Santander Brasil(BSBR)2024-10-29 19:06Financial Data and Key Metrics Changes - The quarterly net profit for Banco Santander (Brasil) was BRL 3.7 billion, reflecting a 10% quarter-on-quarter growth and a two-digit growth year-on-year [5][45] - The Return on Average Equity (ROAE) reached 17%, showing significant growth both quarter-on-quarter and year-on-year [7][46] - Net Interest Income (NII) grew by 16% year-on-year, with a portfolio growth of only 6%, indicating improved efficiency in generating income [7][45] - Fees increased by 13% year-on-year, with a month-over-month growth of almost 3% [8][38] Business Line Data and Key Metrics Changes - The retail loan portfolio grew by 11%, while the corporate segment focused on profitability, leading to a slight reduction in its portfolio [33] - Consumer finance, the largest segment, saw a portfolio growth of 20% year-on-year, with net revenues increasing by 33% [22] - The mass retail segment reported a gross revenue increase of 113% year-on-year, indicating a healthier portfolio [23] - The cards segment experienced a spending growth of 10% year-on-year, with an increase in active cardholders [21] Market Data and Key Metrics Changes - The funding grew by 5% year-on-year, with a focus on improving the quality of the funding mix [9] - The loan-to-deposit ratio remained low at 93%, reflecting strong liquidity management [37] - The auto loan market showed good dynamics with a growth of 4.7% in the quarter [34] Company Strategy and Development Direction - The company is focusing on diversifying its credit portfolio and enhancing profitability through better capital allocation [12][16] - There is a strong emphasis on technology integration to improve customer experience and operational efficiency [48] - The strategy includes a new positioning for SMEs, aiming to double the size of this segment in the coming years [29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic environment but expressed confidence in maintaining growth through disciplined capital allocation [54][60] - The focus will remain on profitability rather than just growth, with a commitment to sustainable long-term expansion [32][46] - The company aims to enhance its presence in clients' daily lives, emphasizing the importance of transactionality [11][47] Other Important Information - The company is investing in technology and has introduced new advisory services to enhance its offerings [15][25] - The quality of assets remains stable, with a cost of risk of 3.7% and a non-performing loan (NPL) formation rate of 1.1% [40][41] Q&A Session Summary Question: Future growth expectations in a more uncertain macro scenario - Management indicated that while some portfolios may experience flat or slight declines, overall growth will continue with a focus on marginal profitability and cross-selling opportunities [54][60] Question: Impact of old cases on Tier 1 capital - Management clarified that the recent impact was due to a long-standing case, and they do not expect further material surprises affecting shareholders' equity [62][71] Question: Consumer finance and regulatory impacts - Management acknowledged the upcoming regulation but does not expect a material impact on capital or payout ability [74][76] Question: Strategy for low-income clients and SMEs - Management confirmed that low-income clients remain a focus, with ongoing efforts to derisk portfolios while maintaining a conservative credit appetite [84][86] Question: Growth in fees and commissions - Management emphasized the importance of diversifying revenue streams and maintaining a disciplined approach to fees and commissions [92][93] Question: Profitability levers to reach ROE targets - Management identified maintaining a balance between assets and liabilities as crucial for profitability, alongside a focus on fees over risk-weighted assets [103][104]