Good morning, ladies and gentlemen, and thank you for waiting. We'd like to welcome everyone to Banco Bradesco's First Quarter 2018 Earnings Results Conference Call. This call is being broadcasted simultaneously through the Internet in the website, BancoDoc BradescoIR. In the address, you can also find the presentation available for download. We inform that all participants will be Conference Call.
Instructions will be given. Q1. Before proceeding, let me mention that forward looking statements are based on the beliefs and assumptions of Banco Bradesco's management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Banco Bradesco and could cause results to differ materially from those press in such forward looking statements.
Now I'll turn the conference over to Mr. Carlos Firetti, Marcos' Market Relations Director. You may proceed.
Welcome to our conference call for the discussion of our Q1 results of 2018. Conference call. We have today taking the call with us, our Executive Vice President, Andre Acano Our Executive Managing Director and Investor Relations Officer, Leoniez Pabarina Our Executive Managing Director, Moacir Nasbar, Jr. Vinicius Albernaz, and the CEO of Bradesco Sebulius. So now I turn the presentation to Denise.
Hi, everyone. Thank you again for joining our conference call. I'll start with the main highlights in Slide number 2. We have net earnings of BRL 5.1 billion, an increase of 9.8% year on year 24.9 percent quarter on quarter, representing a return on equity of 18.6 20.6%. Our operating income grew 16.5% quarter on quarter.
As you know, We also adjusted our debt origination model and collection purposes. The impact of these adjustments have been captured Fiscal Year 2018. And our results finished this improvement. The good trend in credit quality and cost of risk delinquency, bringing the overall delinquency ratio down 0.3 basis points. This led to a new reduction of cost of risk, which dropped, as you can see, 20% in the quarter.
We understand that for the year, Cost of risk may be around the bottom of our guidance and this of course has to be confirmed, but that's our expectation. Operating expenses showed a reduction of 0.4% year on year as a consequence of our tight cost control And the adjustments made last year, which more than offset the inflation and the collective salary adjustment that we have in the Q2. Going through the loan book, it grew 6.4% year on year in retail, While the total extended growth was fully shrunk 3.2%, mainly driven by the contraction in the corporate segment, This has to do with the letters of credit and also the ventures, which is Castel Americas is already in bond, of course. There are good opportunities for the company those days. The corporate portfolio trends should revert We have, of course, waiting for the more clear scenario, As anticipated, the average loan volume contraction and some reduction in margin was pressured in our net earnings I'm sorry, our net interest income, which reduced 2.6% year on year.
We continue that The change in mix should help us to offset part of the impact, not totally but part of the effect. In the VoIP Insurance business, We had a reduction in premiums this quarter. And we have to say that the production of insurance premiums varies during the year, not 2019, the same quarter by quarter. Therefore, this performance doesn't change our expectations for the full year. We expect the contribution to our results in the coming quarter as we see already signs of improvement in the health insurance Going to the end, I would like to To keep our cost control very tight, we will continue to do that.
Adjustment will continue, but now not gradually because As I said, I just received our cadence adjustments. We're done during next year and basically are concluded. We have Just a few things to do here. NDDO, we expect to clone or convert to point of service with nearly 200 branches. This is a way to queue up and our clients to listen to comments.
The other thing we want to do is to deepen our segmentation strategy, Especially in the High Income segment, we reached the initiatives implemented in 2017 related to Wealth Management and Financial Advisory. Already shown meaningful results here, We have established a new platform that is providing advisory to our clients and we see very good results of this. Other thing very important for us is the focus on innovation, innovation of processes, innovation of products and sales channels, Improving the amount of credit products available to digital channels and reducing the paperwork, Not only credit, but also the other financial products that we can sell. We sold 500,000 products of our insurance last year in Brazil. Additionally, we will continue leveraging our improved CRM.
We have a Tier 1Q, through more agile processes. In conclusion, we understand that our strategy results show that we are in the right direction The quality of the new loans that we are considering are much better. We have improved
We expect to amortize for full year 2018 BRL 2,000,000,000. On Slide 4, We have our recurring income statement. Basically, a few observations here. 2019. First, we regroup our provisions expenses or allowance for loan losses, Moving down the impairment from the margin as on the accounting terms, it is The way it should be to a minor zero adjustment on the provision expenses and also break down the former net provision expenses in its 3 components.
So basically, these 3 first lines are composed in net provision expenses. So Expanded our own for own losses has a quite good performance as already pointed by Denizi reaching BRL 3.9 BRL 1,000,000,000 in the Q1. We understand this level is closer to what we call a normalized level for the time being. We think over time, over the year, it should continue evolving Positively, we think, but It's more normalized level comparing to the 4th quarter where we had some extraordinary impact. We also had a quite important reduction on the impairment itself, reaching BRL 255 1,000,000.
We believe this level is also closer to what we could see As a reference for the year could be a little bit down, but we're not going to see, Again, the same levels we had at the end of last year, unless we have something extraordinary happening. Basically, this put the The provision for expenses close to the bottom of our guidance that is a reference we have been Same is probably a good level for the year. In terms of insurance, the insurance the income from insurance 2019. That you see in the P and L had a reduction this year this quarter, Mostly related to lower premium growth or reduction in premiums in the Q1 compared to the Q4 seasonal reduction, but on year year on year Also, we had a revision of the present value of our liability with a reduction in the discount rate applied for this calculation. So that also caused an expense this quarter that is responsible for most of this variation this quarter.
Our tax rate In the first Q, it was 32.4%. We believe our guidance or segmentation for the full year between 28% 30% continues as good reference. We'll be We believe we're going to be in that range. Slide number 5, we have the evolution of our net income. 9.8% growth year on year for the quarter.
On Slide 6, Our net interest income, our the earning portion of our net interest income dropped 2.6% in the quarter year on year. This is consistent with our guidance, 2019. The middle of the guidance. The main driver for this reduction is the credit intermediation that reduced 8.5%, mostly due to volumes, but also some reduction in the credit margin. Insurance did well, as we have been saying since the end of last year, given that Even if insurance is affected by lower interest rates, actually, our asset liability report this impact.
And in asset and liability management is again, that is related to the fact that part of our balance sheet has a fixed rate exposure. So this Our NIM in the quarter had a reduction of about 20 bps reaching 6 point 6%. Slide 7, our loan book that involve only loans has increased 0.4% in the quarter, driven mostly by 1.3% growth in individuals on that classification. On our traditional breakdown, the expanded portfolio. We had a reduction of 1.3%, basically driven by the corporate and middle market operations, especially in the corporate segment, sure it's in guarantees.
We There were a couple of letters of credit that expired and also the payment of some bonds That also reduced the portfolio in the quarter. The big highlight here is that our retail and mid high income operations, including individuals and companies, grew at a rate of 6% 6.4% year on year for this segment where we have mass credit products for our own clients. In Slide 8, we have our breakdown of the expanded portfolio. 1.3% growth for individuals is the big highlight. Payrolls are growing at 13.4 In real estate financing or mortgage, basically, we had a very good beginning of the year with a very strong level Competitively, we should continue with a very good performance in this line.
In Slide 9, We have our loan origination for business day, a base of our per business day for earmarked and non earmarked loans. This represents roughly probably 80% of our total loan book. We had for individuals an increase year on year in the quarter of 35% for companies, 31% showing that our origination is really picking up and we In terms of the linked points ratio, also a very good performance, Especially in Latinas and individuals where we have been seeing improvement since the Q4 2016, We think there are more improvements to happen considering the performance of Our more recent vintage and considering also that the current NPL levels are still high. So we to continue to see these NPLs improve. In the corporate segment, NPLs are still high, remembering that In 2014, 2013, when they operated on what we consider more normalized, they were around 50 bps.
We believe the corporate NPL should continue on a relatively high level until 2019. The end of this year, we don't see really big tickets moving this ratio to much higher levels, but we don't see actually
an improvement
to the NPL formation, we continue providing for the new formation. In terms of provision expenses, including impairment. They represented 3.2% of our loan book this quarter. In the Slide 12, in the NPL creation per segment, we had quite good performance in SMEs and also a continued improvement in individuals with Fintech NPL formation For both segments and also the total NPL formation can still continue improving. The corporate NPL formation increased a bit this quarter, but its participation in The total NPL formation is relatively small.
In Slide 13, our coverage ratios, We reached a 219 percent coverage on 90 days NPL, very strong level. We believe our coverage will Probably will continue increasing a bit more. We don't manage our provisions through coverage. We for the time being, We don't have any plans to reduce the excess provisions. We can eventually Revaluate that in the near future is necessary, but we shouldn't be doing that in the short medium term.
The renegotiated portfolio evolved positively with a reduction In the total renegotiated loans and also the renegotiated loans that are still In our loan book, there is the gray line. The difference between the 2 are renegotiated loans that were In our off balance book coming from write offs. The coverage for this renegotiated portfolio is quite high, And it's been in perform it has been performing quite well in terms of credit quality. Slide 15, fees and commissions. We had fees growing 5.4% year on year.
The highlights are for checking accounts, where we have the impact of synergies from our acquisitions. We have been Mostly selling services with higher value added, asset management Management to continue doing well as a result of our efforts in the wealth management with our investment consultancy for our clients, and this is in line with our guidance. Operating expenses. We also had a good performance. Total expenses dropped 0.4% Year on year, the administrative expenses dropped 0.9% year on year.
A highlight here for personnel that grew 0.1% year on year, a good performance. But looking to the structural part of it There are salaries and benefits. We have the reduction of 1.7% despite the 2.7% increase in salaries last year. That reflects the results of our voluntary dismissal program. What is holding a better performance for total personnel expenses is the non structural part and the main Responsible are the expenses with the labor lawsuits.
What happened is with the increase in the number of people leaving the bank last year, we have More people getting with lawsuits against us. The in the first quarter reached BRL 407,000,000. A more normalized level is something probably below EUR 200,000,000. And we believe over this year, we should reach those normalized levels as Slide 17, we have our efficiency ratio. We had improvement in the 100 of 100 bps in our efficiency ratio this quarter.
In Slide 18, the our insurance operations, Our premiums year on year had a reduction of 2.1%. We affected by The high strong base of comparison last year, but also a weaker market. We believe that despite this relatively weaker performance year on year. We considering that other periods in the year are more important, Capital, Page 19, reminding you that this quarter, we have Brazil already operating with 100% implementation of BIS 3 in terms of capital deductions. Our ratio in the quarter was 12.4% Tier 1, 11.6 CET1, reminding that the fully loaded calculated in the Q4 was 12 Q1, 11.2 percent CET1 percent.
So we had an organic expansion of capital this quarter based on comparing to that fully loaded. And finally, our guidance And the realized numbers, basically, for the loan book, we are below it, But we believe we can still be in the range, especially in the mid low portion of it. But more important than being the range, let me remind, we are growing more in retail and SMEs, especially small sized SMEs. And this It's mix accretive. So for our margins, growing those segments can be As important, offset the fact that we don't grow that much or eventually, we'll not grow that much in corporate.
In net interest income, we are tracking our guidance. We believe we can improve a bit over the year being closer to the center of the guidance that is 2% 2019 or a little bit better than it. Fees, 5.4 percent, in line with the guidance operating expenses, We will be probably in the mid low portion of the guidance. Insurance premiums, we provision expenses. With that, I conclude our presentation and open for the Q and A session.
Thank you. Good morning, everyone.
I have a couple of questions. First question is on margins. I saw that your margins were not largely because you had some stronger results in ELM and other things. But the credit margins were lower sequentially, despite a slight change in mix in the portfolio with consumer loans growing faster. Trying to get an idea of what should we expect through the end of the year.
But more importantly, if you think that the process of passing through the Lilly Selip And if you think that the competition now that everybody is trying to grow loans, particularly on the consumer side, We'll have any impact on margins, maybe not this year, but down the road. Second question On asset quality, how much more do you think I mean you talked about potentially improving NPL ratios getting lower. The cost of risk is already much lower. Where do you think the NPL ratio can go to? And does that mean that with NPL creation being low, You can actually have the cost of risk get even lower.
Okay.
In terms of margins and starting with competition, the answer is we are seeing some impact in spreads and some lines due to the competitive scenario. And basically, everybody is there because actually the demand is there. The we have so we have seen spreads Going down some lines, still remaining in health levels, but It's we have already seen some reductions in some lines. We In corporate, for instance, where the competition is more a capital market and then actually The other banks' spreads are already meaningfully lower than the peaks we have seen 2019 and in some cases, getting closer to the free prices levels. We believe our margins during the year can start to our credit margin can Loans with higher margins, especially since the Q4 last year, we only have roughly 2 quarters We think over the following quarters as The participation of these loans grow, we can have some sort of offsetting margins due to this Our expectation for NII For the year being minus 2%, Basically, it implies that margin probably will go down somehow this year as They are, but it's implicit that we don't see it going down a lot.
Sorry,
the on the cost of risk, We used to have a longer start on NPLs where the NPL in the total NPL In the past cycle, it reached something like 3.5%. Considering the mix, the fact that actually new vintage are doing quite well, we can go below that level. We are, at the end of this, reducing, retreating as a percentage of the loan book. Looking not 2019. Not only this year, but longer term, we believe we can also operate in levels below what we have seen historically given the mix effect and the fact that Actually, new loans are doing quite well.
Thanks, Stefaan. One follow-up question, if I may. I mean, the question I think on competition, there's still a lot of room to expand because The potential to borrow is still low given that nobody was borrowing. At some point, you start bumping heads with your competitors, everybody's trying to go in auto Expect the competition to intensify this year? Or is it something that there's still enough room for everyone to grow so that it will become more of an issue next year?
Competition is quite strong this year already. If you look to mortgage, To Carlos, everybody wants to grow. I think the difference could be that demand probably We'll pick up even more as the economy improves and as People start to get jobs. At some point, we can have a differentiation. That is our position.
In our case, This differentiation has didn't help us with full impact because, as you know, Regions where we have stronger position than our peers were the ones that suffered most And probably will take a little bit longer to be running at full potential. We also have some differentiation in some lines. One example are the payroll loans. We have invested in the past and because actually we can because we have a strong distribution network to get retirees receiving salary in our branches. So we have an access to This client that no other few other banks have, maybe only the public sector, And this is a very good channel where We can grow also in terms of mortgage, the position in terms of clients, relationships and agreements Also can give some differentiations, but we cannot avoid that in normal conditions with The expectations of risk in a lower level competition actually will be stronger.
Our next question comes Call Mr. Georgi Curi of Morgan Stanley. Mr. Georgi, you may proceed.
Hi. Good morning, everyone. Can I ask about competition from the FinTech space? We're seeing A lot of new companies offering free checking accounts on digital accounts payment companies offering significantly lower MDRs, companies that are able to go into your systems, What is Bradesco doing to defend its market share and to create also a digital world that is appealing to the younger crowd that is rapidly accepting adopting these new platforms. Thank you.
And I'm sorry, if I may add, particularly in what products or segments do you think there is more risk? And what are you doing specifically about those products of Equinor? Thank you.
Sorry, can you repeat your last question, sorry. Okay. I will answer the first part. You are right, Jorge, the competition is strong, and we are basically Fighting Back. It's as a strong bank, we saw some players Growing in areas that are very important for us and areas that are on which we want to be.
One of them is the, for instance, in the digital accounts and also the acquiring business for individual small merchants. We have launched we are ramping up the operation with Cielo to offer cheaper products and selling the machines at very competitive prices. We offer we are going to offer digital accounts. So we have tools capacity and technological capacity we can really remain as a very competitive and strong player in this segment as we are in most of the market segment. Specifically, in the digital operation, Can I remind you of our operation with Next, that is our digital bank focused On younger clients, basically, it is a platform totally separated From ours and very innovative, very flexible, already prepared to open an open bank concept?
And we already have more than 100,000 clients, and we are ramping up. We launched it only 2 months ago, the 3 accounts we in the first stage of the launching, We were operating only with paid accounts, and the rate of growth after the launching increased a lot. And this platform give us a lot of leverage in the sense that we can experience, we can try 2 different products, different formats, and it's working. So we should keep investing on next its GAAP new profile of clients that are normally younger and have a full digital profile for our part of the clients that want The digital accounts, we should we will play with digital accounts, and we have more. We have the complete portfolio of products that we can offer them when they need.
We think other fintechs Not necessarily have that. We are a very traditional bank In the small company's operation, probably we have one of the largest portfolio. We have more than 2,000,000 clients in the company segment where we can offer Acquiring, we can offer digital products. So I think we are And you will hear a lot from us playing
Just to add, we know our clients that grew within companies such as PagSeguro and others. We're clients that we are not actually attacking because of the level of credit the score of credit that we had inside Bradesco. It doesn't mean that we are losing our own clients. Those are clients that we are we were creating with products or no credit. And so this is something that now with this new strategy that we have where we are selling the Abradequina, which is the new machine for clients to commercialize their products.
We sold in 48,000 equipments This is POF, and we went to end the year with around 100,000 equipment. So I think We are there as we were in other situations where we had to compete. And basically, we changed We created new products. We also created a prepaid card for certain types of clients that have different needs. We are glad to face the competition as we have done now.
Jorge, I didn't get the second part of your question. Can you repeat it?
Well, it was you partly answered it. I was asking specifically where do you see more risk, what products and services do you see more risk on coming from FinTech? Is it payments? Is it credit? Is it spreads?
And acquiring and insurance and so wanted to know on a product by product basis, Where do you see the more risk and what are you doing about it? You partly answered it. But if you just can expand a little bit on the credit side because that's obviously where There is excessive pricing in the market, and we are seeing fintech companies that are originating credit cards at much lower rates that are offering clients a better rate. And so You alluded to the payments space, but if you can talk about the credit market and what are you doing to defend yourself from fintech? Thank you.
To be honest, Ode, what really concerns us more than the competition we can expect.
It's really very hard to hear. Sorry, it's very hard to hear, sorry.
Okay, I'll say again. What I'm saying that what concerns us more is It's the growth of the economy is delayed always because if the economy is growing, the other things we are
All right. Thank you.
Our next question comes from Mr. Jason Mollin of Scotiabank. Mr. Jason, you may proceed.
Hi. Thank you for the opportunity to ask the question. My question is a bit of a follow-up on what was being discussed. I'm just looking at the number of clients Our customers that you show as going down, I'm looking at definitely a little bit lower number of branches. And you did mention, I guess, these next customers are there these 100,000 clients, I think, that you mentioned, are these in those new customers?
Because it looks I think you lost quite a bit more than that. If you can talk about that, if that was if that is a migration to competitors or to these kind it's hard
So basically, the main reason for the reduction in clients is unemployment. We had Brazil faced a very, very strong crisis over the last 2 years, as you know. And a lot of clients lost their jobs, closed their accounts. We have a lot of accounts that are payroll relationships. So this is one of the this is the main driver, It's in terms of an account numbers, current account numbers, this quarter it was stable.
And as I said, the main reason for the reduction comes from that. When you look, for instance, health care plan. And with unemployment, we had the reduction in the base of clients. We believe 2019. Our position and our strategy focus in all segments of plants from the top To the bottom, since we have more than our private sector competitors in the bottom where unemployment grew more than Anything else, it's naturally that we got infected.
And just to add, Jason, we our focus is much more now on total clients rather than cash accounts and so, Because our strategy now is to sell to include those clients in many segments that we have to use the CRM to cross selling with clients of our insurance, to sell our products or to sell investments that we have done. So our focus is from now much more on total clients considering that all of them that buy any product of Bradesco are our clients. Cash account is one of the products. So we shouldn't look at those as the main driver.
Yes, it's interesting because I see that I mean, it's interesting in the total customers, it looks like Quarter on quarter, there's a small increase. But if I look at the breakdown you gave, It looks like that the only the numbers show a reduction in all types of customers in all of the line items here except There's 100,000 increase in account holders. The total customers is increasing by 700,000. So I'm not exactly sure where they're coming from, but That makes sense. What about on the branch net?
Jason, just one thing. In saving accounts, if you look every year, there's Interesting phenomenon that we had a big increase in number of savings account clients at the end of the year and a big reduction in the Q1. There are some seasonality, probably people receive their Christmas bonus or get more money, open the account, and we have sequentially a big reduction. You can see every year the same thing happens In saving account,
right, year on year. But I guess that you were explaining that, that could be the economy. What about the branch network? Can you continue to rationalize that? The number of branches was down 8% over the last year, Almost 1%, just a few I guess, 40 branches in the quarter were closed.
If you can talk about that.
Yes. We plan this year to reduce about 200 branches. Q2. Last year, we closed about 565 branches. In the Q1, we already closed something like 40 4 branches, if I'm not wrong, part of what we say close is conversion points of service.
That is a small format only with ATMs, 1 or 2 account managers focused on relationships. To managers' brands and focus on relationships. We think this is a way of keep The presence keeping the our way to serve the clients with much lower cost structure. So Especially this conversion will happen a lot, but the reduction from now on should be It's lower than it was last year.
We are analyzing region by region, city by city and see the model that fits in that place. And this is the number that we have now, but those are evaluated all the time You have you know, we move that we yes, every day we look at the model that fits better
Our next question comes from Mr. Georgi Fridman of Citibank. Mr. Georgi, you may proceed.
Yes. Thank you very much for taking my question. Just a point that I noted on your capital position. I understand that most of the effect on common Equiture 1 in this quarter comes from the agenda of the prudential adjustments that goes towards 100%. However, I also got a bit surprised with the impact on the Common Equity Tier 1 coming from higher risk weighting assets.
So just wondering if you could give a bit more color why The credit risk increased more than 2% despite the sluggish credit performance and also the operating risk went up more than 10%. Just a bit more color on that. Thank you very much. Okay.
It's Part of it comes from credit. It also has a little bit to do Sorry, simple answer. There was some changes in the weight
Sorry, could you repeat that? I couldn't hear you.
There were some changes in some way for assets determined by the Central Bank.
Okay. Both in credit risk and operational risk as well?
Yes, yes.
Okay, perfect. Thank you.
I'll follow-up more on details on that with you, mate. But that's the answer.
Okay, perfect. I appreciate. Thank you.
Our next question comes from Mr. Mario Pier of Bank of America. Mr. Mario, you may proceed.
Hi, everybody. Let me ask 3 follow-up questions here, if I may. The first one on the cost of risk, BRL 3,900,000,000 this quarter. If we annualize, We come slightly below your EUR 16,000,000,000 forecast for the year. So I just want to clarify that Then you're still comfortable with your guidance range of 16% to 19% or do you I think you can come below your guidance because the way that things are trending in terms of asset quality, It's showing that things continue to improve.
So that's the first question. 2nd question is going back to all of these questions on fees. When you bought HSBC, I remember that the revenues that you were getting out of the HSBC clients were roughly 20% lower than what you had at Bradesco. So if you can try to discuss, do you think that the profitability or the revenues that you're driving from the HSBC clients are already at the same level that you had from the traditional Bradesco clients. Because I think what is catching the attention here is that your fee is only growing 5% year on year, right?
And we understand all the dynamics there. But it seems low because you recently, roughly 2 years ago, incorporated to a big franchise. And the third and final question has to do with costs. Just wondering here if I've seen all of the benefits of your early retirement plan. Is that already fully reflected on your results?
If you can comment on that, that would be great.
Okay.
1st,
The guidance, analyzing the 1st Q Really, it goes below the guidance. It's early to review. We think As I said, this new level with kind of a reference, we don't see scenario, probably even impairments also have reached to a more normalized level. So it seems we have said we expected more this bottom of the guidance. So the first deal makes sense with this statement.
For now, let's wait, but We are comfortable. We are doing quite well on that, isn't it? We prefer not change the guidance.
About the revenues per client, as you have asked, when you have retail and corporate clients, We are about to sing already. And when you go to Inconclyde, we have still a way to go. So we are not there yet and working hard to reach the same level.
Yes. One thing that happens is in the agreement with the antitrust regulators, Basically, we cannot increase the fees at once. It's kind of a commercial relationship, and we have to sell better products and the customers have to allow to charge rates. So it's a gradual process. And as Denis said, the mid high income segment is where we have probably A little bit longer way to go.
In terms of the voluntary dismissal program, Some people left only in February. It's smaller part of the program. So possibly, the 1st Q is not really 2019 fully reflecting all the adjustments, but maybe almost fully reflecting on the personnel. What is impacting the personnel expenses and kind of High part of the benefit is the fact that We had very high expenses with labor lawsuits in the Q4, but especially in the Q1, something like BRL 407,000,000. This expense is normally run below $200,000,000 The reason for that is The fact that a lot of people left the bank last year, it takes a while until we receive the notice For the lawsuit, a lot of people anticipated the moment they would get With the lawsuit comparing to what we had before the labor reform, we believe In the coming quarters, we have a big improvement from that.
As I said, maybe going from the $400,000,000 to something around 200 are below it. So this is not a benefit from the voluntary dismissal program, but
Okay. Now that's very clear, Fete. Thank you very much.
Our next question comes from Mr. Thiago Batista of Itau BBA. Mr. Thiago, you may proceed.
Yes. Hi, guys. Hi, Fidachy. You had a comment during the call at the beginning of the call that the results Insurance Company results were impacted by a kind of one off expenses related to the change in the assumptions of the technical reserves. Can you comment in which segment this was impact?
I believe retention, but not only to be sure. And also the magnitude of this impact. How big was this impact in the financial results?
Basically, it's to the to a revelation of our liabilities in the insurance company. It's related to the revision of the discount rate from 4.3% to 4%. The impact is roughly
Okay, perfect. And this was in the pension business itself or in the life or now? Across the board.
Excuse me, ladies and gentlemen. Since there are no further questions, I would like to invite the speakers for the closing remarks.
Thank you, everybody, for participating in our call. The Investor Relations department