the key 1.5, which is what's happening now, it's not limitation, no change in appetite. It's more substantial issues that we're very comfortable with. In fact, if there is any doubt in regards to Tier two, there is no relationship. The discussions of the call of the Tier two, the decisions will be made in the future with more information. Taking into consideration what I just discussed to Nicolas, the utilization of capital that will be an important variable to attribute the economic value of that issuance.

[Moderator]

This is what we are saying, and this is clearer. Thank you. Thank you, Milton, Gabriel, and all of you to all of you that taken part with our Q and A session, our video conference. And I'd like to give you the floor, Milton, to close the call. Well, thank you very much for your participation, for the questions.

[Moderator]

And I think that the point that remains is culture, the strength of the organization in the sense that we are all dedicated looking at the scenario and paying attention to the changes and dissatisfied, thinking that we can always do something better every day. This has made the bank evolve all throughout the years. Once again, thank you very much. We're very happy and satisfied with the results, but that's the past. Water under the bridge.

[Moderator]

We've discussed the results, and we need to work for the next quarters believing in the value of the franchise on the long term. And this is what we believe every day, focusing on a sustainable growth and evolving with the client satisfaction, centrality, solving the pains of the clients every day. And we are in a unique moment, not only of the balance and the results, but strategic positioning to face the challenges up ahead. And we can evolve in our digital journey, artificial intelligence and everything that has to do with technology that is available, always paying attention to our clients and naturally our investors. Thank you very much for your trust.

[Moderator]

Thank you for the messages and the questions. And the challenges are up ahead and we still have a lot of work to do. Thank you very much.

Participants

Analysts

• Gustavo Rodrigues, IR Director & Investor Relations Officer at Itaú Unibanco
• Milton Maluhy Filho, President & CEO at Itaú Unibanco
• Moderator
• Tito Labarta, Vice President at Goldman Sachs
• Gabriel Amado de Moura, CFO & Member of Executive Committee at Itaú Unibanco
• Nicolas Riva, Director at Bank of America
• Carlos Gomez-Lopez, Head - LatAm Financial Institutions at HSBC