U.S. Markets closed

Edited Transcript of BBAS3.SA earnings conference call or presentation 14-Feb-20 2:30pm GMT

Q4 2019 Banco do Brasil SA Earnings Call

Brasilia Feb 15, 2020 (Thomson StreetEvents) -- Edited Transcript of Banco do Brasil SA earnings conference call or presentation Friday, February 14, 2020 at 2:30:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Daniel Alves Maria

Banco do Brasil S.A. - Head of IR & GM of IR

================================================================================

Conference Call Participants

================================================================================

* Geoffrey Elliott

* Neha Agarwala

HSBC, Research Division - Analyst, LatAm Financials

* Nicolas Alejandro Riva

BofA Merrill Lynch, Research Division - Research Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good morning, everyone, and thank you for waiting. Welcome to Banco do Brasil Fourth Quarter 2019 Earnings Conference Call. This event is being recorded. (Operator Instructions) This conference call is also being broadcasted live via webcast through Banco do Brasil website at www.br.bb.co.br/ir (sic) [www.bb.com.br/ir], where the presentation is also available. The replay of the conference call will be available through the phone number 55-11-2188-0400 until February 21, 2020, in the English and Portuguese. (Operator Instructions)

Before proceeding, let me mention that this presentation may include reference and statements, planned synergies, estimates, projections and forward-looking strategies concerning Banco do Brasil, its associated and affiliated companies and subsidiaries.

These expectations are highly dependent on market conditions and on the performance of domestic and international markets, the Brazilian economy and banking system. Banco do Brasil is not responsible for updating any estimate in this presentation.

With us today, we have Mr. Carlos Vasconcelos, CFO; and Mr. Daniel Maria, Head of Investor Relations. Mr. Daniel Maria, you may now begin.

--------------------------------------------------------------------------------

Daniel Alves Maria, Banco do Brasil S.A. - Head of IR & GM of IR [2]

--------------------------------------------------------------------------------

Okay. Thank you. Welcome, everybody, to our presentation. Let me start on Page 4 and with some highlights of our earnings. We presented BRL 53.1 billion in NII in 2019. This is an increase of 6.4% in relation to 2018. In terms of fee income, we grew 6.4%, that represented BRL 29.2 billion. In terms of administrative expenses, we grew 2.8% below inflation, and we reached BRL 31.5 billion. And in terms of credit provisions in all expenses we reached BRL 13 billion, that is a decrease of 8.6% in relation to 2018. All those aspects combined, grossed in adjusted net income of BRL 17.8 billion, and that is a 32% growth in relation to 2018.

Now moving to next page, Page 5. I bring more details about the results of the bank. First of all, we are delivering consistent growth in our adjusted net income quarter-on-quarter, as we show here on the left-hand side, in the yellow part, and we grew 1.8% in relation to the last quarter. And when we compare to the same quarter of 2018, it is a growth of 20.3%. When we compare year-on-year, we have 32.1%, as I said, reaching $17.8 billion in income.

In terms of some of the profitability index that shows the same movement is the return on assets that we moved from BRL 1 billion to BRL 1.2 billion and the return on equity that we reached 17.3% in 2019 from 13.9% what we delivered in 2018.

Now moving to the next page, Page 6. We bring more granular information about the NII. We are delivering growth in NII consistently quarter-on-quarter. On an annual basis, we grew 6.4%, reaching $53.1 billion. When you look at the composition, the yellow part in the board is the main treasury, a contribution, we see growth in the contribution coming from treasury in 2019, and we do not expect the same contribution for 2019 -- 2020 as we're going to describe later. In terms of the loan operations revenues, we see the change in mix being reflected here. For instance, individuals portion of the revenues grew from 49% to 52.5%. Although we have also movements in terms of mix shift coming from companies, this is not completely clear here because the portfolio reduced. But when we look at the size, the participation of the smaller companies have been increasing in terms of the profitability of the total of the values and not the profitability, but for the contribution in volumes.

Another important aspect for the contribution in NII is the reduction in the funding costs. This is one of the functions of the reduction in the base rate. Since most of our funding is very different. It's slow. And also, in some cases, like the initial deposits.

Now moving to the Page 7. We show the NIM and the spread by portfolio. Actually, all that movement related to the change in mix that I mentioned previously, is being shown here. Starting in the middle that we show the -- in the middle of the slide that we show the managerial spread, we reached 8.19%, an increase comparing to 7.6% for the total portfolio, and this is being driven by all the lines of credit, for instance, individuals, reaching 16.44%, companies, 5.30% and agribusiness as well. This is one of the leverages for the NIM. The NIM there is a function of the liquid assets for the NIM. Exactly for that reason, we have some volatility quarter-on-quarter. However, we see the managerial spread increasing, and we see the liquid assets being reduced. Yes. For that reason, these expenses also a higher growth in need. Yes. As I said, we expect some volatility quarter-on-quarter, but in the medium term, we see growth, gradual growth.

Moving to Page 8. We bring some information about the income. The income grew 6.4% year-on-year. And when we compare to the last -- not last, but to the fourth quarter of '18, we grew 3.8%. This growth is being driven by growth in, for instance, consortiums that we grew 29.9%, capital markets, 23.7%, insurance or the insurance business that grew 18% and checking account and asset management with 6%. Yes.

Moving to Page 9, we bring the administrative expenses and the income ratio, which means cost-to-income ratio. We grew 2.8%, our admin expenses, below inflation, as I said. We -- representing this in the cost-to-income ratio in the coverage ratio, we see increasing the efficiency of the organization. By the way, just an observation here, we had won inventing the fourth event in the fourth quarter, that is basically the reform plan Cassi that impacted truly the fourth quarter. This is related to the full year. And what we did here for the cost-to-income ratio just to avoid some relocation, it's to scrap this amount along the quarters. Then exactly to show the downward trends and how we are managing the efficiency of the organization.

Another metric is the number of employees. We ended the year with 90,000 employees, and this is one of the facts of the seventh package that we launched in the third quarter. And in terms of the footprint, bank footprint, we continue the process of optimizing our network. Yes. And basically reducing traditional branches, and we are opening specialized branches and the points of services. And in doing this, we adjust the cost structure for the network.

Now moving to Page 10. We bring more light above the loan portfolio. The loan portfolio, we show the development of all lines here. But most importantly, is that we have grown exactly the lines of credit, for instance, as you can see here on the right-hand side, in the most profitable lines, individuals, SMEs, the retail and the reduction in the portfolio the deflectors coming from wholesale and the agroindustrial that by the way, this is a movement that is linked to a different dynamic in capital markets and the bank servicing those customers through capital markets. There is also a change in the duration of the portfolio that's expressed a little bit of that. And happening all this process, the percentage of the loan portfolio for the retail operations grew from 36.7% to 41.1% of the total portfolio.

Moving to Page 11. We bring individuals loan portfolio and shows the dynamics of change in mix in this process. First, payroll continues to be a relevant line for our own business portfolio, grew 14.5% year-on-year. However, some lines like that consumer finance that has higher profitability is growing at 45.2%. Certainly, in terms of the base is different, but this is very important it needs balance with its the rewards of the portfolio. And this is one of the reasons why that is contributing to an increase in our return on assets.

The company's portfolio on Page 12, it's a similar dynamics. We see the corporate or the large corporate parts of the portfolio reducing. This is the main factor for the growth in this portfolio. On the other hand, we see the stability is much closer, and the SME portfolio is growing faster. Yes. And the growth in the actual portfolio helps the spread for this portfolio. Since we go to some lines that are not capital. And finally opened, the SME portfolio, we see, for instance, that working capital and revolving credit is growing much faster at 28% and 12.5% year-on-year.

Moving to Page 14, we bring the agribusiness portfolio. The agribusiness portfolio has a seamless movement, the yellow part of the board, here are the agroindustrial loans. Those loans are reducing deposit situation of the portfolio. This is mainly explained by the dynamics of capital markets is very similar to the large corporate. When you look at inside the rural loans, there is also a change in this process. For instance, we see individuals gaining more relevance in the product portfolio and reached BRL 159 billion in the total portfolio of BRL 170 billion.

Page 14, we bring AOL expenses. The credit provisions, we saw a reduction of -- minus reduction of 8.6% year-on-year. This movement can be explained by 2 dynamics. First of all, recovery of write-offs grew from BRL 6 billion to BRL 7 billion -- $6 billion to $6.7 billion and also the gross provisions reduced from BRL 20.2 billion to BRL 19.7 billion . Then all these 2 combined movements explains the reduction in the overall expenses. And in terms of cost of risk, we've reached 3.15% and excluding the large case, we are in the region of 3.7%.

On Page 15, we bring the NPL. The NPL of the total portfolio reached 2.54% is a reduction of 20 basis points in comparison to the last quarter, excluding the non working. We exclude the larger, I want to say, restructuring fees, the Chapter 11 case here, exactly to show the dynamics of the portfolio. And we show exactly the same movement with the conversation, including the case and excluding the case.

On the next page, Page 16, we bring general view about the NPL for individuals, companies and agribusiness. Individuals, as we briefly mentioned in the last conference call, reduced the peak that we observed in the third quarter was seasonal and we saw a reduction to 3.41%. In the companies portfolio, we believe excluding the larger case, it's got to be moved from the 3.09% to 2.49%. This is one of the reasons why we see a contribution to reduction to the debt provisions. And in the case of the agribusiness, excluding the larger case, we reached 1.85%. There is one dynamic here that is important to highlight, that is basically the change in mix. As I said in the previous slide, it's reducing the agroindustrial part of the portfolio, this portion has a lower NPL. However, lower profitability as well. And when we take this, we reduce this, the business increases the total NPL throughout the portfolio.

The new NPL that we show on Page 17, and for the total portfolio and by segment, presents also a reduction from 0.84 or 0.76, depending on the growth to 0.5. And when the same dynamics is presented in the individuals, companies, except in agribusiness. But again, this is something that can be explained by this movement that I explained earlier.

Moving to Page 18. We bring the capitalization of the bank. The CET1, we ended the year with 10.02%. We reinforced our commitment to which by January '22, at least 11% in CET1. What happened in this quarter? We had several moving parts. In the bottom part here on this slide, we present some of these movements. For instance, we had some extraordinary events like the treasury shares that we've sold in the follow on that added some capital. The asset interest, mainly related to the disregarded dividends and so on. Filling up those assets, we have around 100 basis points, that was consumed by the repricing of the actual repositions, that was roughly 100 basis points. We have also the repricing of the tax credit and part of this new pricing is representing in the consumption of CapEx due to higher tax credits. Then this explains basically the movement that we have showed.

Now moving to Page 19. I bring some points about ESG policy of the portfolio. This is a subject that basically, has been working in the last years. It is in the strategy of the bank and in the matrix of the strategic goals. This is embedded in all the actions. This is not new. At least, we participate, for instance, in some of those index in the last 10, 15 years. For instance, we are part of the ISE, an index -- sustainability index by B3 since the launching of these index in 15 years ago. We are part of the ICO2, that's another index issued by related to B3. We are also part of the Dow Jones Sustainability Index in emerging markets since 2012. And last year, we, in fact, were included in the global index, and we are part of the FTSE index in the last 4 versions. We are part also in the corporate governance in for the service companies. And we are part of the new markets, that has the highest standards of corporate governance. Then all those movements and some other initiatives, that was mentioned here, gives us some important rewards and recognitions. For instance, the Global 100 is issued by Corporate Knights, and we were among the 10 most sustainable companies in the world for the second year in a row. And this index is issued by Corporate Knights and usually is announced in the host. Yes. We are below in Brazilian and Latin American Bank in this ranking. This 100 rank the check more than 7,500 companies. And this is a reward to all initiatives that we're doing. And we received also the Sustainability Award Gold Class in 2020.

One of the reasons that expenses shown in our portfolio, 30% of our portfolio can be considered as a green portfolio. Something that has some positive externality. For instance, efficiency, low carbon emissions or something related to the renewable energy, its sustainability and the business is related to best practices and so on.

On Page 20, we bring the guidance for 2019. We met all our goals in terms of guidance for 2019.

Now moving to Page 21. I bring more information about the guidance for 2010. Just some internal observations that we had some changes, and they're ready to report. The main key harmonized to what you see in the market and also, to bring something that just shows exactly what we are presenting to the market. Let me start with the loan portfolio. For instance, the retailing portion of the portfolio is one of the aspects that we are giving more attention, and then we started a new weightage, including the SME plus individuals, that we are calling in retail. Yes. And we expect to grow between 10% to 13%. The wholesale that is basically the companies as companies above BRL 200 million in revenues, and excluding governments. We expect to grow between 2% to 5%. This is one important aspect because after several years of increasing the wholesale part of the portfolio, this year, we see possibility of stabilizing and continue process. Certainly, being targeted in this process, we see a participation of the large medium companies in this process. Then Individuals loans growing 1% to 4%, then all those assets combined gives us a loan portfolio growth between 5.5% and 8.5%.

Something that it's important also to highlight is NII. With NII growth in line with the average balance of this portfolio, and we made the change in the index, because in the past, we reached the impairment. This year, we exclude impairments from NII. By the way, we have a pro forma in our MD&A, just to help you to understand those movements for margin, and we moved the impairment to ALL expenses. Basically, what we did in the credit provisions, we include the gross spread provisions less of the recovery, the impairments and plus discounts, and this is basically the ALLL Expanded view shown here, and we expect to grow further to -- 10% to 13% percent. By the way, we got also in our MD&A, the pro forma for 2019 considering these metrics.

In terms of income, we expect the growth between 1% to 4% and admin expenses between 2.5% and 4.5%. All those aspects combined, we see an adjusted net income between 18.5% to 20.5% -- BRL 18.5 billion to BRL 20 billion in 2020.

Just to make some comments about the dynamics of the results in 2019 -- 2020. In 2019, the operational of the bank -- the operations of the bank improves a lot, not completely this process was appear because we have higher legal costs. For 2020, we see this process of having strong operation will continue, we expect to have lower legal costs. And exactly for that reason, we can have in the medium range of this guidance, growth being between 10%, even though we have growth in the tax rate.

That said, we can move to the Q&A. Thank you.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) Our first question comes from Neha Agarwal from HSBC.

--------------------------------------------------------------------------------

Neha Agarwala, HSBC, Research Division - Analyst, LatAm Financials [2]

--------------------------------------------------------------------------------

I wanted to ask about the recent news that is right about the product business. Are you contemplating the sale reorganization of the business? And any plans on CLO that has been determined? I'll ask the next question after.

--------------------------------------------------------------------------------

Daniel Alves Maria, Banco do Brasil S.A. - Head of IR & GM of IR [3]

--------------------------------------------------------------------------------

Okay. Neha, Daniel Maria speaking. Thank you for your question. Actually, you probably heard several rumors in the press about our organization. In the organization, we always review the participation in the business that we have. But something that I can tell you, there is nothing -- in finance, there is nothing in this direction. It's some speculation that we've seen in the market and those rumors. But there is nothing decided nothing defined in this production.

--------------------------------------------------------------------------------

Neha Agarwala, HSBC, Research Division - Analyst, LatAm Financials [4]

--------------------------------------------------------------------------------

Okay. I see. But would there be matured stocks if you would like to divest your stake in CLO? Or what would be the challenges for taking such a transaction, in your view, if you can give any color on that?

--------------------------------------------------------------------------------

Daniel Alves Maria, Banco do Brasil S.A. - Head of IR & GM of IR [5]

--------------------------------------------------------------------------------

Neha, I think that is one thing that we need to have in mind is the structure of the Brazilian ecosystem. Certainly, when you look at all participants, they have a parent in their business. The relationship of the acquired with the banking. That certainly, there will be a huge transformation in the future, and it has been showing transformation. Yes. Actually, the aspect and the most complex aspect is how we're positioning ourselves when the market has loan structure. Yes. And the -- probably 1 million questions, how we view the structure of the market, probably 5 years and 10 years, that you can create competitive advantage in this market. Then -- but as I said, there is nothing we're trying, some speculation. And it's normal that we reduce our business on a regular way. Even though it's a core, non-core, we need to take a look on business.

--------------------------------------------------------------------------------

Neha Agarwala, HSBC, Research Division - Analyst, LatAm Financials [6]

--------------------------------------------------------------------------------

Okay. My second question is more on the guidance side. You expect 1% to 4% fee income growth. I believe that is on the lower side, and when we look at the loan growth, probably impacted due to competition. Anything else that is leading to the lower growth in fee income that you can elaborate on? And the other aspect is the OpEx growth. You've seen that some of your peers have been much more aggressive in controlling expenses, and they would like to close more branches to reduce the cost base. What are your plans in terms of cost control? And do you think you could be towards the lower end of the guidance or mid to high range?

--------------------------------------------------------------------------------

Daniel Alves Maria, Banco do Brasil S.A. - Head of IR & GM of IR [7]

--------------------------------------------------------------------------------

Neha, let me start with the fee income. Yes. I would say that this income that we are presenting here, we have challenges for it and just making some exercise. Yes. In the fourth quarter, we had the full effect of the repricing of the asset management. Just an exercise, if you get the 3 first quarters, and you we analyze this and you project of the true effects in the next year, you would have a reduction -- just looking this commercially, you would have a reduction of 3.5%. What we are saying here, that we are going to grow to compensate this reduction and to grow in the other lines of business. Yes. Then this is quite challenging. Yes. Probably when you compare the composition of the fee income is different from bank to bank. In our case, this is the reality. We have a hit that comes from the asset management business. But we see space for compensate in other lines, for instance, asset -- capital markets is one example. Insurance can compensate this, the consortium is something that is going quite fast in Brazil. Then this is embedded in the assumptions for the fee income.

Going to the admin expenses. Yes. I would say that we started first, this process of reducing the cost structure of the bank. In the last 3 years or even 4 years, we have been showing growth through low inflation, very low comparative in inflation. We -- certainly, the next step that initiates, it is always more complex. And in terms of branch network, we addressed most of the redundance that we have. Certainly, could have some movements, but this will be more case to case, I don't see a bunch of branches being closed, yes, in terms of personnel, we did a lot, we reduced a lot in the last years. More recently, we announced a new approach for the compensation of the employees. This is something that could bring some savings in the medium run, yes, when the bank is addressing all those assets. On the other hand, for this year, we have more expenses, for instance, in marketing. When you have a very competitive market, we need to position ourselves, and this explains for some of the expenses that what we have, it's more related to the business. When -- this is basically the dynamics that I see for the administrative expenses and why we have those numbers. Is it clear?

--------------------------------------------------------------------------------

Neha Agarwala, HSBC, Research Division - Analyst, LatAm Financials [8]

--------------------------------------------------------------------------------

Very clear.

--------------------------------------------------------------------------------

Operator [9]

--------------------------------------------------------------------------------

Our next question comes from Nicolas Riva from Bank of America.

--------------------------------------------------------------------------------

Nicolas Alejandro Riva, BofA Merrill Lynch, Research Division - Research Analyst [10]

--------------------------------------------------------------------------------

I have a question on the overdraft and what's been announced in terms of regulation. So the Central Bank put this cap of 8% a month, how much you can charge in the overdraft lines? If I look at the contribution to the loan book, it's less than 1% of your total loans, but you charge a very high interest rate. I mean, once you've given, charge a very high rate in that segment. Have you assessed the impact from this regulation in terms of your net earnings? I mean also, if you expect more regulation from the Central Bank in terms of caps on interest rates and other credit lines?

--------------------------------------------------------------------------------

Daniel Alves Maria, Banco do Brasil S.A. - Head of IR & GM of IR [11]

--------------------------------------------------------------------------------

Okay, Nicolas. Thanks for the question. First of all, in terms of overdraft, yes. As I said, when you compare the overdraft portion of our total individuals portfolio slower compared to the system. We have lower than 1%. The system is, on average, 2% or 3%, yes. And then the impact of certain -- there is an impact in our balance sheet, but tends to be lower compared to the peers, yes. We estimate the impact something around BRL 300 million to BRL 350 million after-tax in our NII, yes. What we are -- we see stage compensate in other lines of credit and growing in other lines of credits, yes. For instance, we don't give a loan to a certain extent, yes. Another aspect is the new regulation gave the possibility of charging for the availability of the limit of credit. We opted not to do it. We understand that the overdraft facility is one important product to bring the customer to the bank, yes. And we can manage this to consume other products and is exactly the way we are attacking this.

--------------------------------------------------------------------------------

Nicolas Alejandro Riva, BofA Merrill Lynch, Research Division - Research Analyst [12]

--------------------------------------------------------------------------------

Then on -- do you see the possibility of the Central Bank putting caps on interest rates on other credit lines besides for the growth?

--------------------------------------------------------------------------------

Daniel Alves Maria, Banco do Brasil S.A. - Head of IR & GM of IR [13]

--------------------------------------------------------------------------------

Nicolas, to be very frank, it's hard to predict. I would say that it's less likely, this specific case. And the way the Central Bank is behaving actually, they put some sort of cap that will create some situation that the banks compete and find the ceding rates, yes. It's hard to say that the extent of Central Bank is increasing competition. But certainly, the extent of Central Bank is bringing more participants to that market. And also -- and opening the market to mainly to feedback is on. And the bank is prepared to compete in these environments. This quarter -- this is what I call a new normal.

--------------------------------------------------------------------------------

Operator [14]

--------------------------------------------------------------------------------

Our next question comes from Geoffrey Elliott from Autonomous.

--------------------------------------------------------------------------------

Geoffrey Elliott, [15]

--------------------------------------------------------------------------------

There's been quite a lot of discussion from your CEO. And in the past about a number of the stakes that you hold. So you've talked about being in close to looking for binding bids on the asset management joint venture and you've put out the announcement about a buffer, actually, IPO and you've announced that you're reviewing the car business. Can you discuss what you're trying to achieve strategically here? Is it simply about generating some capital? Or is there something more strategic you're looking to do?

--------------------------------------------------------------------------------

Daniel Alves Maria, Banco do Brasil S.A. - Head of IR & GM of IR [16]

--------------------------------------------------------------------------------

Geoffrey, thank you for the question. It's strategic. What is the goal of this management is to prepare the institution for a new competitive landscape. And certainly, as I said, reviewing the business is something that is normal. In the case of -- let me give you the example of the asset management. The bank have a huge capacity so we make deals. Although our hands, we have the debts. Then the debts are in some business, for instance, that is necessary global scale, for instance, M&A or advisory. When we made the agreement with UBS, we closed that yet. Doing someone with global scale and matching with our organization capability. For the asset management business, although there is nothing announced. What is the concept of this, we see a huge transformation in the asset management business. And looking at the structure of the market. Certainly, you need to have some competitive advantage. Having global scale is one important aspect to this, even though to distribute funds abroad or to assuming that the interest rate will continue in low -- at low levels, certainly a global location will be part of the daily business that we've invested here. Then having a global partner is something that you put the institution for this new normal. And although, -- I think there are 2 examples, just to see this to show how the management thinks about this? How we are -- how we see the future of that business? What's going to be the competitive advantages in this new environment? What we need to fill the gaps to reached it? It's not necessary to build up capital. We're building up capital organically and we are quite comfortable with our products.

--------------------------------------------------------------------------------

Geoffrey Elliott, [17]

--------------------------------------------------------------------------------

So when you're thinking about a partner in asset management, what are you looking for them to bring to the table?

--------------------------------------------------------------------------------

Daniel Alves Maria, Banco do Brasil S.A. - Head of IR & GM of IR [18]

--------------------------------------------------------------------------------

Okay. When you look at the asset management business here in Brazil, and you're probably think it's -- let's say, part of the history of the high interest rate environment, most of the allocation issue fixed income. And fixed income is exactly the funds that are having more compressive fees. Certainly, there is a migration to more sophisticated strategies, and some of them probably bringing a different dynamic, you can start to deliver. Also, in terms of having a global location or having capacity to build global access. This is another aspect that you can bring to this. And again, this (inaudible) is another important aspect to this. And then we see a huge transformation in the market and having a lot of innovation in how we can speed up the process of innovation inside the bank. And we understand that a global partner, and this process brings a differential to the market through that probably -- it is a competitive advantage, comparatively to the peers.

--------------------------------------------------------------------------------

Operator [19]

--------------------------------------------------------------------------------

This concludes today's question-and-answer session. Mr. Daniel Maria, you may proceed with your closing statements. Please go ahead, sir.

--------------------------------------------------------------------------------

Daniel Alves Maria, Banco do Brasil S.A. - Head of IR & GM of IR [20]

--------------------------------------------------------------------------------

Okay. Thank you all for the attendance. We keep available here for further questions. And thank you. Thank you, again. Have a nice day.

--------------------------------------------------------------------------------

Operator [21]

--------------------------------------------------------------------------------

That does conclude the Banco do Brasil conference call for today. As a reminder, the material used in this conference call is available on Banco do Brasil Investor Relations website. Thank you very much for your participation, and have a nice day. You may now disconnect.