Welcome to our live stream session to discuss the results of the Q2 of 2022. Our event is bilingual, and we offer simultaneous translation into English. To choose the language, just click on the icon on the right side of your screen, and select the language of your choice. To start off, our CEO, Fausto Ribeiro, and CFO, Ricardo Forni, will make a brief presentation of the bank's performance, and at the end, we will open for questions. We would like to remind the analysts that questions can only be posted through the webcast link. Here with us today is also João Carlos Pecego, also VP, and Ana Paula Teixeira, VP for Internal Controls and Risk Management. Also, we have here Mr. Daniel Maria, Finance and IR Officer. Now, I'll give the floor to our CEO, Fausto, so that we can begin.
Thank you, Janaína. Good morning to all of you, analysts and partners of Banco do Brasil for many years. Good afternoon for those of you who are with us from abroad. I think in Europe, it's already afternoon for you. This is a very special day for Banco do Brasil because we are pleased to report another very successful and positive results for the bank too, that reinstates the consistency of our brand. I have a set of slides that I would like to show to you. After my presentation, I'll give the floor to Ricardo Forni that will give us a brief presentation of the results. After his presentation, we will open for Q&A. Please do not ask very lengthy questions because experience shows that sometimes we get a little bit lost, and we miss the main focus of the initial question.
If you could please ask one question at a time, I would appreciate it. Well, ladies and gentlemen, we are now presenting the result of the Q2, and as such, the first half of 2022. We are reporting very sustainable result because we have a very robust portfolio and a very good portfolio, a portfolio with very good quality. Our net income grew 54.8% when compared to the Q2 of the previous year, BRL 7.8 billion. Now speaking about the half year result, we posted BRL 14.4 billion, growing 44.9%. Then throughout the past quarters, it shows that we've been expediting the bank's dynamics, also trying to close the gap between the bank and our private peers. By looking at the numbers, you see that our ROE was 20.6%.
This is some extraordinary work and also very sustainable, something that we are just about to show you. We are back in the game. Our profitability is hand in hand with our peers, showing that we are very determined. We have great focus, and with that, we can certainly reach extraordinary results considering that our portfolio, by many of you, is considered to be very defensive. We're talking about payroll-deductible loans, you know, agribusiness, and the delinquency rate is way below market levels. Our expanded loan portfolio reached BRL 919.5 billion, which is an increase of 19.9% when compared to the first half of 2021.
In terms of NPL, our NPL is well behaved despite there was a slight increase, but this is part of the strategy of the bank, which is around, you know, the national financial system average is 3%. Our NII, which is very crucial for us to obtain more significant results, we showed an annual growth of 12.2%, totaling BRL 32.4 billion in the first half of 2022. Fee income grew 9.1% in relation to the first half of 2021, totaling BRL 15.4 billion. The strategy continues to focus on relationship, and accumulated administrative expenses grew 5.8% of the year, reflecting in our, you know, cost-to-income ratio that ended the period at 33.2%.
All of this result stems from our strategy that focus on relationship and personalized service through our network. It is also focused on the diversification of our network and constant improvement in customer experience. These are the main numbers I have for you today. From now on, I'll just refer to some of our business highlights and some of the bank's actions. Then Forni will elaborate further on each of these topics. Our target is to become even more relevant in the lives of our clients, and we call this a partnership because that's what we want. We want a relationship with our customers that is like a partnership. There are some actions that gain relevance in the first half of 2022. One of them is what we call Plano Safra or the Harvest Plan. Agriculture in Brazil is really significant.
Brazil exports grain, beef. Therefore, Banco do Brasil is the largest partner in agribusiness. This is very important because we contribute to the GDP of the country and the agro portfolio contributes with almost, you know, 20% of that. Therefore, we dedicated BRL 200 billion for agribusiness for the 2022-2023 crop season. That represents a great effort on the part of the bank to look for different sources of funding. So as to have a very competitive rate considering the profile of our client and also to meet the needs of our growers. Our credit lines represents less than 20%, so we try to merge resources from different sources so as to have a more profitable plan. Also, we have Pronampe, which is the supports to micro and small companies in Brazil.
Brazil has always been, you know, a safe harbor to these companies, and we have resumed our leadership in this regard. This program with government funds operated by financial institutions whereby Banco do Brasil takes the lead, we were able to disburse BRL 6.5 billion in just a few days in this last phase of the program. Therefore, we're able to serve 62,000 micro and small companies that are now eligible to use these funds to pay their bills or to make investments. After the pandemic crisis in Brazil, I mean, Banco do Brasil has been a leading organization in terms of the way we support micro and small-sized companies, trying to offer credit to those companies and allowing them to meet their obligations. That involves a lot of conversation, a lot of credit analysis.
That's why in terms of SMEs, we offer the best possible conditions. We usually say that Banco do Brasil's support to micro and small-sized companies helped to save at least 3 million jobs in the country. That's why this was crucial to help our economy to remain resilient, preserving jobs, and generating wealth to the country. Since the onset of the pandemic, we estimated that at least BRL 200 billion or maybe a little bit over that have been invested in this segment. Also, we have the non-payroll credit line, and this is part of our strategy to invest in products that are more robust and more significant to the bank. Our portfolio reached BRL 92.7 billion, an increase of 34.3%. We are talking about, you know, salary, you know, personal loans, credit cards, et cetera.
All of that is part of the bank's strategy to increase its stake in non-payroll credit lines. That way, we could have a more significant, you know, profitability, reaching our sustainable goals. Certainly, that is followed by a very conservative credit model, allowing us to be very safe in every step we give. BB Securities. Well, we resumed our leadership in foreign exchange in Brazil when I took over the management of the bank. We ranked seventh in this regard. In our view, this position didn't make any sense to us because we are a leading bank in Brazilian agribusiness. 70% of agricultural production is exported. We also work in the agro industry with large wholesale companies that also export the products and services abroad.
Therefore, we calibrated our rates, and we look at the business as a whole and not just one particular transaction or operation. Now we became, once again, leaders in the FX exchange market, reaching $14.6 billion with the annual growth of 67.7%. Early on today, we announced our BB Securities in Miami. Just signed a non-disclosure agreement, a letter of intent with UBS abroad. This will allow us to have a whole menu of options to our private business that's increasing our business potential, looking for more adequate solutions to our clients abroad. We also believe that this partnership, that is not exclusive, because we can also add other partnerships in due time. We hope that this can give an important contribution to the bank, allowing us to attract more clients in this private segment.
In this continuous process of improving the experience of our clients, we are also investing heavily in our digital transformation. You know, we are accelerating the digital transformation of Banco do Brasil. We want to have a bank that is close, complete, and also available to clients through its multiple channels. Very digital in practice. We say that this is a digital in practice. Just to give you some numbers, our customer base reached 80.3 million clients, an increment of 6.6% in the position vis-à-vis June of last year. 26.3 million active clients in digital clients, increasing 21.8%. 91% of all transactions conducted with the bank this half year somehow took place through the digital channels.
This is a great number, which means that we are managing to engage our clients in this digital process. In terms of our virtual assistants, they exchange information with our clients, and we were able to increase 166% the number of interactions. WhatsApp is a tool widely used by millions of Brazilians, and this is being used all over the country. Therefore, we decided to use WhatsApp to engage with our customers and also conduct business. We were the first bank to launch this option that whereby clients can adhere to the option of Open Finance through WhatsApp. This is done totally digitally. Through WhatsApp, they can consent to the exchange of the data from other financial organizations to Banco do Brasil. We are also doing loan transactions through this channel into our supply.
74% of all of the operations conducted through this first trial phase came from clients that never did business with us. This is another additional channel that can also allow us to reach those that are not, you know, taking credit from the banks. We have the lowest NPS score, and all of that means that now Banco do Brasil is being referred to by our clients. They are referring Banco do Brasil to other clients. Therefore, the result had an increase of eight points in our NPS score. We're very happy with that number. That means that our strategy has been successful, you know, also increasing our profitability, taking the right offerings to our clients. Somehow these clients believe in the bank. Our complaints ranking at the Central Bank of Brazil has reached the lowest historical level.
This also reinstates the fact that we are improving our customer service. BB Closer. We are constantly thinking about rejuvenating our base. We've been constantly seeking a different positioning with the younger generations. We have just signed an agreement as part of a venture capital program with Yours Bank. Yours Bank is a Brazilian startup, is a fintech, and we have exclusivity in this segment. With a purchasing option, we can increase our stake further down the road. This is a different bank because they focus on financial intelligence to educate youngsters towards having a more adequate take when it comes to finance.
It focus on an audience between 14-27 years of age, and this is an agreement that has been signed, and we firmly believe in this partnership because this can rejuvenate our base, and this will certainly allow us to support these clients from their early age and then be with them throughout their financial lives. We also made important investments in some sound campaigns with the university audience, university students. We were able to grow 1.7 million university clients that now hold an account with us. They opened an account during this past half year, and this represents a 53% growth when compared to 2021. This also shows that the bank is trying to rejuvenate its customer base to allow us to be perennial. We organized a major event in São Paulo called POV BB, Point of View BB.
It's a very young event that has a different take on it, but the purpose is to interact with the young audience, understanding their views of the financial market, so as then to be able to offer them adequate solutions. We are also investing in the gamer universe. We are present in the Metaverse through an agreement with Roblox. This will allow us to have a virtual volleyball arena, a banking branch, and all of that will help youngsters to interact with us more often. This could be a bank of their choice in the future. Therefore, we are trying to position the bank amongst this younger generation. Okay? Here, the main objective was to enhance our our participation in this new ecosystem or ecosystems that came about after this technological transformation, like Open Banking, Open Finance. Now we have a new competitive space.
In order to be part of that ecosystem, we launched a new digital platform called Liga PJ. What is this? This is a new hub of information, and we try to attract micro and small-sized companies in the country, offering training, helping them to lead their businesses with improved management or even to expand their businesses. This is a hub of solutions catered to the needs and desires of Brazilian micro entrepreneurs. This is just the beginning, and certainly, this will evolve to become a small marketplace that will help us increase the number of solutions offered to micro and small-sized entrepreneurs. We have our marketplace at the famous Loja BB, launched last year, last October. Today, we already have 27 major brands of, you know, retailers interested in accessing our large customer base.
You saw 24 million clients that access the Banco do Brasil app, and almost 10 million clients access our app on a daily basis. That means that there is a huge number of clients that could possibly also access the marketplace. We already have agreements with 27 major retailers offering customized products or products that they have in their own stores, offering differentiated prices and cashback to attract more clients. The store, the BB store is still gaining traction, but more than 430 million transactions were made, reaching 4 million clients. We are very excited about this platform. Now speaking about benefit platforms, we consolidated everything into a new platform with better usability. All of the benefits that somehow the bank already made available through different means are now in a single platform. We are talking about a relationship program.
The more relationship the client has with the bank, the more benefit it will he or she will have. This is a way to return part of our profitability to our clients. In terms of cashback alone, since the creation of the program, we already gave away BRL 300 million in redeemed cashbacks. Well, what was good is now even better. You know that our app is renowned in the market, received many awards. It has great usability, very user-friendly, but we are in constant evolution. Therefore, we decided to invest a bit more in this tool, and we made it even better. Now it's called the Super App of Banco do Brasil. A new portal, more colorful, as you can see, more user-friendly.
Therefore, we are constantly trying to improve customer experience, making it more modern, simple, agile and intelligent, you know, allowing our customers to have a better value added perception. In terms of our engagement and sustainability, we are totally committed to that approach. Our portfolio was audited by external parties, and we reached BRL 292 billion in credits. This is very positive in terms of having a sustainable loan portfolio. This represents a 13% growth vis-à-vis the former position. We also conducted a major carbon credit event called Global Carbon Market Congress. The event took place in Rio de Janeiro. We brought in people from the market and also large companies that operate in the country who are also our clients.
Those are the company and also legislators who will draft the laws related to carbon credits, meaning that we are very much involved in this cause. As we have a bank with 60% of all agribusiness transactions in the country, we can certainly lead this sector and be protagonists in this carbon credit market, which is opening up to us right now. We already have 70 operations ready to be closed in the market. Banco do Brasil, as a leading agro bank, is ready to help those who can benefit from carbon credits. Also, we are here to help companies that need to compensate for their emissions. We are also looking at funding opportunities related to sustainability. To that end, we just announced this partnership with the World Bank.
We have BRL 500 million already in funding, EUR 100 million already in funding from the French Development Bank and BRL 200 million at NDB, which is the New Development Bank. Our BB Para Elas, we started BB Para Elas in March. We have major objectives behind this solution because it allows women to engage more in female entrepreneurship. The amount of BRL 5 billion invested in micro and small size company, BRL 2.6 billion were earmarked for entrepreneurial women, 24 companies led by women. We try to, through BB Para Elas, we offer education, training, solutions to problems that usually micro and small-sized companies don't have. We already trained 14,000 people throughout this process, of which 9,000 are women. Somehow we are ready to offer other types of solutions in this platform, like female well-being and medical visits through telemedicine.
As of last year, we launched a campaign initiated by the Association of Magistrates in Brazil that aims at fighting violence against women, domestic violence in the country. Since then, since June 2021 up to June of this year, there were 19 cases or nine women that were protected through Banco do Brasil's initiative. This wonderful campaign that aims at protecting women. We have more than 30,000 employees participating in this activity and prepared to help women in situation of risk. All they have to do is to signal through, you know, their lipstick or some sign written in pen. We bring them to a protected environment, and then we call the pertinent government officials. We have intensified more and more our work in Banco do Brasil Foundation. The idea is to transform the lives of people.
Here are some highlights in the social investment we've made. Looking at the last 10 years, we had BRL 2.7 billion invested in social projects with funds, not only from the bank, but also engaging our partners and clients who are willing to use the foundation to take education, health, and well-being to the needy population. In the last 10 years, we had 6 million people served. We've been acting and operating this initiative in more than 2,000 cities in Brazil. Lastly, I would like to end my part talking a little about how we generate value to society. Our DVA, that's the value that we add to society, of almost BRL 37 billion, up 31% when compared to last year. How do we return value to society?
By paying our taxes, our fees, investing in our people, paying rent, paying dividends to our shareholders. One way or another, we are giving back to society, making the economy turn, generating jobs and income in this country. This is what I had, and now I'll turn the floor to Forni to detail our financials.
Good day, everyone. I'd like to thank CEO Fausto Ribeiro, and I will start the presentation with the highlights of our earnings. As mentioned by our CEO, adjusted net income in Q2 2022 posted a quarterly growth of 18%, ending the period at BRL 7.8 billion. This result was supported by the strong growth of the loan portfolio, which totaled BRL 919.5 billion, with good performance in all segments. The non-performing loans totally under control at 2% below the average of the Brazilian financial system. NII, net interest income, and fee income recorded quarterly growth of 11.2% and 4.3% respectively. Administrative expenses remain under strict control, growing 1.3% in Q2.
We also recorded a cost-to-income ratio of 32.2%, the very best in our historical series, resulting from consistent business generation and discipline in cost management. Lastly, we ended June with a robust CET1 of 12.49%. Now moving to the next slide. We'll detail our quarterly and half-yearly evolution of adjusted net income that totaled BRL 13.4 billion in the first half of 2022, ending the quarter with an ROE of 20.6% of the BRL 7.8 billion. That's the 19.6% ROE for the first half of 2022. With that, our profitability, which had been increasing quarter by quarter, closed the gap and is now at the same level as that of private peers in the country.
The expanded loan portfolio exceeded BRL 919 billion, up 19.9% compared to June last year, and 4% quarter-on-quarter. The sustainable business portfolio, which exceeded BRL 292 billion in June, represents 31.8% of the loan portfolio expanded view. The individuals portfolio grew 14% over June 2021, and 2% quarter-on-quarter, driven by the positive performance in payroll loans, consumer credit, and credit card. In line with our strategy of origination with better risk-adjusted return. Still in the individuals segment and in line with our long-term commitments to sustainability, we launched a loan facility for electric and hybrid cars and grew our renewable energy portfolio by 22% in the quarter.
In SMEs, we observed a 17% annual growth and a 3.5% quarterly growth in credit for micro, small, and medium-sized companies, while the loan portfolio for large companies grew 25% and 5% respectively, with the highlight going to operations with private securities and guarantees. The balance of the agribusiness portfolio was BRL 262 billion, growing 27.3% year-over-year and 3% quarter-on-quarter. The funds that go to sustainable agriculture represent 46% of this portfolio. On the next slide, we present the evolution of ALLL in the expanded concept, which ended the quarter at BRL 2.9 billion. In the quarter, ALLL was BRL 5.7 billion, up 5.6% comparing with the same period of last year.
The highlight goes to the strong results of recovery of write-offs totaling BRL 2.1 billion. On slide 18, we talk about credit quality. NPL over 90 days ended the quarter at 2%, a gradual increase of 11 basis points in relation to March 2022, remaining below the Brazilian financial system. We still don't have statistics disclosed by the Central Bank of Brazil, but we have here a projection. Default indicators have proven to be resilient, with stability in the SMEs segment, a drop in the agribusiness segment, and as we have already commented, an increase in the segment of individuals. This behavior is in line with the strategy of changing the origination mix and is expected. The coverage ratio ended the quarter at 271%.
The new NPL over the loan portfolio reached 0.78%, with the coverage of the new NPL reaching 74%. On the next slide, we present the net interest income, NII, which posted an annual growth of 12.2%, totaling BRL 32.4 billion in the first half of 2022. Quarter-on-quarter, the highlight was a rise in revenues from loan operations benefited by growth in the loan portfolio and its repricing, in addition to deceleration in the increase in the cost of funding. We also observed a higher treasury result, up 27% on the back of the growth in the fixed income securities portfolio and higher Selic rate. Net interest margin, NIM, posted an increase of 30 basis points and ended the period at 3.8%, reflecting the good performance of the NII.
Fee income totaled BRL 15.4 billion in the half year, up 9.1% year-over-year, mainly influenced by the commercial performance of asset management done by our BB Asset, pension funds, and loan operations. Administrative expenses, extended view grew 5.8% in the year, below the inflation rate for the period, reflecting our strong discipline in cost control. On slide 21, we present our common equity tier one, CET1. That was 12.49% in June, mainly impacted by the RWA increase, leverage of the portfolio growth, which was partially offset by higher retained earnings in the quarter. On the next page, we present the corporate projections for 2022. In view of the performance presented in the first half of the year and to better represent the management's expectations, Banco do Brasil has revised its corporate projections.
In the loan portfolio, we increased the estimates for growth in the portfolios of individuals, agribusiness, and SMEs, considering the excellent performance up to June and the positive outlook for the second half of the year. With this, the range for the loan portfolio extended view was also adjusted for growth between 12% and 16%. We have also revised the range for net interest income to 13%-17% in order to reflect the better than expected performance in loan and treasury operations. Fee income was revised to the 16%-19% range, reflecting diversification and good performance. We increased the projection of ALLL expanded view to BRL 14 billion-BRL 17 billion. This, there was a reduction, a relevant reduction in the remuneration of time deposit.
I just want to understand if there is any new strategy by the bank regarding that. I'll start, and maybe Daniel Maria can help me. You will see that the reduction in the cost, in the expansion, in volume occurred in a more disseminated way, not just in time deposits. This was diligent work that our financial area performed in the pursuit to extend and diversify funding and reducing costs. As regards to the expansion of time deposits, we have been acting both commercially in the product itself and in the offering of this product as an alternative to renovate the balance in the checking account. These are basically the two lines of what we did in terms of funding, which expanded our funding and the diligent work that we had of reducing costs in all segments.
You can see that savings is a reflection of Selic rate, but funding in LCA and other models and also Pix deposits helps reducing relative costs. It is natural with the current interest rates that there will be a greater demand for fixed income, and we have a retail-based funding. This is basically the retail strategy that we put together considering this moment in the market. Our next question is with Marcelo Telles, with Credit Suisse.
Excellent results. Congratulations, and a record net income in the quarter. Congrats. My question is regarding the sustainability of this return. We had an ROE that was quite high, above 21%. The bank benefiting from deposit margins. You revised the guidance. My question is: How can we think about these results? How sustainable are them for next year?
Marcelo, thank you. Excellent question.
A question that was also asked by the journalists earlier today. How did I answer that? If we stop and observe, perhaps with a more long-term view, in recent years, the results of the bank have been improving. You can observe that if you look at the historical series of our earnings. In recent quarters, what have we been doing at Banco do Brasil under the new management, particularly? We have been focusing on a very clear and objective plan spread all over the company. We have been focusing on those lines where we were not having a leading role. I mentioned foreign trade, agribusiness, small- and medium-sized enterprises. In the results game, we have been growing consistently. This result is also supported by credit models, which are extremely robust and conservative. Ana Paula is here. She's our Vice President of risk management and internal controls.
The bank has always adopted a more defensive portfolio position. You call this defensive because we have a lot of operations with low risk segments. We have a high concentration in payroll loans, a high concentration on agribusiness that reduced 0.6 to 0.4, their position. We have a solid portfolio position in a defensive approach. Now what we are doing is taking one step forward at a time in a controlled fashion, trying to improve our NII so that we can have a better ROE. With lessons learned from other American banks, because we have been growing consistently and with a lot of responsibility and conservatively.
Now, of course, we will be observing the growth of the 90 because our risk and return move together, and we expect the return will be rewarding to meet your expectations, and so that the risk will always be under control. You can observe that our coverage ratio continues very high at 270-something, 271. That gives us that extra buffer so that we can broaden our strategy in those higher profitability lines, non-payroll loans, credit cards. You can be sure that these results are sustainable. They have come to stay. What we are doing in the bank is stimulating our network more and more, we want to be very close to our customers. We're the first bank to resume physical visits, face-to-face visits.
I, together with the vice presidents, believe that being in proximity with the clients, we can understand their needs better, we can be closer to them, we can engage our clients more with our products and services.
In a nutshell, the results have been consistent. You can expect growing and consistent results and sustainable results for the coming quarters.
I would just like to add, Fausto, something, 'cause you said a word which is fundamental. You talked about consistency. We have been executing a strategy that is very consistent and that is evolving over time. We got where we got in the Q2, not by chance, not due to a non-recurring event. No, definitely not. We have been working hard to be closer to our clients, to expand the business, to mobilize our sales force, controlling costs, growing the portfolio with dedicated risk control. And this is the work that is going to take us forward and to maintain our performance among the very best in the industry. We had a gap, we closed the gap, and now we are delivering performance compatible with all the best peers in the market. This is the take home message. For 2022, we revisited our projections.
What we expect to deliver until the end of the year has been explained here. The strategy is being revisited. All of our competitors are also trying to evolve. A constant evolution in delighting our clients, that's the reason why we exist. This is what we are doing. For 2023, we will be looking at the economic scenario and what we can expect in terms of portfolio growth and several other initiatives that are underway to deliver performance in line with the best performance in the industry.
Can I just add a point to what Fausto and Tony said? This management under Fausto's leadership made very clear our strategy to be customer-centered. The wholesale networks, retail, and the government got very close to our clients with the full support coming from the areas of technology, loans, risk, the operating areas. All of the areas work together so that this network could have all the means necessary to have that proximity. When you refer to proximity, we call that the perennial results, because this will allow us to maintain the relationship we have with our clients. This is a successful strategy, a winning strategy, where we focus entirely on the client, and that also has the engagement of our entire staff. Not only we are posting sustainable results, we are certainly maintaining this customer-centric view. With that, we will be more perennial.
In line with that view of being customer-centric, I would also like to refer to the resilience of our portfolio. 92.13% of our portfolio is in the best risk levels possible. Its risk model also brings about resilience in origination of our portfolio. That's why sustainability comes hand in hand with this proximity with our clients. Well, thank you. I will now move to our next question from Geoffrey Elliott, Autonomous Research. Hi, Geoffrey. Can you hear us?
In origination of our portfolio.
Geoffrey, can you hear us?
Yes, I can. I can hear you now. Thanks very much. The translation might have had a bit of a lag, so sorry if I was slow coming in. My question is on the ALL expense guide for BRL 14 billion-BRL 17 billion for 2022. If we take the first half, that was BRL 5.7 billion. The second half implies between BRL 8.3 billion and BRL 11.3 billion. At the high end of the range, that's very nearly double the run rate of the first half. Even at the low end, it's nearly 50% higher. Why are you expecting such a big increase in provisions in the second half relative to the first half of 2022?
I will start, and then I can have some extra information from my colleagues. I think that one thing in this the first semester, we are still seeing the, let's say, what was the end of the pandemic, let's say, evolution of the portfolio. Considering this, let's say, ending this phase, we have been from low NPLs, and we are because we are adding risk to the portfolio, we have seen this increasing on the margin. In the first semester and at this quarter in particular, we have ended, let's say, the.
The postponed classification or worsening in terms of the portfolio at the beginning. We had the provisions during the pandemic. Now we have been for these two years following the returns on the portfolio, and now we released the classification. We have, at this quarter, the end of this process, this implied recognition of improvement in the classification. When you see the letters of our portfolio, you can see some movements into this AA, A, B, C, and other ratings over there. This is the, let's say, end of this phase.
On top of that, we have been adding risk to the portfolio and then the expansion of our prognostics of evolution portfolio in the different segments, especially the retail portfolio is deteriorating, let's say, the quality at a pace that we have been looking very very closely. On the company's portfolio, we have a stable NPL, and the agribusiness portfolio we have been improving the NPLs. All this dynamic, when we are looking for the second semester, we are expecting that the level of provision will come back to the levels that we used to have before the pandemic.
Roughly five, a bit more than 5 billion per quarter. That's why we are, let's say, adjusting the range. Why we moved the range right now is because the portfolio is expecting the growth that we foreseen initially in the year. But now, I would say that the better guess would be the mid-range of this of the new range that we are showing to you today.
If I may, just to make some additions. When you observe the performance of the provisions in the first half of this year, we had a very good recovery, and this combined with less discounts. Certainly, this combined with the fact of assessing the risk of the portfolio that Forni mentioned, brought us a lower provision compared to what we expect. It's not necessarily we are going to have this replicate in the second half of this year. This tends to normalize, and consequently, what we are expecting was to have provisions in the region of the upper part of the former guidance. What we made was just an adjustment in the guidance in a way that our expectations is in the mid-range of the guidance. Basically this.
That's gonna support the growth of our portfolio.
Yeah, importance. The growth of the portfolio, that's Forni mentioned.
Okay.
Good day, Fausto, Forni.
Forni, Ana Paula, Daniel Maria, Janaína, thank you very much for the question, and congratulations on the results. I have a very direct question related to dividends. You have a very strong capital position with CET1 high, and I think you're generating capital in a very strong way. Is there any possibility of increasing your dividend payout considering the very high ROE and a high capital base? Gustavo, thank you for your question and for your praise related to the bank's performance. This question came about this morning, and I said that certainly we're constantly reviewing our policies. At the moment, we believe that our payout is adequate, in keeping with our peers, and on occasion, even lower than what the bank is currently paying.
Capital preservation can also allow us to ensure that we have a very robust capital to support the growth of the assets that we are suggesting in our guidance. Right now, we believe that the 40% payout is more than adequate and also in keeping with our peers, and we are paying that in 8 installments. Somehow, we believe that we are meeting your expectations when it comes to the frequency of payments. We are always alert to whatever comes in the market or whatever is new in the market. Any other policy on our end or if there is any relevant fact that we need to review that, we will certainly do so. Currently, we believe that our payout is adequate. Gustavo, just to add, I believe that.
I mean, we've been provoked about this topic because of the demand from the government to all the federal companies. We are just following the plan to a T. We are increasing our portfolio. We are increasing above the expected levels. This equation with a 40% payout, which is certainly adequate and very attractive, and follows best practices, and 60% profit retention to support credit growth and the growth of all of the other businesses of the bank. At the moment, this is certainly the most adequate mix. This push towards a higher payout is here. We will always evaluate it.
Looking at the year 2023, I think now is the time to review what lies ahead in terms of growing the portfolio or growing into new businesses, will allow us to say whether it will remain as such or whether this payout could be optimized somehow. Planning at the end of the year and the execution and results delivery, I think it has been very good to investors and also adequate to the bank. We recently evaluated that. Fausto Ribeiro, I think the best way for us to meet the desires of our shareholders is just to post better results. As a consequence, the payout will be certainly better at the end of the year, and that's why we just had a new projection about the figures.
Well, thank you. Our next question comes from Mario Pierry from Bank of America.
Good afternoon and congratulations on your results. I do apologize because my camera is not working. My question refers to cards. We saw that you posted very strong growth in credit cards, over 50%, but we also see a very steep increase in delinquency levels. It's close to 8%, and a year ago it was 4%. I just want to understand whether this appetite to continue to grow has changed, and whether this delinquency increase is something that was expected or something that needs further improvement.
Well, I will start answering your question, and then my colleagues will add. In our last earnings release call, we also referred to the importance of working with NII, Net Interest Income, or looking at lines that are less defensive. I think this is how you call it, less defensive.
Lines that are more profitable, but by the same token, would produce adequate results that could compensate for some occasional delinquency or increase in delinquency. Banco do Brasil has highly qualified credit models. They stem from a lot of investment in seeing how it evolves. We learned a lot throughout the years. I've been asking our VP for Risk and Control that we have to release things and learn as we go. Doing one step at a time. Therefore, we are constantly learning. We will continue to grow in some lines that present a higher, I mean, a higher NII and lower risk. Therefore, as I was saying, it's a continuous learning curve, and as we move forward, we make adjustments to our model. We have to be posting more consistent models with a higher assertiveness level.
I think that Ana Paula can give us more details about how the process is evolving. Let me just make a brief comment before I give her the floor. Well, first credit cards. This is a product that is very relevant to us, and this is important when it comes to our change in the mix. Brazil took some time to enter into what the market calls the Open Finance. This market has its own peculiarities. There is an evolution that we clearly see in terms of incumbent clients or our longtime account holder whose portfolio is very adequate. Now we've been attracting new clients. With these new clients, we are using a new approach. Therefore, clearly, this audience has a different profile, different NPL levels, and the speed with which NPL has increased, it was anticipated. These are their expectations.
Our credit risk management is very qualified and robust. This was quickly perceived, and it's now the time to adjust our credit models, which we have done, and even the evolution of limits throughout the client's journey with the bank has been adjusted. This involves continuous fine-tuning just to maintain the quality of the portfolio as a whole, to adjust it to the current moment and align that to our projections and issues where inflation and available income is impacting NPL in the market as a whole. Therefore, this is the reality we see right now, and we are continuously monitoring our credit risk portfolio. Now, I'll give the floor to the expert in the subject. Mario, I think both our CEO and CFO, they talked about issues related to our strategy. This card delinquency reflects our strategy to seek for more profitable line items.
Certainly, this card line delinquency sometimes occurs faster when compared to other products because sometimes people, you know, delay payment, et cetera. We are now looking at the market as a whole. We entered into this market, and as Ricardo said, this is an open sea. We are now seeking for new clients or non-account holder clients, and we are also revisiting our own models. We already deployed measures to that end, using a lot of data from different data providers, because all of that will help us find a balancing point. Not only that, we have a very winning collection strategy. We are certainly pursuing our strategy to look for more profitable lines.
We know that this involves more risk, but our risk models are constantly monitoring the pulse of the market and helping us to take the necessary measures as we have been doing in regards to that line of credit.
Our next question comes from Tito Labarta from Goldman Sachs. Tito, if you want to ask your question in-
Thank you, Janaína. Good morning, everyone. Thanks for taking my question. I'd like to ask about your NII. You know, good growth there. You increased the guidance. Certainly it had benefited, I guess, from a combination of strong loan growth, a better mix and higher rates. Just to think about, you know, perhaps going into next year, as well, you know, loan growth seems to be slowing down for the rest of the year. Not sure how much visibility you have till next year, but how should we think about your NII growth, you know, beyond this year, depending on loan growth, if rates maybe start to come down next year, could that create some pressure, or do you think because of the better mix, you could still get some margin expansion?
Also, just one other point. On the treasury income, you have very strong results there. You know, some of the private sector banks, I know it's not fully comparable to their market NII, but, you know, they seem to be having some trading losses. You seem to be doing, you know, very well on the treasury income. Just to help us think about that also combined with the evolution of interest rates from here, if that comes down, should that come down at all, just help us think about the sustainability of this NII growth. Thank you.
Okay. I will start here, and Daniel Maria can add on that. I believe that we are still seeing the improvement in NII not finished, so we are expecting the growth in the NII, and that's why we adjusted the guidance on that. I believe that probably we will reach let's say the highest NII in terms by the end of the year when we have all the strategies that we are doing in terms of looking for the highest this improved risk return portfolios on the retail side, on the individuals.
We have been working, let's say, on the cost of funds on all aspects, in all the products of the funding. I believe that this will still evolve over time until the end of this year. I believe that on the agribusiness, the new harvest, we will have slightly lower, let's say, spreads on that, so that we will affect over time the NII as well. I believe that for the end of this year, we still see the NII improving. For 2023, I think the dynamics will evolve as well.
We believe that the treasury results will still be there, and we need to see how we will evolve on the credit portfolio in 2023. We don't know, let's say, the numbers yet, but Banco do Brasil will try to be, let's say, very close to what the peers will be evolving in terms of the credit portfolio over there. It's a matter of seeing what will be the scenario that we'll be facing at the end of this year to plan for 2023.
Tito, just adding some thoughts to what Ricardo mentioned. Probably it's interesting just to analyze the structure of our balance sheet. We have basically liquids or net position of assets at fixed rates against net positions of liabilities at floating rates. The difference is that this net position is at savings deposits remuneration. That is basically TR plus 6%. When this SELIC rate is above 8.5, it means the liabilities move faster compared to the assets. They reprice faster, but they have a cap. They have a cap when the interest rate is above 8.5%.
This is one of the reasons why our liabilities, even though are growing, when you compare to the base rates, are reducing relatively because we have this cap. Let's design a scenario when the interest rate starts to go down. We are going to reprice liabilities faster and assets slower. Exactly as this gives the dynamics for next year that we strongly believe that NII tends to grow above the credit portfolio. Just to take this opportunity to remind one of the drivers for NII this year. Firstly, cost of funding. Repricing of transactions is exactly what I mentioned about the assets and treasuries.
Do not understand treasury as the concept of treasury. The way we report this, we have some transactions there. For instance, the corporate bonds, we have CDCA, we have CPR. That is basically commercial transactions that is there. Yeah. In a reduction of interest rate tends to reduce the participation, but it's still above the growth of the credit portfolio. I think that is a good assumption to consider in the models.
Jason, can you hear us? Sorry, Jason, we cannot hear you. Oh, congratulations on the strong results return on shareholders' equity of 21%. Thank you for the call. Thank you for the opportunity to ask a question. I would like you to give me more color on the dynamic of the agribusiness segment. Agribusiness accounts for about 28% of the portfolio, with the segment growing 27% year-on-year this quarter. In the guidance, you talked about growing credit to agribusiness of 18%-22%, that range for the entire year of 2022. Is this a guidance for the next half year? Could you speak about your expectations, mid-term expectations of growth, delinquency and profitability of this segment? Thinking more about the competition and how subsidies will behave in the future. Thank you very much.
Jason, thank you for the question. Since we took over the management of the bank, I have been saying over and over again that we have to return to being a leader in some strategic lines for the bank. Agribusiness has been a vocation of this bank for more than 100 years. The first agribusiness operations date back to the nineteenth century. Financing production of coffee in Brazil, sugarcane and so on. Agribusiness was born in Banco do Brasil. The first big loan portfolio in agribusiness is from Banco do Brasil, dated the 1930s. The manual of agro loan adopted by the bank was born in 1954, 1955 at Banco do Brasil. It is now a standard for all banks.
Well, having said that, I think it is undeniable the knowledge that we have of the Brazilian agribusiness and our capability to serve agribusiness from small to large growers. I said in the beginning that less than 30% of what we are directing to agribusiness comes from what we call firms with equalizable interest rates with the federal government. The remaining 70% is our effort of putting together funding to offer a better rate for the agribusiness. Talking about the agribusiness, it has been in a boom. We can see that the population is growing around the world. The world is growing strongly every 10-12 years, increasing the number of people by 1 billion. More and more there will be a growing demand for food. The Brazilian agribusiness can be an important solution for us to export more and more.
We have fertile land.
We have technology, we have Embrapa that supports the technological development of the agribusiness. On the other hand, we have a pressure to prevent deforestation. There's only one way of doing this, having a better return, bringing technology to the people out in the rural areas so that they can use their land to produce even more than they produce today. The demand there we see has been strong at the cost level. The cost of planting the seeds and growing soybean, wheat, corn, and so on and so forth. This is money for the producers, the growers to buy seeds, to buy fuel, to plow the land, to buy fertilizers and manure. In other words, to make their crops plant and harvest. What we can see clearly is that because of inflation in agricultural machinery, machine used to cost BRL 300,000 in Brazil.
Now their cost went up to more than BRL 1 million. There's a high demand and little supply. We also have a supply chain issue of chips, tires that come from abroad. There has been an interruption in the supply chain of some countries. If this causes a delay, we believe that these issues will have an impact on the crops. The agribusiness will get a lot of strength and momentum in terms of the costs that I mentioned, planting the seeds. We can witness the strength of the agribusiness in this first month when we opened our operations. To give you an idea. While in the first month of last year we had about BRL 11 billion at the start of the season, we're at BRL 27 billion so far this year. Agribusiness is very strong.
It proves the strength of our agriculture. We have new entrants in the market, new investments being made, and the expectation is that growers will become more and more capitalized because of this commodities boom. The delinquency rate are expected to remain stable. We are also offering alternatives to the growers so that they can have a future sale of their production. We created some options in our website and in our app so that they can hedge the future price, so they won't really depend on spot prices of the market. We also built four laboratories to develop technology, one of them geared to the agribusiness here in the region of São Paulo, in the countryside of São Paulo, where we have a very strong and active university in agriculture. We have a lot of agri-techs.
That's the technical name we give to startups that work in agribusiness. The idea is that we are going to look for more and more smart solutions so that the agribusiness will be sustainable, improving and increasing productivity in this region. In other words, the bank doesn't wanna be just a credit solution partner. We want to bring the agribusiness intelligence. We are developing these labs with very interesting solutions so that growers can use those to increase their production, reducing the credit risk for the bank more and more because of the technology, because of the information and helping growers be more profitable. This is what I had to say about agribusiness. If you wanted to have more color on the agribusiness, this is exactly my perception.
Thank you, Fausto. Our next question is by Nicolas Riva with Bank of America. Nicholas.
Nicolas, can you hear us? You have the floor.
Yes, I can hear you. Thank you very much, Janaína. I have a question about the perpetual bonds. Do you have any
Coming April. My question is, if in your views, calling the 9.25% is subject to issuing a new perp? Or if you think that, even without replacing this perp with new AT1, if you still feel comfortable with your capital ratios, and if you think you would get approval from the central bank to call that bond. Then maybe I'm just gonna make a second question. Besides the perpetual bond in April, the call date, you also have maturities of senior bonds and legacy tier twos. In total, through April, you have $3.9 billion in the maturities, if I include also the perpetual bond.
My question there is if you think you have enough dollars to meet all these payments or if you have any dollar funding needs to make these payments? Thanks.
Thanks for your question, Nicolas. In terms of the perp, we are following, let's say, the situation in terms of the market. I believe that the treasury market debt has increased very quickly the interest rates. We are monitoring, let's say, the situation in terms of new issues. We are very well prepared in terms of dollar liquidity, even with the senior bonds that you told us about. We have been anticipating all this following maturities and we can manage easily the dollar liquidity and the capital position.
We foresee the perp in terms of, let's say, as expected by us in the beginning, to exercise the call and then we will see how the market will be to a new issue, either offshore or on the onshore market. We will monitor this, but we have been looking this very closely. We are quite, say, very okay in terms of handling either the dollar liquidity position in terms of the renewals and also the capital position. This is part of what we consider when we see, for example, the payout discussion.
We're handling the capital position, looking forward in terms of all the scenarios, let's say at least for two or three years in terms of maturity. Daniel, if you can add on that.
Yes. Just to make some additions, Nicolas, and to give some data to help you make your judgment. First of all, we have more capital, more additional tier one that is necessary in our capital structure. Currently, we have about 300 basis points and easily we can reduce these at least in 100 basis points. Then it means that from the $5.5 billion that we have maturing or callable in 2023 and 2024, it's very likely that we're going to have less than we have. An additional information, when we built those positions, we have different demands in terms of foreign hard currency, and we have also a different perspective in terms of capital. What was our concern?
At that time, we saw all the markets cleaning the capital or changing the capital. We want to anticipate in this process. At that time, we didn't have the domestic market, and currently we have. If you ask me if I would build the capital structure from scratch, probably we're going to have a mix between domestic and international markets. This means that we have other opportunities and possibilities to finance this. In terms of capital, it's basically this. We have sufficient capital, and we tend to reduce this position. In terms of liquidity, we pre-funded those positions and our balance sheets reduced in terms of hard currency, then we don't have the same need of funding.
We expect to have lower amount of bonds in the market in the near future.
Of our conference call, this is the last question.
Thank you, Janaína. Good afternoon, everyone. Congrats on your results, President Fausto and your team. My question relates to cost reduction and the efficiency. Well, you reached a great level of efficiency to be more competitive. Now, your line of admin expenses did not change from the guidance. This alone is a challenge once inflation was higher. But I just want to understand, going forward to 2023, whether expenses with credit provisions could be higher. Could we understand this trend and whether this continues or this will have a positive contribution to the numbers next year? It's such an excellent point. We talked a lot about that with the board of the bank, and this is the message that we want to convey to the market and to all of you.
The culture within Banco do Brasil in terms of expense controls is here to stay. This is part of our DNA, and it's ingrained in the organization. We've been doing that for many years. The message is that we will continue to control costs diligently. That's why we didn't increase our guidance. It is a challenge, and we are aware of that because we have a collective bargaining agreement. Coming in the second half of the year, there's also inflation on, you know, rents, et cetera. This will certainly incite us to exercise our negotiation power and also to find more adequate and fair solutions. I hope that we continue to keep our expenses very much under control.
I might say that this is our major challenge, but also something that, in our view, is very feasible, and that's why we maintained our expense levels at this level. Well, we now conclude the Q&A session. Thank you so much for joining us today. Now, I will like to ask our CEO to make his final remarks. I would like to thank you all very much. Thank you for joining us today and for being with us during our results presentation. I would like to reinforce that this is a very sustainable result based on the robust growth of our portfolio. By the same token, having our NPL under firm control. The bank has robust credit models. The bank has a long time experience in the market. We are present in all corners of the country. The bank is very sound.
The bank has extremely good experts in the field and very qualified to manage this company, to innovate, to renew our base, and to rejuvenate our customer base. I mean, there are a series of actions that we are putting into place to move forward. This agreement with Yours Bank is something that, in our view, could bring on board many future clients to us. By the same token, this will also contribute to the society in general, because we will be able to educate the youngsters so that in the future, they can also be with us in their financial journey. We are looking at many different ecosystems, some unique opportunities that came about in the market. We look at Open Finance and Open Banking as opportunities rather than threats. Therefore, we are benefiting from a lot of the innovation using a lot of analytical intelligence.
We are thinking outside the box, trying to innovate and to be more assertive in our offerings to our clients. We are also noting that clients that decided to allow us to get information on other banks. In these cases, the offerings are even more assertive. This involves analytical intelligence, some convincing work, and also the fact that it's important to be close to our clients. If you can benefit from that in different fronts, the bank will become even more sustainable. This result is here to stay. This management is very resilient, have a lot of focus. We are very objective. We have very clear objectives that have been extensively communicated throughout the bank. People know exactly where we wanna go. In the bank, people feel like they belong to a company that is over 200 years old.
Rest assured that we will be constantly surprising the market, not only presenting more adequate solutions to our clients, but also posting more consistent and sustainable results. Thank you all for your attention, and continue counting on us for everything you need. All the best to all of you.