Good afternoon, everyone. Welcome to our Bradesco Day, APIMAG 2019. I am Leandro Miranda, Bradesco's Executive Officer and IRO. It is great to have a full house in this First Bradesco Day, I would like to thank all of you for joining us and the more than 2,500 people who joined us online. I would also like to acknowledge and thank the presence of Ricardo Tadeo Martins, President of APIMAC and Felicius Correa Gisav, Vice President of APIMAG.
He'll be with us during the Q and A. And I take this moment also to acknowledge and thank the presence of investors, analysts, clients, the press and authorities here with us. And of course, I have to thank the members of our Board of Directors and Executive Committee here represented by Mr. Luis Carlos Trabuco Cappi and Mr. Otavio Lazari.
It is great to be with you today. In today's event, we'll share with you our vision about the macroeconomic outlook of [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Brazil and the world speak a little bit about Bradesco's DNA, culture, principles, values, which allowed us to come this far. And we'll speak about our strategic positioning for the coming years. We are very confident about this new Brazil that is coming, and you'll see that our Financial performance reflects this. I will be coming back later to talk about our financial results in Q3 'nineteen, and I'll share with you How we are getting positioned to continue with the good performance.
At the end, we are going to have a time for questions Shands with our speakers and the President of APIMAG so that we can answer your questions and Clarify your doubts from you here and from the people online. We will be getting questions in writing. This is a very special day because in addition to our Bradesco Day, We also had here an advisory communicated to the market this morning as you saw talking about the integration of the Brokers for Individuals by Agora. So we will be here to answer your questions regarding our strategic positioning. To To begin the meeting, I would like to invite our Officer and Chief Economist, Mr.
Fernando Onorato. Thank you.
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:]
Good afternoon. It is a great pleasure. We have a full House, as Leandro mentioned. So welcome to our home. It's great to welcome you.
My mission is to speak about the outlook for the Brazilian economy, and I'd like to start provoking you regarding the great transformation that Brazil is going through. This is a transformation of a country that has been used to public spending for many, many Gates. And that has in the private sector that will have in the private sector its main growth engine. This is what we will discuss here, and this is what I want to speak about. I would start saying that the essence of this transformation goes through the Establishment of a cap on public spending that started in December of 2016.
And this is a transformation amid Brazil that spent 6% a year above inflation, Public spending growing 6% above inflation per year. They started growing 0% from that moment onward. This brings changes in bank loans. It brings changes in the way the government relates to companies. And with the leading role that the private sector will have to take on, This brings a change in the economic policy that we haven't seen since the real plan.
It seems that now we got the right combination so that we can finally have a balance of our public accounts and an easing of the monetary policy, as you will see. And the essence of the cap on public spending is the perspective that the country will become solvent. When we look at what happened with The pension reform plus, the cap on public spending, that produces an idea that the public debt in the several scenarios that we FannieL8 will become not only convergent but declining. That transforms the perception regarding Brazil's potential. It is natural to see that public deficit that got to 10% during the crisis will stabilize around 4% in the coming years, which is a huge deleveraging of the Brazilian public sector.
And this will translate into greater expansion for the private sector. The main consequence of having this agenda is a convergence of interest rates to international levels. For many, many years, we used to say that Brazil needed to converge the interest rates to advance. And with this reduction of public debt, We can bring Brazilian interest rates. They used to be double of other emerging countries to very close to that of the emerging countries.
So this is the nominal interest rate. Every project to transition from the public sector to the private sector Private sector involves low interest rates or funding. They used to be provided by the MDS, the Brazilian Development Bank, will go to the Private sector, nominal 6.5 percent interest rates are unprecedented in Brazil. With that, it is possible to finance infrastructure project and more accelerated growth. This is the essential transition that we've been having.
And when we look At the countries with low interest rates, what we see is that credit is more dense, more abundant, greater than the GDP, greater percentage of the GDP. It is not an exaggeration to say that Brazil can double alone over GDP if our interest rates stabilize. Average of emerging countries is 135% Brazil 70% with a marked difference between companies and households. In the case of companies, the role will be fulfilled But a capital market, in the case of the households, this is linked to mortgages. Mortgages account for about 10% The GDP in the world, about 30%.
So we have a lot of room to grow. In the case of the capital markets, This transition that I am describing as being a future one is already happening to some extent. While BMDS portfolio shrunk by about BRL200 1,000,000,000, BRL630 1,000,000,000 to BRL400 1,000,000,000. The Brazilian capital market has delivered more than more a lot more. So we had a lot of IPCA indexations this year in IPCA index issuances with an average tenure of 140 months.
And this transformation is in the heart of what we are going to see in the [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Brazilian economy with a deeper access of companies to this market. Well, the credit Well, this fiscal adjustment agenda is coupled with an agenda that goes way beyond the pension reform and the cap on public [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] We'll not take up your time talking about all of these reforms listed here, but we're talking about a set of agendas linked to the business environment, Privatizations, opening of the economy, demand stimuli. And even the reforms that have been passed, they need to advance in coming years. Just to mention a few, Economic Freedom Law. We say it's going to empower small businessmen and entrepreneurs.
It will provide more loans to small businessmen. The sanitation law, the oil and gas law for privatizations In concessions, BRL 204,000,000,000 in projects and an administrative reform that will give more Ability to the Brazilian government will make it more efficient. So this is all part of a set of agendas that go way beyond the pension reform and the cap on public spending to drive lower interest rates and more loans. And the market is already pricing, this adjustment that I've been talking about. When we look at a 5 year CDS for Brazil, about 120 points.
This is the level that Brazil had 1 year before we got investment grade. The risk was at 109, 110 points. So the market price this scenario and the rating agencies hopefully will follow the kind of pricing and will give us some upgrades. And who knows, maybe Brazil will regain investment grade by the end of this administration. It is fundamental to keep in mind that the economy is beginning to respond more intensely to this scenario.
I would like to highlight here 2 themes that have to do with loans and the labor market. We talk a lot about unemployment rate at around 12%, very high. But I would like to focus on activity. We have 93,000,000 People in the labor force, but it is already at a level prior to the crisis. Brazil created 5,000,000 jobs in the last 3 years.
A lot of them Informal jobs, but these jobs start to produce income, increased demand and consumption. Real income is growing around 2%. And what is very interesting, this process of creating jobs that is coupled with this agenda to our small businessman and entrepreneurs. And this agenda of providing more flexibility to the economy is that many of the formal jobs today Are being created in small and midsized companies. This is a focus of this presentation.
So Small and midsized companies in the industry or agriculture are creating more jobs. This is a typical phenomenon of a more competitive economy with greater density of credit, and we start creating a more robust GDP base for the future. This is What we expect as a result of this process, this job creation starts having an effect on the Households consumption, we can clearly see this in some indicators. We make a job creation plus loans, credit. Loan to households has been the greatest engine for growth, and we see household credit growing 15%, the highest expansion rate since 2018.
This is free credit, of course, but this is expanding. And it comes from low indebtedness of the families and lower interest rates. The cost To service the debt is reducing, and this will allow us to close the gap with the emerging world in trends of interest rates and loans. So it seems very sustainable and solid looking forward. And in credit, just like I spoke about jobs, small and mid As companies are the highlight, in this case, legal entities.
This segment will have a lot more access to credit in this whole new world of low interests, and we can see that this process is advancing. So the basic consequence of that is that segments That rely on credit start having an interesting performance. When we look at the sales of vehicles, they grew 11 Sant, per annum, in recent years. And this is the half full or half empty glass. No exuberant data here.
But If we focus on the half full glass, any indicator growing 2 digits should deserve some attention. So 11% of vehicle sales growing. In the case of real estate market, which is highly credit dependent, where we have the biggest gap, and this is data for Sao Paulo, data for Brazil, a very heterogeneous. We are not going to see in Brazil such a great abundance. But in the case of Sao Paulo, we have launches growing 100%, 105%.
We cannot ignore data doubling in size in 6 months as is the case of the real estate market in Sao Paulo. So this joint action, jobs and credit, produces retail expansion. Look how retail started gaining momentum. Earlier today, data were released even better retail Retail will add to the Workers' Compensation Fund that will be released another BRL40 1,000,000,000 inflowing to the economy. And retail will push the industry.
Since inventories are very reduced, what we have looking forward Is space for retail to generate more demand from the industry, and this will create more jobs? So this is clearly an important driver for 2020. And I'm moving to my last point. What happens to exchange rate, interest rates and growth in this environment in the mid run? And we look at what's happening in the economy, the transition of the economy, which was more public sector oriented, moving to more protagonism of the private sector.
This is a recent but relevant phenomenon. The fact That bad engine that propagated inflation, public spending, when it's no longer there, it drives down inflation. Inflation used to be 6%, 6.5% for almost 2 decades and since 2016. It is at the lower range of at the lower end of the range of inflation. And it will be very close to the lower end of the range set by the Central Bank, and this will Make more room for new cuts in select interest rate.
Expectation is that it will get to 4.5% by year end and 4.25% next It could even be lower than that. And this is not by chance. This is happening because of this reorientation of the economic policy that finds in the cap to public spending the right condition to help drive down inflation. And the exchange rate reflects a lower interest rate. Brazil has lower attractiveness for investments.
Our currency is detached from the emerging markets average, which is the white line. But our currency drivers are very diverse. We have the dollar in the world, the interests differential, but there is also a growth differential. Our main bet is that if Brazil is able to set itself apart from the rest and deliver stronger growth in 2020, this driver will attract more currency investments in our real will appreciate. We don't estimate a 3.60 We estimate $3.80 for dollar by next year, but this is the appreciation of the currency of a country that tends to grow more with accelerated growth.
Well, this is being followed by us Bradesco and it's shared by the IMF. The IMF has just released its forecasting for 2020 in their October Annual Meeting. And Brazil is the country with the fastest to growth next year compared to most of its peers. Of the 180 countries monitored by the IMF, Brazil is among the top 20 in terms of growth acceleration. So it includes India, Russia, the United States and Brazil is leading the way.
So hopefully, this growth driver will and will help the Political outlook and the agenda of reforms and will also help with our exchange rate and to appreciate the BRL, attracting more capital to Brazil. And then moving to the end. When we think regionally, Brazil should grow 2.2 next year. With growth all over Brazil, across the regions, There is some heterogeneity, the north of Brazil and the Midwest with its 2 main growth drivers. But we can see [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Growth for this year, how much we are estimating.
And we see that this growth is spreading. Several states started adjusting their accounts, controlling their accounts with more organized the public management in the labor market, which is very informal still. As we move towards a more Formal market, we started gaining traction in the regional economy level. So if we were To summarize my message, we are quite hopeful regarding the economic agenda. We believe that there is room to have a lot a more protagonist of the private sector, a lot Spring the Country in an Environment Where Interest Rates Will and Inflation Rates Will Remain Low.
This is my take home message for you. This is what I had for you today. And now I would like to invite on stage the Chairman of our Board, Mr. Doctor. Trabuco.
Thank you very much. Good afternoon, everyone. To begin, I would like to acknowledge and greet the investors, analysts, journalists present here and the President and Vice President of APIMAC. It really honors me to have you all on board of this Bradesco Day and APIMAC. But this event, well, it welcomes journalists, investors and analysts because we always want to have transparency.
But I would like to remind you that this is the first APIMAC with the absence of Mr. Lazaro Brando. He was always very present in our APIMAC meetings and in the old ABAMAC meeting when we had the first meeting here in the auditorium of the foundation in 1985. Well, But I would like to begin my speech of greeting all of you, my colleagues, and to especially Great and thank the Executive Committee of the bank here represented by its CEO, Mr. Otavio dell'Azari.
I would also like to thank the members of the Board for their support and constant presence in helping build this organization. As Fernando mentioned, we now live a context of great changes in the Brazilian economy and in the world economy. Well, we have new wins regarding Pricing and the economy. We have all time low interest rates, inflation under control, Reduced volatility and a fluctuating exchange rate performing its role. So this is a situation that changes and changes for the better our risk management.
In society, and I should say in society as a whole, we feel that Everyone is anxious for transformations. And unlike a famous book of the past that talks about the risks SIP Democracy. We think that we currently live a moment that is A historical moment to strengthen Brazilian democracy. What we see is a functional, organic Democracy. A living being in permanent evolution according to the perspectives of the 21st century.
And this is how a country is transformed, a country, its companies and its people. And this is a vigorous transformation in our view. The more debate, the better. However, Modern time is not for subtleties. And What represents this new context of the economy?
In our opinion, structural changes came to stay. These are achievements of the Brazilian society and of the world in this new world of digitalization of all social and economic relationships. We believe that this is the ideal Scenario for a bank like ours with our values, with our business practice, with a strong commercial bias and a deep footprint across Brazil. The main strategic pillars of Bradesco's culture is to Cope with the challenges, but always keeping an eye on the future, preserving our current revenue streams. In a nutshell, it means to be grounded in the present, Envisioning the Future.
This is in our DNA. And for that, we have Six main directions: 1st, to permanently improve our ability to capture opportunities Number 2, to have a cost to serve, which is adequate for the new economic scenario. 3, to fully use the force of our distribution 4, to have the broadest Folio of products and services with product segmentation and with a focus on clients. It sounds like a heresy when we talk about product segmentation, but we have a focus on client, which means a client targeting adequate to our relationship model. And number 6, development of our mindset for innovation and attractiveness.
In March of 2020, we will complete 77 years of existence. Bradesco was founded in the city of Marelia in March of 1943. At the time. The financial system was formed by small banks with a local or regional footprint. They were enough insufficient to meet the needs of a little complex economy based on the exports of agricultural products, Better yet, of almost just one agricultural product and twothree of the population lived in the countryside.
Great advantage of the new speaker is that we get to drink more water. As I mentioned, twothree of the population lived in the countryside. Our founders anticipated The economic transformation that was coming in Brazil back in the 1940s 1950s as is happening again now. Industrialization in Brazil required more sophisticated financial instruments and large banks with a national footprint. Since the beginning, those who conceived Bradesco, notably the legendary Amador Aguilar, assisted in the pursuit of one goal, to have a large scale bank.
This was a fundamental target. We had 7 branches in 1943, 44 branches in 1946. In 1968, the bank had branches in all of Brazilian states. 10 years later, a historical milestone. We were present from the north to the south of Brazil.
And in 1985, we had 2,000 branches. In 2020, we reached all Brazilian municipalities. That is why since Bradesco's day 1 back in 1943, We opened our doors to all: poor, rich, the labor force, the business community, farmers. And this was the big news. It was a paradigm shift in the 1940s.
At that time, people with little money did not have access to banks, but Bradesco opened its doors so that these People could have access to savings accounts, to loans and the possibility to talk to the manager because the manager would speak to And this is an important trait of our DNA, which is the title that I was given for this lecture. We were always very inflexible In terms of the following: All clients, no exception, deserve the best services. We were very inflexible about that, and this is a powerful legacy. What can we do for clients to have more convenience, Speed and efficiency in their relationship with the bank. This is a permanent question for us.
Many of the actions that the organization Comdauge in that sense, were pioneering initiatives and later copied by other banks. There are many examples. I will mention 1. In 1946, we created the Payments and Receipts section. So taxes, rent, water and electricity bills could be paid in Bradesco branches.
With that, people no longer waste their time moving around to pay their bills. Along 76 years of our history, Bradesco published year after year substantial reports explaining its activities at the end of each fiscal year. And here's an interesting reading. We see in all of these reports an interesting reading. In all of these reports, we see in print a set of values that now people call organizational structure in which guided the first managers and officers of the bank and that remains as firm and current beliefs among us.
What are these principles? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Support to the country's development. We are the biggest public bank among the private banks. The bank has always believed in reducing regional inequalities In the ongoing modernization of banking practices, Babik has always believed in the well-being and motivation of its employees in capturing opportunities to add value to clients and shareholders alike. And we have always focused on education as it is
Today, we provide services to the most remote areas in the country, in some cases, only reachable So this is one of the means through which we support development. So what is Bradesco today? Bradesco today is a significant bank, Brand value, as it was very well shown by the first video, decades of financial soundness, Growing income year over year nonstop. Today, We turned 77 with a high ability of innovation and reinvention. If in the 60s, we were pioneers In adopting computers to process data storage, today, Currently, we are one of the leaders in the application of technology to serve our customers.
The most recent achievement is BIA, BIA is information, financial education, Supporting and qualifying our customers, which is one of our key commercial pillars. So this is why Building Bradesco involves a dignifying corporate trajectory with very well set values and beliefs Going through several bank generations, the banking activity in Brazil is one of the most competitive in the world. And for that, it takes a permanent look where we came from, who we are And where we're heading to in the banking industry. And along this journey, our main challenge is ourselves. Just like this famous book, Dante Alighieri's Divine Comedy, he used to say that in the path of human existence or organizations, It is always built by errors, success cases and discoveries.
The same goes for the corporate world. We are working on errors, successes, attempts and also discoveries. So this is why in our culture, The operating risk is measured by our capacity of not being proud nor arrogant to understand the economic scenario and the risks it entails. So this is why we have these three powerful letters In our organizational culture, DNA, you copy processes, you copy products, You can even copy strategies, but copying a company's DNA is extremely hard. For people, DNA is the life molecule.
It stores personal information. Now It is naturally pass among people, but the corporate DNA needs to survive relentlessly And it all depends on the engagement And why is that? Because the culture of our bank, In addition to being a career bank, it also supports the company, preventing it from growing old. The only thing that doesn't age is time. And companies are updated Just as they take care of their legacies of people transferring the company's culture, Bradesco has been through tough times.
Waiting until the end of the Second World War, not easy at all. Having a bank back in 1943 with a world that hasn't come to an end and also the end of the new stage, We've been through changes in the political regime back in 1945, 1964, 1985 and other events. We've also been through inflation, hyperinflation. And regardless of the time volatility, The main defense of the organization was respect for our DNA. The pursuit for professional excellence is a driver that set us apart in different moments.
So that's why highest positions are only taken by people with a lot of capital knowledge and commitment to our values. It was through this path that our corporate culture got stronger from one generation to the next. We already mentioned Unibrad, the corporate university, providing hundreds of courses to our employees. All employees to start working at Bradesco have available to them the means to build their careers. Now if we look deeply into our main characteristic in our DNA, I would say that equal opportunities is there for everyone Who can work on a brilliant career in our organization.
Bradesco's best is our main value reserve, Leveraging a commitment, our productivity. Now in this very accurate picture, Bradesco's DNA As a characteristic, has its social environmental practice. For a long time now, we've been working on several actions, But I'll be limited to the oldest and most far reaching of all, the Bradesco Foundation, established back in 1956 With a purpose to provide free education to low income communities. Today, it owns 40 schools in all Brazilian states, More than 49,000 students. So that's a commitment in terms of social role The food is really salt rich.
I need some water. So here at Bradesco, we have a strong example. At the main entrance of this building In front of us, there is a message displayed with a final statement: Only work can produce wealth. This concept is dear to our hearts. It means trusting and believing our work As an individual driver for growth and also a driver in the corporate and national level, So that was inspired by the legendary Amador Aguirre.
So today in Brazil, we have Xi Jinping. And I'd like to share with you something that I've been doing. I'm reading the man's biography. The recent biography of Xi Jinping, Known as the governance in China, is the size of China. A 1257 pages.
Two books, 10,000,000 copies sold in 27 languages. And there is this chapter that really drew my attention. It drew my attention because it really resonated. The text which supports Working hard turns dreams into reality. So that's a rationale lived by Our DNA in Bradesco throughout our lifetime.
Xi Jinping even adds, Work is virtual, Extravaganz and Hedonism. These are ideas that are part of our DNA as well. Again, if the work is good, values and commitments of a company when they start their job, this can assure the future In terms of success, leadership and activity. So I borrowed some words From this biography, and I do recommend that you take some time during the holiday to read both books. And simply, in 3 days, you have a chance to come to your assumptions.
So these are values and commitments That I really wanted to share with all of you gentlemen. They are preserved by our employees. And once they are acknowledged By the public, as important and necessary, they will be critical to project the company for many generations in the future. So that's what has been happening to our organization. We are part of a tripod: Shareholders, customers, employees, we exist to transform to shareholders the best way The best way to invest and have credit.
We are not a loan institution before providing credit. We have credit from the customer because we have a solid brand and the other part of the tripod employees. We exist to turn this place into the best place to work at. So this is our commitment from all the management, A commitment from the Board, the Executive Committee to make sure we [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Thank you for your attention. So what comes next?
We have a video. Everybody talks about the future, but where exactly does it start? What we know, it is born with an action that reflects a movement and reverberating until it affects everyone. So when does a more egalitarian, efficient, fair planet that is more sustainable, a Time in which banks worldwide would turn their efforts to welfare and development of each person impacted by actions. The answer is right now.
That's why Bradesco is the only Brazilian bank founder of the principles for bank responsibilities at the U. N. With financial institutions worldwide to set responsibilities of the bank sector to build a better future initiatives Targeting welfare and prosperity of our society, building a healthy, sustainable environment With plenty of opportunities for all, an honor for those who invest for 76 years in education, Culture, environment, diversity, financial inclusion and innovation. Bradesco, Founder of Principles for Bank Responsibility at the UN, Building a Better Future.
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:]
Good afternoon, dear friends. Trabocco, thank you for the kind words. I thank the board. But reading a book of 1300 words or pages in a weekend is a little bit too much. Let's try to do something else and at least start reading it.
So welcome, analysts, journalists, shareholders, investors and friends. Thank you so much. I thank the Board, Traboko, our whole executive committee, for being with us today. It's an honor and delight having you all here in our home, A home that came from Mr. Amador Aguilar's dream with a mission to serve and provide return to shareholders and the Bradesco Foundation, more than 100,000 low income children and continued with Mr.
Bradesco, courage, It doesn't matter what it is in the financial heart of Latin America, in In the head office of our wholesale bank, Orpalista Avenue, where we have prime and wealth management and Agora, your investment home or even BAC, our bank in the U. S. Or in each one of our branches and many branches throughout the country of absolutely continental dimensions. Our team Has a unity, just a single purpose, to serve 72,000,000 customers who The challenges behind the new scenario, the new competitive scenario, but we also know very well our strength And competitive advantages we have, possibly the largest distribution strength in Brazil, as you've just seen. With Onorato's presentation, we have a constructive scenario to the whole Brazilian economy.
At first, it is well adjusted, particularly after the pension reform and ready to grow as we have a more consistent turn in investments, the lowest interest rates in our history, sustainable. So we expect to see soon a more consistent reduction in unemployment rates. And companies and households are slightly leveraged. So we believe these are ideal conditions to begin a very significant and long credit cycle in Brazil. To some extent, it is already happening, particularly in individual and personal loan.
And this is expected to benefit the whole country, Contributing to speed up investments and growth. We see Bradesco particularly well positioned For this credit cycle owing to our positioning in Brazil and in all income segments, the market is highly competitive when it comes to banks. Big banks keep on competing for customers and business as usual. Public banks are more rational, And we believe that we'll keep on reducing their share in the absence of subsidized credit. Brazilian Capital Markets In the low interest rate scenario should address demand and credit for investment.
New competitors using new technologies, and they are very competent. If in the past we knew who our competitors were, Today, they come from everywhere, different sectors, new competitors, and we acknowledge the change And we know the size of the challenge ahead. However, we're also aware of our strength in the market, And we're doing a lot of things, a lot of initiatives to transform the bank very soon. In addition, there is a transformation in the way how we work and how we solve problems and how we relate to people. And that's why I'm going to show you next in my presentation How we face our business, our strength, our strategy and how we are putting into practice through key initiatives.
We know these current advantages will not assure our leading position for all. So that's why we work hard to evolve and turn the bank in all its aspects. The most important ones To bring convenience to our customers' lives, bringing great experience and having our people fully engaged in this evolution. This is The reason why digital is so important in our strategy. In digital, We have a full fledged footprint allowing our customers to meet their bank needs.
Daily transactions, investments, insurance and banking. And this is why we simply have to place our bets in AI, Artificial intelligence. We believe our digital footprint gets even stronger with BIA, Bradesco artificial intelligence. BIA used To be in information, and now it's already with transactions, transfer payments. And in the future, in the near future, BIA will also be active in product and service distribution.
We believe that in the future, banking, particularly in retail, We have intensive use of AI. And in this field, we are leaders in the use of development and particularly knowledge. But in addition, people are different depending on the moment of life, and Bradesco tries to be absolutely segmented, providing customers with the expertise required to meet their local needs. We also believe that Proper segmentation is critical to meet the expectations of customers and assure satisfied relations. Customer evolve in our segmentation based on their needs in a very dynamic manner, and they are The reason that we of our bank.
Some of the most important Current projects in the organization pursue to improve our customer performance. Our distribution evolved from product sale To full fledged service to our customers with intensive use of technology and journeys of hiring, Very intuitive and digital. So this is why when we shift our focus From product to a vision on the customer, in addition to improving experience, we believe we also had a positive impact in profitability and sustainability of customers in the long run-in all the relations we want to see. And this can be measured by an increase in NPS, the new model. We check the global profitability of customers and not And in order to change this mindset, to make it happen, we start by changing the way how we work.
We'll reorganize our vice presidencies. We have 4 VPs and departments in order to have the customer as We have a vertical, for instance, Asset Management, Corporate, Foreign Exchange, Institutional, Global Market, Private Banking, Operations. So we are positioned as the main banker of Brazilian companies. We use our balance sheet and our ability to provide top quality services to set deep and engrave relationships with our customers, always providing full solutions. Oftentimes, we operate in less profitable products like corporate loans, for instance.
We know spread is However, we also benefit from the full result and relationship with far more attractive returns. And by placing value on what the customer really needs, in addition to having happy customers, we have higher profitability. Please note that back in 2012, 28% of our customer relation were from commissions and services, now 40 So we don't depend so much on loan and relation increases with services in addition to investments. So we've been successful in growing our The income and investment share. Another vertical, for instance, retail.
And if we consider The whole environment, warranty, cards, digital channels for the sale of products and services, CRM, products and services, consortiums, Bradesco, espresso, redesigning a new retail bank, Customers will migrated partially or fully into digital, and we have important opportunities to change our branch network. We are evolving in the definition of capacity and profitability of the branches, Adjusting our numbers based on revenues generated by customers who use services Only in digital without the branch interference, for instance. This new vision will bring a clear picture Chair of the right size of our network. We have the opportunity to streamline the network, closing less profitable branches, for instance, But mostly reducing the size of other branches, we envisage a future with hubs and satellite Agencies like many branches acting in the influence sphere of this hub branch that will surround all the satellite branches. We see our branches and many branches taking more and more the role of business and relation points With customers and investment consultants.
So this is why in the earnings release, we said that this year, we're going to Ship down more 100 branches and possibly 300 branches in 2020. So that brings A cost reduction close to 30% when we convert a branch or a mini branch into a business point. And not only that, Another process that is ongoing at full speed is digitization of our branches, allowing us to eliminate bureaucracy. So we've been investing in order to have the manager journey and all the processes even more digital. As a concrete result, 40% of processes of credit are no longer paper.
So these measures have allowed us to reduce the back office even more with gains of efficiency and improve
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Customer and manager experience. And speaking of our
managers, what have we done? Focus on mobility. In other words, we can serve people from different ages, different needs everywhere, anytime. And Bradesco Link gave us this power, a corporate mobile phone in the hands of more than 30,000 managers. With tools required to turn a financial terminal, something that you can do in the palm of your hand For loans, investments, so in addition to our partner distribution, We can also work relationship with our managers with an iPad or a mobile phone in the palm of the hand to sell the bank's products and services.
Another important aspect and also true and very successful Or an open bank, a traditional open bank is Bradesco Expresso, which is one of our strengths and competitive advantage. It adds on to our branch network, allowing us to reach out to customers anywhere in Brazil with a very low cost And particularly only with variable costs, 40,000 stations of Bradesco espresso with partners Like bakeries, drugstores, mini markets and Bradesco Expresso accounts for 39% of Bradesco's account openings and 36% of credit card sales and one of the highlights of our footprint. It makes all the difference to our customer. Now we are in a process of digitization of Bradesco espresso, moving away from the former PGV and getting into tablet. So it brings possibility to sell credit and products More efficiently with a pleasant journey to the partner and the end user, and it all driven by An important driving force of business to Bradesco and very close to our footprint, And it allows us to have a relationship with payrolls of SMEs.
And despite the portability that has come to Brazil, we can see that owing to good services and credit operations and credit limits, The bulk of these accounts are active, and we also actively benefit from these purchase opportunities of The rights of services of payroll of the government. Our network of Bradesco Expresso has proved to be a significant competitive advantage visavis our competitors fighting for payrolls. We have very attractive levels of return from these operations, Generating many opportunities and also payroll deductible loan origination. 70% Of public accounts were issued by Bradesco this year, on average return 25%. Lastly, we are the greatest benefit payer of so almost 33% of the total benefits of INSS Come through Bradesco.
And this positioning is owing to our branch network and also And the ATMs. So owing to this business and other business that will definitely Come in the future, as we have the economic upturn, we are very thorough how to adjust our network. Point of service is absolutely key to all of us. And another vertical, our high income bank. There's high income bank, Bradesco Prime, investment, treasury, The economic area and right now, Agora, our investment house.
Let me Tell you more about our investment house. We are fully committed to revolutionize the experience of our High income customers and provided to the market as a unique offer, currently, Our performance in our income is through prime with internal segmentations and also private, segmented based on the volume of funds.
In addition, our investment advice done by bankers, investment experts and investment consultants, Well, we have a strong positioning in all of these segments, offering our clients our own products and third party products through Miro Funds and our Treasury. However, we know that we need to innovate to gain more space and to offer our clients an even better service. It is with this vision in mind that we launched Agora Investimentos, which becomes an open platform at the disposal of all our clients Bradesco checking account holders and non checking account holders. Clients of Bradesco from all segments will be able to operate on Agra with a Simple digital onboarding, settling their operations directly in Bradesco's checking account with the convenience of seeing their Global Bradesco Investments in a Totally Consolidated Way. Agora has a unique positioning in the market.
Our clients already acknowledge this differential. It counts, of course, on the health and reliability of Bradesco with the strength of our relationship. But above all, it counts on the user experience and an open platform With all investment products, this new agro structure is formed by a number of, say, agro, agro educational that deals with training, knowledge, dissemination, leads, agro resources, Agora Investments, Agora CVTM, Agora Cohetura Chesiguros. And well, we modeled completely the Agora platform, and we will continue to evolve it. We have squads focused on promoting constant evolutions in the features in last generation content.
And one of the key points about our new wealth management strategy is the forming of our team of investment experts offering our clients financial advice at the branches. We have 1 expert in each prime branch, at least one expert and one expert in each branch with more than 500 clients, more than 830 investment expert by 2020 that will be that will spend 60 days in training. In addition, our The acquisition of BAC Florida that complements our offering for high income, strengthening our offering of products such as checking account, credit cards, mortgage And investments, Berg Florida and ENGRA will offer what's best in investment products in Brazil and the U. S. Alike, Combined with a complete investment advice in a avant garde digital platform, we make available a unique offering in the market in terms of investment options for our clients.
And the vertical that provides the foundation for everything else, which is our vertical of people, technology and support, Legal, Technology and Innovation and HR. We have a strategy that we consider Broad and bold, divided into 3 pillars. We focus speaking about the first pillar, we focus on one hand on the digital transformation of the traditional bank. We have NEXT as a disruptive strategy playing with even better weapons than our digital competitors. And we believe that we can also capture opportunities in the open banking concept.
The first pillar of our digital strategy It's digital evolution. We want to onboard an incumbent bank all of the benefits and efficiencies of digital bank. One of the fundamental points in the process of transformation of the traditional bank is a complete digitization of all processes. We are moving towards a 100% digital onboarding in all banks' products and services. We want it to be paperless.
Our transactions are becoming multiplatform, allowing for formalization of contracting products in the Digital channel even when the process begins at the branches. Digital transformation has an important access in clients' experience, which evolves strongly in this context together with the change of our commercial focus from product to customer need. A good example of this is on the screen, the result of our digital strategy. Well, with that, we presented significant growth in the origination of credit via digital channels. In individuals, we grew 55% until September and in legal entities, 45%.
Our digital strategy It is complemented by the physical world because clients operate in both channels. With the reduction of Transactional use, we can transform the way in which we present our network of branches to our clients, broadening particularly our Soltiv focus and business generation focus. We're evolving for smaller cashless, mini branches Without back office and consequently, with a lower cost. The 2nd pillar of our digital strategy Is next a native digital bank where we compete with even stronger weapons than our digital competitors? We have a flexible platform, totally digital with a totally different and pleasant experience and journey.
In addition, we offer free of charge service. Next, we'll mean a deep relationship with clients by use of products but also because we'll have alternative revenue streams such as data and business directing to partners working as a hub for all of our clients. We also offer a digital experience that does not charge of fee, but it offers convenience of products for the whole network of ATMs of Bradesco of Entech Ben ATMs. Next has an offering of products and services, which is complete, comprehensive among all Digital Banks. We made available domain banking services to our clients, among them financial planning, credit limit, insurance in the complete portfolio of investments.
Next, we'll be decoupled from Bradesco Institute. And the goal is to bring more autonomy and speed in business management In addition to having more regulatory symmetry with our digital competitors, 8,000 checking accounts opened today and 2,000,000 clients By end of 2019, this is our target, and we'll definitely meet it for next. Finally, our 3rd pillar in our digital strategy, which is to actively work with the open banking concept. Our technology platform is flexible. It's structured with APIs.
It allows us to connect other with other platforms from 3rd parties. And that's why we see open banking as an opportunity to distribute our products and services and even data using all of our technology. Bradesco as a service, for example. We have concrete examples of Actions with the open banking concept in our May platform such as Agoda and Next Networks as a platform plugged to Bradesco APIs. Bradesco has a natural appetite for innovation.
We are in a constant search to facilitate the lives of our clients to be ahead of the competition, always seeking greater efficiency in our operations. We know that technology will continue to change the way in which banks operate as has happened in the last 7 decades, but this will happen even faster. It is with this vision that we constantly invest in innovation. More than BRL 2,000,000,000 invested per year. This led us to a pioneering position in artificial intelligence, what NEXT, with the use of biometrics and other pioneering actions.
We advanced quickly in incorporating several technologies to our day to day, reaping concrete benefits in our origination and quality of credit, and we continue to evolve. We have invested strongly in our analytics with an exponential evolution curve. We have invested in 3 fronts, both in infrastructure, data architecture, People in systematic coordination, leveraging the work among different areas using the agile technology. We have had relevant results in terms of credit granting and adapting our offerings. The next steps will happen with an evolution in the BRAN project and in distribution, our CRM2.0 project.
The BRAN project will bring us data science and analytics, and it will help us In our decision making in real time, the main evolutions will be in broadening the understanding of the client and considering Complex data such as big data and behavioral data on a timely basis to allow us to better decide on credit limits and pricing. CRM 2.0 We'll bring us important evolution in the coordination of distribution in journeys that are mapped And always to put clients' needs even more at the center of our offerings, the integration of Different data sources such as the Salesforce platform, for example, will be an access to improve the process and will contribute to an ongoing evolution in the integration of physical and digital channels, moving towards a totally omnichannel approach. All of that is supported by a broad program of innovations, which is our INNOVA BRA. We invest also to develop a culture which sees innovation as a priority. It was with this concept that we developed the Innovabrara program with its several branches: Habitat, Ventures, FLAP, STRAD UP at Hub.
We believe that this is a successful program with palpable benefits for the culture of our organization. We have a rapid incorporation of the use of the agile methodology into several development processes and search for new solutions that improved clients' experience in our organization. We've had very consistent great results with a strong engagement of these several areas of the organization. In implementation of squads, we have several important examples of deliveries using the agile methodology. All of these processes and evolutions are All of these processes and evolutions are fundamental.
But we never give up on what is the reason to for our organization to exist. That makes everything more tangible, our people. We serve our clients with trained and motivated teams that have career meritocracy as fundamental points. And we are convinced To better serve our clients, we need to take care of our employees. So we try to attract, Develop and retain the best talent with a focus on their career, offering opportunities to those that dedicate themselves and to stand out.
Our teams have a robust training. In addition, through our corporate governance our a corporate university, pardon me, Unibread. We train all of our employees that join us at entry level positions. And also those employees that joined our headcount through merchants and acquisitions and those we hired at the market. And it is true, we never lose sight of our DNA.
Bradesco is a bank that believes in the concept of a career. We defined This concept in the past has a closed career. We also called it internal career, but we just prefer now the concept of a career. We aim to have the best talents and give them direct conditions so that they can progress professionally in the bank, offering them training and the Deal, environment for personal and professional evolution. These talents can be trained internally from the start.
They can join the bank through acquisitions or they can be hired At the market, it does not matter. We follow the market's development, and we create new Job positions for a more digital world. Experts in algorithms, data scientists, anthropologists, Journey Experts, and we train these new professionals with the new skills that the position needs Our requires, we give them the new skills that are necessary. And that's why we look for a headcount of diverse people, People from different backgrounds, different social classes and income brackets and personal traits because we believe that Bradesco is the bank that best represents Brazil. We have a strong footprint everywhere in the country, so we become naturally diverse as is the country.
Gender diversity, women are the majority in our commercial sales for race, racial diversity, age, diversity for generations working together, Reinvention of our labor relations. We are rich in diversity. And just like a career opportunity, education is one of our [SPEAKER UNIDENTIFIED COMPANY
REPRESENTATIVE:]
So I can conclude saying that Bradesco understands and sees the importance of training our team because with that, we'll be prepared to tackle the challenge that we are facing with all of these changes that are happening in the several ways of serving the clients, to retain the clients and meet their needs. We understand, however, that the bank is prepared with the right tools, the right methodologies and with the adequate team so that we can keep up with this success story that Bradesco has had for 76 Sears. Thank you very much for your attention. Everyone has a goal in life, but we all have something in common, uncertainties. We like to place to turn uncertainties into plans.
Yes, traveling plans, plans to get married, to have children. And we take your objectives to achievements, and we do that in one single place at home. AGRA, your home for investment. We're more than a brokerage house. We are a big House, a House with a solid and stable foundation.
We understand each person's objective to offer you What you need, exclusive products to the best independent products to fit different profiles. We have Structured and Sophisticated Opportunities. There are many opportunities out there. Do you have still questions about investments? Don't worry.
I'll explain it to you. All of our investors transform information into good investments because if you are well informed, you can invest a lot better. If you need help to make a decision, there are many ways for that to happen: via phone, WhatsApp, e mail, chat, meetings, events, messaging and investment expert. With that, we're connected to everything that is happening to us. Like we're connected To the Internet, we are 20 fourseven with our doors open on the website and on the app.
I know you always thought that investing in the stock exchange is hard. What can I tell you? Here at Agora, this is very easy. You join at any time, anywhere. You invest locally or internationally.
You talk about our objectives. We'll help you get to them because the we are only sure that here, we have no place for uncertainties. This is us. This is our purpose. This is Agara, your investment home or house.
Good afternoon, ladies and gentlemen, shareholders, analysts, investors, Colleagues and friends of Bradesco Bank and Bradesco Seguros Insurance Company, it is a pleasure To be here to speak a little about our numbers and the strategy of Bradesco Seguros. We operate in all business lines, trying to meet the needs of all clients SoftBank. Our ambition is to be present along the different moments of our clients' lives, offering adequate protection solutions to serve the needs and the expectations of our clients. To speak a little about the insurance group structure, we entered through specialized insurance companies Bradesco VIDA y Pravidencia Life and Pension Bradesco Capitalista Sound Bradesco Sabudio Health, Bradesco Auto and P&C. And we also control the Dental Prep, an open company, a listed company that sells dental plans.
We have a relevant share of Europosist, an important company in our auto insurance and residential insurance. We have a share of Horizon that provides health insurance, connectivity, service providers and MCOs. We have a share in the area of Risks with Swiss Re for Corporate Solutions. It allows the insurance company to continue to offer insurance and specialty lines of great risks for our corporate clients. We have a 16.3% stake at Flow Re and Ebri Brasil Reinsurance.
We also have to mention our shareholder BS in Primpreinte Minto Z Mobile Helios with about 900 properties of the Bradesco organization. Okay. Let's speak a little about the fact that we are part of this huge capillarity of the bank's network branch network. We benefit from this capillarity. We have thousands of brokers present in our branches offering our insurance products.
We I have about 24,000 market and corporate brokers that work with the market. We manage our sales force by 1100 employees in our sales organization distributed In 181 offices, we have 13 corporate subsidiaries, 63 Market 1s, 64 network subsidiaries and many representation offices spread all over the country. Speaking about our product Portfolio and how we divide our distribution. Pension. Pensions, this is done through the branch managers.
But when we look at Auto Property, Casualty, Health and Dental and Life, about 50% is distributed through our network And our network brokers, about onethree by market brokers and approximately 17% by our Corporate Brokers. Let me speak a little about opportunities. This is well known to us. This shows our opportunities in terms of relative underpenetration of Insurance market in Brazil. Even considering the most popular product policy, auto insurance, only about 30% of the fleet is insured.
We have about 13% penetration in dental plans, less than 25% of health plan beneficiaries homeowners insurance about 14%. So this shows overall that we are underpenetrated in terms of Brazil, despite being the 9th economy in the world, we ranked 16th in the ranking of Insurance premiums, and we ranked about 50 in terms of premiums per capita. And we have a vision in terms of how to increase our penetration of insurance. He would like to mention a point that was mentioned by Otavio in our journey to be customer oriented and to transform the organization into 1 organization, which is client oriented and less focused on product distribution. So in our Digital transformation journey at Bradesco Seguros.
We have massively invested in digital transformation. We have introduced our squads. We are operating with about 45 agile sales at Bradesco Seguros as part the digital transformation process, which is a process that involves a shift of mindset, as mentioned. And it involves More training, skill building of our people. It involves an innovation driven culture in all of these aspects.
We had a complete restructuring
of our digital department this year. Our digital department. This year, we grew about 28% our investment in digital. We created From experience, the priority meant to bringing new competencies with user experience, user interface design in addition to our Journey to deepen the use of the agile methodology. I would like to highlight some progress we've made In our self-service in some areas, such as health, we had 38% of our reimbursement is done digital aim.
This is a considerable progress. We started last year. A year ago, less than 10% of reimbursements was done digitally, now more than 38%. About 37% of our auto inspections are done Our vehicle inspections are done digitally. We have 6 products whose sales are done 100% online, we have many, so 6 products and what we call the Mr.
As well. And we've had a considerable evolution. We are investing a lot in this digital transformation journey. Let me just drink a little bit of water. Let's talk about the structure of our companies.
In Health, the main element has been the deepening of our strategy to change shipped with our service providers. This is part of an important change In order to have better cost control, better loss controls, and we want to have a relationship based instead of FIFA service, but which is more outcome based and to control our medical and hospital Here, we have invested a lot in this change by the creation of payment models based on standardized teachers. And by expanding our network of primary care, Amil, Dottore, NovaMed, We have now 3 NovaMeds working. There will be 16 by year end, another 12 in 2012, totaling by end of About 28 Mediterunova Med Clinics, considering full clinics and in company clinics. So we are working to increase our learning regarding the Best outcomes: What are the best protocols and bundles to serve our clients?
We have strongly worked in the health area to create more competitive products with a regional focus. And we want to create customized network of providers so that we can compete regionally very strongly. We have a family of products called Saudi Efetivo. We recently launched Saudi Efetivo in Bahia Sao Paulo, countryside, Recife, Victoria, Minas. We'll be launching it in the city of Manaus next We have a product Saudi Rio, all of these products with a focused on a customized network of providers focused on regional competition.
And I think it's worthwhile mentioning the new list of dental products geared to our checking account holders. Initiatives strategic initiatives for auto and P and C. Here, We see a strong improvement of our results when we changed our pricing models. We have better acceptance. And we saw an increase in conversion in our automobile business.
We created a fleet trading desk that allows us to have much better situation to accept fleet risks. We have been growing this business with Profit. We also have the customized homeowners insurance, which is a product with Flexible coverage that can be adapted to any segment of the of clients of the bank. You can be easily hired for the high income segment, for example. We also had the launch of our new product called Auto Coentista.
Here, We have a product identifying all of the advantages of having our checking account holders on board because these are the clients with the best claims ratio. It is the client with the best relationship with the insurance company. So we have this auto currentista with a focus on increasing conversion and renewal of insurance policies with our checking account holders. And we created the Auto Light product, which is a product with a more effective cost. It is a product that is able to compete with low cost alternatives out there in the market.
We estimate that we have a savings of about 30% in the premium of several of our competitors with the auto light product.
Speaking of pensions and life, we have a new insurance, a new life product, Miuseguru Bradesco, my Bradesco insurance, also with highly flexible coverages, targeting different segments of the bank, Easy to use. So here we're pretty much focused on increasingly evolve in this journey to design customized products, [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Increasingly more customized for different profiles. We also launched our new top club Bradesco. And for pension, we also have a full review of our grid of pension funds. We can say today that within the pension segment, we have our grid of products, the largest In the market, active in multimarket funds.
So we already have this characteristic. And therefore, we have competitive products With the ability to compete with a whole market in different segments of customers, We also go deeper into the integration of pension in the full investment platforms. It's one of the main strategic drivers behind pensions. Now a little bit about our results. In the 1st 9 months Of 2019, Bradesco Insurance with sales of €56,600,000,000 accounting for 24% of the market.
Our insurance company is the leading company in premium in Brazil and Latin America. A total of €200,000,000,000 or nearly €270,000,000,000 in technical provisions or approximately 27% of total provisions in the market. Net worth of 36,700,000,000, shareholders' equity net income 5,500,000,000 ROAE of 23.6 percent and combined ratio of approximately 83%. Last but not least, I would like to underscore And also considering the 1st 9 months of 2019, the total of benefits and indemnification It's a way to depict the return to the society. This is paid to Bradesco Seguros totaling 24,000,000,000 Daily average of BRL126,000,000 paid, including benefits and indemnities.
When we speak of purpose and adequate products to serve our customers, the best example of product category that fits Into this pursuit of adequacy and products that have a purpose to the customer, Insurance is the best fit. If you think about health, EUR 16.4 payments as indemnities and benefits. For life, £5,000,000,000, 600,000 indemnities and pensions paid And vehicle went home, 155,000 claims and BRL2.5 billion, the most amazing figures. If we break down in Health, we can have it tangible. What does it mean?
Nearly 32,000 Babies came to the world in the 1st 9 months of 2019 owing to Bradesco Health. 61,000,000 Exams order 12,000 medical appointments, 6,100. So that's the number of admissions. So you can have very tangible results considering the size of our insurance company. So I thank you all.
Thank you for the opportunity. And now I give the floor to Leandro Miranda, our Executive Director and IRO. Thank you, Vinicius. I guess Mr. Trabuco gave us several examples of Bradesco's DNA.
One of them is simplicity, considering that I'm so thirsty, there are only 2 glasses of water. So break the protocol and drink from the bottle. Okay. So let me tell you more about our major financial performance. I guess the best way to get started is by exploring our NII.
More effectively, it fits in an expansion status. We are increasing the volume and the mix. And this has provided us with a maintenance of the historical levels Before the crisis, around 10.5%. And that's a trend that we believe that owing to the mix and the scale. Now as the economy resumes, we expect it to be maintained.
But most of it, like Otavio also mentioned and explored in his presentation on credit and loans about our loan models and our analytics. We've been evolving a lot in this regard. And despite the growth in our portfolio, we managed to maintain our low ALL. In absolute numbers, it was reduced in the past quarters. As a result, we can grow in our net spread despite The competition and the contraction that we've seen in different lines.
And at the bottom, you can see that more effectively, our financial Our NII is very robust when it comes to customers. For the market, it's not so significant to us. We are a bank of relations. We work in each one of the product lines with our customers, and this is where we really are positioned as an organization. Now what about the shift in the mix of our credit portfolio?
We have a question. Undoubtedly, we have this question in all our meetings with analysts. And this is about how we see the growth of each one of our customer classes. If you have a look at this at the At the center part, you will see that back in 2016 2017, we are already going down in the number Of corporate. And like Otavio said, it is not a segment where we expect to see a lot of substantial growth with credit.
This will happen owing to services and owing to our central relations with a customer. But what we expect to see here, as you can see on the first part of the slide, is continuous growth For personnel or individuals, 31% in 2012 to 38% in the 3rd quarter, Growing more than 19% of the portfolio and expect to keep on growing. That's an amazing segment to all of us, the best margins. So effectively, the spread is fully in line with what we pursue, The most profitable lines and also our ALL is very much controlled owing to our models and the use of algorithms. A second part that we place our bets on with a very robust growth in the coming years has to do with Micro and small sized companies at the bottom of the chart.
Despite the level of 18%, We believe there is plenty of room to recover our historical positioning, which was up to 30% in 2012. Bradesco is the only bank in Brazil that is 100% of the towns. We are the only bank in Brazil serving the whole, all social brackets. As a result, as a resumption of the economy, it is the first segment that is strong. It needs us and we manage to serve Better than anyone else.
As analysts tend to say, Bradesco has an aggressive target for Brazil. Brazil does poorly. Brazil Well, by far, we have the best performance, and it clearly shows our positioning and the belief that there will be an economic upturn in Brazil. Now going deeper into personnel loan, like I said, we're growing around 19%. As you can see, we are growing significantly in each one of our business lines.
Personal loan benefit A lot from the new modeling with the use of algorithms, 36.2% per year and growing Payroll deductible loan like Otavio said visavisourshare in NSS Auctions and public companies, it's growing by 24%. And other lines as well, double digit growth: Vehicles at 21.4 percent, real estate loan. Despite all the squeeze of spread, we are in line And also fully digital, we have 18.9% and credit cards despite the full competition in the market at 12.5%. Credit modeling. Now that's a beautiful slide for us to understand How we've been managing to grow by evolving our credit modeling and also the use of algorithms.
As you can see, Our portfolio has robust growth in all product lines. And our loss of loan, our provisioning It's going down like a paradox. Usually, you're growing in the ALL together with the credit portfolio, Just something we expect to see starting mid-twenty 20. But as we speak, we're doing fine. And this stems from what?
From all the hiring of scientists, all the progress achieved with credit and also the recovery of credit Via Good Collection Strategies. NPL creation, good performance. Some people only focus on the last Picture showing our growth in NPL, but I'd like to invite you to see a deeper analysis. Firstly, individuals, The highest risk segment, our NPL is going down. The segment where we are more profitable, more dilution, Our NPL is going down.
2nd segment that we'll place our bets on micro, small and midsize companies. We're increasing FOLU is one of the best for the future, double digit growth. What about our NPL? Well behaved at 1.4. Large companies, now we have a significant increase of 0.3 to 1.2, but also arise not in the whole segment.
In some cases, it's very specific and they are properly provisions. So we didn't have to work on additional provisions. However, in this segment, sometimes you have more important cases, and they can bring a mass If you fail to look into details of our performance but like I said, our focus is increasingly more strongly And individuals, micro companies, small and midsized companies for credit purposes, so 1.1.3%. But net of that, we would have the NPL fully in line with the latest quarters. What about reduction with ALL expenses?
Look at the cost of credit vis a vis of our portfolio. It's going down. As we speak, we are the only bank in Brazil posting this result for 3 consecutive quarters. In other words, we have increasingly held their vintages. Our vintages owing to the choice and selection of assets, Owing to lower risk in Brazil, our vintages have proved to have less ALL needs.
And when we check our guidance, 11.5 percent, 14.5 percent, 10.5 percent in September, we will be meeting the target very smoothly. Fee income. That's an important item for us to keep an eye on. We have a decreasing order visavis the place of and importance of each one of the business lines. And we can say That despite competition in acquiring, that's a reflex, particularly at Cielo In our lines, regulation of debt interchange and a reduction in asset management rates Owing to the new environment of interest rates in Brazil, so we adjusted several of these lines.
We made Efforts fully concentrated in the Q2 and the difference is beginning to appear in the current quarter. There was sign of improvement both visavisQ3 of 2019 and the Q3 of 2018 And more effectively in the 1st 9 months year on year. As of now, what do we expect to see? Higher volume of trading as the economy Covers a comparison base adjusted because we will not have such a depressing scenario for interest rates. So our products and services are very well priced and a change in the mix of investment funds.
At the end of the day, Our asset management company, ABRA, will recover growth and go back to its natural position after a new adjustment to the fee income and administration fees. What about insurance? Vinicius explore this a lot. We can see that all lines are growing, but I'd like to draw your attention To two lines. First, Health.
In Health, we have the best health care Plan for corporations in Brazil. Bradesco Insurance is a corporate plan that companies use to attract And retain talents. And in moments of crisis, they can be replaced. But in moments of economic upturn, as we've seen right now, it naturally grows. So in addition to having adjusted The operational aspects of suppliers in the health arena, now we have a great outlook when it comes to the economic upturn.
And then P and Our ROE greater than 20%. This year, we are at 26.3%, and we're confident that we'll remain as such. Bradesco is a very organized and very well balanced group. Onethree of our revenues come from fees, onethree from spreads And onethree from services. On the other hand, we can also understand that onethree comes from retail, onethree from wholesale and onethree for health insurance.
So the insurance branch is balanced, and that's a strength for us. Operating expenses. Once we reposition our machinery, particularly for Individuals, many companies, SMEs and adjusted the service area owing to the change in interest rates, This turns out to be our strongest focus. But most importantly, we have to understand what happened this year. First of all, we created 2 very significant lines.
One part Of the program for extraordinary performance, now we are compensating more than 30,000 managers with variable income. We can see that in several regions, depending on the claim, we can also reach substantial savings With our labor claims, and that's what we did. It was not part of our track record. So when analysts make comparisons, they don't find a previous Comparison, but in the future, this is expected to be crystal clear. So as of now, we'll be Focusing more and more and the reduction of branches like Octavio mentioned, shifting satellites into hubs.
And now with the point of sale, we reduced approximately 3.5% of our workforce. And we have digitization of branches, processes, which also support us in terms of costs. For investors and analysts in this room, we are focusing on cost expenses. So this is our priority, cutting down on costs. So converting this into numbers, we have closed 50 branches this year.
We have another 100 to shut down by December, totaling 150 For 2020, the number will be higher than 300. Our voluntary severance program with 3,500 employees or 3.5 percent of our headcount, savings not only now but also for the coming years. Labor expenses for the moment we created this new line, this new practice. For the future, it is expected to be maintained at the current And lastly, something that we also did this year and we intend to keep on doing in the future proved to be highly profitable for us Is negotiation with big suppliers. We can assure minimum values, extending terms and therefore generating substantial savings.
Our results, as you can see, concerning everything we've shown so far From our operations and also net income, more effectively things are growing and are expected to keep on growing. And Also sustainable returns at 21% ROE. So it's worth mentioning something. The ROE in September was 20.2%. However, if we consider Extraordinary dividends that we paid out at BRL8 1,000,000,000 in October, This would be equivalent to ROE of 21.5% for the fiscal year, and it helps as a capital base for next year.
We have a strong organic capital generation, 14.7 Tier 1 in September. Now if you work on the numbers, pro form a, Extraordinary dividends paid out BRL8 1,000,000,000 and reallocation of funds from the insurance group, then we have BRL14.1 billion. In addition, we have accumulated income and we also have even other proceeds. So at the end of the day, we are confident that we keep on having robust capital to benefit from business opportunities that we envisage in our economic scenario. Our dividend payout is very robust, around 35%.
And it would be close to 80%. But if you consider by year end based on the numbers and the market agreement because I cannot talk about future numbers, the market consensus This is that we would have 70% of our results as dividend payout. Now something that we really like to show and to talk about stakeholders, Mr. Trabuco said before, Here we have a vision not only for shareholders but also for employees and also the society at large. Here we can see that if you consider compensation and salaries, we distributed 29%.
And if we consider reinvestment Of income with what we effectively paid as interest on capital and dividends, we'll be paying out 38% Out of the BRL 49,600,000,000
part of it will be
at the company, 26.6 percent because it's A better capital use and the remaining share will be as dividend payout. And for the society at large Via tax, 30 percent of nearly BRL50 1,000,000,000. So just to conclude my talk And to invite some of the speakers to join us upstate so we can start the Q and A session, I would like just to address the outlook for 2020. First of all, like Fernando said in the beginning, We are fully convinced about an economic upturn. We don't believe there will be a rally.
We don't believe there will be a sudden boost Because that would be harmful generating inflation, but we believe in step by step growth, healthy growth and also A kind of growth that help us keep inflation rates under control. So we can see the benefit of a strong credit growth cycle. ALL will be under control. The risk environment will be very low in Brazil. There is still significant room to leverage Individuals, households and companies.
Our market positioning, we consider to be fierce competition. But through our DNA and our strategic positioning, we can see that we are ready to face it. A reduction in public bank market share From the moment, they will not have subsidized funds. And naturally, private banks will have a historical market share. We can see a reduction in the positioning of public banks and constant focus on customer journey in all business.
Like Otavio said, we are here effectively positioned having the customer at the core of Four actions. And lastly, plenty of opportunities via branches, routes of digitization processes And opportunities for cost reduction in our ALL. So thank you very much for being with us today. And now I'll invite some of our speakers to join us upstage for the Q and A. So I invite Mr.
Trabuco, Mr. Ozari to be at the center of the stage.
[SPEAKER UNIDENTIFIED COMPANY
REPRESENTATIVE:] So you'll be with us, right? So please, next to Andrea Kurnau, and I'll be sitting next to Feretti, and we'll all be ready to take your questions. Good afternoon, everyone. We are starting now the Q and A session. We'll take questions From the web and also via WhatsApp, on the screen, we are going to show you our number.
So if you want to ask questions, The first question is about the launch of the new investment platform, Agora, Agora Investment House. The question is, could you give us more color About how the platform will work into practice. What does it mean with regards to Bradesco's strategy? And also a question from a customer wanting to better understand the migration between Agora and Bradesco. Thank you for your question.
Truly, Agora today is the news of the day. More effectively, what we wanted to do Was to design a single route to the market, an alternative that is not only A brokerage housed from big banks but that are equally valued owing to institutions, legal, Compliance, reputation. And we didn't want to have an individual independent brokerage house. We want to have a user experience, but we also need robustness. Sometimes, we see also self agencies, but Agoda is unique.
It turns out to be our platform for individuals with the best from both worlds. Agora is a digital platform that is state of the art. Agora has an open platform to all products and services, financial services and Agoda counts on the robustness of Bradesco Bradesco Cirrus approach. And it's deeply ingrained in the checking account system of Bradesco. So with all together, we have the best from both worlds.
A checking account holder at Bradesco won't have to anticipate funds as it typically happens with an independent brokerage house. There can be a debit in the checking account on the last day when there is the settlement of the investments. 2nd point about migration, it already happened. It is happening in waves. As of now, if you're an account holder at Bradesco Cohetora, you have a service Plus.
So what does that mean, the Plus service? The same functionalities served by the same people but now with more products, more services and more technological functionality. So that's what we designed. That's a new animal That will be competing with the independent world, the bank world, but a brokerage house that is 100% Bradesco Group. There is another question.
This one is about next
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] And I'll pull questions.
A couple of other questions about competition in digital Why did Bradesco decide to create Nxt rather than simply Converting the traditional bank operation. And also another question about the benefits of splitting NEXT from Bradesco. And along the same lines, another question about How we see the competition environment about digital banks and fintechs. First question? In reality, we did not abandon the traditional bank or known as bank.
Quite the opposite, All functionalities, all improvements, all new discoveries, all the journeys and the efficiency that we implement in next All that we find out in next is embedded in the traditional bank, so to speak. So there is a specific NEX journey with dedicated exclusive NEX teams and also teams dedicated to the bank so that The whole incumbent bank journey is as good as or even greater than next. So that's the first point. The traditional bank is as digital as our digital bank in its own home right or Nxt. So in NEXT, we have an expectation in the Q1 of 2020 to decouple so we can have its own life And so it can have its own balance sheet, its P and L with proper evaluation of the bank Because it runs in a different market or a different competition.
And I believe the digital banks in the market, All of them have their own competences and advantages, which but I simply have to mention NEX. NEX has to be seen as one of the greatest digital banks in the market. Well, this is not my comparison, but an expert company work on this of several different banks side by side, NEX provides more products and services. It's not by chance that NPS was 76. So there was an increase.
And in this item, we're only second to new bank, which is 84,000,000 if I'm not mistaken. So I think we're very well positioned With a digital bank that is in a bancard without forgetting everything that we're up to do with the incumbent Mauricio, any comments?
Very well. There's another question about Bradesco espresso. It was highlighted. Bradesco Expresso. And I would like to know more about the importance of this channel for Bradesco's operation.
And what else can be done with this channel? Bradesco espresso was born at the time that we had a Postal Bank. And we ended up losing the Postal Bank, so we decided to grow our branch network. And before anyone started talking about Open Banking, we started doing Open Banking, perhaps in our own way, but it became very successful. We signed partnerships with many Supermarkets, little grocery stores, drugstores, bakeries with a number of clients.
We put our systems on the premises of these partners, so it's linked with Bradesco. And these partners, well, You go to the supermarket or to the drugstore and you can pay your electricity, water bill. You can pay a payment slip. You can withdraw money, Get your government pension. And if you're a client, you can even sign up for a payroll deductible loan.
But This was done in the POS in the COVID terminal. Now we're implementing at Bradesco Express with iPad. So the offering of products and services to serve our clients will become even better. 40,000 points of service all of Brazil, in many locations where the community does not have adequate banking services. So the retirees, for example, can be served by Bradesco Xpresso.
And these partners of ours are remunerated with variable pay. The more checking accounts they open. The more Visa products and services or grant alone, they are remunerated for their performance. So I think that for this country and hopefully, the country will start a growing journey having this kind of Distribution network with 40,000 operators. We could even call them managers, serving the clients, doing deals for the bank and being remunerated for that.
We can only say that this is a significant competitive edge for the bank. There is another question about mortgages. How does Bradesco See the segment in this new landscape of low interest rates. How to make a more long From funding available. And more specifically, how does Bradesco see the IPCA Pact Funding, if you for mortgages.
Well, let me remind you, IBCIP Times to answer this question. Well, when I was President of ABCIP, back in the past, I was fortunate. We were leaving 1 of the best real estate credit in Brazil the best time for real estate credit in Brazil. There were a lot of problems abroad, but we didn't have such a terrible problem here back in 2,008. But mortgages are strategic not just for the bank but for the economy of the country because it creates a lot of jobs.
It's all we need. It's no use thinking that we are going to be able to train this mass of 28,000,000 unemployed And give them new skills to find other new jobs in other companies. This is not going to happen. We need to create jobs in civil construction. We have to generate income for these people, and they'll continue working in civil construction.
Perhaps the next generations will have different skills, but we have to create jobs for These people that have low skills, and these are the 14,000,000 unemployed plus 14,000,000, €15,000,000 unemployed in other areas. And civil construction is a fast response to create jobs because you strip building, erecting a building, You have to hire 100 to 300 employees for the construction site. And that will take Our building to be erected takes 3 to 5 years to be erected. So mortgages are a great bet. Firstly, it doesn't show in the statistics.
When somebody does not have their own home, most likely, they pay rent. Rent is not included In the household debt, but the moment that they sign a mortgage, that's when it starts showing. And this is great because indebtedness Our families is very limited considering mortgages. And delinquency is very low, by the way. It is not by chance that all banks have an underscore.
All banks are focused on that project. If you get the top 3, I'm going to exclude Bradesco, I'm going to exclude Banco Brasil and Carja. But all the other 3, Itau, Bradesco and Santander Investing more than €1,000,000,000 in mortgages. What is the average number of products per client? 2.8, 3.2.
Real Estate clients, 7.2 clients 7.2 products, I mean. So they become very loyal because Brazilians, They like to well, they have a passionate relationship with their own home. Having my own home was always my dream. So this is a business line that we are going to continue to invest very strongly in. We have strongly adjusted our mortgage product.
We were the 1st bank reducing interest rates to 7.3%, right? 7.3%. And then Caixa followed, reducing interest rates to 6% around 6%, but they are different. So this is a serious bet for us. We are very focused on mortgages.
We have a couple of questions here regarding costs. Considering the expectations to reduce the branch network, What is the expectation in terms of costs for next year and for coming years? Can we grow our costs below inflation? How do you see this?
[SPEAKER UNIDENTIFIED
COMPANY REPRESENTATIVE:] Would you like to speak about this? This is a target for us, right? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] I can speak about that. Well, this year, we had Costs increasing a little more than we expected initially. And this was done because of a number of projects that do bring a counterpart in terms of commercial results.
But we are very much aware that now in 2020, we have to be very disciplined Regarding our costs, we will be, in a way, benefited by this program of voluntary severance. And like I said, it reached 3,500 employees. In kind of the same amount that we had in the prior program in terms of percentage of employees that were eligible in that joint the program of voluntary severance. And this should bring savings in terms of personnel for next year. In addition, we are working strongly on other points.
We want to reduce the number of branches, And this should bring a more rational use of our resources and costs under control. We always have to remember that closing branches does not mean missing or losing business because we'll Close some branches, which will take this account to other branches or we can turn our branch into a settle wide branch, a midi branch, as Watabe mentioned in his presentation. So this will bring about a cost reduction without impacting new in our results. And also, we are calling on all of the areas of the bank to review their Process is to use technology as much as possible. In other words, all departments are seeking to have a cost reduction.
Our expectation is not only for next year, but for the coming years to continue to grow our Spences below inflation, which is something that we managed to have last year with a lot of discipline here at the bank. I think the challenge for the banking industry, not only in Brazil but everywhere in the world and in particular Brazil, is reducing relative operating cost. It's not an absolute cost, but it is about reducing the cost to serve Vis a vis the business volumes that we can have, we have to pursue an operating efficiency index, which is based on 2 variables: reducing costs, which depends on being clever, being resilient, having determination and increasing revenues, which depends on talent. These two variables will give us the right conditions to have the next Call here is in very good shape because as the charts showed, the reduction of the presence of the state On banking, we'll open some space for private banks. And so with the same cost, which is not the case, But with reduced cost, our businesses can expand.
In addition to that, We have a portfolio of products that is profitable as the economy rallies. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Well, we have one question to Trabuco, which is: Considering everything that is happening in the world in terms of competition and digital transformation, in the bank's Strategic decisions. How do you see and how do you discuss evolution in the next 5 years in terms of [SPEAKER
UNIDENTIFIED COMPANY REPRESENTATIVE:] Opportunities and potential changes in the way the bank operates.
Well, I think Otavio was very clear in his presentation. He talked about all of the efforts the bank is making to be in the avant garde and to be the 1st palleton of digital transformation. Of course, in this admirable new world, which is not that new, with so many shifts In the paradigms for banking, for transportation, medicine, The whole society is shifting given the progress of digital in people's lives. And so, [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:]
Of course, banks do face
challenges given all that. Of course, I would not be able to predict what's going to happen in 5 years, but [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] In our time line well, actually, in the time line, the banks will continue to exist but in a totally different way. That transactional bank will happen more remotely, more independent of a physical presence. On the other hand, being close to clients, It doesn't matter whether it is by boat or using our branch network or using Bradesco, Expresso or digital Channels, well, that is what matters to be close to clients, and that's why Our financial intermediation has to be profitable, and we're optimistic about that. And we hear a lot of people Internationally, financial intermediation will continue to exist.
There will always be people offering money and another group of people borrowing money. The question is to have the adequate cost for the new reality. This is the material question, to have adequate cost when serving our clients in this whole new world. You mentioned in the presentation CRM 2.0 and BRAM projects. Could you give us more color on these two projects?
And what is the impact on the bank's operations. We'll have an opportunity to Talked to some of you before we began, but CRM 2.0 and BRAN are 2 revolutionary projects. They bring credit granting decision and loan offering and loan pricing Online real time for clients such as your brand and then CRM 2.0 will Have the best offering at the right timing for the right client on the right channel. So it's joining these two worlds so that we can serve the client in the best Way possible with the best channel with the right offering. And already giving them an answer, when it's a negative answer, If there is an alternative answer that will meet the clients' need, we would use that channel.
So it's a omnichannel approach. All of the channels should be fully integrated so that clients can continue their journey coming in through one channel, going out through another. We want to integrate these offerings so we can be more assertive in credit granting, to make decisions more accurately, to deny it In the better way to approve it, in the better way with the best pricing at the right time of the year, post adequate offering. And let me add, I think this is worth detailing. Well, CRM traditionally allows us to capture a number of data to make decision on loans, But it is incredible the amount of information that we have at the bank and that we didn't fully put to use.
CRM 2.0 is exactly this ability to capture data from all departments of the bank. 25% of the Brazilian GDP goes through Bradesco's collection portfolio. And this kind of data that needs to be captured. So credit card purchases of our clients in at the different merchants, we can use that data. We put together a team now with 80 data scientists to focus just on that.
And when we talk about brand, well, it will give us ability to make decisions online. So we used to Gain a client, we would understand the client, give them a loan limit. But now This is happening online through Omnichannel. We have like a work desk where all of our data scientists, analysts, the product expert, the pricing expert. They're all sitting at that same desk working together and running offerings to our clients.
And once we have an offering being accepted, We try a more bold and daring offering, and we'll compare and see which one is giving us the best results. If that challenging, daring offering is generating more businesses. It will become the primary offering, and the new challenging offering will come up. So we can test it. So it is this kind of wisdom, the ability to join teams with different team members, with different skills, competencies and wisdoms so that we can get to the clients if they use BDM or if they use the mobile phone more or the ADMs.
So we have to serve them with the right channel. But these clients, If they don't use the bank mobile phone during the day, only at night, that's when we have to send them that offering in the evening. So we have to understand the client, their moment in life and the way in which they prefer to relate to the bank. And that's where we derive advantages of such powerful tools such as CRM2.0 and BRAM. Next question.
I think it's a question to Leandro. The reformulation of AGRRA involves an important platform reformulation. What is the appetite of the bank to have a broad opening of the funds platform with 3rd party funds to be offered to Bradesco's client base. Even in the segment below prime, In addition, there's a question about back the strategy, if it's possible to expect the bank to offer checking accounts for Prime and Agra clients abroad.
Like we said before, Agra intends to be an open platform. That's the new demand from individuals in Brazil. And open platforms have to begin with the best products in the house. Bram Stands out year on year, being awarded in many cases from its funds. So all the categories It highlights in all categories, and it's a flagship.
And at Brown, we're also going to have all the funds available in the market. At first, via curatorship, the funds that we consider to be adequate to our customers. But Even those that we wouldn't recommend passively because we are a brokerage house and we need to serve our customers, Well, if they need other funds, we have to pursue them. That's a strategy of an open platform just as we have in Agora. As for the connection between Agora and Bak, we have to set 2 things apart.
First, Bak is a bank, a commercial bank in Florida. And it's critical to the strategy of high income, be it In private or prime? So you're speaking of high income. So you have to Supply to Brazilian customers, the possibility of open an account overseas and having a credit card in the U. S.
You can even go for Apple Stores and iTunes, you have to pay IOF. So Bak is the greatest Real estate funder in Florida for foreigners, but Bak has BFI. BFI is A securities brokerage firm, and we want the U. S. To approve of the transaction.
So we want to connect it to Agora. It's going to have The symbol of Agro Labs, we're going to think about the name. And the idea is to give Brazilian customers So we wish we could pass them on to our customers. And that's a point of uniqueness These are the brokerage houses in Brazil today. Just adding to the comment And precisely answering your question, once we have the suitability of the customer, if he has the whole Right profile and he wants to have the product.
It's up to him. If he is cognizant of the product he is buying, Agora is going to distribute the Agora. It's the purpose. So we're going to meet the needs of our Customers through open platform. As for Bakkt, the idea is that customers, whoever they are, Open an account in the U.
S. If they want to do it and have access via mobile checking the statement, The transactions respecting naturally all the rules of sending funds abroad. But just as he checks Bradesco's account in Brazil, he should be able to do the same in BAG American Company in Florida, U. S. Good afternoon.
Good afternoon, everyone. Just want to add something to what Leandro and the CEO said, specifically about customers. So we are a very happy day With the launch of Agora that really takes the individual part of Bradesco Cohetura. And Bradesco follows its specific DNA in global markets and institutions, but that's a brokerage house to the market With clear missions to pursue and go for a big number of customers in the market and mostly Bradesco customers. Bradesco customers through mobility, accessibility and customer mobility, in fact, knowledge, profile and having access to all open platform for products in order to be served, Like Otavio said, pretty much based on suitability.
A customer that can buy any third party product All the products offered in Agora platform, once suitable, he can definitely go for it. So that's the DNA for Agora, An investment house with an outrage for all targets and investors. Bradesco Customers that are account holders at the bank or not, in addition to investors from other audiences as well and from the competition, so we can have a larger market share. So we can have a larger market share. Just wanted to add this comment.
Now we have another question about the strategy of Payments with QR code. The Central Bank has been discussing instant payment system and QR code applies very well. We don't know exactly what the Central Bank is going to decide. They say it will be their own platform, and they're going to be with a clearing. So we need to set up the whole structure at the Central Bank, the technological aspects, 20 fourseven payments Without having any cost additional cost to customers, it all involves a time frame.
I don't know if The Central Bank can deliver that to 2020. Anyway, Bradesco will be ready To launch the payments with QR code, be it with a central bank or our in house Bradesco is working on it. There is another question. How will Bradesco assess The performance or customer satisfaction actually. And what about specific actions to improve the level of satisfaction?
We have very stringent follow-up Our customer satisfaction rates, we conduct surveys every year In all segments, all customer segments many times over the year, and we watch very closely our NPS In each one of the several segments. And sometimes offenders, for instance, when NPS can be improved points of improvement. So we discuss this very broadly. We even have an executive committee dedicated to that, the quality committee And Service Committee. So that's a critical topic to us, and we're constantly keeping an eye on it.
Satisfaction boils down to quality, and that's a never ending thing, a Constant point of improvement moment by moment. The final aspiration of a satisfaction process is Satisfaction guaranteed or having your money back. Now a question on dividends. In terms of proceeds policy, Bradesco pointed significant signs for extraordinary dividends. What Should we expect to see down the road how does the bank consider to be the ideal level of capital for the operation?
We have adequate good level of capital, and these are discussions that take place in a timely manner. Now we have a question about the use of data. What are the tangible benefits behind The intensive use and availability of data in Bradesco, how does it happen with credit origination and maintenance of good quality of credit? We created the data management department 2 years ago, and ever since then, We hit a lot of targets. They include the use of our collection base.
We have the greatest collection base in the market with over 30% share. It's very rich. We have information on customers who are Paying, receiving, where the money is going, a number of information. And we can download work on the database And user modeling put into production, just to mention a single benefit, our average income in the ABRA Income which is inferred at Bradesco and are active in all segments from Class A to E. That's very critical in the credit decision making process.
It increased average income by 41% compared to the master file. So it brought progress to credit. Credit assignment is more assertive, effective, once again, approving more, approving better And also denying credit better. So that's an example. I mentioned the credit process, but we also had several benefits From statistics to understand the public, the audience with a legal claim, for instance, Human Resources, Investments.
So this area was involved throughout the organization, putting a modeling throughout the bank in areas where information was not used. They didn't use statistics. And now as if we had a letter, different areas in different steps of maturity. So the purpose of the area was to make one driver push everything upwards. So some people could migrate the steps into other steps, and that's precisely what's happening at the bank right now.
Some areas didn't use and are using now. Others have a more sophisticated use. And now we're moving the latter upwards And also with different areas. There are two questions on insurance, and I'll pull the questions. First question, well, should we give more color about competition in insurance, particularly for insured tax?
The other question, Bradesco has a full portfolio of Insurance in several lines. Why do you consider this to be the best strategy? Good afternoon. Companies really getting into the insurance chain. Insurance involves several links Like acceptance, loss ratio regulation.
So there are many different innovations in these Links and these innovations tend to be very beneficial. They bring opportunities to have More efficient and fluid processes. One of them is disruption. The concept of insurance at InsurTech It's something that we haven't seen yet. We're keeping an eye on everything that is happening in terms of distribution, innovation, products.
[SPEAKER
UNIDENTIFIED COMPANY REPRESENTATIVE:] Well, the thing is
that to date, we've been seeing insurtech innovation as a very favorable scenario. The majority of these companies, they are great levers and drivers of our processes when it comes to efficiency and quality and relations The second question about the reason why we have this vision. First of all, we are in the insurance business in the long run. We are not here just placing our bets in the short run. And we know how resiliency in the market is associated to grabbing opportunities in different lines of business.
So we firmly believe that the future is more multiline rather than a monolithic future. If we believe that customers will actually come to the center of our attentions and brokers' attentions in all channels, The broker and ourselves will have to grow more and more in terms of risk consultants. A customer doesn't buy an auto insurance, but during a certain time in life, he might need a life insurance or pension insurance Or be in need of asset insurance. So we have to understand customers, and we believe that having A full multiline offer is critical. And secondly, because we are in this context of the organization, We want actually to serve all our segments of customers.
And thirdly, because we have a full fledged bank, The corporate bank companies and that's necessary. They need to buy And it's great that we have all these products to sell. And fourthly, in all our lines, they're all given returns higher than the capital invested. So the return on equity is even greater than the banks. So we're confident these are winning strategies.
Octavio, Vinicius, well, this Question is always asked. And if we consider the importance of insurance in Bradesco, it always involves a time line. Bradesco has been against the grain. They tend to say that banks didn't need an insurance But we've been claiming for decades that insurance is a good business and that's why we have an insurance company. However, there is an actuarial technical reason.
For life insurance, we have the risk of death. When I work on pension funds, we have the risk of survival. So these are opposite, opposing risks. From the actuarial viewpoint, they bring a balance. Just as customers are healthy, they can have the dental health.
By the way, help starts from the mouth. So if I don't treat people's teeth well, they can have other diseases Like a poorly treated cavity can be transformed into a heart disease because of the infection. I'll spare you from my poor advertising manners. Anyway, This wholeness of the insurance world, I think Bradesco was against the grain when it comes To specialize insurance companies and multiline insurance companies, the bank runs financial risks. Insurance risks also have the actuarial risk and actuarials like big numbers.
So that's the vision, so to speak, Well, our time is up. We would like to thank you very much for joining us Today, thank you for your questions. And questions that were not answered, our question by Feretti is going To provide you with answers, we tend to ask all the questions. And in order to close the meeting, I'd like to give the floor to Vinicius So he can deliver the take home message. Thank you, Vinicius.
I would like to thank Bradesco and the early remarks from Trabuco visavis Abamec and APIMAC. A lot was spoken about the bank's DNA. And Ricardo Tadell, APIMAC President, said that Bradesco's DNA is mixed with APIMAC, Abamec's
DNA.
Well, we will be turning 50 next year. Our association was incepted in Rio. Bradesco was born in Marira. Next year, we'll turn 50. So we're so happy to renew this partnership with another joint meeting, Bradesco Day at Mac, a public meeting That gives us the chance to exchange ideas and better know the bank.
Congratulations on the opportunities. And right now, I'd like to invite Ricardo Tadeo to give the platinum 20 year Of ongoing meetings with the diligence CEO and APIMAG through the public meetings. Ricardo, over
to you. Well,
hello again. I would like to thank you for joining us today. I hope we were able to clarify some questions you had. I think that In the past, we've had crisis. We always say that Bradesco was not just a survivor.
We were winners in this process of stabilization that we had in the last 20 years. In order to face the new models and the new challenges that are arising, particularly regarding the digital world, we assure That we are moving in the right direction. We are not moving as a cruise. We are moving as a destroyer Fast with agility so that we can implement all of the necessary improvements for our bank. We're very confident regarding our results.
Our VPs, I think, give you a clear idea of to what extent the bank is well aligned. All of the executives are very much on the same page regarding what we need to do. So we have no doubt about our success. We just don't know how successful we'll be, but we know we are going to be successful. Thank you very much for joining us today.
And we remain available. Our VPs are here, Feretti and Leandro. And Everyone is available to you. If you have questions, if you need further clarification, you can call me as well. It is a great pleasure always to speak with you.
Thank you very much, and I hope we have a great year ahead of us.