XP (XP) 13 Nov 232023 Q3 Earnings call transcript

Good evening, everyone. I'm Antonio Guimarães, Investor Relations at XP. It is a pleasure to be here with you today. On behalf of the company, I'd like to thank you all for the interest and welcome you to the 2023 Third Quarter Earnings Call.

This quarter, we had a strong set of results, which will be presented by our CEO, Thiago Maffra, and our CFO, Bruno Constantino, who will also be both available for the Q&A session right after the presentation. Instructions] [Operator

begin X, refer forward-looking on we disclaimers our statements. presentation, Page on which our before to please legal And we clarify

SEC Additional found IR statements forward-looking Filings the website. information the section can of on on be

now Good Maffra. Maffra. to evening, I'll turn So over Thiago it

a quarter's our pleasure will Good Thank this to quarter In introduction with line tonight. I on be tough reaching with updates. with trillion Antonio. Quarter a Earnings to in different macroeconomic joining in across high with investment we us you had organic here and strong the Thanks, led BRL metrics, Third X.X for Call. start the KPIs. brief records that XXXX, evening, of today money, quarter everyone. quarter key XXXX weaker highlights It's to increased a growth you and all-time third we most the assets, conditions despite client of net top this our quarter new profitability ended

result BRL For at our net history this our year-over-year. quarter, as and XX% income in X% the of our we quarter-over-quarter achieved strategy, focus billion, highest up executing X.X in continuous a

Our in efficiency in XX.X%, the last has control ratio and at discipline XXX down X quarter-over-quarter. best years bps than cost the more year-over-year in bps reflected XXX

to ROE in quarter-over-quarter As not X% least, but less, XX our a earnings the bps share history. of the our increased year at rose also highest were result X.XX, efforts, quarter-over-quarter, during the reaching XX.X%, per BRL diluted highest

benefits have all-time the market our investment fully In incorporated of conditions. positive should and same and in expanding first, which want this Moving At the business. to protecting in leadership our capacity leadership our next time, investments to XXXX. X different reinforce core have be operations, by Modal's to hand-in-hand position, more reached reap we in quarter, points: with I an we KPIs, slide, enhancing financials the our focus high integrated

the continuous verticals improvement into offering product superior performance. new of translated Second, our

Verticals total and last in grew X of XX% our XX revenue last revenue. Xx years New the months now represents

the We the diversify deliver the confirms our that verticals new investments market. a was thesis for first. our environment This enabling client expanding and are into initial growth certain evolution importance of product the even tough us investment decision, right in to revenues offering having of

we For example, we a This in is cardholders opportunities of in out time. proper example many credit ahead total of cards, of XX% estimate our principality have will clear explore the we base.

to and our wallet NPS NPS of focus, at in focused achieve client on wallet, our everything remain directly in we into our a we of excellence that consistently and We translates client high high long-term in maintaining goals. again industry key once see the into Lastly, this and quality deliver the directly high quarter. the top pillar translates this is XX share base. this we see consistently base. client share NPS above High High of

advisers to retail in strategy superior this plans better is best them improve products have with clients. models providing In tools, can clients' investors. more experience order and centered for and they in so with resulting intelligent we our providing evolved the technology serve to asset systems direction, Our advisers allocation, and our incentive

the to Moving slide. next

improved mentioned progress made profitability financial the earlier, Modal's have are to on I happy we for quarter we see As while in results our integration.

volumes in the in Services. second Corporate in to quarter, markets GCM continued third capital high in recovery have Following activity and quarter revenue all-time with increase an Issuer initial the

high riskier tougher quarter, in depends a faster interest last and due is assets, better inflows take rates. As recovery in retail we may to revenue on net it more in time the said as performance which

quarter-over-quarter, million one leverage, of the in related we front, have operating going XX.X plus margin XP, main diluted on quarter-over-quarter despite X.XX we the XX for metrics bps profitability in issuance of with EBT quarter. ROAE metrics EPS shares higher BRL the increased the Modal's On forward, to in key XX look X plus bps acquisition

financials consolidated has we accounted into million BRL third our of in Modal, have quarter integration, Modal's XXX and Modal this in quarter about first Talking In SG&A. XXX for results. million line already fully BRL top

structure. to been share contributing Lastly, announced what to of in December XX, accordance paid our capital saying additional we $X.XX we to more optimization about returning of shareholders, be per dividend an in just have capital to the

Now Thank Bruno I discuss he can so will over you. this quarter's to hand financials. it

everyone. Good pleasure evening, Maffra. with again. you Thanks, It's a here to be

slide. of revenue gross the our on left with the Starting part

This of a growth quarter DCM, XX% our in and benefited representing XP slides. XX% growth growth 'XX. discounting and X.X quarter, million, Retail of BRL on Modal's XXX which ex-Modal XX% BRL next billion, quarter-over-quarter. activity, revenue growth The will After year-over-year. we Corporate Issuer billion quarter-over-quarter BRL mainly the reached in and sequential be than which record previous contribution Both gross quarterly we history, Services, by billion, BRL X.X third would revenue for in services Issuer was markets higher revenue our the capital in and especially on XX% of of X.X record reached XX% led explore growth was quarter-over-quarter. the Incorporate from responsible retail, detail revenue

and segments, XX.X% increasing X.X% issuer in from growth relevance mix terms in highlight quarter between third with its is quarter-over-quarter, in of services XX% by the quarter. strongest right, the corporate second On the revenue to

we are focus the revenue, on then into next deeper and on first, verticals. slides, going retail new of couple core retail On

Moving we strong all-time XX% quarter-over-quarter. million, a the main next When had fixed to a representing is fixed the of slide. growth at We income. improvement quarterly platform, revenue, BRL the income fixed for XXX sequential our look funds high core quarter equities, to income highlight and

fixed Our previous in record was BRL 'XX XXX reached when quarter second income million. revenue

we market the has later of a and of X when distribution to of The a experienced quarter Americanas. revenue components: main corporate offerings. As the of first you bond know, was growth trading XXX% income impact secondary fixed primary revenue had dysfunctional and quarter-over-quarter Xx due

during quarter. some distribute to turbulent return We to an conditions them this normal. offerings to had aiming This moment, the underwrote important contribution whenever record

quarter DCM the be the healthy of every expect XXX recognized at we fixed for but the year. reaching to third We see second is the Funds million, X% pipeline, decrease expected, as slightly quarter had revenue continue of considering quarter-over-quarter, a and a seasonal best quarter fees, BRL income semester. had platform to end the performance which

revenue quarter Modal, continuous BRL time over and Excluding quarter gradual fees impacted sequentially revenue quarter-over-quarter. approximately a second X% the was to third from from equities X.X X% growth lastly, billion, And improvement by performance positively of higher half increased in equities. results,

X. Slide to Moving

well, has a XX% BRL of recent in million reaching quarter-over-quarter, and the a in million, reaching on total market and growth based highlight from enhancing XX% XX% The Apex, revenue, verticals TPV XX% be market. diversification quarterly third plus released BRL XXX growth X% opportunities. to quarter, cards XP quarter-over-quarter of new grow cross-sell continued quarter Our to of and the the XXX our main year-over-year continue to grew quarter-over-quarter with year-over-year. by compare XX% we data When compared our

expect quarters. the We other verticals following in the new remain outperforming cards to

XX. retail to Slide Coming total to revenue. Moving back

still in slide X XXXX in yet stand: key company. of reached revenue We to The peak The is include quarter not we results. best quarter last Core again. grower delivered assets of have BRL cyclical is X.X revenues third has this the retail billion a demonstration Number been this one, XP cyclicality. updated

Third improved million that X.X quarter quarter months, billion, BRL last quarter. last 'XX, from to reducing core this gap, XX X BRL last XXX retail billion revenue this BRL to was quarter,

our in clients' that It is billion. assets XXXX, remembering worth BRL XXX were

Our XX,XXX. active X.X million clients and were IFAs our were

same year, way X.X The for fostered BRL trillion IFAs. recovers. KPIs market potential this million clients, quarter clients' of As in of development X.X KPIs upside and as the third the main are the active XX,XXX investments of the assets,

model. recovers, debate as increasing two, impacts model. headwinds, rate and care of our of help and for months expect although terminal new increasing market we risk In If is the the number the resilience the verticals have interest for gradual summary, considering new we interest a diversification XX growth and approximately resilience last more cuts, And our rate offset to pace revenue verticals continue of the with we the keep recovery, revenue, assets, business potential compare and diversifying there XXX%. the business XXXX increased our macro

retail the importance shows retail. XX. new Moving addressable for diversifying Services, were and Slide Corporate This everything quarter keep our our opening connecting and core our to Issuer with income the fixed strategy highlights together to of results. with of markets corporate, 'XX example, stream, revenue as third

our the which year, quarter, DCM million XX% period. and quarter-over-quarter Corporate XXX demand year-to-date, Corporate reaching revenue, activity benefiting record had better quarter of for corporate million, from in XXX clients, grew and best BRL revenue, its related at Issuer derivative from quarter reached all-time Services also This XX% year-over-year. the to BRL probably high the

DCM for with fourth the good same after XXX% Americanas the expect XXX XX% and services reached I led was year The became names in when the at quarters do quarter. market quarter first by revenue some We million, this the quality not growth of level dysfunctional highest Services underwriting rewarding of already corporate Issuer Issuer quarter-over-quarter event. we XX in as DCM in BRL activity, Corporate magnitude said, and did a positive year-over-year. result

represented were: The When BRL Modal our revenue long-term Moving third same. excluding already BRL the numbers, SG&A Slide non-people main million. inclusion XX% as and trend BRL has Expert expenses including and ratio billion, XX quarter. the line billion anticipated The and the from related increased not in in expenses, previous SG&A, was with XXX guidance people were Modal Even million non-people, Modal X.X for on gave respectively. and billion X.X and people to expenses, seasonal to BRL our we between BRL of SG&A around XX. Event of remains incentives the quarter considered. being which year, XX% the XX% to guidance Total our X between the XX%, in impact

XX. Slide On

keeping on quarter since ratio months quarter-over-quarter, said when fourth XX.X% we from both efficiency XX.X% all-time remain focused lows earnings discipline, XX comp we Last IPO. reached lowest cost last our XX.X% near the ratios and our 'XX we to since ratio. to efficiency efficiency decreased call, close As on level

levels quarter-over-quarter, compared Compensation XX.X% assume to when best to XX.X% when level share-based ratio kicking ratio natural sequentially. was in. our in to the comp program XXXX decreased of from quarters compensation It higher just is XX

and priority role a discipline Our operating played the next is we our slide. has to going talk cost are on an which in margins, control important

good an our XX% power, bull growth of the side. XX% market and fourth X.XXX 'XX at quarterly quarter, BRL reached billion quarter beating proxy EBT year-over-year last is EBT, this earnings the EBT, growth It high quarter-over-quarter. a for the peak all-time

the by operating increasing driven XX quarter-over-quarter, also quarter, has margin EBT XX improved leverage. bps Our in and year-over-year bps

margin Modal, Excluding EBT our would been XX.X%. have

XXXX from XX% in year-to-date EBT is annual guidance line between and XXXX. margin our to Our with XX%

Moving to the slide. next

income also to history, has net reached quarter-over-quarter been operating Our leverage in lower when growth this compared Despite X% X.XXX quarter, EBT best quarterly billion XX% net the up and BRL our benefited from year-over-year. growth. income the

We expect be should the be trend this our next to come. years given accounting going to in forward tax the expenses higher

quarter margin, reasons quarter-over-quarter net presented decrease 'XX year-over-year. a Modal main XXX third in the terms margin quarter In margin, higher XX.X% net bps expenses bps and tax XXX the decrease behind and lower sequentially. of a the are Expert,

impact both been net higher Modal quarter-over-quarter. have bps the around margin and Expert the Excluding quarter, and from would flat in XXX

the to moving last Now slide.

equity. X sequentially. 'XX, to increasing BRL ROAE quarter-over-quarter despite Our XX billion continued annualized to points reached average In has basis which equity grow Modal's, our our quarter added return third XX.X%, on

time, Excluding Modal, when a of gradually our the over to XP, retain ratio at to conservative of plus need our capital desire been capacity to profits We on reduce in it balance the towards approach of XXX continue would plus have too look our our increase platform. grow, XX.X%, capital average XP quarter-over-quarter. to ratio healthy But return bps we at level At our equity lack our much generating capital is have sheet. an

We driven reduction quarter In mainly by of capital was our dividend capital in ratio million quarter-over-quarter The ratio second USD the XX.X%. XXX third quarter a XX.X%. ended 'XX, September. payment was of 'XX with

share, have a with up USD need to we to year shareholders. capital conservative next get pay ratio there, additional a end per income net decided below XX% to returning expanding we To December, level. our $X.XX an to year, this to expect and dividend capital we context, XXX million. forward, continue Looking on around In very that

be happy and your will Now both questions. I to Maffra take

The Mr. Instructions] one [Operator Kuri Stanley. today is Jorge first Morgan from

is that far that see this now quarter platform of seeing ask to something wanted are I super narrative evidently on vis-a-vis the this mentioned you Brazil. results. debate the you the on which previous more behave rate quarter. on for Congrats the cuts trending seen so [indiscernible] And your terminal XP, how revenues important and the quarter, do equities we've retail Bruno how particularly, the for rate is you

service focus think some [ now I year-end are XX%. I ]. consensus moving the by So XXXX, know rates already at up shows economies at it's X.XX%

look So below equities. to the get XXXX. business like reaction the would look? during again does go cannot XX% kind How I rates, wanted that particularly how on does retail of least your revenues, at It on

Maffra. This is

Going point, to your haven't retail any on straight big yet we flow. seen the clients change

rate. we investors. about are because not retail have XXX SELIC When XXX, and been They -- repeating clients, calls we that So lagging. see the with last they we bps talking in move are on will meetings cut just

if interest the almost XX the you the you of asset every level high. is than months, XX losing riskier look to assets in rates SELIC class more But very that, or rate. of performance past look still If important

class LCAs, other from that's from to when grow if rate, SELIC LCI, MT clients going taxes, see the okay? retail don't hard we assets the price not action the up. asset [indiscernible], it's you it's moving only very to banks, see ], [ losing basically The CGs So

my view. So that's

back we retail So clients. from any yet see coming don't

Maffra I past the not probably data just rate. moderate, XX% add years may in X below point, a SELIC is portfolio, what moderate just If one to Jorge, the of aggressive, mentioned,

invest like And pretty the those have classes. good hard right in the that it's picture So this this the that coming, moment is asset see to we in environment, although usually much especially now. moments flow to in

that's So year. do. direction. per individual are the for to XX% job move But hard the in keep their remunerated well Individuals advisers the to in need it's cash, that that being to money

So that's picture. the

as how of part settle, the retail second to the XX%, probably on envision the and investor do much question next below not rates you Regarding such. base my current maybe for year expectations

down. mean, path future positive interest we riskier And are that better. we performing the coming I believe for rates one have see considering assets already started to

to So are attract more assets they individuals to assets the whenever on. to the flow so the more tend performing better, funds and and

the you we platform Brazil. know because ask are largest portfolio If funds in managers, the we

look at is the performance for below hurdle. of everybody example, funds, you multi-market the If

environment. than performing see So whenever going of rates It's better to risk about a a -- better you it's interest funds itself. performance rates and down, more for level interest precondition by have level We those that of the to going we're happen. again, believe the market terminal assets care

one Next Bank in Pierry Mario line from is of America.

year-on-year a billion This discuss more Let stand-alone your could on is see of by me Because to ask question. follow-up basis you XX of the XX% two we IFA Jorge's if quarter. questions. bit inflows only little BRL about One of right? XX%. a productivity your a is the IFAs, a drop expanded or base But the in

the guess but So of can like declined with quite productivity impact, a rates you IFA I -- negative your network has high bit. the

is throughout think Also, months off you see did us any if in fairly the how perspective inflows can were give the what on just can discuss they can or quarter, you a even you like the drop you impacting, September? improve. of If that

clients. then to Even the second only that brought a We about related think one people. And I your XXX XXX Modal. increased about It's in -- roughly by though it quick about XXX,XXX question. was XXX headcount Modal people, see

Modal? some that think -- that? synergies that you on you any helpful. realized do give achieved how like you So to Have also, will are cost be can color with there be If already us

Thiago. is This Mario. you, Thank

So to your question. first

and IFAs, so reasons because keeping But the past to on they environment of that when market much we the was it market is expanding already productivity of performance level are much reasons we advisers by about than for same the again, investments are share But lower. growth. and the investing numbers, question reasons, capture made of advisers already same back, IFA of and ready it's productivity this by are the on on. the And mentioned is believe assets, riskier same the course, the in humans, year for lower comes Jorge's the the internal we me, we macro For mentioned. the we

question On in the your approval July Modal. received second We about X.

integration. already in we at to probably sure, question, basis, are XXXX, easiest XXXX. very we on the the deal on for your the of the have we we And in synergies. a be share accretive So already accretive And way beginning answer per be lot of believe okay? So will will earnings earnings,

clients brand because have a part bottom need XXX million. and For Modal already XP line migrated we Modal's and of that deliver Rico clients above happen, the to we to BRL to

accretive the in year. achieve threshold we it base, we believe that's to next can EPS that make So and

Okay.

ask me bottom what What on a bottom of and was then. line? about the talked quarter the follow-up couple Modal SG&A. about Let questions Like You revenues this impact of line? net your

around Was something not relevant, BRL XX million.

million. XX BRL

then your about decelerated like inflows to And show inflows inflows quarter? the like organic an do Or what throughout think bit. stable Okay. saw And We in did had. like the in see other some right, you how a inflows or -- acceleration about than because market the that the of drop higher a data your were quite September the peers question you go from share, back relatively September? on you the also, inflows,

mature people do some How gain if that starting market will are to share that? speculate So for you you very feel share. to to be continue already you a it have reached about difficult

Yes.

imagine answer for is And Mario, has believe basis. a on business a of the on already lot not misleading part we reason basis. the basis, question, a this of first we The on your a to investors. that monthly Regarding prefer quarterly main monthly volatility

part we second about feel question, potential. the confident still Regarding your of the

have We segments the the the terms platform. we planting better affluent the client of we have client that share XP seeds. among talk highest can assets in are in where about We

and And stay on well-remunerated the cash. the already affluent to performance, with the industry and the client, it's performance in described fund's being we scenario so

So and cyclical. we our we believe it's the of because business, cyclical it's are still part investing

number and So of that at shows in core assets, that for terms bigger. ready But of all-time consecutively. it not the all-time and some of in high now high. tide advisers, of investments, about KPIs clients point, all of That turn -- revenues. will of much an that client in to third quarter the talked The potential an is going be It's the slide still I and will retail terms we're the is ecosystem the them are active bigger.

to believe we really share. terms market there is So grow in of

And is Batista Try Thiago get next later. UBS. to to one from back Batista

one Labarta from Next Tito then Mr. Sachs. Goldman is

but A basically little answer, follow-up, devil's maybe a slide. to and advocate that bit of little a Bruno

these You mentioned in [Technical the revenues the are I cyclical down right, at [indiscernible]. But investments understand the the core can rates, anything business. there, that highs. this do aside interest from down, rates to all-time made think are on all competitive X% those and So your do where investment also get XX, your you've why come is tougher, you Slide need Difficulty] despite all you down, revenue play and right? revenues go which environment is you level to there's to has do rates as maybe else down gotten at back below that look

rates. limit you things improve? like the how could potentially on understand, see anything it is there to in potentially terms Just upside of that competition else Is that going when something or sensitive else to

you new we've What that career form believe doing, business, that okay? been start enabler. innovating been an the revenue of started people part investment and XXX% this have through financial the in advisers to are -- business change, verticals, contact. Modal's core invest is our we a as let when months we new the last relationship, First, we in company lot that we've training of using saying a human So want use mean, that we And as to invested to made IFA for me is the XX strongly an because are a education business, outside all the make are It's how in of a in the like industry the we as industry. we I advisers We up. The up XXXX. that compare we education know.

we And if tools with about way this and they the can they the so skills, relationship financial go. create a soft the to we right have trust the and with and good client. the market, can give people That's understand

of And there macro whenever the not the we believe core and the is a operating huge it's investment there. again, helps, high heavy in leverage So a potential part believe one. business, we that

I forgot, can second you Your part, if repeat?

I do well throughout rates XXXX to the of need just guess, bit rates mean, how rates from think benefit? level X% to to to that see go it's do below you -- see X%, you I and need coming right? as the the rates. a I mean, rate were inflection to to related go little get level So low as

It's a delivering if assets well we hard wait say number, happen, rates because are have are performing really that. need It's to for know care returns interest a we single-digit single digits. environment. to XX%, higher then above rates honestly, If than that good for to don't and we will but risk

I we that. pace like do it a a -- answer question. like. But at is not would So I have we trend, we But again, control than to are but good think slower your a precise don't

quick follow-up one the just on Maybe inflows.

on know in inflows color past So I are you're your that higher, you growth the you inflows gross much I low, right? doing? your you net think in but can actually mentioned are give outflows. the inflows Any past, seeing

revenue, Yes. we but company not It's the gross deteriorating of and corporate clients with retail in allocated of and of million where inflows annual terms client assets. into it's not the volatility is stable. that improving, threshold it's BRL further, in XXX more It's outflows also have

have volatility. So we more there

comes Citi. Next from Gusan Gabriel from question

questions. So of couple a

year-over-year. driver and quarter, such of and the First, What's inside can strong both is why the view. us you we main the Can why And ups saw effective saw in pace comparison this the also, your the remind managerial accounting of in you downs. there? we the And rate that? tax sequential us contributions this come and what is in a both revenues remind the up quarter

in cannot the previous that. a an higher Like, the definition, everything take we remuneration was have specifically, over for ALM, revenue main allocate some I of other also thanks. does third retail, insurer that not services. we and it's own fit positive the management, a of the segments lot following had cash, segments, we impact in one-offs that stuff In our in made other Gusan, this we I'll there, that revenue institutional, it's the with Other just quarters. mentioned. see termination corporate that but asset there that associated revenue, not liability the by financial happening that in quarter, do example, expense. we had back, The

So for and was something SG&A. also the the but X, revenue impacted million EBITDA BRL negatively XX around impacted positively net impact

high placement statement, quarter, And in That's explains accounting at lot the level you our see broker-dealer securities going basically markets and has if regarding look at income of capital bracket. rate, effective broker-dealer tax the DCM third tax all-time you're what activity. there A revenue XX% activity. to

it a up than going because accounting effective a to an income, higher is effective we at When be net on rate basis. a should it's rate. longer volatility. that's annual that EBT our there with horizon, be look faster the tax basis, forward. On pace going time But tax quarterly So pushed exactly should growing be expectation

Next Rosman is one Eduardo BTG. from

back your But thinking know growth very question to I to your back. contributor revenues. invest as line business because We've see a bottom important asked far an the a been able cash card this future you on about clients I wanted or have offer business. that lot, we that not, in I probably as in the invest strong know, if have right? on like should numbers. or credit to be as Congrats a I

lot a of benefits. have You

appetite, to your headwinds, not this say, understand in going clients good We amount as same, clients have to whole also I clearly, trying to market right? of more wanted the so using future still, I you think possible just it's line And bottom risk a to your to credit didn't Your don't understand revolving, attract right? go problems, the and into if that that appetite but generate a business. risk saw, you AUC say, with try trying with the card face through the increase if to understand do of that, just you do could lot a eventually let's just

of first, end at as credit bottom that year. beginning when the line we change, margin or of Well, this of cards is I contribution would we negative, next should -- the the look expect at year, today still of of like say, but

okay? contributor So cards, you start the margin positive So curve be as credit a on it issuing point the to at we there will are is but as for to XP, J become know, of business card, escalating we are new positive.

to of the collateralized. When billion, something like portfolio, of we out billion BRL BRL that's look -- of billion part X big X.X BRL at NPL, course, we have our a X

when okay? to portfolio, it's have, NPL when to we close days X%. is the low, it's XX And the X%, close NPL at the at provisions we very today, over look we So But whole look is the okay?

what provisions over NPL. realizing Xx we have we on So are

So because the profile course. it's basically of we customers of -- that's the have, of

much have So is the that has. lower the NPL than we what market

over expanding portfolio the So at when we provisions. LA Rico has have been but the look NPL, a good very that revenues you at a with brand ratio higher

two these are very good. So

paid capital, right? topic, lot question If No. this actually say, to time. let's has XXX% that's and/or buybacks in you to future. of the let's than recurring year, I sustainable that, And Great. kind here, the a over another right? your that idea and is about time may, we which billion, the was of here on Bruno excess, the think assuming a dividends say, X.X income. add just buybacks talking If company right? I BRL another I'm Naturally, net don't more paying keep if basis think on to understand just it's I over But trying dividends,

Yes, is yes. answer the

at going XP the quarter through what or buybacks when capital this to we at dividends. we XX%. quarter, presentation, I mentioned Inc. capital ended are And above third returning keep look ratio We to in shareholders our level,

leverage. it's under So too

We balance of conservative in our are sheet. terms

Brazil, XX%. not that usually a we ratio the XX% compete we going bank. to be to more, But We are considering against in we banks that especially see bit around are where leverage with for have little a to capital example, room

Now to the broker-dealer in the it and the company the will Central bank have our conglomerate that's of possibility restructuring we as use parent us Bank in corporate Prudential are that to group and the something give under ongoing the with the bank below better.

instruments main a fund funding cheaper terms And vehicle depth know, as a can a as market for by that, itself mean, bank, achievements. you because in strong with the of I at

So going we keep are our going forward profitability. to

to capital that expect move in keep expect to earnings, us do mind, yes, our need retain with we We can forward. distributing we keep capital not to growing as growing. shareholders to And and keep you to

Now let's UBS. from try to connect with Batista again

profitability about question one have I XP. of the

already of time [indiscernible] you Because past want XX%. possible, mentioned see that X horizon have we like XX do for can believe this. we to in I But peers, ROE would this for of look You Fineco XX%. a years, have we the when achieve players we ROE should has also years, an XX%, when but that international is be some

this see level. to -- trying XX X, if years X, achieve to horizon it's So when

corporate R&E negative But the default, negative And mentioned, part that the follow-up just money. much And latest, second a already question [ those LCA to you able to been if is know for I about LCI, lot of questions has a structure but you How how be LCIs been instruments the new is of XP? answered LCA. about has that it. least at issue that ].

is linked corporate structure. if So your this with

set based income for ROE. quarter discount second BRL didn't we annualize that remuneration take equation Start you would and the we the that capital net is the We of also we divide The from by second it get ROE look, earnings of excess if XX% of the new XXX to post tax we net equity, in that XX%. the quarter, and mentioned, close capital, and target million Thiago, basically income new on the said, mass capital, a we the question. a excess results that out the with

a as more terms conservative Again, move in to have So to better have distributing vehicles leveraging very reducing forward that. using our and and forward. going way was the in look, that capital our leverage the in calculations in ratio potential we change of sheet so that capital keeping just liquidity, math balance we we terms on, start move group, and shareholders. to we But more a not the we say, of are as

the of it What for I'd you I guidance plan of, going not company ratio, become we horizon corporate that time in would in the directly in are in course, potential can when you because a is The of tell must. controlling efficiency ongoing answer restructuring is achieve that, terms to there XX% future. that's otherwise, a terms the a rather

eyes net not we to ball keep to not going controlling the evolving terms going and ratio. in ratio are We of are out take -- income the our of capital to efficiency

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we Neha HSBC. And have now from

Congratulations the on result.

quick on transaction. mentioned you Modal about the a clarification Just had what

when that what the So And the And is what [ impact ] was not be accretive? it's Just to expect very transaction that, clarification the required is do this you level quarter? clear. of accretive? to be

Bruno for thanks your and Neha. mentioned, question, As

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And now Research. from we have Geoffrey Autonomous

the the retail quantify big And us impact quick from there revenues side? the were you A also could in distribution on DCM I to Was one it. DCM on an deals Clearly, guess, revenues. those, help some quarter. there

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assets. The basically, other parts, risk no

question And from last now from Yuri Fernandes the JPMorgan.

to question, I limit myself just on expenses will one here.

revenues guidance a trigger you another usually super deliver And still was your But able guidance, if third strong. Modal. I with quarter had quarter, SG&A expenses. within even little this are to Even Modal, assume to also similar higher your right? This right? You think profit you confusing, be bit were we the will

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expenses. you So on I would take your like to hear from

Yuri. Thank you,

Bruno The we Going one export. have is already mentioned, your quarter, question, as first impacts, this okay? to some

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effects, these above XXX BRL So if up we sum all it's million.

we look mentioned, gave. the projection we the we be the year, for when target the year, that the will So we delivering guidance that

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last It one. was the

with the So everyone. discuss be and with you night, IR to good in We'll team all the have for we results participating would like the call. thank later, you available to a