And gentlemen, good day, and welcome to the Banorte First Quarter twenty nineteen Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ursula Wilhelm. Please go ahead.
Thank you, Abby. Good morning, everybody. Welcome to Grupo Financiero van Norte's first quarter twenty nineteen results. I'm Ursula Wilhelm, the Head of Investor Relations and Marcos Ramirez, our Chief Executive Officer, will lead a presentation. And at the end, we will take your comments.
Thank you. Marcos, please go ahead.
Thank you, Usuna. Good morning to all of you. Thank you for attending our earnings presentation. I am pleased to report that we have encouraging results to start the year. So despite a more cautious business environment and the beginning of the new government administration, the quarter evolved quite favorably, as you can see in the strong performance in our core businesses.
Moving in full to the results, let's go to Slide three, please, where reported net income for the period reached ARS 9,900,000,000.0. These results include ARS 1,200,000,000.0 extraordinary income net of taxes generated from the dissolution of Anorte U. C. U. The I and D Bank.
The recurring net profit for the quarter was ARS 8,700,000,000.0, 2% above the recurring result in the fourth quarter and 29% higher than a year ago. Recurring return on equity declined 20 basis points from the last quarter to 19.9, while return on assets expanded 10 basis points to 2.2%. Moving to revenues on Slide four, you will see that they grew 2% in the quarter to total 25,400,000,000.0, supported by strong growth in net interest income, adequate growth in fees and good results in trading income. Net interest income grew 6% in the quarter, aided by the MXN 3,400,000,000.0 from the insurance and annuities companies. The net interest margin of the group reached 5.7%, 32 basis points above the prior quarter and reflecting the strong seasonal quarter of the insurance businesses.
The NIM of the bank was 6.2%, declining 10 basis points in the period, mainly on the effect of the incorporation of the Interxiones assets on the funding costs, but it increased 20 basis points versus last year. Overall, we are still forecasting the mean expansion between 10 basis and 15 basis points for this year. On fees from services, they totaled ARS 2,900,000,000.0 below the fourth quarter. This is explained for less transactional activity at the beginning of the year and seasonal higher insurance acquisition fees that explain the softer progress. Trading revenues posted a good ARS 1,100,000,000.0 in the quarter, slightly lower than the fourth quarter result when we reported several transactions with customers that were not repeated in this period.
Moving on to Slide five, please, where you can see that expenses remained flat in the quarter, while increasing 9% versus last year, in line with our forecast. This includes ARS 300,000,000 related to Intraxiones and ARS 86,000,000 of rains related to the sale and leaseback operation of last quarter. Both items, while now they are part of the recurring expenses, were not present in the first quarter of last year. The remaining growth in expenses is part of the business as usual and comparable to last year. The recurring efficiency ratio continued its positive downward trend to reach a low 39.4 on the back of positive operating leverage.
Now changing topics to credit and asset quality, Slides six and seven. Overall, the loan book slowed down 2% during the first quarter, mainly driven by a decline in the balance of government loans. As we have anticipated, mortgages and auto loans grew 23% sequentially. The slowdown in the loan portfolio shows our commitment to prioritize quality over growth as we are managing the business being very selective where we want to expand. Despite the soft increase during this period, we remain committed to achieve the loan growth guidance of 9% to 9% for this year, and this is not in during Interxion.
The quality of the overall portfolio is stable, and the NPL ratio remained at 1.7%, unchanged versus the prior period. The cost of risk result was low at 1.9% and reflected the combination of stable performance, particularly in the consumer portfolios as well as lower growth in the overall credit book. Moving to Slide eight and changing subject, I want to comment on the performance of our long term savings businesses. The insurance operation posted a strong quarter despite a tougher environment, especially in the business related to federal government entities. Overall, retained premiums grew 2% over last year, reaching 9,700,000,000.0.
Technical reserves increased in tandem with renewables, while claims were down 11% in the quarter. Insurance earnings reached ARS 1,600,000,000.0, 20% above last year. The annuities company achieved net income of ARS $272,000,000 on good underwriting activity. Afore added ARS $4.00 8,000,000 in profits to the group, 84% higher than the prior quarter on the positive impact of the higher interest rates on its invested capital. Overall, the long term savings segment contributed with ARS 2,300,000,000.0 in net profit or 23% of the consolidated net profit of the financial group.
With this, I conclude my comments on the quarterly results. We are encouraged by them and believe to be on the right track to deliver on the whole set for this year. Now moving to another topic. I want to comment briefly on the issue about banking fees. We are pleased with the conversation of the banking system and the Central Bank involving the government and the Senate of this matter.
We understand and share their desire to increase financial penetration and agree that in order to achieve this goal, the banking services need to reach the low income population. At Vanorte, we are engaged in the development of the digital payments platform to service this segment. We also have banking products with lower or no fees at all available to this segment. We are working to be more transparent to our customers on the cost of transactions and services. Like the government, we believe that competition will be the main force to set prices.
Switching gears to the economy. It has had good performance in the quarter despite a slowdown in investment. We are also seeing that the private sector is slowly regaining confidence and coming back to business as usual mode. Inflation is moderating and it's driving economies to predict a potential rate cut by the Central Bank later in this year. Thank you listening.
With this, I conclude my remarks. We are pleased to take your questions. Operator, we are ready to take the first question, please.
Thank And we will take our first question from Ernesto Gabilondo with Bank of America Merrill Lynch.
Hi, good morning Marcos, Rafael and all your team and thanks for the opportunity. My question is on your plans to distribute the social programs to the low income segment of the population and implementation of Kodi. We have seen many participants that are interested to develop this new ecosystem of digital payments such as Amazon, MercadoLibre, Walmart, Fintechs and some private banks. We're seeing that BBVA is already testing COVID in the streets. So by Norte being the second largest group in Mexico, it will be interesting to know your feelings and expectations to develop the digital payments and what will be the strategy to differentiate some competition.
Also, if you can add your strategy in biometrics to develop the market will be much appreciated. Thank you.
Thank you, Ernesto. It's a big question. All these are the social programs, lease of payments and biometrics. Rafael is going to help us with this. Thank you.
We will take our next question from Mario Perry with Bank of America.
Hello. Can you hear me, Ernesto? Well, I I will continue to the to the digital payment. We have been investing heavily in the past three three to four years on the digital platforms, and we have been able to create an aggregator platform on top of all our architecture in the in the IT that we have now the the first in in in being able to really integrate the big players like the like the Amazons, the the PayPals, and every all all these all these all these players plus a bunch of other aggregators on on this layer. And we are around 50% of all the transactions that we acquired from the acquiring business are now fully digital.
So that will continue to advance. So you will continue to see a more evolution on that part. So our platform allow us to really plug in any of the aggregators that we would like to aggregate into our platform. In the piece, we have been also quite active with the Central Bank. We are ready to start the pilot for the CODI.
We see that as a big evolution in order to favor the inclusion of the low income of the mass especially on the mass retail piece, especially the small stores and things like that and a big push in order to eliminate cash from the system. So I think that we have been quite successful in building up a very strong merchant and acquiring business, so we will continue to do so in this new coated platform. So we are fully and ready to start the pilot in this. That will require a specific distribution capabilities that I think with the sales forces that the retail organization has, I think we will be able to compete quite successfully in this space. On the third question you say, and just to remind you, we have already a debit card with Amazon fully digital in this piece.
So we are easy to integrate with the players that we would like to integrate. On the biometric piece, now we have fully deployed all the biometrics in our branches. At this point on time, this has been ongoing for the last Point 84 of all the transactions now have been now are fully identified biometrics, and we will continue to evolve to reach the 100% in biometrics. That will continue to evolve more and more into a fully capabilities to do onboarding on a remote basis based upon this biometric base that we are building up.
So we are quite advanced on this and quite happy with the results of this one months point that we have been testing this.
Thank you very much, Rafa.
Thank you,
And we will take our next question from Mario Perry with Bank of America.
Yes. Good morning, everybody. Let me ask you two questions related to first, your fee income generation, which appear to be a bit on the weak side, especially account management fees. If you can give us some more color on why that's only growing single digits? And then second question is on the operating expenses.
You are showing very solid cost control here. Just wondering if you have already achieved all the cost synergies that you're expecting from Interexiones or if there's more to go? Thank you.
Yes. On the fee base, Mario, as you know, the fourth quarter is always a very active quarter on a fee base. No, I think that if you look at the net service fees, we are around 14%, right on target what we advise the market to be around 12%. So no, I think the activity continues to be strong. We don't see any weaknesses at all in the fee base.
If you see our guidance, it's right even a little above our guidance in this part. On the OpEx side, there have been some concerns about and let me just guide you through the numbers. As you know, the Interaciones operational expenses was €3,200,000,000 Now that number has dropped to €1,200,000,000 That's going to be the recurrent expense line. If you see on the expense growth compared to one year to the other, as Marcos mentioned, is ARS 300,000,000 more. And on the rents that was related to the lease and sales back, we're looking at EUR 80,000,000 per quarter.
So is there a possibility to continue to reduce some expenses? I think so. And we are committed to continue to see some synergies coming down from the not just for the Interxant integration, but for many automation processes that we are delivering at the bank. So if you strip out those two numbers that I just mentioned, the EUR 1,200,000,000.0 and the 300,000,000,000, we are right on track of what we see as 6% recurrent expense growth without interactions and the rents that are really inflations plus 150 basis points, that is really where we would like to be.
Okay. If I just go back on the fees, what I meant here is when I look at basic banking service fees, you only show growth of 8% year on year. And when I look at account management fees that actually contracted 2%, and I'm also talking about year on year. So So I was wondering if there was anything specific in those, especially in account management fees.
No. No. I think you will continue to see the evolution as the quarter and the next quarter and the third quarter, especially after the third quarter, a big pickup on the fee. No, we haven't seen anything different from that. What you have also have to to remember is that we changed the the value add the the into a value proposition instead of a number of accounts in order to increase the minimum balance that we accept from the clients to be able to open an account with us.
So in a way, that could be see less number of accounts. But in if you see the growth, like, for instance, in time deposits, it's around 16%. That is related more to this type of more valued client that we are attracting to the bank.
Okay. Thank you. Thank you, Uman. We
will take our next question from Jason Mollin with Scotiabank.
Yes. Hi, thank you. My question is on the strategic plan and you were talking for the last year is about 20% ROE by 2020 and we're already there in 2019. Can you talk about the outlook and drivers for return on equity going forward? Is it are you highly dependent on interest rates?
Should that if we see if we expect and what is your expectation for rates? If they come down, will that put pressure on returns? How should we think about the drivers? Is it volume growth? Is it efficiency?
How should we think about the long term ROE for Banorte from here on in?
Jason, thank you for the question. I think this is a quite important question. As you say, we are already at 19.9% on recurring basis for the group, well above for the bank on return on equity around 24.5%. What we have been building up at the bank is it's really a platform that allow us to keep reaching more to our own client base and and increase the value proposition for for our clients in order for them to to keep all the businesses with us and and keep on reaching more and more value and, at the same time, reducing the the acquisition cost that you need to have when you are building a a franchise. The franchise of the bank and and of the group is you are looking at a franchise around 19,000,000 clients when you integrate the pension company and bank.
So all the efforts in order to keep evolving the ROE will be based upon being the preferred bank for our clients, based upon a very efficient distribution platform. And the most important piece is really coming around July. That is when we're going to be able to really personalize the value offer for each of our clients. We see that as a big push in order to keep reaching into our client base and increasing the number of products and relations that they have with us. That will continue to push the return on equity high because basically, what we will be doing is increasing the value of all the already existing clients that we don't have to pay high acquisition costs for them to be bringing brought into the bank.
So that's I think that you will see us continue to expand the return on equity, yes. And if you also look at the structure of the capital base that grew 20% on last year, and we have been able to keep on building capital at a very fast pace. And at the same time, we are not leveraging the bank at all. If you look at the leverage number of the bank are really have really almost no leverage at all. So basically, we'll be the deep penetration that we can achieve with our client base based upon all the things that we have been building up and extremely good attraction capabilities that the network and the retail platforms and the corporate and commercial has with their clients.
More and more, it's becoming very familiar for the banking personnel at Vanorte to be centered in what exactly the value proposition for each of the clients should be. That will continue to keep the ROE up. On the interest rates, I think the treasury and the risk and the accounting team has been doing an extremely good job in reducing the exposure of the balance sheet in the in when the interest rates is starting to come down. We hope they can come down soon. And we have been calculating sensitivity now that we have completely changed a lot of the structure of the balance sheet.
And you are looking in a worst case scenario for 100 basis points around $383,000,000 pesos of of sensitivity if the interest rates drop 100 basis points. That's the worst case scenario. But at the same time, you have to remember that we have a big chunk of assets that are that came from Interacion, around 110,000,000,000 of assets that are being every day funded at a lower cost and a lower cost, and that's a natural protection also for the reduction on rates. So we are very comfortable with the potential reduction on rates. The sensitivity of the balance sheet completely changed from EUR 1,200,000,000.0 that was one years point ago to EUR $380,000,000.
That is currently the sensitivity that we have.
Thank you, Jason. Also, this is Marco Ramirez. We still have, as you can see, a lot of room for improvement. So it's achievable with the ROE for 20%. Not this year, the next year, the answer is yes.
And next year, one year from now,
we will launch
the next program from the 2020, showing that we still have a life after the 2020, and you will see a lot of numbers there. And the idea is to continue with the ROE of 20%. And the last thing is remember that we have the ALCO, and we have a dynamic hedge there. And the idea is to know where the rates are going. But then after that, we can hedge and we can work with that issue also.
So we feel pretty comfortable for now, and we are we feel pretty comfortable with the future. And as I can I was saying, next year, you will see the next movement of the bank for the next year? Thank you, Lejuez.
That's very helpful. Maybe just a follow-up on that. How I mean, that is a material change in the sensitivity of the balance sheet to rates going from over MXN1 billion per 100 basis points. I'm imagining that's all else equal versus $3.80. Was this done with hedging?
Or is this how are you managing that exposure?
Yes. Can it's dynamic, as Markus mentioned. And if when we if you look at three years ago, fixed cost the fixed rates on the balance sheet was around EUR 170,000,000,000. Now that number jumped to EUR $280,000,000,000. That is basically the mortgage and car loans and some of the fixed rate loans.
Those loans were really the cost of covering those loans were around 8.5% of the to to the all that those that hedging. That cost has been been going down to 3.5%. Three years ago, margin that we were getting on this hedging process on the balance sheet was around 9.2%. Now that went down to 7.2%. But with this improvement in hedging process from 8% to 3.5% because we see a natural evolution of the rates to go down and the natural coverage of the stickiness of the deposit base allow us to do this.
You see that the 7.2% that is now the margin on this part of the balance sheet will jump to 8.1%, and that will allow us to really reduce the sensitivity to the reduction in rates, as I mentioned to you before. Happy to send more information and discuss that in detail, but we are very pleased with the way the protection of the balance sheet on the the downward trend of the potential rates to not be an issue for the achieving the results of the bank. If you ask us what would be the potential ongoing margin for the bank with a scenario of reducing interest rates, we see potential 6% to 6.2% for the bank sustainable net interest margin.
Thank you very much.
Very clear. Thank you, Ruudis.
And we will take our next question from Thiago Kotulski with BTG Captual.
Good morning, everyone. Thanks for the opportunity to take questions. I just have one actually. After actually the good results that you had with the high ROE, the non recurrent actually numbers that you also had and the deceleration in loan growth. I'm just wondering how you guys are thinking about the payout.
Could we see an extraordinary dividend this year given that the CET1 ratio in this Q actually extended 110 bps sequentially. So if you could give some color on this, it would be helpful. Thank
you, Thiago. Yes, actually, one hour from now, we will have the assembly, and we will ask for an increase of the dividend up to 50% of the earnings of the net income. And maybe in the future, we can again make a dynamic distribution depending on what's going on.
Great. That was very clear. Thank you.
Thank you.
We will take our next question from Jorg Friedman with Citibank.
Thank you very much for the opportunity to make questions. So just like to understand a bit the evolution of the loan growth, particularly with regards to the government lending portfolio, which contracted substantially quarter over quarter. Just wondering if this is because of the slow government deployment in the beginning of the analyst term or if it has to do with the strategic direction of the bank itself to be a bit more conservative in this portfolio given the representativeness of the total loan book? Thank you very much.
I will let Rafael give you the numbers, but it's mainly driven by the competitors. It's tough, and we want to keep it, but the rates are there, and everybody is fighting about that. Rafael, give us the numbers, please.
Yes. I think, as you mentioned on the guidance, we advised the market that we will be reducing the loan growth at the government book. And the reason for that is that we can be very selective on the type of relations and loans that we would like to keep. As Markus mentioned, there has been also a very strong competition from many players now trying to get into the government business because it has been very secure and the margins have been going down since the last three years. But we still have a very sizable business that is quite profitable.
There were some concerns about the margins that we have been achieving from the Interactions portfolio. And that margin is expanding by the day. The more increase the retail deposits, the more we increase the margins. So no, it's basically in accordance with our guidance that we set up at the beginning of the year. And also, as Marco said, more competition than in some cases, we are not willing to go at a very thin margins to this market.
And we are very comfortable with the size of the portfolio that we have, so we can be very selective in where we want to play and what relations we want to keep.
Perfect. Thank you, Rafa. Just a follow-up there. I remember that right after the announcement of the transaction with Directionis, that part of the portfolio would represent almost 30% of the book. Of course, given this selectivity that you mentioned, you have been diluting that part of the book to a point that in this quarter it represented 23.3% of the book.
So where you see this number going to if you could give me some educated guess this year and for, you know, the coming years? Thank you very much.
Yeah. I think 22% will be, as we mentioned when we did the Interxiones deal, because the rate of growth of the of the consumer continues to be very strong on the commercial and the corporate. The SME is also the same. Just to give you, car loans continue to grow 20%. The mortgage book will continue to grow 14%.
The the the the the retail guys are are launching an extremely advanced process for the mortgage group, so that will continue to to reach maybe 15% for the year. And and the mortgage book, we are very happy with keeping the the book at the size that that we have. This is very profitable for us. We will continue to fund that that portfolio at a much better cost every single day. So no, I think we are in the sweet spot that we wanted to have, a very secure portfolio that allow us to have ancillary business on the government side and continue to expand on the consumer and the commercial and the corporate as we have been doing in the past.
Perfect. Thank you very much.
Thank you.
We will take our next question from Carlos Gomez with HSBC.
Thank you and good morning. You referred to the negotiation regarding the fee limitations that the Senate introduced. Could you perhaps be a bit more concrete and give us an idea about possible timing and the possible financial impact or a range of financial impacts that you would expect? Second,
I don't want
make any changes to your Afro business with the expectation that the government wants to bring the fees down from 1% to 0.6% of AUMs. And did you expect that to be accompanied by other changes that do not reduce the profitability of the business?
You, Carlos. I will ask the second one, the Apore Firstoliv. But we still don't have timing. So I never know the story with so we cannot tell you when it's going to happen. It's something and but well, let's start with the Apore with first solids, please.
Sure. Thank you, Markus. Well, with respect to the Apore business, they well, several changes have been taken place. To begin with, yesterday, an initiative was approved to provide a more flexible regime, investment regime, and that has a positive need. On the other hand, the authorities are committed to the regulator, to some extent, the authorities, and that would also, if it's done properly, also diminish the cost.
However, there is an intention to the of the regulator to have a formula to determine the it will be a factor which we will be taking into consideration. I mean, as you know, we have to negotiate the commissions fees every year. But they are introducing a formula in which they want to take into consideration the rate of growth of the assets under management and take that into consideration also to negotiate the commission. So it is too soon to tell how this formula will affect us because it actually was only presented to us yesterday. We have to go through it, understand it.
But what they have been given is that they what they have been saying is that the average commission, not the commission, the total of all, the average commission of the system would be able to reduce somewhere to an average of 0.7% or 0.77% depending on how much the assets under management of the whole system have been accumulated. So that's contingent on how these assets grow. And the target that they are well, the target because it's not it's not something that necessarily will will have to occur by law. It's something that it's something that will be taken into consideration in in the junior negotiations with huge, very sensitive on how the assets under management will grow. So we have to wait and see the details actually to understand all the effects that will take place.
Certainly, and that's a possibility if what happens after we revise and understand these new guidance and formulas, if the rate of reduction of the commissions is more aggressive than how it has been, well, that will certainly affect everything else the same, the profitability of the business. This will be mitigated, the other hand, however, if all the other positive changes take place. And another one that was discussed very important to mention yesterday with the secretary of the treasury with the subject with the other secretary of treasury and the other regulators is that they also are committed to actually fix the main the main problem of the system, which is the lower contributions that we do see. If they fix that, that will also be something that will accommodate more aggressive reductions in the future. So it's hard to tell you.
I will ask for some time to understand all the changes. There many other changes taking place as well. They want to change also the way in which the authorities invest to take into consideration the replacement rates, which is being known as target daily funds. So there are so many things going at the same time. I think to be able to determine how these businesses will be affected for good or not, I think we will have to wait and see for all these changes that are current at the same time.
And that I will stop there because I don't have more visibility at this point.
That's what I'm about that point, Carlos. And the banking piece is the same. The initiative that was put forward a few months ago is frozen, as you know, in the Senate. But more importantly, President of Sobrador was very clear in the Bankers Association Annual Meeting a month ago. In Acapulco, you remember that the government will not regulate fees and that it will allow competition to be one of the to put the push down the fees.
Let's see how it moves, but so far we feel pretty comfortable and working with the government as we were saying. Thank you.
Thank you so much.
We will take our next question from Enrique Mendoza with Actinver.
Hi, good morning to all. Considering the strong growth in profits that you already achieved, Could you tell us if the net income target of the guidance is only including the recurring profit?
As you see, the rate of growth for the currently is around 14%, 15%, the net interest margin. And we guided that we could see the net income from 35.8% to 36.8%, total net income. So that's our guidance to see for the year. Remember, and this is quite important that every time we we see a change in administration, usually, the the rate of growth for the country, no grows no more than 1.4, not 1.5%. And that's that's impartially that some people consider that guidance to be a little bit more conservative.
As we said it the same when the when mister Trump took office that we'd rather be conservative on the guidance at the beginning of the year. And if things change through the year, we change the guidance for the best. At this point in time, we are keeping our guidance to 35.8 to 36.8 net income. So I think this is even what what what is considered to be conservative, an extremely strong profit growth as you have seen 29% net income growth for a year, year on year on on on on recurring basis. Some the ROA continued to expand nicely.
I mean, ROA, that is a critical measure for us more even so that the return on equity because I think the ROA really shows the the strength of the business continue to expand. So I think all the numbers are moving in the in the right direction. Some people think that the loan growth around seven to 9% is too low. I think it depends. If you are being able to manage seven to 9% loan growth and keeping the cost of risk at the levels that we are keeping is equivalent to have much more aggressive growth with a poorer cost of risk.
So we'd rather be quite conservative on the loan growth, EUR 7,000,000 to nine and be very, very, very, I would say, vigilant about the cost of risk that has been achieving quite low numbers, even so the integration of Interxiones. But overall, I I think we are quite comfortable with the NPLs that are running on the on the on the consumer and the NPLs that run on the on the commercial, on the corporate, and, obviously, on the on the government book. So this is the numbers that that I think is even though some people consider conservative, when you see rate of growth of net income of 29%, I think that's not very conservative.
No. No. I I I absolutely understand and and and agree with with you. And and although I I have all those two two questions, I I I know that you that that that you are trying to to to to to just one question. Therefore, I I will I will wait until the moment that you because it is appropriate for for lunch.
Thank you, gentlemen. We
will take our next question from Yuri Fernandes with JPMorgan.
Thank you, gentlemen. Can you provide more color on your insurance business? You had another very good quarter, 30% ROE. And we know that you have a strong seasonality in the first quarter because of the mortgage product, but it still was a very good quarter. So the question here is just this sustainable?
In particular, the loss ratio, it was very good. So if you can provide some color on what
you have been doing in the
business of the insurance business, it's going be very helpful. And my second question is regarding just a follow-up on half of sensitivity for interest rates. Is that Ps. $280,000,000 impact for every 100 bps of rates also including other business. I mean, does that number also include potential negative impact from the insurance business?
Or these numbers could be higher if you put like the rates the impact of the rates in the insurance business as well? Thank you.
You, Yuri. The first one, the insurance, I will ask first for Luis. And the second one, remember that this is a dynamic hedge. And yes, everything is included in our machinery. When we see the ALCO, we take all the positions there.
But Rafa is going to explain that after. First of all, if you're going to talk about the insurance topic.
Sure. Well, the insurance business experienced a very good quarter mainly because the combined ratio has been better. But also, it's very important to mention that we diminish our catastrophe exposure and to some extent. And that gave us an extraordinary reduction in our reserve, the catastrophic reserve, more or less of Ps. 140,000,000 before taxes.
So that also benefited on an extraordinary basis the business. So I would say that if you take that into account, the rate of growth instead of being 20%, it would have been 12.5% in net earnings. So that's very important to mention. So we expect the insurance business to be profitable but keep growing. But it's very important to mention that part of the growth that was experienced in this quarter, respect to the first one, was explained due to this extraordinary effect, and that's something that will not happen in the next quarters.
However, we do expect to see an important contribution, as been always the case for the financial results.
Super clear. Thank
you very much.
And there are no additional phone questions at this time.
Thank you, all of you, and see you in three months from now. Thank you.
Ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.