Of all the development that is evolving on the digital front of Banco do Brasil. Here in the fourth quarter of 2025, we have a result of BRL 33.4 billion, and this result demonstrates our capacity to go after what we set ourselves to do, and to execute our strategy. This demonstrates our ability to deliver. When we talk about 2025, let's, let's remember what was 2025. This was a year that I think in my 26 years of the bank, was very challenging. 2025 was a year that brought many challenges.
But in the month of February, s ince the last quarter of 2024, especially beginning in February, in with the default in agribusiness, brought a larger challenge for us because we have a very significant agribusiness portfolio, and the only way to work with this portfolio, dealing with what happened, which was unprecedented in 2025, we brought an result estimate that was increasing, larger than what we had expected. As we divulged the results for the first quarter, we decided, and this decision was, thoroughly thought out and discussed, and in our view, responsible, which was to suspend. Excuse me, not suspending. What's the term, Janaína? We revised three lines of the guidance. We were questioned. We had a lot of transparency in the market. We placed it in revision to, after the agribusiness portfolio, what would be our real possibility for performance in 2025?
In August, we went back to the guidance in our second quarter results. We took into account the expectations and knowing the closing of a whole semester, and in view of the reality in agribusiness, we had talked in May that we were going to seek and increase conversations with, a regulator is always open to receive our concerns and listen to our concerns and suggestions. The Banco do Brasil portfolio is a different portfolio, and what we brought to the regulator, and we received an approval for adjustments MP 4966 or 4966 resolution, resulting in a not the resolution that brought a correction to this accounting manner in agribusiness.
We received approval in August for MP 1314, which we launched as BB Faz Agro. We worked extensively with the government, the central bank, and the Ministry of Finance, and back in September, we had MP 1314 for us to re-adapt the capacity to make payments to farmers. In October, we launched a program on October 21st, 2025, and it's important to note that date. It wasn't on the first of the month, it was the 21st. We understood the challenge that we faced in the last quarter of 2025, and with eight months into the year, with results closed and understanding future predictions for defaults in contracts and seeking adjustments under MP 1314.
We had an additional challenge in November, in the specific case of large companies, and we had an increase in the amount that we were able to judicially recover in agribusiness. As I mentioned before, and we have been talking about this extensively, we want to bring you a little bit about what we said and what we did. So we are presenting this vision in the execution of the strategy. We said that we were going to add risk indicators in credit operations both for companies and agribusiness for better crops with more guarantees of credit. We had 63% of the operations of small enterprises, and 75% approximately with collateral in terms of real estate.
We sought a collateral that was more adequate for the moment, and which would bring us greater comfort in credit recovery. So the 2025-2026 crop was originated already in court recoveries. When we think about credit, and I said that we are going to have the best return adjusted, risk adjusted, adjusted returns, and this was what happened. We disbursed BRL 13 billion in worker credit, and I said that Banco do Brasil would come out ahead because this is a business that we know. This is something new to the bank in 2025, the worker credit; it's a strong example of this. When we address about digital acceleration and talking about the reorganization of the recovery strategy, we had a agile digital strategy with.
This helps us deliver solutions and the new recovery process. We increased by 114% the amount of court proceedings. Geovanne mentioned that we need to grow the gross margin, and we had a 12% increase in the margin with clients, if we compare the end of 2024 and the beginning of 2025. We said so, and we delivered. We began conversations with the regulator for a different treatment for agribusiness. I received some criticism about this, but the agribusiness portfolio has a different, it could not be treated as the individual's portfolio with monthly payments. We had dealings with the government and the market, and we had the CMN Resolution 5244, and the BACEN resolution.
Gilson mentioned that with the temporary measure, we would certainly surpass the BRL 20 billion in free rate, and we actually went above BRL 35 billion based on MP 1314. We said that we were going to adopt measures to control expenses to ensure efficiency level. In administrative expenses, we had a growth of only 5.1%. If we compare it to 2024 and 2025, with an institution as large as Banco do Brasil, this expense control was very disciplined and adjusted to what we needed to deliver. When we talk about the market of companies, I said that we are going to focus on service, and this happened in 2025.
We have the BB Empresas brand, which was launched officially in 2025, and we increased the BB Estilo, and the importance of the growth in high-value clients rose 36%. In this profile, it's not easy. The profile is very challenging, but Banco do Brasil grew. Credit cards in 20% growth. How did we execute this strategy in a disciplined way? We do not have delivery of strategy or results if this is not based on the strength of Banco do Brasil personnel. We continue to invest in people and ensuring the satisfaction of our clients. We had growth of NPS, 10 percentage point growth. Growing a client base as large as ours and achieving a 10-point increase in client satisfaction is of note, and that's why we're bringing this information to you.
I should note that the public sector banking, we have already achieved excellence, and we have a client satisfaction level as the market wants to have. So we are above this level of deficiency. When we talk about excellence and the BACEN ranking of complaints, we have 14 consecutive quarters in the best positions among the main banks. So NPS growth is not an isolated factor, it is the result of consistent work to deliver Banco do Brasil to each client. Now, talking more specifically about 2025 results, we showed an adjusted net profit from Q4 to Q1, 51.7% growth, delivering an adjusted result of BRL 5.7 Q4.
We grew from, in relation to the third quarter, we grew the gross financial margin, and that indicates that we continue to business. We invest in our strategy as planned to handle default without losing sight of the margin growth. We have been saying this to the market, 0.2% of growth from one quarter to the next, and with the expanded portfolio, we had a growth from December 2025 at the level of 1.4%. We see that we are in line with what we said to the market in November, but according to the guidance that we propose to achieve in all lines, and I call your attention to administrative expenses that we closed at the lower end of the guidance.
Here's important in this, pact of transparency that we, went into with you, with information about agribusiness. We'd like to talk to BB Regulariza Agro to show you that we knew who these clients were, what crops, what regions, and that we were going to seek solutions with clients to, bring the agribusiness operations into normality. In BB Regulariza Agro, we had BRL 35.5 billion in new operations, BRL 32.2 billion in operations that were contracted with clients that had received free resources from the bank, and BRL 3.3 billion in supervised sources. 21,000 clients benefited, 29,000 transactions. And when we look at, guarantees, and we wanted to show this, for the sake of transparency, as a result of the BB Regulariza Agro, was not just to look at and go, after this.
We looked at the clients that were paying and regularly, and we understood what the clients were in default, in which region, which crop, and we looked at our portfolio of clients and what profile of clients that were default-- that had defaulted over the years. So we had a portfolio of very qualified clients. We looked at client by client, and to see if BB Regulariza Agro would bring gain from this client to be able to regularize the situation with the transactions coming due and their obligations coming due. If this regularization, the client would again reestablish their capacity to make payments. It's. I should note that 72.2% of these, 72.9% of these operations were, and 8.2% in mortgages, and 18.9% in other guarantees.
BRL 35.5 billion of BB Regulariza Agro, with 70.9% with fiduciary settlement. I won't go into details, but you need—you should understand that the default profile that we presented in the 3Q last year, and for you to compare the situation in relation to where we were. Let's talk about 2026 now. 2025 was challenging, 2026 will be challenging. But it's a challenge that we know and we know how to address. We are going to continue disciplining the execution of the strategy, delivering Banco do Brasil to each client, and it's very important to have strategic credit management, and I will talk about this further later on. With sustainability, diversity, which are vectors of our values. This is part of who we are as a company.
When we talk about a bank for each client, we are talking about digital reach, with a lot of human proximity. We have worked extensively on evolving our digital operations to define, to be where and when the client needs Banco do Brasil, without losing sight at any time of what it is, what Banco do Brasil is, which is human possibility. We will consolidate the Ponto BB, BB Point, the BB Hub, which, gains efficiency and reduces costs, and we will have the entire accessibility and energy efficiency will be consolidated in 2026. We have conducted tests over the years, and we have talked about them with you. The phygital strategy, which is a combination of physical and digital. We launched BB Point in Belém, and we understand that this is a new way to relate to the client, which works.
The BB Company brand was launched in 2025. It's consolidating in 2026. The revision of our portfolio to work organically with the digital acceleration model, we were able to bring together very disciplined teams to bring much more agile solutions and consolidating our style brand. The trend in 2026 is that we will be involved in this concept. We are working on better allocating staff in retail, and we will be present when and how the client needs us. This adjusted profile with according to client preference, happens organically. We have a model. The model begins to be implemented in 2026, and it remains as a new model for permanent analysis of our structure. I believe that we are very much in line with what the market declared. The preference that we already have for segments, high-value segments is very consolidated.
The private banking and style segments are segments that we have been operating for more than 20 years. We celebrated the anniversary of these two high-value segments for the bank. In 2026, we are going to continue and intensify the focus on this. Banco do Brasil is very diversified client base. We have a potential to grow in all segments. In 2026, we want to increase by more than 20%, consultancy, and we will be in new areas, and this will confirm what we said before. A structure that suggests us to each region and each client preference. We see the need to open new points with specialized agribusiness with 230 new locations. This, at the end of 2025 and beginning of 2026, we started this strategy.
We will seek a portfolio of benefits and investment opportunities. I should talk, which would be of interest to everyone, how we will manage credit. We will manage credit very strategically, growing with quality and rebalancing the portfolio mix to seek stability in increasingly secure lines, supported by a robust guarantee for framework, with resilience that was launched in the end of the second quarter of 2025, and has been demonstrating a strategy, a set of models that are very appropriate to address client risk and provide loans, and establish credit limits. We are going to increase a net margin with clients. We talk about, gross markets, but we need to understand net margins, which is the margin, after deduction of credit cost. The net margin is something that we were focused on in 2026.
In 2025, was BRL 41.2 billion in 2025. In 2026, we see a growth between 53.4% in the high range. Billion, I'm sorry. I'm talking. I have percentage. BRL 53 billion in the high range. So we understand that the net financial margin shows our capacity to which generally results in a sustainable manner. When we talk about individuals and this spotlight for 2026, we intend to grow from 6%-10% in individuals. It's something that we do know how to do, which is consigned credit. We are going to reinforce our leadership in this area, and we are able to achieve 20% of market share. In the non-consigned credit, we also are familiar with this for a long time. We will seek guarantees with collateral of interest in real estate collateral.
In credit card, our focus will be in growing the portfolio. In companies, we have a guidance of -3% to 1%, that we will be able to maintain the portfolio with qualified origination. We are saying that we are going to seek increasingly to grow our balance with funds that will mitigate our credit risk. Vertical integration with Cielo, I think, in mid-2025, w e talked about this. We began to work with Cielo in 2025, and we are going to seek a growth strategy in this acquiring segment. In terms of capital markets, we are talking about origination, which we are very familiar with. Origination and distribution. In agribusiness, our guidance is -2% to 2%, so we have a historic partnership with the segment.
We are going to follow the producer, the farmer, closely from the family agriculture to the mega producers, reducing risk and increasing profitability, applying the resilience matrix on all segments and all client profiles, and a framework of guarantees. When we talk about innovation and agility, we have been talking about this in a very transparent manner. In 2026, we are going to increase the use of artificial analytical intelligence. We have more than 1,800 models, freeing people up for the business. Our focus will concentrate on more people, more people cooperating with people. When we talk about people, we're talking about our clients. We have observed an increase of efficiency of 41,000 hours per month in process with embedded AI.
In 2026, we are going to increase this process with embedded AI, and we have significant investments in this year. We have some solutions that have been tested in processes with business agents, and we saw in 2025, in this test, that we have a 90% gain in efficiency. A bank as large as Banco do Brasil, growing this by 20% is an extraordinary thing. To make this in context, we have upskilling and reskilling data. We already have more than 67,000 employees who have been trained in AI analytics. We have the digital leader program with more than 1,800 hours of training. In 2026, we want to implement our solutions, everything that our colleagues have learned to do.
In digital, we have more than 50% of the multidisciplinary lines implemented since May 2024, delivering solutions in record time. We have reduced the time for the development of solutions by 20%-75%. The eNPS in this movement with the staff that has already been working has increased 14 points in the last 12 months since we intensified the implementation of this digital era. We are going to do all this with sustainability and diversity as vectors of value. This is part of who we are, what the Banco do Brasil is. We are going to intensify businesses that are sustainable with a bioeconomy hub. In 2025, we had BRL 3 billion that were directed to projects in the Legal Amazon, impacting more than 100,000 people, and we are going to intensify this business in 2026.
Funding, we are referencing partnerships and funding, and during COP last year, we attracted BRL 3 billion, generated during COP, and we also attracted BRL 5 billion in 2025. We are going to seek external training for us to bring results in sustainable business, focusing on what we know how to do on energy matrix, energy mix, and carbon-based economies. We have achieved our environmental goals. In 2025, we reached 1 million hectares of preserved land, and our goal by 2030 is 2 million hectares. We are the company that most contributed to environmental preservation in our business. In terms of diversity, we are going to bring this forward, and the goal that we propose is to have.
The goal that we propose of 30% of women, blacks, and other areas. We achieved our goal for 2025, and we are already pursuing our goal for 2030. 50% of women in leadership positions, 50% of black people, and brown people in positions of leadership by 2030. In terms of macro scenario for 2026, we are optimistic. We see the scenario that the Selic rate will reach the end of 2026 at the level of 12%. These 3 percentage points in reduction that we project, it makes a big difference for a portfolio as large as ours. For the market as a whole, it is a big difference. We understand that IPCA, we have a projection of 4.2% below the top level of the goal.
We saw over the last 3 years a consistent growth of Brazilian GDP, and that is worth noting. The historic level of unemployment, we are at 6%, which is positive for business with Banco do Brasil. With the market as a whole, but particularly with Banco do Brasil, because we have a very significant base of clients. We see FX with volatility over the year, but closing 2026 at the level of BRL 5.50 . In terms of the crops, the 2026 crop, at least 354.4 million tons of grains, and we also highlighted the exemption of income tax based on law 15,570, which increased disposable income for millions and millions of Brazilians.
In Banco do Brasil, these millions of Brazilian citizens that have been benefited bring the opportunity to Banco do Brasil to grow BRL 28.28 billion in consigned credit portfolio. So the exemption, income tax exemption for people earning up to BRL 5,000 is a big difference, makes a big difference in the expansion of the, these clients', payment capacity, and we are going to seek a adjustment in the financial flow of these clients, but also expanding credit, which creates very interesting possibilities. And we are going to intensify our work with companies, insurance companies, consortiums, and services in 2026. We have a sea of opportunity, and we are going to work intensely to deliver even more results in these profiles. Here, I would like to present to you the guidance for 2026.
Everybody knows already, I've been talking about this throughout my presentation. I would like to note here, for us to see two main lines of the guidance: the credit line, with a growth between 0.5% and 4.5%, and this reflects what we have talked about in terms of investments to adjust the portfolio mix to seek results in more profitable lines with safety, and seek results in more profitable lines, keeping agribusiness companies. And this is a very big challenge for a portfolio as large as Banco do Brasil's, and we are going to work intensely to deliver on this guidance for the credit portfolio growth in 2026. Another line that I would like to highlight is the administrative expenses, with a projection of growth between 5% and 9%.
We have been dealing with this very responsibly, with a lot of attention, and the guidance that we propose for 2026 shows that we are going to continue to be careful with our administrative expenses and the adjusted net profit w ith a growth between 15% and 26%. And in 2026, we are going to work hard on delivering on the guidance and the results that we're proposing for 2026, always relying very much on the dedication of our employees, who make Banco do Brasil be what it is every day with the trust of our clients, and I'd like to thank especially the trust of our clients. 2025 was a year that showed the resilience of Banco do Brasil, the robustness of Banco do Brasil, and in practice, demonstrated how Banco do Brasil clients trust us.
It was a challenging year in which our credibility was put to the test in more than one situation, not just in agribusiness default and the need to revise our guidance, so during the year, but, you remember that we were on the, on the press, all the time. We were attacked, there were a lot of fake news divulged, but the clients remained with us, and the proximity to the clients made a difference. When everyone expected us to talk to the outside world, we talked to, our colleagues and our clients. I thank the Banco do Brasil clients who are with us, with a relationship, a long-lasting relationship, and I hope that this will continue for many decades in the future. Now, I will give the floor to Janaína to begin our Q&A session. Thank you, Janaína.
I'm going to start here our session of Q&A. So that we can be able to ask questions, just I'll ask that each analyst ask just one question, and I already have a list here with 10 names, so that we can try to give everyone a chance. And our first question comes from Daniel Vaz from Safra.
Hi, Jana. Thank you. Geovanne, Prince, Gilson. I'd like to come back to something Tarciana shared, that 2025 was definitely one of the most difficult years of the last decade. So first of all, congratulations to everyone, to the dedication and seriousness in facing all of this. And the guidance for 2026 is conducive with the current moment. When you put a flat portfolio for agro and businesses, we see that definitely you are taking this very seriously. So first of all, congratulations.
I'd like to come back to one of the bits of the presentation when you talk about BRL 35 billion in the Regulariza Agro. Gilson was talking about the third quarter, in that you would go over BRL 20 billion in the free rate. Does this BRL 35 billion, does it compare to the portfolio, of the fourth quarter that you were talking about in the BRL 35 billion in the presentation? And in my understanding, when you do this free rate program, you relieve your prudential adjustment, and up until what we had talked about in previous interactions, BRL 19 billion, BRL 20 billion were the prudential adjustments that you were able to bring back the adjustments to zero. From this, are these loans that are without this capital?
I'd like to understand if this interpretation is correct, if this would also relieve in terms of capital, because I don't think so, but thank you for clarifying that. Thank you for the space and for taking my question.
Your understanding is correct. It's important to remember we're always trying. We had a goal initially, that we would have BRL 12 billion, ideally, we'd get to BRL 20 billion, and BRL 35 billion shows clearly the will of our clients in terms of resolving their debts. Is the audio okay? There is an issue with the audio volume. I lost my train of thought. Here. What's important is that we were able to. We had an effective limitation for everything that we renegotiated. The positive collateral effect was the relief in the capital, and you can see that in the results, with what we showed.
On the other hand, this shows clearly that this partnership between Banco do Brasil and our clients, and that's why we went beyond what effectively, beyond the fiscal benefits. What's important is that our main focus is stabilizing the NPL in this portfolio and ensure the growth of the businesses with our clients in agribusinesses that bring not just returns in terms of the agro business, but also in the individual segment. Our greatest growth in the private segment are from the agribusiness sector. I'd like to invite Gilson to complement this, since he was leading many of these renegotiations.
Good morning. Daniel, thank you for the question. We had, at the end of 2025, the BRL 22 billion. This increase was what we were able to work on between January and February. The provisional bill was what happened in this period. And as Geovanne highlighted, our increase in capital, we need to look at 2026, but also look at the next four years. So we still have a gain this limit of capital up until 2029, and we went over BRL 20 billion up until this credit.
We're going to maintain this gain for the next four years, and the important thing to note is that this renegotiation sought to look at the non-performing clients in this period of 2025, and, and in the next 2-3 years, trying to improve the capacity for repayment of these agricultural clients. So we expect a better performance in the next period. And the guarantee, and I think this is the main highlight, many of these operations, in these new operations, as Tarciana said, we had 72.9% of trust sales.
So it's a credit that, for the producer, allows them to balance their flow of payments, and for the bank, we get a more significant guarantee, if we need to go collect. And just to finish, give you a little bit more color, we have around these numbers, we have BRL 35 billion, but not all of them are with these, resources for supervised. You have 32.2%, as we've shown you, for the version of February, and of course, this applies to a limit around BRL 25 billion that we have in terms of capital benefits. But we have to look at the curve in the long-term perspective.
Of course, we have amortization, and with this, we can benefit from other amounts that have not been amortized yet, so that we can maintain this capital and ensure profitability and the execution of our strategy in the next few years. I think we should also talk about the adjusted risk and return of the operations.
Now, our next question is from Tito Labarta from Goldman Sachs.
Okay, thanks, Janaína. Good morning, everyone. Thank you for taking my question. My question is on your guidance for net interest income, and you had a pretty good quarter in net interest income, although it looked to be driven mostly by the market NII. And if we take your guidance for this year of the 4%-8%, it implies that NII would likely trend down a little bit from what we saw in 4Q. So maybe if you can break that down, I guess, between the client NII, I mean, given the loan growth between 0%-5%, more or less, how should market NII evolve? Just to understand why the guidance implies, at least at the midpoint, that the NII would trend down a little bit lower from the levels we saw in 4Q. Thank you.
Thank you, Tito, for your question. I'm not sure if I understood your question correctly, because the sound for me wasn't that good. Should I speak on the mic? Okay.
Yeah, let me know.
Yeah, you should expect, coming from the top line improvements, not only given the growth of our credit, the main focus of our growth, as you've seen in the guidance, is on individuals, where we have a risk-adjusted return higher than the other portfolios. We will continue focusing on our payroll loans, not only for civil servants, but also for private sector employees. As Tarciana mentioned in her presentation, we are expecting a bonus coming from salary raises, a low level of unemployment. On top of that, we will continue focusing on increasing our fee income. Fee income, if you compare our fee income growth to our peers in 2025, w e lagged our peers. I think we have room to continue growing, particularly on that line in our P&L, control in expenses.
Of course, that we will be paying a very close attention to our cost of credit. That's where we could potentially deliver higher net interest income, especially net profit, sorry, at the end, given the control of our delinquency. And you should bear in mind that we are expecting our Selic rate to go down. This is beneficial in the short run for Banco do Brasil, given the drop, the reduction in our funding cost. We have already shown that in the fourth quarter we have reduced significantly a part of our funding that bears higher interest, and you should expect also our net interest income being benefited by them.
You should remember that In October, if I'm not mistaken, we bought out all our Banbra 81s, and this also brought us some savings in our net interest income, because Banbra brought higher expenses in our net interest margin, and we swapped that for our Letras Financeiras that has a much lower funding cost. This was also a positive impact in our margin. Okay? So basically, these are the main drivers that give us some confidence on growing our net profit around 15%-20% looking ahead. Okay?
More specific on the net interest income guidance, because that one does imply that NII will slow down, or no? Because if you just annualize 4 Q, you get to about BRL 111 billion, which is 9% growth. That would be above the guidance of the 4%-8% that you're giving. So maybe, and I want to understand, maybe between market NII and client NII, because you said market NII, I assume, was very strong in the quarter. Does that continue to benefit? And is the headwind here, the client NII, because agribusiness is still not growing, is that a bit of a headwind? Just to understand the dynamics of the and net interest income specifically. Thank you.
The market helps, but the focus will mainly be on our client margin, given the growth in our loans to individuals. That's where you should expect not only a part of our client margin growing from volume growth in the individuals portfolio, but also from the drop of our funding costs and coming from clients as well.
Yeah, and Tito, just remember that in our ALM position, we have a net position of prefixed assets against floating liabilities. So once the Selic rate is down, we have this positive effect that Geovanne mentioned on the funding costs, and at the same time, we have the loan portfolio that takes a little bit more time to mature, to change for the new rates. And at the same time, we will still have Selic rate, an average Selic rate, that is high during the year. So this also helps and also supports the treasury income. So that's the dynamic. We grow the portfolio. Of course, we also grow within this new mix with better profile on the individuals, and then we balance with the funding costs.
That's-
That's implied in the 4%-8% growth.
Yeah, we have more than BRL 6 billion on net exposure to prefixed assets. That brings also this bonus, given the drop in this expected drop in the Selic rate for 2026, and this implies this growth we're expecting to see. Okay?
Okay. Thank you, Geovanne, Janaína.
And now I'd like to call Henrique Navarro from Santander to do the next question.
Good morning. Thank you, everyone. My question is about the renegotiated credits. The relevant amount, BRL 22 billion. And these are credits that should, in 2026, maybe had gone to Tier 2 or Tier 3, maybe a deterioration on the stage in the tier, but this didn't happen because of the lengthening of the debt. And we're talking about a year of risk, and the problem with this, that the bank loses its capacity for payment. It's a period where maybe you're not reaching out to the client to understand their conditions to pay. So what am I trying to get to? In 2027, when the payments should start being made after this initial period, a relevant part of this credit may still have problems.
We can't say that we're in a scenario where we can see stability for agribusiness, and maybe this credit should go to Tier 2 or 3, another round of provisioning, etc. I would like to know if this scenario is being considered for the. I'm not even asking about the guidance 2027, but in this hypothesis of the scenario, this credit being renegotiated, a deterioration for 2027, and how will you keep your ability to perceive this credit, after this initial grace period?
This is not gonna happen, Henrique. According to the rule of the bill, they need to pay the interest based on the principal, not on the grace period. So in 2025, we're going to be able to understand these payments and have a finer analysis of the capacity of repayment for this portfolio.
This is crucial for this process. Second, for the operations that were already NPL, Tier 3, for example, even with the process of this new negotiation, they were kept in the same tier, and the large majority was in Tier 1. But we looked case by case, and I think this is important to highlight because those producers, agricultural producers, case by case, that did not show capacity for payment, we didn't renegotiate. We didn't make a new agreement with them because it would just be pushing forward the problem. And this is why we kept an elevated NPL in the last trimester of 2025, and now in the first trimester of 2026, we still have some of this delinquency, because we focused on the agricultural producers that had capacity for repayment, and this is why we kept these operations in the same tier.
But we're going to keep monitoring this process. It's very important to highlight that the majority of these agricultural producers that we extended the deadline are producers that historically were up to date with the bank, that have been with us for 10, 15, 30 years, and maintain a very positive relationship with us. And this longer deadline is a relief so that they can be rebalanced and maintain its commitments in the following years. So this is important to emphasize. And 45% of the operations that we did for 13 and 14 with free resources was already with post-fixed rates. So we're able to maintain our margin, but if the Selic goes down as we expect it to, we're also offering a gain for the producer to have a higher capacity of repayment in the long term.
This is also something that we talked about in the third quarter, and this will allow us a stronger capacity for repayment. That's what we want, because we want to keep these relationships. Agribusiness is a priority for Brazil, and it's a priority for Banco do Brasil, and we understand that these producers are able to give this response. I'd like just to come back to something I mentioned during the presentation. When we talk about the segment, high-level segments for the bank, and agribusiness is one of them, I'd like to emphasize 2 points. We're going to remain together with this client for the whole duration of their crop and harvest so that we can understand with this client what the productivity, we're gonna continue offering insurance, credit.
We're going to continue financing the equipment and the vehicles they need, because we understand the investments that they bring to the bank. So I'm saying all of this to make it very clear, we looked for clients that have a capacity for payment. We went case by case, client by client, and looked for those that have the capacity for repayment, and especially for those clients, we understand that the possibility for regaining their capacity of payments, those were the ones that we selected, so that we can work together with them and think about new operations with 13, 14. So I'd like to highlight the relationship that we have with the agribusiness sector.
It's different, and we understand from what was observed in 2025, the need for us to be present in other locations and other sectors, some that we were present in the past, but aren't anymore, so that we can for the presence of this specialized agribusiness sector. This is part of what we're projecting to specialize our services for the agribusiness sector even more in 2026. Between the deadline and this grace period, there's a long time of also nurturing this relationship with the client, understanding the rhythm of business in their business, up until the first payment is due. Just one other point. This renegotiation wasn't to reduce the provisioning, quite the contrary. Our guidance shows this. Yes, the risk continues to be grave, and we have an expectation. It's a portfolio that requires a lot of care.
We tried to expand the capacity of payment for these agricultural producers to normalize. 2026 will continue this way. It's a year of recovery. We don't know if the recovery will be what curve, what form this recovery will take, if it will be steep or more gradual. But it's very important to understand that this bring results in other portfolios, in other lines of business, like the individual segment. And this 50, between 53 and 58 B in our guidance shows clearly that this was not a measure simply to reduce provisioning or improve profitability. The focus is on the sustainability of the result and maintaining these relationships with our clients. And just to make clear here, Bittencourt already spoke about this, and I'd like to emphasize this as well, there was no process of reversing tiers after 13, 14.
Another point, how are we going to manage this risk, as you said, is not yet stabilized or normalized from here onwards? And we're gonna do applying the same models that we already did under 13, 14. And so a large part of these operations came with a significant volume of provisioning, and this is representative of our credit risk of BRL 18 billion. And when we think about the forward-looking of the market, if it gets better or worse, we'll recalibrate this. We'll recalibrate our models so that we don't have any surprises in a deterioration or eventually in an improvement, in which we would have capacity to put this provisioning in other markets. So we're very confident that this was a very well-executed analysis, and we have an adequately provisioned plan to face whatever comes next. And lastly, this wasn't just a quick resolution.
We brought, for the majority of these operations, the correct conditions, for example, for trust sales, when we changed the framework from mortgage to sales. But the client, to honor 13, 14, has to put in a down payment as well. And just to complement Prince, we, we raised the Tier 1, the coverage for Tier 1, in this last period.
Our next question, I'd like to invite Gustavo Schroden from Citi.
Good morning. Good morning, Tarciana, Geovanne, Prince, Bittencourt. I'd like to talk a little bit about the guidance for PDD. BRL 55.5 billion is the average point here. If we do some simple math, we're talking about BRL 13.5 billion of PDD per trimester.
If we look at fourth quarter, this was around BRL 18 billion, and this gave us coverage on some of the aspects, despite Tier 3 of some of the aggro having been covered. My point here is, if we think about this average point for 2026, we're implying that if we assume that the bank will reach about 100%, we're assuming that there will be an improvement in the NPL. If we look at NPL for 90 days or 30 days, however, they continue deteriorating. So I'd like to understand, how are you seeing the evolution of this NPL, especially in the agribusiness portfolio, assuming that there would be a reduction of the PDD in 2026?
I'm thinking here about an average of BRL 13.5 billion per trimester around—and the next trimester, around BRL 18 billion, and assuming also, consumer levels and the reserves. So I'd like to think, what can you share with us in terms of the evolution of the delinquency in 2026, so we can have an idea of how this is going to look in 2026?
Thank you for the question. Before I give the floor to our CIO, the first quarter is not 13. It's closer to the fourth quarter. But now I give the floor to Prince.
Thanks for being with us here. We are not giving a. We have a challenge. It is focused on the agribusiness portfolio. As new defaults in the small and micro companies, in, as in 2025, it's been leveling off. It's more related to the changing mix and seeking for a better adjusted return, risk-adjusted return. And agribusiness is, as we have been saying, a market that we are still working on. The stabilization process is correlated to the crop process. We still have half of the 2025, 2026 crop still underway in the first half of 2026.
There are challenges related to the due dates of this crop, and we understand that given the revenues that continue to be positive with a record crop, the recovery of payment capacity that 2013, 2014 brought, will create a process of reducing the risk level in agribusiness. And in our projections, this will improve as of the second half of 2026. We also need to consider that this entire contracting framework was implemented as of the beginning of the 2025, 2026 crop. We have better quality. We are better protected by guarantees, and this will help default to evolve, not quickly, but positively, particularly as of the second half of 2026. The flow will be irregular during a year.
We will continue to be under pressure, particularly in the first quarter, but our expectation, based on all the measures that we have implemented, that we will have relief as of the second quarter, beginning in the second quarter of 2026. There's also the issue of consumption of coverage, what happened, and it was widely disseminated by the media, there was a default in the fourth quarter of 2025, but has been normalized, and the operation was transferred in the first half of 2026. All this movement that has been captured by our guidance, there were adequate provisions for this transaction.
So you see a pseudo gap in the coverage of NPL, but it's nothing more than a result of the specific case, which has been resolved, and you will see this curve normalized in the first quarter of 2026. Thank you very much.
The next question comes from Yuri Fernandes from JP Morgan.
Thank you, Janaína. Good morning, ladies and gentlemen, and congratulations on the transparency during 2025. Going back to Schroden's question, credit quality and coverage quality, everyone is asking the same question in different ways, talking about NPL and provisions. But, in this specific case, in your coverage, there was a consumption of more than BRL 5 billion in coverage.
And when we talk about agribusiness formation and the corporate formation, a little bit above 100%, or very close to 100%, but the individual portfolio it came under. Given that you are growing this portfolio with consigned private consigned credit and credit card, why did the individual formation was so much lower?
Same question, different way: Why did the bank provide provisions for individuals? It's an addition to complementing Schroden's question. Where is the default formation, especially in non-consignated credit and credit card? In the last month of 2025, we began a process to adapt the adjusting default in this portfolio.
Given the default levels that we had been observing historically, and based on the implementation of this new solution, we are already seeing a very representative reduction in default, which has already impacted credit cards in the last month of 2025. In practice, the expected loss is adjusting to the new way how we have been engaging our clients, particularly along those two lines. When you look at the rest of the portfolio, which is very focused on consignated credit, public consignated, where our default rate is lower, and the private consignated, where the default level is where we had, as we expected, with a very adequate adjustment to risk. There is change in the mix of products. We are offering new solution to our clients so that the client can continue without being in default.
In January, where seasonally clients have been, very affected based on all the, deadlines of the beginning of the year, and the solution has been very well received, and, the origin of it is different because it, it is adapted to the client's payment, capacity. So this is an adjustment to the, expected loss, and it brings a specific movement in the change of NPL formation. And along the period, this will be normalized, and you will be able to see this in the first quarter. It's also should note that, we have 70% of the portfolio in Stage 3, entirely provisioned, and individuals, 66% in, in provisions in Stage 3.
Thank you, Yuri. The next question is from Mario Pierry, from Bank of America.
I will continue with the-- on the topic of, default. Can you update us on how you see the number of quick recoveries, judicial recoveries in the last half? It was something very significant for you. You are making an effort to reduce the number of cases. So how do you see the evolution of a court recovery, and what's the size of the portfolio, and what is the positioning of the portfolio?
Thank you very much, Mario, for being with us. This is very important topic for, not just for the bank, but for the system. 2025 had a record number of court recoveries, not just in agribusiness specifically, but although we obviously have relationships with companies that are being court supervised reorganizations.
We were very vocal about this with respect to our desire to act, to have conversations with the courts, with farmer associations, with all the stakeholders related to this topic. But Banco do Brasil would be very rigorous in defending our rights in this process. We went to the field, we raised awareness, and we accelerated the processes, the court proceedings, where we understood that the negotiations were not producing results, and we needed to defend our rights. So you can see the curve in our release on the document issued. Agribusiness new and new actors in agribusiness in the third quarter was lower. And we are very reliant on the solutions that we are offering our clients. With the MP 1314, we expect that these proceedings will be reduced.
We also see that many of these cases that had begun without a basis or a proper rationale, that those that were reorganizing, restructuring, had some difficulties in the courts. So we are raising awareness, and this awareness is reaching many farmers. And now with proper products to recover the client's payment capacity, we continue to expect a reduction, not a reduction, but slowing down of growth in these numbers, both-
Going in with the judicial recovery. We did our modeling, and we saw a number that was 75% of our portfolio is provisioned, and then you can ask me: "Should it be 100%?" So we have a recovery that is 30%, more or less, and we see this with our clients are in process of repayment in these operations. So it's a little bit of that what's happening. What we can affirm here to you is that judicial recoveries that are on the radar, and on our radar for 2026, they are already contemplated in our guidance. And those that are still circulating in our balance, they are more than adequately provisioned. Just one highlight that I'd like to make here.
In a first moment, the judicial recoveries were very focused on the financial institutions, so the debate was very much on these two different levels, the rural companies and the financial institutions. And we now see another sector entering this conversation, because it's affecting the supply, sale of supplies, the local municipal economies. So we have many more stakeholders involved in the conversation about judicial recovery, and our expectation that, with everything that we and other institutions have been doing on this, we have a bigger conversation so that this can be effectively applied only in those cases in which it is very justified.
And as we see, the growth was very elevated in this last period, and as Prince said, sometimes to deepen this debate in terms of what are the minimal criteria for, especially in the individual segment or in the agribusiness sector, this has helped us in this year, and that's our expectation. So involving more stakeholders from agribusiness, we have a stronger voice to discuss this theme, be it in the National Congress or in the judiciary. Mario, have we answered you?
Yes. Thank you very much.
Thank you, Mario. I'm going now to our next question from Carlos Gomez-Lopez from HSBC.
Hello, good morning, and thank you for taking my question. Just one, not on agro for once. On the capital ratio, I think from your podcast you were saying that you're getting 122 basis points benefit from Resolution 1314. Can you confirm that is the benefit, that it will last four years, and is it going to change over time? Do you expect it to increase or decrease? Thank you.
Yeah, the benefit in our capital ratio, given this restructuring program with rural producers, has a due date. So you should expect looking forward, and we are always projecting our capital ratio looking for the next three years. We believe that although this benefit in our capital ratio tends to drop throughout the time, we will be able to bring profit generation back to the normal level of Banco do Brasil, adding extra profits to our capital base, maintaining our balanced CT1, that we consider very comfortable to sustain our growth in our portfolio close to the 11-ish area. Okay? Definitely, it's positive in the short run, but in the mid to long run, we will go back to our returns that we were used to have before this specific issue on the agri sector. Did I answer your question correctly ?
So, just to confirm, you get the benefit, which is related to the balance that you have in these restructured loans. As the restructured loans are paid off, that balance will decline, and therefore, the benefit will decline. Is that correct?
It is. It will decline, yes, but as we mentioned, we made BRL 35 billion in the program. So, as long as the loans are maturing, we will be replacing them by this, excess of loans, okay? So it will help us to maintain this level for the next five years.
Okay.
Okay?
Can you remind us what the impact of the new resolutions will be, the additional capital requirement that you are going to face this year for operational risk, etc?
Carlos, I'm having a-
He wants to-
A problem to hear you.
The regulatory requirements that will happen this year-
In the-
Especially coming from the operational risk, is that the question, Carlos, that you ask?
That's correct. The addition, the-
Okay.
T he new impact of the phase II.
Okay. Do you have this number, Prince? the exact number of w hat is expected to hit our capital ratio coming from the regulator in terms of operational risk?
Perfect. From the operational risk, Carlos, under the 14,467 law, we are expecting 0.7 basis points impact in 2026.
Yes, and Carlos, there is also the second phase of the implementation of IFRS 9 here in Brazil in the first quarter, so we have 25 basis points coming from that. Together with this close to 10 basis points that Prince mentioned about the operational risk, we are also repaying the hybrid instruments that we have for the agribusiness, additional 10 basis points in this year, okay?
Thank you.
Thank you. And also our next question- Our next question comes from Pedro Leduc from Itaú.
Good morning, everyone. Two quick questions. First, about operational costs, the guidance says 5-9 in the year. You, this, you mentioned this is something you're paying a lot of attention to. Maybe the portfolio is slower. You can prioritize certain things, and it seems like you're really able to continue the cycle of investments. If you could share a little bit with us, what are you prioritizing? Why this guidance to increase this above the inflection? That's my first question, upsides and downsides of this, and by how much. And the second, I know you won't say names, but can you talk a little bit about third and fourth trimester?
Leduc, you have a lot of background noise, but I think we understood more or less. With respect to the expenses, why do we put 5%-9%? It's important to remember, this is not, doesn't just apply to Banco do Brasil, but to all banks. This is a year of renegotiation salaries for the entire sector. This is led by Febraban. And so in some measure, we bring a little bit of what can happen. We don't know, because it's a negotiation table, but this will happen around August, September. We're also, when we think about expenses, we have to think about what we can control, the cost of credit and how we control expenses. As Tarciana said in her presentation, we've optimized our service points. We're creating hubs, new models of service, the phygital, bringing AI. So all of this, we believe that we have conditions to c ontrol.
It's, that in comparison with our private peers, we have specific rules for SG&A. We have to have specific criteria in the contracting process. So we make an estimate. For example, if I have to change my equipment or infrastructure, I have to open a bidding process, and these bidding process give me an idea of the reference price in the market, and we open the auction. So we never really know how much exactly we're gonna spend, but we're trying to save and tighten as much as we can, so that the costs can actually turn into profits. But we've shown you our capacity to execute what we set out to, to achieve, whether it's growing our business or controlling expenses, and it, that's why our efficiency rate, compared to our peers, is one of the best.
So we always talk about this guidance, given the uncertainties in this scenario. If we're able to delay some things, we will, but we've, we've always been able to deliver on the lower end of the guidance. Why? Because we're doing much more with much less, and this is extremely positive. To your next question, I'm gonna invite Prince.
Pedro, it's great to see you again. So to give you a fuller explanation, this case is a PVM, so from this we're, we're looking at those that have this characteristic of credit. This was already problematic and adequately provisioned for a few years, and this operation became delinquent in the fourth quarter of 2025, as a result of a negotiation that was in process, that was successful at the end of 2025, but that the instruments, the Banco do Brasil instruments, were agreed upon in the beginning of 2026.
This is why we thought it would be better to let the NPL continue in 2025, even though this didn't bring us additional expenses related to the provisioning, because this was already included there in the provisioning. The negotiation worked out. The operation was normalized, now in January, and this operation was ceded to third parties. So that's what happened. We can't disclose the name of this client, but I think you can probably do some deducing, based on news reports to understand a little bit better. We feel very confident with this. It's nothing new. It's a CVM that was already on our radar, that became NPL in the fourth quarter. The negotiations were positive and implemented between December and January.
The specific Banco do Brasil instruments were signed in January, and with this, we cede the operation, and you'll see this reflected in the balance sheet of the first quarter, and everything will be clean as a result.
Thank you, Prince and Geovanne. I'd like to talk about the administrative, administrative expenses. It's important to note that Banco do Brasil has the lowest volume of administrative expenses compared to our peers.
We're projecting between 5%-9% in our guidance, but it's already the lowest volume in the financial sector. We also have the highest efficiency index, and in the last few years, we've been demonstrating a lot of discipline and care in the administrative expenses, without having to let go of people or equipment that we need to continue growing. It's a percentage index, but I think it's important to look at the volume, and in what volume this percentage refers to. Thank you.
Thank you. Our next question comes from Renato Meloni from Autonomous Research.
Good morning, everyone. Thank you for your time and your questions. I'd like to come back to the NPL, but looking at the individuals portfolio, you talked a little bit about this, but, and it looked like the quality of the risk is improving. And I think given the growth that you're projecting in the guidance compared to other ones, reflects a little bit about this risk. Are you having to grow in a portfolio with the credit still deteriorating? I'd like your thoughts on that.
Second question related to agribusiness, if you look at the central bank numbers, NPL in the short term has already started falling in the beginning of the year, but for you, it remained stable. So I'd like to understand why. Is there a different dynamic in this sector with you, or is there any additional analysis you can share?
It's great to see you again, Renato. Starting with your second question related to agribusiness, there is a difference because the central bank releases information with more than 15 days of, a nd we release, to remain coherent, only after 30 days. And so we see a small improvement in the short delays, but I have to be honest with you, this is a period in which seasonally we have the lowest volume of investments.
So maybe looking at the default in the short term is not the best in this moment, because it's going to capture a period in which I have less repayment, and then obviously, the resilience test for the agricultural producers is lower threshold. But we have seen here in the metrics, we follow the delinquency rates here even before they go into default, and we did see an improvement in this short term. When we think about MP 1314, we also think about all the measures that were taken, but we have to be very responsible here in how we assess and understand this also as a period with the lowest volume of investments in the portfolio, traditionally, because this is tied to the harvest.
So these investments are concentrated in moments when the agriculture producers have liquidity, which is around the harvest of the crops. So even though we've seen a small improvement here in the very short term, we have to be very responsible and emphasize here that we have a significant challenge in the first trimester and in the first month of the second trimester. With relation to the portfolio of individuals, we've been very vocal, and it's a strategy of rebalancing this portfolio, where we are placing more emphasis on those with a better rate of return. And you know that our individual portfolio is what brings the greatest returns in terms of risk, and that's why all the effort that we did to rebalance in 2025 still is not at the number where we'd like it to be.
But as you can observe, that this individuals portfolios becomes representing a larger volume and a more representative volume in our portfolio of 2025, and this hadn't happened since 2019. So the path and the discipline in executing this is on the right track. Now, obviously, you have a bit more risk in these portfolios, and that's natural. You have to understand the return that we're receiving is more than enough to cover the risk we're incurring. This doesn't mean that we're satisfied or that we're comfortable, but... and this, as President Tarciana said, our focus on individuals in 2026, in addition to this better balancing of the portfolio, it projects a strong growth in lines where we have the best ratio of risk to return. So payroll loans, public payroll loans, they have a few leverages that will come through in the first quarter.
We've already seen, for example, salary increases, tax filings that affect a lot of our clients that are civil servants. You have to remember that our portfolio isn't just federal civil servants. We have municipal and state-level civil servants that will be very benefited by this, tax exemption, and this brings the margin of the payroll loan that's available and gives us conditions to advance in this portfolio of clients. We also have a private payroll loan and credit to workers where we led in disbursements in 2025, and we have a very strong strategy to advance in these bases of clients in 2025 and 2026.
So we have this repositioning of all of our brands of high level, and that doesn't mean just services around products and consumers, but clients that are demanding credit, and credit that has better assurances. For example, we have the largest pension funds in the country, and this already means that we have a ready solution that gives us guarantees for our loans, for the clients, individual clients. So we have an ocean of opportunities here for 2026, especially with the perspectives of maintaining the unemployment rates at historically low levels. It's a little bit contradictory, low unemployment and high levels of debt in families.
With these new measures in 2026, the family debts tend to go down, and this brings us opportunity to confront this niche of clients with security and exploring the volumes that we project in our guidance. So this is why our individuals portfolio is growing much more than the others, and obviously, this growth increases our capacity to bring to you a stronger and more robust recovery. This is all part of our long-term planning. We know and we're aiming where we want to get to, but obviously, it's the market that will bring us a little bit more risk. We have very strong criteria.
We're monitoring this daily, and the risk of these operations, we have our eye on this, and we don't have any problem in recalibrating quickly, so that at the end of the year, we're able to meet this expressive growth, rebalance our portfolio, and with the credit risk controlled. With the opportunities with the income tax exemption, we have BRL 28 billion that is already available in credit for our clients. This means that, 18% of the portfolio based only, in the, income tax, exemption in the payroll loan portfolio.
The next question comes from Marcelo Mizrahi from Bradesco.
Hello, everyone. Thanks for the opportunity, and congratulations on your presentation. I wanted to ask you about the individual's portfolio growth. In the last quarter, we saw a very strong growth in, credit card portfolio. In terms of, NPL in the third quarter, what is the profile that is bringing this, client base? Is it a private payroll loan line, or is something different, going forward? Another question with regard to the individual's portfolio growth with private payroll loans, how much of it is an application from the bank or in the Dataprev system? I wanted to understand how much is in-house and how much is at Dataprev. Thank you.
Mizrahi, in with respect to credit card NPL, we have, first of all, complementing what Meloni said, our farmer client is also an individual client. So what we see in terms of default reflects the agricultural, the rural context. As an individual, he has a credit card and expenses, and as was said here, some regions, the RJ issue brings problems for the local economy as well. Part of the individual default, we have talked about our individual clients who are rural clients.
We have a profitability committee that we monitor every month, and we have been inquiring about the initiatives to for us to control the default. Especially in IE individuals, there's a practice that we were not following, contrary to our private peers. When there's a delay, we can offer the possibility of the remaining balance to include that in the invoice, in the bill. The bank was not doing that. So when there is a changing stages, we see this inflection in default rates, which were growing. As we grow, the relative participation of the individual's portfolio within the entire credit portfolio of the bank, if we have a higher default level, the return is higher. It brings this higher NPL, and we should expect this growth. We are going to work with higher levels.
With regard to private payroll loans, it presents one of the lowest default rates. The expected loss is about 3.5%-4%. We are very rigorous in our methodology. Banco do Brasil was in fact pioneer in managing not just the client's risk, but also the employers. So when we talk about private payroll loans and how it's generated, it's important to remember that we began virtually at zero. We didn't have such a portfolio, and we focused effectively on the original origination, CTPS, in the government Dataprev system, and we have the highest. 70% today of all contracts are originated at Banco do Brasil through our direct channel, and 30% comes from, are originated in the CTPS. We have a percentage of new clients coming from Dataprev. About 8% of clients that come from Dataprev become new clients of Banco do Brasil.
Excellent. Thank you very much.
Thank you, Mizrahi. Now, our last question comes from Matheus Guimarães from XP.
Hello, Janaína, Prince, Geovanne, Tarciana, and Gilson. Thank you very much for the opportunity to ask a question. I wanted to go back to a topic, which is the agribusiness delayed portfolio. So there were some write-offs. Can you bring some light to the behavior of this portfolio going forward, if it has come to the maximum here in terms of participation in the agribusiness portfolio? Can you give us some information about this relevant portion of the portfolio? That would be very useful for us. Thank you very much.
Matheus, in terms of delays in agribusiness, this is a reality that has always existed and will continue to exist because of the risk that we incur in this portfolio, in this activity, rather, both in terms of weather and price volatility. There will always be a moment when we need to delay in order to adjust the flow of payments from the farmer. We saw this in Rio Grande do Sul with a drought in Mato Grosso do Sul two years ago. We had some problems related to cattle raising and soybean. This is a system that will continue to work. This is dynamic that will not end. We are facing a challenge this year to focus increasingly on this and reducing this percentage with respect to the total portfolio, but we know that it will continue to exist.
It does have a higher default rate than the non-delayed portfolio, and we work based on this fact. There was this variation. We hope that this year, as President Tarciana said, we expect a positive crop, both in terms of, planted area and, production and productivity expectations. So we expect that, we will be able to maintain or even reduce this percentage in the, delayed, portfolio. We will wait for the next months to see how this portfolio evolves. The product that is more focused is milk, especially in the southern region. There might be some pressure in this. So we will try to receive what, we received last year in other crops. This is a reality that's not at Banco do Brasil, but all institutions that work with agribusiness.
We are very focused on this situation and try to maintain it, if not at the current level, or even reduce it in the coming months. In light of all this, what happens? First, we have a higher risk in this segment, and this is reflected in the expected loss models. Our expectations in terms of expenses double up during the year. Not only that, you need to understand that there is a 4966 dynamic, and before these up transactions were lowered to loss as a mandatory measure after 360 days, and that has been increased to 720 days. So these losses will be, are expected, but will be even lower than with respect to 2024. The models are live, and they are looking at the client's payment capacity.
When the model sees that the recoverability of the asset is finished, what we do, if it's not provisioned, we direct it to provisions, and we write it off after the, in regardless of the, the, of the delay time. The assets in the delayed portfolio is that they have the payment capacity, so that these liquidations can be done. It also has a volume of provisioning, lookhing at all the expected loss and, degradation of the segment criteria, but the assets with recoverability has finished. We use the provision and write it off to loss. The active balance is healthy. That's the conclusion.
Thank you very much. Very clear.
Thank you, Matheus. Thank you very much. Well, we are finished here with the Q&A session. I thank everyone for your participation in our live stream, and we are available for any clarifications that you may need, and see you next time.