Good morning, welcome to the first quarter of 2020 results conference call of Banco BTG Pactual. With us here today, we have Roberto Sallouti, João Dantas, José Miguel Vieira. We would like to inform you that this event is being recorded, all participants will be in listen-only mode during the bank's presentation. After Banco BTG Pactual's 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 simultaneous webcast that may be accessed through the website www.btgpactual.com/ir the platform. There will be a replay facility for this call from May 12th through May 18th.
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. These are merely projections, and as 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 the changes in the 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 disclosure documents, and are therefore subject to change without prior notice. Now I'll turn the floor to Mr. Roberto Sallouti, who will begin the presentation. Mr. Sallouti, please go ahead.
Thank you very much. Good morning or good afternoon to all of you on the call. Thank you very much for joining. We hope that this call finds you all well and healthy in these unprecedented times that we're currently living. We would like to start off the presentation on page three, where we briefly mention some of the initiatives that we have done to combat the effects of the new coronavirus or the COVID-19. First, it is important to mention that in two weeks' time, so even before mid-March, we had already allocated 93% of our global workforce in home office, allowing us to be completely operational for the very intense period we had in the market in Brazil at the second half of March and beginning of April.
We basically settled twice the volume of trades compared to the first quarter of 2019, with a peak, of course, in March, and we were able to keep our operational platform stable and settling all trades with very good cooperation with our counterparties, even though we had 93% of our workforce at home. We also adhered to the Não Demita Movement here in Brazil, which basically means don't make layoffs. Not only that, but in the first quarter, we had a net increase in our headcount of 240 people, 87 of which happened in March after the crisis reached Latin America more strongly. Basically, these are teams dedicated to technology and to the growth of our digital retail initiatives.
Finally, we announced a few weeks ago a BRL 50 million donation, half and half between the bank and its partners, to projects to support social and healthcare programs in the combat of COVID-19. This has been allocated week after week. Up to now, we have already benefited over 430,000 people with our social initiatives. We have distributed over 86,000 food baskets to 32 NGOs that we've been supporting, and we've been able to support over 16 hospitals. It's important to mention that we are not doing those donations not just monetarily, but especially in the case of hospitals, we're making sure that they receive the needs they have as soon as possible. In some cases, we deliver equipment such as ventilators or heart monitors. In some other cases, we are delivering to them supplies such as hand sanitizers, masks, or aprons.
In some cases, we're even hiring temporary health workers to support them in this urgent moment. We think it's very important not only to make sure that the money reaches its destination, but most importantly, that the actions take place as soon as possible. Turning to page four, we talk a bit about what we expect for the rest of the year for our business. When we report the numbers in the next few slides, you will see that we closed Q1 with a very conservative balance sheet, robust capitalization, very high levels of liquidity, well above the industry average, and we plan to keep these conservative ratios throughout the rest of the year. The actions we took in the first quarter of 2020 allowed us to be in a position right now where we can actively support our clients by increasing our credit portfolio.
That's exactly what we plan to do. We want to be, of course, very selective, extending credit to prime names, extending credit to companies which are resilient to support the difficult times that are ahead of us. You should expect that over the next few quarters and months, we will be growing our credit portfolio and consequently, the revenues from this business line should grow. We will also maintain our focus and investments in the expansion of our digital retail business. As I mentioned previously, we even increased our headcount in the first quarter to ensure that we are able to conclude the investments and the developments that we need to do. Finally, you can expect from us a continuous focus and full commitment to our traditional client franchises here, Investment Banking, Sales, Asset Management, and Wealth Management.
Turning to page five, we talked a bit about the highlights of the quarter. We go to the operational highlights of the first quarter of 2020. We finalized the quarter with a Basel ratio of 19.4%, being that with a 15% core equity Tier 1 ratio. We also finalized the quarter with a cash cushion equivalent to 80% of our equity. As I said previously, we will continue to be very conservative with the ratios of our balance sheet throughout the year. We also increased our unsecured funding base by R$7.5 billion, or 14% quarter-over-quarter. Basically, our funding benefited from the movement of people being more conservative with their portfolios. As people shifted their portfolios to fixed income and to more conservative credit profiles, we benefited such that you can see this in the growth of our funding base.
Our Investment Banking franchise finished the first quarter of the year with a leading position in both M&A and DCM rankings. In the first quarter, we also had very strong net new money inflows from Asset Management and Wealth Management, with a total of R$21.2 billion in the quarter. Not only that, but Wealth Management also established a record high for revenues in the quarter. Our Sales and Trading performance was impacted by a conservative risk approach. We basically had a VaR of 30% decrease, 30%, and we also had a conservative balance sheet. Consequently, we had lower revenues than the last quarters from Sales and Trading, even though this last quarter was the record level we had in our brokerage business. Moving on to page six, we talk a bit about the numbers of the first quarter.
We had total revenues of BRL 1.52 billion and adjusted net income of R$789 million for the quarter. This meant an annualized return on equity of 14.5% for the quarter, and a net income per unit of R$0.91. We had a cost-to-income ratio of 43%, a comp ratio of 19.5%, and we finalized the quarter with total assets of R$200 billion, net equity of R$22.1 billion, capital ratio of 19.4%. With this, if you turn to page seven, you can see the breakdown that we had of the revenues between different business units. Here, what you can see is that we continue to have a very balanced and diversified revenue stream. Exactly what we have been seeking to achieve over the last few quarters and years. More and more, we get this very consistent, well-spread out, balanced revenues from the different units.
I'll now pass on the floor to João Dantas, who will talk about the performance of each of our business units. Thank you.
Thank you, Roberto. Thanks everyone in the call for joining us. We will now go through the details of the performance of each of the business areas. I think there are important messages here considering this period that we are going through. We start on page nine with Investment Banking. As you can see, we had solid performance considering especially that the quarter had a bit less than two months of normal operations. We have reached R$189 million of revenues and maintained our leadership position. As Roberto said, we continue to be number one in volumes of transactions in LatAm and in Brazil for M&A, and number one in number of transactions in LatAm for ECM. It was a tough quarter because we only had ECM and DCM activity until towards the end of February.
By the last week of February, capital markets in Brazil and in Latin America in general came almost to a halt. Since then, until this day, we have seen very few transactions going on. Global markets, the larger companies and the sovereign issuers have done significant transactions since then. Throughout Latin America, especially for corporate issuers, we have seen very little activity. We are glad that we reached R$189 million of revenues and maintained our leading position in the rankings, which is good. We are also glad that we keep very active and very close to our clients.
We have been maintaining very close contact with clients and counterparties in almost all industries that we cover throughout Latin America and Brazil, health sector and other important sectors, and doing our best to support the companies to continue to operate the best way they can given the scenario. Moving to page 10. Here we have the Corporate Lending portfolio. The portfolio in the quarter growth. The growth was based on prime names. We did benefit from the reduction on the credit capital market activity. Since there is very little credit capital market, debt capital market activity, we have been seeing more demand on credit. In terms of revenues, we reached BRL 267 million, which is a very good, very solid revenue for the quarter. Our portfolio grew from BRL 43.8 billion to BRL 47.7 billion at the end of the quarter.
This means a 9% increase quarter-on-quarter and a 54.9%, almost 55% increase year-on-year on the portfolio. We continue to grow the Corporate Lending portfolio with the same strategy, which is disbursing to prime names with high quality. We also had growth during last year and during the quarter of our SME portfolio, which is a digitally originated supplier financing portfolio that reached, by the end of the quarter, BRL 3.3 billion. I think it's important to explain, in this quarter, in more details, our credit reserves. We adopt the expected loss model to determine credit reserves, as most of the banks in Brazil and globally as well. As you know, our credit portfolio is composed mainly of large corporations, and it's concentrated not only in large companies, but companies with high quality.
Our credit provisions are adequate. They had little change in the quarter because we have very little exposure to the sectors of the economy that were most affected until now. We feel confident with the levels of reserves that we have now, even though they didn't change much during the quarter. We will continue to adopt the expected loss model and continue to review our portfolio for the adequacy of the reserves with high frequency during this period of high volatility and economic turmoil. Moving on to page 11. Here we can see the Sales and Trading results. As Roberto has mentioned already, revenues were impacted by the lower use of VaR and the lower use of balance sheet due to the volatility and uncertain trading conditions. That reduction in revenues was somehow offset by very high levels of brokerage fees in the quarter.
We reached BRL 455 million of revenues, which is lower than the last three quarters of the last year. Still, for a quarter like this, we consider this a good achievement and a good result that we're delivering in Sales and Trading. Moving to page 12. Some important messages here on Asset Management business. The first one is the net new money on the quarter. We reached BRL 9.3 billion of net new money, which is not our historical high, but is a very good net new money for a quarter. Our AUM in the quarter reduced from BRL 273 billion to BRL 268.8 billion. The reduction is mainly caused by what happened in the equity markets. Something around 12%, 13% of our funds are equity funds.
The devaluation of the Bovespa and the other stock indices in countries where we have equity Asset Management are the cause for the reduction in AUM, even though we had positive net new money. In Brazil, Bovespa, at the height in the middle of February, was around 115,000 points and went down by the end of the quarter to 63,000 points and came back somewhat until today. The performance in terms of revenues was very consistent. We reached R$214 million of revenues in the quarter, which is less than the fourth quarter, because in the fourth quarter we have performance fees. It's typical that we accrue performance fees in the fourth quarter. In other words, by the end of the year and by the middle of the year, our Asset Management business records performance fees.
If you exclude the performance fees, management fees only in the first quarter were higher than the management fees that we accrued for the fourth quarter of 2019, in line with the average growth of the portfolio. In average, we had portfolio growth from the fourth quarter to the first quarter of 2020. Our Asset Management business continues to perform well. It's a very resilient business, offers a variety of products so clients can migrate from one asset class into another asset class, which maintains our attractiveness and our resilience and our ability to attract net new money even throughout this more difficult market period. Moving to page 13. A similar picture that we see here in the Wealth Management business. Starting with revenues, we reached R$170 million of revenues, which is record high revenues for Wealth Management business.
It's a new plateau of revenues that we reached in the first quarter of 2020. We also have a very high net new money of R$11.9 billion. It's the highest net new money for a quarter for Wealth Management business, with some contribution as well from the digital business, impacting here net new money and revenues. Wealth under management went from R$168 billion to R$160.6 billion, also impacted by equities, by the equity portfolios inside our wealth under management. It's also important to note that in the first quarter, revenues were pushed by the highest level of brokerage fees and trading activities that we saw. It was really a large movement, a very steep number, increasing number of trades and volumes, and we captured brokerage fees, not only in Sales and Trading, but also in Wealth Management because of that.
Our digital platform demonstrated strong growth capacity, not only that, moreover, a best-in-class operational environment. Even though we moved most of our people in operations, technology, client advisory, to operate from home, we maintained our platforms, our portal, our home broker, fully operational during the most volatile and acute periods of the crisis. That makes us very proud of the excellence of our operational environment. Moving to page 14, some highlights on principal investments. First is that we keep positioning the business to trim our exposures. The total, the sum of private equity, real estate, and global market exposures today are below 3.5% of our assets. The results in the quarter were very close to zero, minus R$18 million.
The trend is that we continue to trim exposures, and now we are disclosing principal investments on a consolidated basis given the lower relevance of these three business lines. In terms of specifics in the quarter, we have close to neutral P&L contribution from Eneva, even though Eneva share price reduced significantly during the quarter. As you know, we have a methodology of applying reserves, and because of that, the P&L in the quarter for Eneva was kind of neutral. We had some negative contribution from investments in global markets. A slight negative contribution from real estate due to cost of funding and positive equity pickup from private equity investments, which led to minus R$18 million of P&L for principal investments in the quarter. Moving to page 16, in terms of expenses and the main efficiency ratios.
As you can see, our cost income ratio was 42% in the quarter, and our compensation ratio at 19%. Both very much under control and in line with our historical averages. Despite the fact that we had, in the first quarter of 2020, lower revenues than the fourth quarter of 2019, we were able to maintain a good standard in terms of efficiency ratios, exactly because the most relevant component of our expenses is the bonus accrual. The bonus is variable in terms of being impacted down when revenues go down and the margin goes down, and up when the contrary happens. This creates a resilient business model where we are able to offer a very good efficiency ratio throughout different cycles of the economy. What impacted the costs was basically an increase in salaries and benefits.
The increase was about 17%, not only because, as Roberto mentioned, we did hire people in the first quarter and during March, but also because of the FX impact, since about 16% of our payroll is dollar-denominated. Administrative and other expenses fell about 9% quarter-on-quarter due to lower legal expenses and lower travel expenses. Finally, we have a positive impact on the income tax line because we computed for the JCP, which is the deductible dividend, or interest on equity that we have in Brazil. That computation helped the effective income tax rate to be reduced to 11.4% in the quarter. Now moving to page 18, in the balance sheet analysis. I think this is a very important slide in the current quarter. I'd like to make some highlights here on what happened in the first quarter.
First, there's a dichotomy, an apparent dichotomy, in terms of the increase in total assets and the decrease in risk that we mentioned before. Let me explain that. We have an increase of about BRL 36 billion. Our total assets reached 9.1 times our equity. It's a nominal increase of 22% during the quarter. That doesn't mean that we increased risk. On the contrary, we have reduced balance sheet usage and required capital fell in the quarter. Why is that? Basically, as you can see in the chart, the single line that was impacted in terms of growth in total assets in the quarter was the repo financing. What happened in markets, especially in Brazil, is that we are a very active counterparty to help institutional investors and other counterparties to pass liquidity on into the market. We were very active in doing so.
There is a tendency for counterparties to look for prime names in doing repo and reverse repo transactions in moments of more volatility. We help our clients in executing that. This is a match portfolio which carries no risk since it's fully collateralized by government bonds on a DVP basis. Also, it doesn't consume market risk since it's a neutral book. The match portfolio, typically in other accounting regimes for banks like IFRS or U.S. GAAP, would be netted down and wouldn't be included in the total assets. In Brazil, we adopt Brazilian GAAP, as you know. In Brazil, it's necessary to include both legs of the trade on the asset and liability sides. Therefore, this is simply a nominal increase of assets, but not a real usage of balance sheet.
Despite the growth in total assets, our risk density, which is a comparison of risk-weighted assets to total assets, has reduced and also required capital fell significantly in the quarter, as we'll show in the next pages in terms of the capital indices that grew significantly in the quarter. Not only capital, but cash. We increased cash cushion to about 80% of our equity in the quarter, which is also a very high historical measure and makes us confident that we have the right shape of the balance sheet to face the current period. Because of that, we can say we have comfortable coverage of unsecured funding to credit. You can see here as well the coverage of unsecured funding to credit. Unsecured funding in the quarter grew substantially more than the banking book utilization.
Our coverage increased in the quarter, as we'll show in the next page. Moving to page 19, here's a snapshot of the unsecured funding base, where we went from BRL 53.6 billion of unsecured funding to BRL 61.1 billion in the end of the quarter. A 14% growth of the unsecured funding base in the quarter, or about BRL 7.5 billion of additional unsecured funding base. As you can see, unsecured funding grew on most of our funding lines, especially time deposits and securities issued, which reflects our ability to continue to fund well in all types of segments and with all different types of counterparties in the country. The behavior of the unsecured funding base makes us confident that we're functioning normally, and we are attracting typically more depositors and counterparties to do funding transactions with us than in the average.
This means also a market share gain on relative terms. Also important to note, the unsecured funding base in the quarter was not impacted by any of the government programs yet. The most important program that we foresee impacting our funding base positively is the Brazilian LPRO, which is a large program of liquidity for banks, of asset liquidity for banks. This hasn't kicked in the third quarter. It's kicking in now. Sorry, it hasn't kicked in the first quarter. It's kicking in now in the second quarter as we speak. Finally, moving to page 20, here we have our BIS ratio. As a result of everything that we said, Basel ratio went from 14.9% to 19.4% in the end of the first quarter.
19.4% of total capitalization and 15% of core equity Tier 1, which is not our historical highest level, but since our IPO, it's one of the highest historical levels of capitalization. We intend to maintain this high level of capital and also the high level of liquidity. The most relevant impact to the increase of the capital ratio was, as you can see in the right part of the page, the decrease in market risk. Our risk appetite has been reduced to 0.37% of our average equity, one of our historical lowest levels of VaR, and that's how we intend to keep the business during this period that is still ahead. With that, these are our comments, and we finish our comments here, and we would like now to open the floor for questions. Thank you very much.
Thank you. The floor is now open for questions from investors and analysts. If you have a question, please press star then one on your touch-tone phone at this time. If at any point your question has been 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 also ask you to please pick up your handset when you ask your question to ensure optimum sound quality. Please hold while we pull for questions. The first question today comes from Nicolas Riva of Bank of America. Please go ahead.
Thanks very much, Roberto and João, for letting me ask questions. I have two questions. The first one, if you can comment on the outlook you are seeing for the market in terms of your Investment Banking and Sales and Trading franchises. In terms of Investment Banking, we saw a good amount of deals in the capital markets happening earlier this year, January and February. Of course, things slowing down a lot in March and April, kind of picking up a bit now, like in the capital markets, for example. If you can talk about what you are seeing for the rest of the year in regards to capital markets, M&A, and Investment Banking in general. Then in Sales and Trading, you would assume that probably more market volatility would be positive for your Sales and Trading business.
Clearly you took a more conservative position in the first quarter. We saw the reduction in your Value at Risk and the reduction in revenues in your Sales and Trading business. If you can comment also on the outlook for this business. My second question, regarding your risk appetite. We saw a significant reduction in risk-weighted assets in the quarter, and that drove increasing in capital ratios. You mentioned in the Corporate Lending business that basically you're going to grow lending to your prime clients, to your best corporate clients. If you can talk about the risk appetite that you have right now, and maybe also with an emphasis on the Corporate Lending business, for the rest of the second quarter, and maybe the third quarter as well. Thank you.
Thank you, Nicolas. Regarding your first question, the truth is, in Investment Banking, as you said, things are starting to pick up. You are starting to see some discussion of companies looking to issue equity. You will start seeing, at some point, some M&A transactions going through. Let's say the debt capital market is taking up a new shape. We think clearly it will not be the levels that we were at Q4 or January and February, but clearly will not be zero like we were in March. We think this will be gradual as the economy picks up. The truth is, there's still a lot of uncertainty, so my prediction also has a lot of uncertainty. That's the beauty of our model.
We have a cost structure and the combination of businesses that allow us to keep a very senior team, a very seasoned team, even throughout the downturns in the market, because we know at some point the market will come back. We are positioned exactly to be here as long as it takes, because we want to ensure that we are ready to serve clients with the traditional quality that we've always given them once the market picks up. In Sales and Trading, you have to be careful as to how much volatility. Of course, a market with no volatility is not good for the business, but a market with too much excess volatility, I mean, the level of volatility or the VIX we saw were just absurd. We have five days in a row of circuit breaker, one on each side, going up, going down.
Just imagine if you're giving prices to clients in this scenario, that it's basically flipping a coin. We're not in the business of flipping a coin. We're in the business of risk management. In this scenario, we decided to lower our exposures. It was the right thing to do, even though it sacrificed short-term profitability. As we always said, we think that our Sales and Trading business has a range of BRL 400 million-BRL 800 million a quarter. We think this quarter was towards the lower end of the range. We do expect probably to go towards the middle of the range, but also, again, this will depend on how the market develops. At the current level of volatility, yes, the market is much better than it was, let's say, in March. You are correct in your theory. Talking about risk appetite, more specifically about Corporate Lending.
We finished the quarter, we're roughly two, 2.1 times our equity in credit. We probably want over the next quarters and months to grow our portfolio to two and a half times our equity, focused on very high-quality credit counterparties. Companies that are resilient for a very long-term, what we're calling during Corona, because we do think that this kind of market that we're currently living in some shape or form will be with us for a while. That's basically the risk appetite we're looking at, to increase from two to two and a half times of our equity, our Corporate Lending portfolio. We think that spreads have repriced to quite attractive levels, even though with the fall in interest rates, the cost of servicing debt to the final client has actually reduced compared to what it was in the past.
This leads us to believe that there's a very good opportunity here, an opportunity for us to support our clients in this very difficult market.
Okay, thanks very much. That's very useful. Thanks.
Thank you, Nicolas.
The next question comes from Henrique Navarro of Banco Fator. Please go ahead.
Hi. Good morning, everyone. Thanks for the opportunity to make questions. I have two questions. First one is on provisions. Most of your peers, they decided to build up provisions ahead of the coronavirus outbreak, but you didn't. I would like to ask you, the reason why you haven't built up provisions is because your credit profile allows you to do so. I mean, it is so safe that you don't need, or it is because you already have enough provisions in excess, so you can burn the cushion you have built up in the past. Maybe we shall expect some reinforcement in provisions on the second quarter. That's my first question. The second question is, when you analyze line by line of your P&L, there were ups and downs and positives and negatives.
I got the impression that maybe the first Q is going to be, I would say, the lowest among all the quarters in 2020. I know you cannot provide a guidance. This is more of, let's say, a free conversation. I would like to address your comments on that. Maybe, the first quarter is going to be the worst. Maybe, all the next quarters, considering the positives and negatives, the balance of everything, we could see a slight improvement in the quarter results. That's it. Thank you.
Hi, Henrique. Thank you. This is Dantas. Thank you for your questions. I will address the first one, and I'll let Roberto talk about the second question. In terms of provisions, you mentioned the fact that many of our peers have booked up generic provisions in the first quarter. Not all of them, most of them have done so. It's important to make a distinction here. All these provisions, the generic provisions that you mentioned, they were done based on the expected losses for Corporate Lending portfolios, for retail portfolios. There, the expected losses are a statistical approach. You measure your expectations for GDP, for employment, and other macroeconomic factors that impact the performance of Corporate Lending portfolios, and you estimate losses based on that. That's the expected losses on consumer portfolio.
In our case, as we have a corporate lending portfolio, expected losses are name by name. As I said, the reason that our credit reserves didn't change during the quarter is that we have very little exposure to the sectors that were most affected in the current scenario. We have a corporate lending portfolio that is comprised of prime names with a high quality of guarantees. Because of that, given the expected loss approach that we take in line with the rest of our peers, the provisions are adequate. It's important to make the distinction because all these generic provisions that we saw being made, they apply to consumer lending portfolio, not even to the corporate lending portfolio of these other banks.
Thank you, Dantas. On your second question, if this is the lowest quarter of the year or not, it's still very hard to say. There's so much uncertainty. I hope you are right. The truth is, we are putting ourselves balance-sheet-wise in a position that if for some reason the market is similar to March, we will be okay. Maybe this will not be the lowest quarter return-wise, we will be fine in this scenario, being conservative in our marks and conservative in our risk-taking. I see a scenario where what you said is possible, I also see a scenario where that is not the case. It's very hard to give you now. One thing that we are working in our scenario is that we think that we divide the world into pre-corona, during corona, and after corona.
The truth is, we think that during Corona will be much longer than we expected or people expected a few weeks ago. The truth is, there's a big chance. What we are modeling is that the during Corona will be something that will last another 12 to 18 months, meaning that we will be seeing some kind of social distancing, not going back to normal as we expected. This probably means that then it's hard to predict an answer to your question. We also think that when you go to the after Corona, we have to take into consideration what will be the behavioral changes of the clients and of the market in general, right? Will be sanitary, economic behavior, and even, let's say, digital behavior, given our home office experience that we're having now.
That's why we don't want to give you any strong guidance now. We think that once this has passed, we can go back to our targeted ROEs of close to 20%. To give you a quarter by quarter now, I really don't feel comfortable given the scenario.
Just to give an observation, the 12- 18 months that Roberto has mentioned is very much linked with the possible probable timeline for a vaccine to be developed.
Okay. Very clear. Thank you.
Thank you, Henrique.
Thank you.
Next question comes from Thiago Batista of UBS. Please go ahead.
Hi, guys. Thanks for the opportunity. I have also two questions. The first one, if you can comment about the bank's pipeline of new products, especially in the, let's call, retail segment. The second one, if you can talk a little bit more about the performance of BTG Digital during this very volatile market. Has BTG Digital gained clients or not? If you are expecting any big change in the BTG Digital strategy going forward.
I'll actually put both of the questions in one. Actually, what we saw was continued growth in the number of clients in AUM, in BTG Digital. We're very satisfied with that. If anything, we are committed to keeping the same pace of investment, be it in technology, be it in business development, that we had in the past, because we see this as a trend. There were two trends that we thought benefited this move. One was the lower interest rate scenario, where people had to rebalance their portfolios, and the second was digitalization as people got used to it. The truth is, this pandemic has accelerated both of these trends. That's why we plan to keep the pace. We have continued to see growth, and this is becoming, every quarter, more relevant in our Wealth Management business. We plan to continue expanding there.
The pipeline of retail products, we think that it changed from the past. We had IPOs or we had credit funds, and now it's going to be similar type of credit products which are more conservative, less volatile, or products that replicate fixed income as people try to adapt to this lower interest rate scenario. Interestingly enough, we have been seeing that every week we've had positive inflows of the retail segment into the stock market, which just means, shows exactly what I mentioned to you, right? People are having to shift their portfolios to deal with the interest rates at the level that they are now and will probably continue to decrease, just given today's central bank minutes from the last meeting.
We think the pipeline continues to be interesting, even though it changed dramatically, and we plan to continue investing at the same pace we had in the development of our digital retail businesses.
That's just to make additional comments for Thiago. There's one other aspect that can be very interesting going forward and that we think can benefit our digital investment platform quite well. Of course, market shocks and periods of high volatility are an opportunity for investors to rethink how they view risk and how they take risks into their portfolios. We think that this is a period of learning for investors, and we think that after this, there will be higher appreciation for suitability and for the adequate advice. We see our platform and the quality of our advice very well-positioned to take on additional market share, once the quality of advice will probably rank higher in the preference of investors going forward.
Perfect. Thanks for the answers.
Once again, if you wish to ask a question, please press star one on your touch tone phone. Please hold again while we pull for questions. The next question is a follow-up from Henrique Navarro of Santander.
Hi. Sorry for bothering you guys again, keeping you busy. Because of the coronavirus outbreak, we have seen digital initiatives gaining ground. We have heard about banks where, because of the coronavirus or whatever, or the digital initiatives you were speeding up like one year and a half. Things that were planned, now you had to implement instantly. You have a fully operational digital banking side house. I would like to hear you, if you could shed a light in any new advancements, any news you could share on the BTG Digital, I would welcome. Thank you.
I think here, what would be new would be the launching of our transactional bank. We have already done the first release of that, which is an internal release for taking out the bugs and testing it. We will do probably by the beginning of the third quarter, a second release to some of our digital clients, and then we will open to the market at the beginning of next year. The truth is, going to home office probably delayed this a few months, but it is what it is. People had to get used to working from home office, now we're very efficient from it. I would say that we are, of course, investing in our investment platform, but it's within plan. I would not say that we shortened anything.
We continue investing in our transactional bank platform, and we will probably be able to launch that to the full market at the beginning of next year.
Okay. Can you share, for example, the number of digital clients and the number of independent assistants as well?
Both of these continue growing. As I said in the past, we intentionally don't think that this is the right KPI to follow, because we think that necessarily not having the clients which fit the profile of the platform is not necessarily good for the platform, for the client, or for the profitability to the business, because you can overload your platform and not give good service to the clients. The same thing with independent advisors. We think having the independent advisors which fit our culture and the quality of service we want to give to clients is much more important than the number of them.
To not send the wrong incentive to our teams, we have not been emphasizing or disclosing both of these numbers, because we think that the profitability of the business, the level of service to the clients, and the AUM of the business are much more important indicators than the necessary number of clients or number of independent financial advisors.
Okay, thank you.
Thank you.
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 any closing remarks.
Thank you very much once again for joining our quarterly call. We hope that you are all well and your families are well. We hope to be with you again soon to talk about our second quarter results and highlights. Have a great day. Thank you once again for joining.
Thank you. This concludes today's presentation. You may disconnect your line at this time, and have a nice day.