Good morning, ladies and gentlemen, and thank you for waiting. We would like to welcome everyone to Bradesco's First Quarter 2021 Earnings Conference Call. This call is being broadcasted simultaneously through the Internet and Investor Relations website, bradescori.com.br slash EM. At that address, you can also find the presentation available for download. Informed that all participants will only be able to listen to the Conference Call during the company's presentation.
After the presentation, there will be a question and answer session and further instructions will be given. 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. May 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 expressed in such forward looking statements. Now I'll turn the conference over to Mr.
Carlos Direcchi, Business Controller and Market Relations Director. Mr. Carlos, you may proceed.
Hello, everybody. Welcome to our conference call for the discussion of our 1st Q 2021 results. We have today with us our Chief Executive Officer, Otavio Del Azari our Executive Vice President, Andre Rodriguez Cano Our Executive Director and Investor Relations Officer, Leandro Miranda Oswaldo Tadeo Fernandez, our Executive Director and CFO and Bradesco Sigurro's Chief Executive Officer, Ivan Bontecho. For starting the presentation, I turn the floor to Leandro.
Thank you very much, Gireci. Good morning, everyone, and welcome to our 1st Q 'twenty one earnings conference call. As we all know, the Q1 was marked by The worsening of the COVID-nineteen pandemic situation, with the 2nd wave unfortunately leading to a new peak in case and victims, much as what we have witnessed in 2020. We believe that restrictive measures adopted in March In most states, somewhat controlled the spread of the virus and thereby reduced cases and hospitalizations. Despite levels remaining high, we believe that we will see an improvement in this statistic over the course of May.
The worst case scenario we believe is going to be June and even greater reduction in restrictions, especially as vaccination progress. We sympathize with all those impacted by the disease and thank our employees for the full efforts during this difficult time. The impact on the economy in 2021 appears to be lower than it was in 2020, probably due to the fact that people in business are better prepared to conduct business in the midst of the restrictions. Our performance was solid in the Q1, and the second wave of the pandemic had no significant bearing on business dynamics. With the exception of a natural deceleration in the origination of some credit lines.
We now see signs that appear to indicate an improvement in the scenario of the pandemic. We believe that this improvement should continue throughout May as some of the restrictions are already being relaxed in a number of states. With vaccination efforts continuing, we expect that risk groups We will be vaccinated at the end of the first half of the year, which will allow the economy to see a more pronounced recovery starting mid May or June. We now move on to Slide 3. We have revamped our corporate strategy to further reflect our ambition, viewing our clients as our inspiration.
A practical example of this is the 100% client program, which establishes Bradesco's commitment to apply the best market practice available to transform our business model and make sure that our clients are always at the center of our attention. Another pillar of our strategy is digital transformation, improving the way we do things with an active, connected and innovative mindset. We have a solid foundation in the people pillar, our team. They are top performing professionals Who are totally committed to ethics, transparency and respect. They are really awesome.
And of course, We can't leave out sustainability. After all, we are a company built to last and to provide value to all stakeholders. Our purpose is at the center. It's what drives us. It's the impact we strive to create and change.
We want to bring about people, companies and society as a whole. Turning now to Slide 4. We have our financial highlights for the 1st Q. We posted a very strong result in the 1st Q with a profit of BRL6.5 billion, an increase of more than 70% compared to a year ago, and a quarterly ROE of 18.7 percent. Our operating income was BRL9.7 billion, rising both in a yearly and quarterly comparison, which is the highest in our historical series.
The loan portfolio grew 2.6% in the quarter and 7.6% when compared to 1st Q 'twenty. Our Basel Tier 1 ratio remains at a fairly comfortable level of 13.6%, a substantial recovery of 220 bps compared to a year ago. Operating expenses dipped 4.7% in an annual comparison and 2.4% compared to the previous quarter. An extraordinary performance resulted from the optimization we promoted in our structures in 2020. The 12 month efficiency ratio reached 45.3%, down by 3.8 percentage As we mentioned before, we posted good results in the quarter.
Net interest income rose 7.4% annually, with growth in the client portion and our still strong performance in the market portion as well. Our expanded ALL expenses dropped once again this quarter. Insurance operations reported a healthy recovery with emphasis on premiums as well as in its financial income. In costs, As I mentioned before, we maintained an excellent performance. The next slide will show details on all of our lines.
Turning now to Slide 6. We can see that funding shows a positive evolution in the annual comparison. Deposits from clients net of compulsory deposits grew 18.2% and the total fund 12.8% in the annual comparison. Our loan funding ratio ended the quarter at 87.5%, which shows our high degree of liquidity in relation to loan operations. Turning now to Slide 7.
As mentioned before, the total portfolio grew by 7.6% in 12 months. The growth for individuals was 13% with an emphasis on real estate financing, which grew 38.1% and payroll deducted loans, which grew 11.5%. We have a strong focus on real estate with a fairly competitive origination process and channels. Our real estate financing is offered digitally, and even the contract is now signed through digital methods with some notaries. Growth in SMEs was 18.6%, mainly due to the lines of the emergency programs is the consolidation of Bakken.
Just to let you know, 9% represents 5% out of the 18.6%. For large companies, the annual comparison was somewhat hampered by the solid growth of working capital lines at the start of the pandemic and greater access to capital markets. Loan origination remains at a pace that we consider to be very good, And we believe it will intensify as the economy begins to reopen. Turning now to Slide 8. Our expanded ALL expenses fell to BRL3.9 billion in the quarter, Consistent with our expectations for the year, we carried out a BRL1 1,000,000,000 supplementary provision over the quarter, reinforcing our stock of provisions, given the expectation of worsening ratings and the consequent provisions for those clients who extended their debts but did not pay the first instruments.
However, the performance in this quarter is fully in line with the center of the guidance for 2021. The coverage ratio over 90 days and including renegotiation remained at very comfortable levels. We will now take you to take a look at Slide 9. We'd like to point out that we provided a chart with an extended historic information back to December 2008. As we had expected, the delinquency ratio over 90 days registered a slight increase, shifting from 2.2% in the previous quarter to 2.5% in this quarter.
The rise was seen in individuals and SMEs. This increase is in line with expectations and occurs as a consequence of seasonality in the beginning of the year as well as a consequence of reduction in the pace of renegotiations and the end of grace periods. We provisioned less than the formation as a significant portion of delinquencies came from renegotiated portfolio, therefore, from operations that already had a high level of provisioning. We believe that delinquencies will continue to rise gradually and reach an even higher level at the end of the year. This level will probably not be much different from pre pandemic levels.
We are comfortable with that. We think that the good quality of credit is due to the quality of origination during the periods prior to the pandemic and to the solid financial health of clients overall as households have accumulated savings throughout this period. Slide 10 details the extended portfolio. The balance of extensions continued to shrink, totaling BRL44.1 billion as amortizations continued. As of March 31, This balance was composed of BRL37.4 billion on time, meaning that they came out of the grace period of payment of at least one instrument.
BRL2.9 billion was still within the grace period at the end of March. And we'd like to point out that 55% of this amount has already came out of the grace period in April and are up to date. They are on time. And finally, BRL3.9 billion in overdue loans, which are operations that came out of the grace period in our overdue for more than 30 days. This represents only 0.7% of the bank's total loan portfolio.
We continue to permit extensions during the Q1, but the volumes were minor. We believe that we may see a moderate increase in in the Q2, but definitely not the intensity witnessed in 2020. We now proceed to Slide 11. Our renegotiated portfolio was stable compared to the previous quarter, which halted the growth cycle. This was due to a gradual return to the renegotiation conditions in place before the pandemic.
We witnessed an increase in delinquencies within this portfolio, which reached 14.4%. However, this level is still well below the historical average. We believe that delinquencies in this portfolio will continue to add slightly higher, And we can state that the renegotiated portfolio will be one of the drivers for the rise in our delinquencies over the upcoming quarters, which is totally in line with our expectations. On the other hand, we emphasize that this portfolio contains high level provisions, 64%. As a consequence of this, the rising delinquencies will not lead to significant pressures in terms of new provisions.
We are very well covered. Now let's take a look at Slide 12. The Tutu Financial margin performed well in the year on year comparison, posting a growth of 7.4%. The client portion remained stable over the quarter and grew 2% annually, mainly due to the growth in volume and the mix favored by the solid growth in individuals. These factors more than offset the fall in the spreads in the fewer number of days.
We expect a recovery decline portion throughout 2021, in line with our guidance. The market portion performed well in the quarter despite a decline relative to the Q4, where we posted a rather strong performance. As indicated before, we expect a drop in the market portion for 2021 in relation to 2020, But in levels around 2019. Turning now to Slide 13. We had a drop in fee and commission income in both a quarterly and annual comparison.
In annual terms, due mainly to the baseline comparison effects. The Q1 of 2020 still did not fully reflect the impact of the pandemic. Despite the drop in the annual comparison, the fee income result was in line with our budgets, which forecasts a better performance in the second half, allowing the guidance to be fully achieved. This is due to the base of comparison and the reopening of the economy in the second half. Important lines have been pressured by specific factors.
The card line suffers the most in co branded and private label as many retailers had restriction operation due to the lockdowns. The front management line as we had a strong migration of resources to fixed income and reduced management fees in the first half of twenty twenty And last but not least, checking account line due to the lower volume of transactions in the network of bank correspondence Due to the restrictions of the operation of Commerce, as I have said before, due to the lockdown. We now turn to Slide 14, where we have the operating expenses. Our performance in cost remains a strong point. The following expenses reflect our strict discipline in costs, management the adjustments we made last year when we revised our cost of service, including the closing of branches and converting branches into sourcing points, taking advantage of the opportunities created by the change in our clients' behavior.
We will continue our cost reduction efforts in 2021 in over the next years. Turning now to Slide 15. Our insurance operations posted a solid recovery in net income, which grew 40.6% as well as the operating income, which grew 7%, both in the annual comparison. The performance is above guidance and showed conversion guidance throughout the year. The highlight of the quarter was the 3% growth in premiums compared to the pre pandemic Q1 of 2020, driven by auto and insurance, which grew 7.3% and 6.5%, respectively.
The financial income also registered a positive performance, primarily due to the income and positions in equities, multi market funds and IPCA index securities. Insurance claims were impacted by the health and life segments, which were affected by higher frequency related to the pandemic. We now move on to Slide 16. Our Tier 1 capital ended the quarter at 13.6%, an increase of 2.2 percentage points compared to the start of the pandemic in March of last year. The fall of 20 basis points over the previous quarter was due to mainly market market of securities available for sale and the growth in loan operations.
Our capital positions has held to rather comfortable levels, with the common equity at 12.6%. We recently announced a share buyback program that complements our practice of distributing capital through dividends and interest on shareholders' equity. Turning now to Slide 17, where we can see that we continue to make advances in digital with an ongoing focus on clients' needs. In this quarter, Dia had 130,000,000 client interactions, almost 5x more than in Q1 'nineteen. In the month of March alone, there were 5,160,000 client interactions, and it was not just data.
Since BIA's transaction, as we have already mentioned, in the earnings report, for example, We delivered 2,500,000 reps reports to clients in March. The CRM 2.0 that we provided you In 2019, already results in 5 times more active contacts with clients and with a high degree of personalization. Now we turn to Slide 18. Digital continues to widen its share of total transaction as traditional and hybrid clients are increasingly adapting online methods to conduct transactions and business. Around 98% of our total Transactions are now done digitally.
Annually, we saw a 21% growth in our mobile clients and 16% in digital clients, which also accounts for Internet Banking. The volume of cash transactions is 83% lower than it was in the Q1 2020, and the volume in mobile financial transactions increased by 75% over this period. We now go to Slide 19 to discuss our 3 digital business. Agora reached 632,000 clients, a growth of 52% in 1 year, While AUC grew 55%, Agora has one of the most comprehensive offers on the market, and we will continue to grow. NEX has further accelerated its growth curve and is now at 4,400,000 clients, almost double its base a year ago.
The goal for this year is to reach 7,000,000 clients. BIDS, our digital wallet, was introduced in September 2020 and has already exceeded 500,000 accounts. It's expected to grow significantly throughout the year. And we would like to remind you that Beats offers clients a complementary product to NEX and Bradesco. The marketplace and cash back features offered at Next are now becoming available to Bradesco's clients.
We introduced the pilot for Prime segment this quarter with a marketplace that includes 7 partners. We will soon expand this pilot with more partners, and we are working on combining the vision of Veeva Prime, cash back and Livelo points into one place within the Primac. Ultimately, we want to offer clients a clear overview of the that they can take advantage of. We plan to expand these clients in other segments in the near future. Turning now to Slide 20 regarding to our ESG agenda.
We are very, very proud to announce that for the 3rd consecutive year, we have won the silver category in the S and P Global Sustainability Book Awards. We are among the top 5 banks in the whole world and the only Brazilian bank there. This is a result of our commitment and continued progress in implementing the best CSG practice at Bradesco. Speaking of commitment, we are taking a new step today in Bradesco's mission to promote social economic development and inquiries to the initiatives needed to transition to an increasingly sustainable economy. We would like to announce our goal of allocating BRL250 1,000,000,000 in corporate credit lines, providing advice on capital market operations and financial solutions with a focus on promoting a positive social environment impact by 2025.
By doing this, we expand our business scope to support the targeted sectors while helping clients transition to best practice for many sectors. We now move on to Slide 21, our last slide today. Despite the intensification of the pandemic in Brazil during the Q1, we were able to post a Solid performance in line with, in some case, above our budget for the quarter. We are performing at the top Or even better than the guidance when it comes to expenses and insurance. In annualized terms, We have performed at the center of our guidance for ALL, at the bottom of our clients for NII and below of our guidance in the loan portfolio and fee and commission income.
In terms of these 2 weaker performing lines, We can see an accelerated growth in client NII, primarily in the second half due to the reopening of the company, the economy and growth in lines with higher spreads. The annual growth in the loan portfolio has been hindered momentarily by a baseline comparison effect in large companies, which will lead to a natural acceleration of the second half of the year with a more beneficial base and a pickup in business gradually increasing towards the center of the guidance. We also see a potential acceleration in growth in individuals and medium sized enterprises. Finally, we believe that there will be a natural increase in fee and commission income as the economy begins to reopen with an impact on cards income, collections and payments with increased volumes, investment funds through a shift in the mix and potential growth in DI funds with an increase in the CELIQ rates as well as a more favorable but baseline comparison. As we previously mentioned, this line went through some adjustments in the first half of twenty twenty.
In summary, we expect our performance to improve over the upcoming quarters. As such, We believe that our guidance remains consistent, and there is no reason for any changes at all. I would like to thank everyone for your time and attention so far. We will now move on to the question session.
We will now initiate the question and answer Our first question comes from George Curry of Morgan Stanley. George, your line is open. You may proceed. Hi. Good afternoon, everyone, and congrats on the numbers.
Sorry, I'm not sure you mentioned this at the Talking about the guidance on that last slide, maybe you did, but it was a bit difficult to hear. But I wanted to ask you about The guidance range for expenses, you're evidently And in the area, of course, but you're at minus 5% minus 4.7% for the Q1. If I look at your Last 12 months performance, you're minus 6%. Do you think it's possible that you'll end up at The better part of your guidance for expenses, which is minus 5%. And same question for Provisions, you did EUR 4,000,000,000 EUR 3,900,000,000.
I'm assuming that Excludes the EUR 1,000,000,000 in additional provisions. So is it possible that you end up excluding that €1,000,000,000 in provisions at the low end of the guidance of €14,000,000,000
Thank you very much for your questions. I'm going to go straightforward here to the points. Operating expenses, we expect them to go in the worst case Scenario in the middle of the guidance. So we shall continue to perform very, very well in operating expenses. Of course, we shall see some adjustments regarding to the compensation of the employees, but we shall never exceed the center of the guidance there.
Regarding to expanded ALL, we shall see the provisions going to the mid of the guidance. It shall be in a range, I would say, between BRL15 1,000,000,000 or BRL16 1,000,000,000. This is our base case. But if the economy really recovers as we believe, we shall even be lower than that.
Our next question is coming from Mario Pierry of Bank of America. Mario, your line is open. You may proceed. Hi, everybody. Congratulations on your results.
Let me ask you two questions and also related to your guidance. When you talked about the outlook for NII clients and how should the growth rate should accelerate second half of the year, you talked about better mix, We call it a reopening, but can you talk about the impact of a higher rate environment in Brazil and how that Could have a negative impact on your funding costs in the short term. So if you could Give us a little bit more detail about your expectations of rates and the impact that it could have on NII growth this year. And second question also related to fees. As you mentioned, might be expecting better volume in cards, Expecting a better mix in the asset management to support your fees.
So what concerns me on your fees is that when you look at your checking account You said on 2% year on year, while your client base grew 8%. So we see some pressure on current accounts. Can you be a little bit more specific about your views on the outlook for current account fees? Thank you.
Thank you, Mario. Basically, in the very beginning of the year, When we released this guidance, we were very conservative, and we are keeping this sense. The client portion shall go to the center of the guidance naturally, pretty much because as we are Reopening the economy, you shall have more transactions and you shall be able to change the mix of products as well as the mix of clients into a more into a riskier standards. Just to give you a flavor, when you have the retail closed, you are not able to Work so much in SMEs and the individuals portion as we were conservative, We decreased the amount of credit cards, personal loans, and we increased the focus on Mortgage financing and compulsory loans, which are less risky lines of products. Besides that, it's important to mention that when you compare to the Q1 of 2020, During 2 months, pretty much, you had the large companies raising a lot of liquidity here, and they have lower margins than SMEs and individuals.
Therefore, from now on, we do not expect to have such a base of comparison. There's a dirty one. And so we shall see an increase in this client portion. So better mix and better Of products and clients shall be the answer together with the reopening of the economy. And of course, as Otavio has pointed out earlier, It pretty much depends on the vaccination process.
So we are confident that by May or June, we shall see this improvement in the economy. Regarding to fees and commissions here into services, Well, we have here, again, a very conservative guidance From 1% to 5%, we believe that we shall go to the lower portion of the guidance to the center. So we shall be in the first half here of our guidance. And we can give you some overviews regarding to our lines. And of course, my colleagues here will be more than happy to help me out to complement anything.
First of all, credit cards. With the reopening of the economy, suspension of the restrictions due to the lockdown, you shall see the retail And of course, our base of private labels and white branded credit cards shall have a much better performance than the previous year. Retail through Bradesco espresso also is important for our tariffs. Regarding to asset management, we made significant adjustments in management fees. And now we see a growth of migration to better paid management fees and performance fees into our funds.
Besides that, there was a lot of withdrawal from fixed income funds to buy CDs from the banks, and we benefit from that in our liquidity. Capital Markets, Investment Banking has performed extremely well. We are positive for the year, but it pretty much depends On the opportunities, the windows that we see in the macro has a significant impact on that. And on insurance, We, the premiums were very good, and we intend to keep on doing that. If my colleagues want to complement anything more than that.
Yes, One point on the funding side, you asked, the higher rates actually have a positive impact in the funding results that go in the client margin. So this should be positive. When you look to the client NII, we have there, apart from this Funding results, mostly spreads. So basically, the increasing rates don't impact that. Any rate variation actually is managed by our treasury And this is in the market NII.
Thank you.
Thank you, Mario.
Our next question is coming from Jason Mollin from Scotiabank. Jason, your line is open. You may proceed. Thank you very much. My first question is a follow-up on the sensitivity of The client portion and the treasury portion to rates.
Maybe if you can just give us an idea all else equal, and obviously, that's not the way you manage the balance sheet. But if all else equal at the end of the Q1, let's say, 100 basis point increase in the SILIQ, what does that do for your client portion and your treasury portion. I just want to try and clarify that. And then secondly, on the fees line, It sounds like apart from what you said about adjusting management fees and asset management, that it was The reduction in the fees from cards in current accounts was related to activity. But can you give us some sense of what's going on, on the pricing there, Competition, you've seen free checking account.
You've got everyone has their version of a free checking and other fees. What's going on with the pricing side, not just the activity? Thanks.
Okay. Jason, let's start from the beginning here. You're pretty much asking for sensitivity In 1% select rate, right? We believe that there is no negative impact On the client's portion, it's pretty much dependable on economic conditions and competition. So we do not believe it shall create us any problem.
We have a benefit in our deposits since because of the floating, we can invest more. So it's 1% of our deposits. And besides that, assuming that we wouldn't hedge, We wouldn't come along with any market strategy. What is totally unusual with the bank, if we are just stopping and we fire everyone there in the Treasury Department For a 1% CELIQ change, we shall have a BRL900 1,000,000 impact.
Yes, just complementing that this exercise is based on 2020 figures and also things keep changing Yes, Len said.
Yes. But we are active. We are dynamic, and so it should never happen. It's just a theoretical to stress your model.
On fees,
basically, as I have just Answered Mario, it pretty much depends on scale and the recovery of the economy because basically we see competition there. But credit cards, you have seasonality in the Q1 And you have the retail pretty much shut down. So as the economy reopens, the barriers end for lockdowns, We shall see it coming strong, especially because we have a significant part in white label and private label ones.
Yes. I think it's important to emphasize the base of comparison effect. We are comparing a very almost normal quarter last year with a quarter that actually is impacted by the pandemic, its impact in the credit cards. There was also in the beginning of last year A very important change in terms of volumes of fixed income mutual funds that went to deposits, also a revision of management fees in asset management. And we believe as we go through the year, as Andrew said, We go to a different base of comparisons and our performance in fees will naturally improve.
But we are confident that we shall reach the center of the guidance.
We shall have 2 years.
Great. Thank you very much.
The first half and the second half, 2 different years.
Thank you and congrats on the strong Q1.
Yes.
Our next question is coming from Tito Abata of Goldman Sachs. Your line is open. You may proceed. Hi, good afternoon. Thanks for taking my question also.
My question is looking at the digital initiatives that you do and then you're taking the data around some
We can't hear you. I can't hear you. It's we can't can you Maybe pick up the phone or talk slower?
Yes, I'm picking up the phone. I'll try to speak louder. I don't know if it can help. Can you hear me there? Hello?
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Hi. Can you hear me?
Yes. Try to speak louder.
I started to hear louder. Is that better?
Yes. No, it's better.
Okay. Did you hear me there?
Yes.
Yes. Yes. I guess my question is just on the digital initiatives, right, you did some good data there. How do we think about the impact on this. I mean, if you look at some of the same facts, they're gaining clients that don't necessarily have revenues at your level.
And given some of the revenue pressures that we're seeing, I understand that should improve as the economy recovers. When it become more and more digital, do you think that should not necessarily boost your revenues? And do you consider to be pressure there today, client, convertibly perhaps offset by continued cost control. Just to try to think about how that competitive environment and digital initiatives should impact the revenue growth and expense growth and where you see the benefit from that? Thank you.
No, I got it, Tito. Thanks. Let's start from the end this time regarding to costs. You're totally right. As the clients get into more and more in digital channels, we are able, as Otavio has emphasized earlier, we are able to either close or transform our branches into point of services, increasing the level of business.
We can also reduce the space in the branch and give it back to the lessors. So therefore, there is a significant reduction in costs for us as the clients got more Digital, as we have seen in 2020. So it pretty much shall see the continuation of this trend. Regarding to pressures on fees, we have to take a look into scale, And we have to consider the cost associated with that. But as the economy grows, you have all kinds of clients.
And they also need important products such as credit, and they also need to have the whole combo of banking services and products. Therefore, we believe we have an agenda there. We have a very strength that shall be seized. Of course, the open banking, it reduced our market share initially. If you just consider that we are stopped, but we are not.
We are active. We are being proactively discussing And analyzing a lot of opportunities of growth with this enhanced competition as we can get market share from the other banks. So If the newcomers shall get market share from the incumbents, we are in a position as we are the most with Vaca Digital Bank in Brazil to get market share from the other competitors as well.
If I can add this is Renato Venizmann From NEXT, on the big data and analytics front, I mean, I can tell you a little bit about our experience in NEXT And the same I know is happening at other areas, including Bradesco itself. But the use of big data, I mean, it helps on the two front that you mentioned. On the expense front, we have models to calculate and try to quantify the propensity to churn. We also have models to calculate the propensity to default. Obviously, these are algorithms that we Are developing and hopefully soon introducing machine learning aspect, so that it improves over time by itself without further manual or further human input.
So that's something that significantly reduces expenses. And on the revenue side, we also have models to see what is the capacity to consume some products and at the same rate that I mentioned, I mean, the next That will be to introduce machine learning aspect so that over time you don't have to have any human input and they just get more and more efficient over time.
Okay. Thank you. Our next question is coming from Thiago Batista of UBS. Chiazza, your line is open. You may proceed.
Yes. Hi, guys. Thanks for the call for the opportunity. I have one question about of the insurance business. We saw this quarter a good improvement in the profitability of the intrinsic business.
It achieved about 20% this year versus mid teens in the previous quarters. This level of possibility or results of insurance business, do you believe that this is recurring? We can see This level or even some additional improvement you have followed. So how do you guys are seeing the result of the insurance business?
Thiago, basically, we Performed this quarter a little bit above our guidance. Our guidance has a growth considers a growth of 4% for the insurance line. I think there was some good news this quarter related to Premiums, I think we performed better. I think it's a good sign and it's the base for actually keeping constant Continued pressure in some claims due to COVID on life insurance, health insurance. But as you guys know, we have constituted provisions.
I think We are well prepared to face this environment of higher claims. On the financial results An environment of higher interest rates actually somehow helped. So I would say, I think we are very comfortable with our guidance of 4% growth for the line. Maybe we could do better. That's, I think, at this point, is the best I can tell.
Thanks, Eric. And just to confirm one point, There is no reversion of the provision that the bank or the insurance booked in the previous quarter. So there is no reversion, correct?
No, we didn't revert anything this quarter.
Our next question is coming from Carlos Gomez of HSBC. Carlos, your line is open. You may proceed. Hello, good morning. Congratulations on the results.
Can you comment on the bank debt bank in Florida that you have recently acquired? What are your plans there? Is this the first step? Do you want to go to John, Troy, in your expansion The second, the Central Bank has recently published a report regarding the impact of the positive credit bureau explaining how it reduces the cost of credit for Lopez clients. Is that starting to be the bank on the margins of the products that you offer?
And How do you give respect to counter back in the future?
Carlos, we had some difficulties To understand you, especially on the second question, we understood that the first one is about bacteroides, but if you could repeat maybe the second question.
Yes, my apologies. The second question is about the influence of the positive credit in Brazil. In terms of pricing the products, is that making the market more competitive for you and instead reducing the margin that you can charge on consumer credit.
Carlos, Leon speaking. I'm going to address Baki And then your, Kasir actually will address the second one regarding to the credit bureau, okay? Pretty much But we'll have a wealth management strategy. It's key for our clients to have The ability to have a checking account, credit cards, mortgage financing at a bank in U. S, It has been a long term demand from them.
And the appetite and the willingness of clients to participate has been outstanding. Besides of that, Pacio also have a brokerage house in which we can help clients to Invest their money throughout investment funds and securities, either debt or equity there. So the point is, We shall be able from now on to provide a full array of alternatives regarding to banking and investment products there in Florida. Regarding to expansion, we want to feel the American market, we want to feel how clients feel this experience. But initially, our focus It's to stay in Florida.
We do not want to expand throughout other states. It's important to mention that Bakkt has rebate. There is an app in which Bak is pretty much able to raise funding in almost all over U. S. States.
They have local licenses in almost of all U. S. States. And therefore, Baca's ability to raise funding on a very cost effective way is outstanding. In the back, of course, we'll keep on its Original strategy of financing banks throughout Latin America and Brazil and support Any Brazilian company that is a multinational in its services there.
Carlos, regarding the credit bureau, I think this is a very important development for Brazil, for the Brazilian market as a whole. In our case, as you know, we have a lot of information and we have experience, we have been investing a lot and Especially over the last few years in credit models, in data. So, we believe our models and the information we have, It has allowed us to originate more and more loans and very good credit quality. The credit bureau in our case allow us to bring new information that eventually complement The data we have and allow us to actually eventually approve loans For clients that without with our own models, eventually, we wouldn't Considered, given this complement of information. As you know, we are shareholders of Quad, A credit bureau on which we have as partners the other banks.
It's another credit bureau that provides also information and for which we consume data. I think for the market as a whole, It really helps other players that don't have as much Information has us to have access to client information, but we believe That considering our experience, our models and everything we have invested in these models, We continue with an advantage and we also have a very good access for originating loans. That also is something very important in this process.
Thank you very much, Torila. Call. Excuse me, ladies and gentlemen, since there are no further questions, I would like to invite the speakers for the closing remarks.
Well, first of all, once more, thank you very much for making the time to be with us. We are very proud of the results we are presenting, and we are even more confident in our performance from now on as we see advancements in logistics of the health situation. And we are confident on the recovery of the economy. Thank you once more. Have a great day.
That does conclude Bradesco's conference call for today. Thank you very much for your participation. Have a good day.