Good morning, and welcome to the first quarter of 2022 results conference call of Banco BTG Pactual. With us here today, we have Roberto Sallouti, Renato Cohn, Julia Rocha. We would like to inform you that this event is being recorded and all participants will be in a listen-only mode during the bank's presentation. After Banco BTG Pactual remarks, there will be a question-and-answer session for investors and analysts when further instructions will be given. Should any participant need assistance during this call, please press star zero to reach the operator. Today, we have a simultaneously webcast that may be accessed through the website www.btgpactual.com/ir in the platform. There will be a replay facility for this call from May 9th.
Before proceeding, let me mention that this call may contain forward-looking statements relating to the prospects of the business, estimates for operating and financial results and those related to the growth prospects of Banco BTG Pactual. Those are mere projections and such are based exclusively on the expectations of Banco BTG Pactual's management concerning the future of the business. Such forward-looking statements depend substantially on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and the industry, among other factors and risks disclosed in Banco BTG Pactual's filed and disclosed documents and are therefore subject to change without prior notice. Now I will turn the floor to Mr. Roberto Sallouti, who will begin the presentation. Mr. Sallouti, please go ahead.
Thank you very much. Good morning to all of you on the call. Before I pass the floor to Renato Cohn, which will talk about each of the business units, I'd like to highlight some of the KPIs and results of the quarter. Starting on page three of the presentation, we think this quarter really evidences our all-weather equity story. As all of you know, we built BTG Pactual to ensure that we could perform with solid results under any macro scenario. I really think we had a very challenging macro scenario in the first quarter and continue having now in the second, but that we were able to, in this scenario, come with the most profitable quarter ever in our history. In this quarter, our revenue grew 56%, totaling BRL 4.4 billion.
Our net income grew 72%, reaching BRL 2.1 billion. In the quarter, we had a return on equity of 21.5%. Turning to page four, we talk a bit about our investment management businesses. In this quarter, we reached record revenues in our Wealth Management business. Remembering all of you that when we say Wealth Management here, it includes the digital retail unit activities related to individuals. We crossed the unprecedented mark of BRL 1 trillion under AUM. In the quarter, we had net new money of BRL 52 billion. Our assets in our Wealth Management unit increased 44% to BRL 458 billion. Assets in our asset management unit grew 30% to BRL 586 billion. Turning to page five, we show our funding, credit, and capital numbers.
This quarter, we continued with very strong funding inflows and a consistent growth in credit revenue and portfolio, at the same time while we kept very solid capital ratios. Our unsecured funding, even with the real appreciating in the quarter, grew 28% year-over-year, reaching BRL 155 billion. Our corporate and SME portfolio grew 39%, totaling BRL 111 billion, of which BRL 19 billion in SMEs. We finalized the quarter with a Basel ratio of 15% and total equity of BRL 39.3 billion. On page six, we show the results in the traditional manner that we always do. Just to repeat a few of the highlights and give some additional information here.
The first point to mention is, once again, we had revenues of BRL 4.35 billion, net income of BRL 1.94 billion, and adjusted net income of BRL 2.06 billion. Our adjusted cost-to-income was in the lower bound of our historical range at 39%. Just reminding all of you that when we say adjusted here, we're only excluding goodwill. Also reminding you that we amortize the goodwill over acquisitions and investments between two and five years in an accelerated manner. Finally, we finished the quarter with total assets of BRL 391 billion, equity of BRL 39.3 billion, and Basel ratio of 15%. Turning to page seven, we show the revenue breakdown by business unit.
Here we see a stable revenue distribution between the areas in the twelve months ending in Q1 2022 compared to the twelve months ending at the Q1 of 2021. What we really like about this page is that it highlights the strength of our integrated business model, with the expansion into new segments and products bring growth to all areas. You can see that all of our areas are having double-digit growth, and many of them significant double-digit growth in the last twelve months compared to the previous twelve months. Finally, on page eight, we highlight a few of our ESG and impact investment accomplishments for the quarter. We issued another BRL 780 million in sustainable deposits in the second phase of this initiative.
We issued almost BRL 1 billion for our clients on ESG-labeled DCM issuances, and we also became a member of the Green and Social Bond Principles of ICMA. We launched our venture debt fund in Chile, focused on SMEs. This fund will follow our ESG and impact investment framework. For the third consecutive year, we were listed in the Brazil Climate Resilience Index, which is the gold standard of our environmental reporting in Brazil. With that, I turn the floor to Renato Cohn to talk about each of our business units.
Thank you. Thank you, Roberto . Very happy to be here, starting with the right foot in, with such positive results. Looking forward to meet everyone individually and personally in the very near future. Going to more specifically into our businesses, we start with the investment bank, where we maintain a leading position in industry rankings despite a weaker market activity. We recorded BRL 351 million of revenues during the quarter, and that was comprised of a stronger quarter in M&A, somewhat reduced activity in ECM, similar to the previous quarter that you saw, very little activity in that area in the market, and an increasing activity in DCM during the quarter.
Obviously, as usually, January was a slower month, especially in the first two weeks, and then it picked up to normal levels in February and March. Important to say that we see very strong pipelines in both the DCM and M&A for the next quarters. Also, as I mentioned in the beginning, we maintain our leadership position in several rankings that evaluate the market. Once market activity picks up, especially in ECM, we will certainly benefit from it. Moving to corporate and SME lending. Another quarter of record revenues as we maintain a high-quality credit portfolio. Actually, they were record revenues for the second quarter in a row.
Revenues grew by 47% year-over-year and 10% quarter-over-quarter as we continue to consistently grow our lending portfolio, both in corporate and SME businesses, while maintaining the same level of quality and similar level of spreads, without a credit provision. Our total portfolio grew by 4.6% quarter-over-quarter and 38.5% when compared to last year. Our SME initiative, which we launched about three years ago, continued to grow at a higher pace, accounting for 10.4% growth during the quarter and almost 82% growth year-over-year. Excellent results on our lending business, and we continue to see those levels of revenues going forward.
Moving to sales and trading, we have record contribution from client activities, and higher market volatility, with efficient VaR allocation. It was our best quality result, with again, record contribution from commission and flow revenues. As our client franchises grow, we have more clients from different areas of the bank using the services that our sales and trading desk provide for their investments or hedging strategies. That enlarged client base aligned with somewhat higher volatility that we saw in the market during the quarter resulted in higher volumes of business, which allowed us to achieve such performance. It's important to note, as you can see in the right-hand chart, that we achieved those results with very low, or below historical levels of VaR utilization.
A very good quality in those results in sales and trading. Moving to asset management, we had solid net inflows and growing management fee revenues. We recorded BRL 313 million in revenues. That was a 13% decline when compared to previous quarter. Obviously, as we all know, we usually collect performance fees during the fourth quarter. When excluding Digifap, we see a consistent revenue growth trajectory as we have been seeing in the previous quarters. Revenues increased by 18.3% year-over-year. That is consistent with assets under management growing at almost 11% and our assets under administration are growing at 30%, reaching a total amount of BRL 586 billion.
Money market was BRL 23.6 billion in the quarter and more than BRL 140 billion during the last twelve months. We see that the majority of the new flows are going into most of our fixed income strategies, and to a lesser extent, to some of our alternative strategies. In Wealth Management and consumer bank, we had another quarter of record revenues, given changes in client mix and increased product offering. We recorded BRL 570 million in revenues, a 27.6% increase quarter-over-quarter, and a remarkable 93% increase year-over-year. That was achieved through consistent growth of our retail, our investment, and our Wealth Management platforms, including the positive effects of the Empiricus consolidation.
Managed money reached BRL 28.2 billion, a very solid number for the quarter, and an impressive BRL 161 billion during the last 12 months. Wealth under management increased to BRL 458 billion, a 35% increase when compared to last year. During this quarter, we successfully integrated our digital platforms, improving our client experience and also brand recognition. Very good results here on Wealth Management. In principal investment and participations, we have very solid performance in both segments. Specifically on principal investments, we posted BRL 290 million in revenues, driven by higher contribution from our global markets, which are the ARC investments.
We also recorded BRL 122 million of net profits through participations, and that is comprised of a net profit of BRL 81.5 million in Banco Pan, and that already considers the goodwill amortization of BRL 57 million that we do. If we were to exclude that only on Banco Pan, we would have recorded BRL 139 million in profits. Additionally to Banco Pan, we recorded BRL 20 million profits on Too Seguros and an additional BRL 20 million profits for our participation in EFG. Moving to expenses, we kept our expenses under control and our cost-to-income ratio remains at the lower bound of our historical range. Salaries and benefits grew by 24% during the quarter.
That was due mostly to organic and inorganic personnel increases, but also to the normal process of year-end salary adjustments and promotions. Goodwill amortization increased as we started to amortize the acquisition of Empiricus. Finally, our effective income tax rate was 20.4%, and that was positively impacted by higher interest on equity, our JCP. On our balance sheet, our total assets increased by 13%. We continue to post solid liquidity levels with approximately BRL 55 billion of cash and cash equivalents, resulting in an LCR of 166%, way above the regulatory minimums of 100%. Our balance sheet credit portfolio in line with our unsecured funding base, which provides a very comfortable level of 169%.
It's important to note that our corporate lending portfolio represents only 2.8x our net equity, so way below most of our peers where we see numbers like five, six, or seven. Obviously, with a significant room to expand. Our unsecured funding increased to BRL 155 billion. An increase compared to last quarter, even considering, as Roberto mentioned, a strong US dollar depreciation against the Brazilian real. The US dollar depreciated about 15% during the quarter. That obviously affects our stock of funding that is US dollar based. Even considering that effect, our unsecured funding increased. Demand deposits remain strong.
Also important to note that our share of retail funding continues to expand, reaching 23% of our total base, or 28% if we would consider Banco Pan's funding base. In our Basel ratio, we continue to show very strong capital ratios with our Basel ratio at 15% and our Common Equity Tier 1 above 13%, which both numbers above most of our peers. As I mentioned before, our borrowing remains at historical low levels and similar to the average of last year. Again, remarkable results in terms of revenues, profitability across almost all our business franchise and all of that supported by an efficient capital allocation and a strong balance sheet.
I think that the quality of these results make us confident that our growth trajectory remains strong as we add more clients to our base and make additional products available to them. Right. Roberto, I don't know if you have any additional comments.
No, thank you. I think we can open up for questions. Thank you.
Excuse me. The floor is now open for questions from investors and analysts. If you have a question, please press star one on your touchtone phone at this time. If at any point your question isn't answered, you can remove yourself from the queue by pressing star two. Questions will be taken in the order that they are received. We would ask you to please pick up your headset when you ask your question in order to ensure optimal sound quality. Please hold while we wait for questions. Our first question comes from Tito Labarta at Goldman Sachs.
Hi, good afternoon, Roberto and Renato. Thank you for the call and taking my questions. A couple questions, if I can. First on your asset and Wealth Management, and your net new money, curious, can you provide any color in terms of the breakdown, between, you know, different types of assets, whether equity, fixed income, alternative investments on the existing asset or wealth under management and also on the net new money? You know, you mentioned the net new money I think coming from fixed income and alternative investments. How does that compare to sort of the total asset and wealth under management currently? Just kind of thinking about how that's shifting, perhaps more towards the fixed income today, but how it compares to others. I have a second question, so I'll throw it back.
Hi, Tito. Regarding the first question, I mean, it's what we see also in Wealth Management is it's that most of the flows are in fact going to fixed income. It's very difficult to segregate exactly where the net new money goes because obviously you have also the natural reallocation of portfolios during the quarter, right? Certainly we see the participation of all the fixed income instruments, not just the funds, but also the securities issued and traded in the market. We see fixed income as a percentage of the total portfolio of Wealth Management increasing in terms when compared especially to equities and in lesser extent to other instruments.
Yeah. I think it's also fair to say that we see the same phenomenon in our asset management business, be it in our asset management or our administration business, where you see investors shifting many times from equity and even from hedge funds into more fixed income funds. Naturally this is just a picture of the short- term. I would actually say that given our experience, recent past performance is a good indicator of future net new money. I've seen hedge funds, especially in our administration business, perform very well. At some point you think that outflow should stop and even turn positive. Equities, I think we have to see at least the market stabilize before we start seeing redemptions then. We are seeing in our administration business this flow.
In our asset management business also we've been seeing this flow into fixed income products. A lot of flows into credit products. Especially because of some specific transactions, we are seeing a lot of flows to our alternative asset management business, and we expect these to continue, for example, with the closing of the V.tal transaction where we have a closed deal there.
Great. Thanks, Roberto and Renato. That's helpful. Any color you can provide on just the underlying asset and Wealth Management in terms of the asset split, you know, in fixed income a third, equity 0.5. Any just broad general sense, doesn't have to be exact numbers, but to help us think about how the portfolio is positioned in that respect.
Look, I mean, this is naturally it changes throughout the time through flows, right, of the net new money that we are discussing and also obviously by market value, right? The effects of the market. I would say that today fixed income and equities are pretty similar with funds a little bit lower. These are the obviously the three main components.
Okay, great. Thank you, Renato. That's helpful. Then my second question was more on the sales and trading, you know, a very strong quarter there. Just was there anything non-recurring in that sales and trading? You know, sort of why the VaR increased a little bit in the quarter, but as you mentioned, below historical levels, you know, you previously guided for about BRL 1 billion+ or - 20%. You know, you're well above that. Do you feel that is still the right guidance to think about for sales and trading, strictly for the rest of this year?
There was no specific one-off in sales and trading. It was a good quarter, I would say, because of the level of activity and I think efficient allocation of VaR. Clearly we see sales and trading benefiting from the integrated sales model. If you look at the line quarter-over-quarter, you're able to see a bit of a trend line growth. I think that's probably something along those levels is probably more accurate than keeping that same, let's say, level that we talked about in the past.
Great. Thank you, Renato.
Thank you, Tito.
Our next question comes from Thiago Batista, UBS .
Yeah. Hi, guys. Congratulations for the results. Very strong numbers. I have two questions. The first one about the capital position of the bank. We have seen that last quarters capital consumption of about 50 basis points per quarter, and it had already achieved 13.2%, if not wrong. Is this level of capital an issue? Or do you believe that with an ROE of 20+, will be possible to, let's say, to rebuild this capital in a kind of organic way? And by the way, what is the minimum level of capital that BTG is comfortable? And my second question is about the impact of the consolidation of competitive.
Do you know more or less how much was the net new money without this consolidation in the Wealth Management business? What was the organic net inflow in the Wealth Management?
Thank you, Thiago. First on capital, we are very comfortable with the levels of capitalization. If you look either at Common Equity Tier 1 or total capital, we are well above our peers. I would say that a good measure for us is that we want to continue to be more capitalized than our peers. I think if we go a bit below here but still well above our peers, we will be fine. I don't think that will happen in any significant manner because as we only pay 25% of our net income and dividends, we accumulate capital in an organic manner. Not only that, but we have been seeing a lot of decay of Tier 2 capital of bonds that we had issued a while ago.
If anything, I would say that probably the best way to access capital would be to issue Tier 2 at some point in time. It's not just the ordinary course in growth of our business. We are quite comfortable with our Common Equity Tier 1 and with the total capital ratio. We will be paying attention to the market. Whenever there's an opportunity to issue Tier 2, we will be able to do that, but in no hurry. Under net new money, basically, almost all of the flow is organic. We had a very small amount coming from basically one-third of the Planner acquisition, which we were able to bring in during the last days of March. Basically the flow was almost all of it organic in net new money.
No more idea. Thanks.
Thank you. That brings us to the end of the question and answer session. I will now return the floor to Mr. Roberto Sallouti for his closing remarks. Please go ahead.
Thank you very much once again for joining our call. We really look forward to seeing you in our quarterly call at the end of the second quarter. Have a great week. Thank you.
This does conclude today's presentation. You may now disconnect your line at this time and have a nice day.