Good morning, and welcome to the Second Quarter of 2024 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's remarks, there will be a question and answer session for investors and analysts when further instructions will be given. Today, we have a simultaneous webcast that may be accessed through the website www.btgpactual.com/ir and the platform. There will be replay facility for this call from today. 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 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 disclosures, 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, and good morning to everyone. Thank you for joining the call. If we could please start turning to page 3, where we have a few of the highlights for the quarter. Starting with the first point, it was another quarter of record results that was driven by both revenue growth, growth and increased operational leverage. We are reached at the quarter 22.5% return on equity. But I think more important than that, we're very satisfied because we see this second quarter as a very challenging one, especially on the macro scenario, both globally and in Latin America, and even so, we were able to deliver solid results.
But more than that, the underlying dynamics that we are experiencing in each of the different business units leaves us very confident that we will be able to continue to deliver ROE expansion over the next few quarters. Going to the second point, we had very robust results in investment banking, which were led mostly by a very strong DCM activity, debt capital markets activity. We had record results in corporate lending, which was driven both, both by a very strong portfolio growth, but also by greater revenue diversification and healthy spreads. Here, we're benefiting from both, to diversification of business, offering, of business segments, of geographical diversification. So we're very satisfied that we've been able to show strong growth, but more than that, growth with very good quality and healthy spreads.
Our total assets under management surpassed BRL 1.7 trillion at the closing of this quarter. We had BRL 56 billion of net new money, and our AUM is growing 23% year-over-year. Finally, the fifth highlight of this quarter is that we continue to expand our funding base, which grew 30% year-over-year, and we continue with very strong capital and liquidity metrics in our balance sheet. Turning to page four, we talk a bit about the key numbers for the quarter. In the quarter, we had total revenues of BRL 6 billion, net income of BRL 2.9 billion, growing 15% year-over-year, and a return on equity of 22.5% for the quarter.
We have, going to the next page, BRL 56 billion of net new money, and our Wealth Management business is showing 27% growth in AUM year-over-year. We finished the quarter at BRL 799 billion, so let's say, we can say BRL 800 billion reais. And our asset management business is growing 20% year-over-year, closing the quarter at BRL 920 billion reais. And finally, going to page six, our unsecured funding grew 30% to BRL 236 billion reais. Our credit portfolio showing strong and healthy growth of 27%, reaching BRL 195 billion, of which BRL 23 billion in the SME segment.
As mentioned previously, a very robust capital base with a total Basel Ratio of 16.2% for the end of the quarter and BRL 53 billion equity at the close of the quarter. Turning to page 7, we show the traditional way that we've been showing for years now. So we had total revenues in the quarter of BRL 5.99 billion, net income of BRL 2.95 billion, BRL 0.77 net income per unit. We continue to improve our operational leverage and continue to maintain a cost income below our historical average, having a cost income of 37.3% for the quarter and a cost ratio of 20.8%. We finished the quarter with total assets of BRL 600 billion, equity of BRL 53 billion...
And as mentioned previously, Basel of 16.2, and it had a very low VaR during the quarter, a VaR of only 21 basis points. During this quarter, we also announced the JCP distribution of BRL 1.55 billion. Turning to page 8, we talk about the results for the first half of the year. For the first half of the year, we have total revenues of BRL 11.88 billion. Net income growing 21% versus the six months of the previous year to BRL 5.84 billion. A return on equity for the first half of the year of 22.8% and a net, net income per unit of 1.53. Again, cost income below historical base at 37.4 and compensation ratio of 21%.
Turning to page 9, we see the revenue breakdown by business unit, and here we continue to see the franchise businesses growing very strongly. And, as we have been saying in the previous years and previous quarters, we continue to experience a stronger growth in our investment management businesses, in our corporate and investment banking businesses than the growth compared to the global markets business. And this is generating a very healthy distribution among the different business units. I think the highlight here to mention is the very robust growth in investment banking, even in a still challenging market, especially for equity capital markets. Of course, corporate lending and business banking still benefits here from the effect of the Americanas events in the previous 12 months.
But what really is really robust growth is what we're seeing in asset management and in Wealth Management and personal banking. 23% in asset management and 25% in Wealth Management. With that, I'll pass the floor to Renato Cohn before we go to the question and answer session.
Thank you, Roberto. So moving now to our business lines on page 11. In investment bank, we showed once again very strong results during this quarter, this time mostly impacted by strong DCM activity. Revenues came at BRL 558 million, which is a decrease when we compare to the first quarter of 2024. Bear in mind that in the previous quarter, we had very strong revenues. We also had very strong revenues and our best quarter ever in M&A. So, as I mentioned, most revenues came this time from DCM transactions, with more than 40 transactions concluded during the quarter. As market conditions for DCM continued to improve, with both institutional and private individuals being very active throughout the quarter.
M&A and ECM continued to contribute to the overall investment banking revenues, and specifically in M&A, we continued to execute our existing pipeline of transactions while we bring new ones for execution in the next few quarters. And in ECM, we executed an IPO of Auna, a Latin American company created in Peru, that lists the shares in the US markets. And also we coordinated some follow-ons, both here in Brazil and other transactions in Latin America. And we maintained our leading position in the industry rankings, being number one in M&A by number of transactions in Brazil and in Latam. We also ranked number one in ECM in Brazil by number of transactions and in volume of transactions in Latam.
Moving now to page 12, in corporate lending and business banking, we had record performance with strong portfolio growth, healthy spreads, and, revenue diversification. Revenues grew 6.8% during the quarter, reaching BRL 1,534 million, which represents a 20% growth when we compare to the second quarter of 2023. Credit portfolio grew 7.3% during the quarter, and 27% when we compare to last year, reaching, one hundred and ninety-five billion reais as we continue to expand our portfolio, not just in Brazil, but also in Latin America with our banks in Chile and Colombia, and now also with our bank in Luxembourg. Important to note that, we managed to grow our portfolio while, we maintain the same healthy spreads and the same quality, of the portfolio.
SME portfolios continued to develop, growing 6% during the quarter, with additional diversification of revenues coming from our expanded offering of products and services. An update on the Americanas credit case with the conclusion of the process of restructuring their debt. According to the judicial plan, we have received the majority of our remaining exposure in cash, with a smaller part received in the ventures and equity. And with that, we expect to have a marginal gain, as the level of provisions we had in our balance sheet were in line with the judicial plan agreed and approved between the company and its creditors.
And finally, we are voted for the 3rd year in a row by Global Finance, the world's best bank for SMEs, and we are also voted by Euromoney, best bank for SMEs in Brazil and in Latin America. Going now to sales and trading, we had resilient revenues driven mostly by client activity and with VaR at historical low levels. Revenues came in at BRL 1.388 billion during the quarter, which is a similar level when compared to the last two quarters, as we face more challenging market conditions with lots of uncertainty in both domestic and international markets, and a low VaR allocation. Average VaR during the quarter was 21 basis points, which is the second lowest VaR in our history.
In July, we announced the acquisition of Sertrading , a company that provides solutions in foreign trade, mostly imports. With this transaction, which still needs the customary regulatory approvals, we will add additional services to our clients and also integrate a range of financial products and solutions to Sertrading clients. For the fourth consecutive year, our teams were voted best research team, best sales, best trading team, and best corporate access in Latin America by Institutional Investor. Additionally, we were voted best local broker and best trading house in Brazil. Just to highlight, our research team was ranked number 1 in 18 out of the 25 categories of Institutional Investor. Going now to our asset management, we had strong inflows and consistently growing management fees aligned with the AUM growth.
Revenues came in at BRL 548 million, which is a 4.6% increase, sorry, a 4.6% decrease during the quarter. Management fees continued to grow in line with the portfolio expansion, but overall, revenue growth was offset, as during the first quarter, we recorded dividends from the independent asset management companies that we invest in. When we compare with the second quarter of 2023, revenues grew by 27%. Net new money came in at strong 28 billion reais, despite the more challenging scenario. And most of the flows are going to fixed income-related products as a consequence of market expectations of a higher interest rate scenario for a longer period of time.
Assets under management and administration reached BRL 920 billion, which is a 4.5% growth when we compare to the previous quarter, and a 20% growth when we compare to last year. Going now to page 15, in Wealth Management. We had another quarter of strong revenue generation with wealth under management growth. We had record revenues of BRL 928 million, which is a 5.6% growth during the quarter, and a 27.6% growth when we compare to last year. Wealth under management reached BRL 799 billion, growing also 5.6% during the quarter, and also 27% when we compare to last year.
Net new money came in at BRL 27.8 billion, summing up a total of BRL 130 billion of net new money during the last 12 months. In June, we also announced the acquisition of M.Y. Safra , which is a bank in the United States, and that will help us improve our products and services offering, as well as the experience for our clients and their financial needs in international markets. Here, we're also voted the best private bank in Brazil, Chile, and Colombia by World Finance. Looking now to our participation results on page 16, we see the different components in the right side of the slide with Too Seguros contributing with BRL 57 million in profits.
EFG added BRL 30 million in profits as they continue to improve their results. And then we have the three different components of Banco Pan's contribution to our results. First, we recorded BRL 145 million in profits in equity pickup from our stake in Banco Pan. Then on top of that, we had a contribution of BRL 99 million in accrual for the portfolios that we acquired from Banco Pan in the last few quarters. And we had BRL 106 million in elimination from the portfolio we acquired during the second quarter of 2024. So overall, our participations contributed with BRL 224 million in profits. Moving now to our expenses and main ratios. On page 18, we see consistent operational leverage gains through effective cost management.
Total operating expenses slightly increased 1.9% during the quarter. Salaries and benefits increased 1.7% during the quarter, while administrative and other expenses remained flat during this quarter. Goodwill amortization increased 8.9% with the impact of the Órama acquisition that now impacted for the first time the full quarter, and our effective tax rate remains stable at 19.9%, mostly impacted by the JCP distribution of the interest on equity. Going now to page 20, we see our balance sheet, and here we see that total assets grew by 5.8% during the quarter, representing now 10.3x our equity.
We continue to maintain strong liquidity levels with BRL 75 billion of cash and cash equivalents, and with an LCR of 191%. Our coverage ratio remains at a comfortable level of 168%, with our unsecured funding growing in line with our balance sheet credit portfolio. Our Corporate Lending business portfolio now represents 3.7 times our net equity. Going to page 21, we look at our unsecured funding base, and we see a strong growth of BRL 11 billion, reaching a total unsecured funding base of BRL 236 billion, with retail funding remaining stable at 28% of total funding and growing in line with the total funding base.
In April, we successfully issued a 5-year unsecured note of $500 million in international markets. Going now to page 22, we see our Basel ratio slightly decreased to 16.2% as we distributed interest on equity of one hundred, sorry, BRL 1.55 billion. Core equity Tier 1 decreased 10 basis points to 12.3%, while Tier 2 capital remains stable at 3.9%. Finally, looking at our VaR, as mentioned before, we see a strong reduction to 21 basis points, our second lowest level ever as we reduce our exposure due to some recent market activity.
To conclude, once again, in a challenging market environment, with lots of volatility in both domestic and international markets, we managed to produce very strong results with record revenues and also record profits. With that, I think, Roberto, we can open for questions.
Thank you. The floor is now open for questions from investors and analysts. If you have a question, click Raise Hand at this time. If at any point your question is answered, you can remove yourself from the queue by clicking Lower Hand. Questions will be taken in order that they are received. Please hold while we poll for questions. The first question comes from Yuri Fernandes with J.P. Morgan. Please go ahead.
Thank you, everybody, and good morning. I have a first one on sales and trading, and I know usually your answer is hard to forecast, and let's kind of use the last four quarters. But going into a little bit of more details, the VaR was pretty low this quarter, right? And usually you say that this line is becoming more and more client-dependent, and we see other lines doing well. So again, guys, if you can help us understand, like, the level of sales and trading, if we just continue to use this average, or if you expect a second half to be better than the first half? That would be my first question.
And then on the M&A, I think you have been doing, you mentioned some of the deals in the presentation, so Pershing Square , the M.Y. Safra in the U.S., the Sertrading. What else? What could we expect for your M&A strategy? Could you see this strong pipeline to remain in place in the second half? So a little bit more color on M&A would also be helpful. Thank you, guys.
Thank you, Yuri. So on your first question on Sales and Trading, yes, as you said, we don't usually say this, but yes, we do expect the second half of the year better than the first half of the year. We were expecting, of course, growth across all our business lines. We did not see that in Sales and Trading. We think that was, how I say, something due to the conditions specific to these two quarters, but we are given the dynamics that we're seeing, we're quite confident that we will see a better second half than the first half.
On your second question on inorganic growth, if you look at the ones you mentioned, Sertrading, or the bank in the US, these are all complementary product lines that we are able to offer to our client base. So you should continue to expect that whenever there are interesting opportunities for us to add product lines to better serve our clients, these will be done. And then there's a different rationale that, for example, the Órama acquisition. We're basically just bringing leverage to the current product offering we have, where we're able to basically bring more clients to the current platform that we are operating. So
There, you should not expect any transformative acquisition, but we will continue to be on the lookout for these, let's say, specific acquisitions that either bring us an additional product offering to our current client base or bring additional clients to our current platform.
No, super clear. If I may, just to follow up on sales and trading, you used to have the principal investments in a separate line, right? And just checking, when you say the second half to be better, it's maybe the principal investments doing better, or is the core, I don't know, the old, the good old sales and trading doing better? Again, I know it's not that mature anymore, but just to kind of separate, not an ave or utility generation on power plant, you know?
It's just the combined sales and trading line as we're showing it now. For my analysis was regarding the way we are showing now, so that's why we expect a stronger second half of the first.
Perfect. Thank you, guys.
The next question comes from Olavo Arthuzo with UBS. Please go ahead.
Hi, good morning, Sallouti. Good morning, everybody. I have two questions. My first one, it's about the investment banking, because, we saw a drop, in revenues, this quarter, and even looking at fees, it shrunk, after a spike, in the last quarter. So could you give us any color on this line, but mostly focusing, on, on these fees, the bank accrue, just, for us to understand if there is any kind of deferred accrual here, and what would be the mechanics behind it? It help us a lot. Thank you, and then I'll go, to my second question.
Well, there, there's no deferred accrual. If there's something. The only things that have been announced and not booked yet are M&A transactions, which they're announced, but the fees are only paid when the transactions are closed. So sometimes you have CADE or regulatory approval, and that takes a while. But as we mentioned previously, Q1 was very strong because we had M&A fees, and Q2 was a bit lower, but still strong, where we had very strong debt capital market fees.
Okay. No, that's great, Sallouti. My second question, I'll shift to the asset management business of the bank, because you mentioned the decrease in the quarter had some relationship with the hard comparison base in the last quarter, with the contribution from that stake the bank has independent asset managers. So would you just like elaborate a little bit more on the magnitude of this impact on the asset business? I mean, the level of relevance of that contribution from the independent assets. Any color here would also help us. Thank you again, guys.
First, I'm going to use your question to comment that we're actually quite satisfied with the performance, especially the net new money of our business, given what is happening to the industry and the very challenging environment. I think here, we're benefiting from the complete product offering, from the fact that we have, let's say, conservative fixed income to active fixed income, to credit products, to hedge funds, to equity funds, to wealth or our real estate. I think we're benefiting from this complete product offering, especially given the very tough moment that the industry is living. We're very proud and satisfied of the performance of this business. What we can say about the revenues here is that we have seen a constant increase in the management fee component of the asset management revenues.
And here you have some performance fees, I think in the first, in the, in second and fourth quarter, and in the first quarter, you have some dividends from the independent asset managers, where you have a bit of volatility that is linked either to the performance of the funds or the performance of these independent asset managers. But what, what's important to note here is the underlying trend of a constant growth in the management fee component, but most of all, a very healthy performance and a very difficult market environment.
Okay. Thank you very much, Sallouti.
Thank you, Olavo.
The next question comes from Daniel Vaz with Safra. Please go ahead.
Hi, guys. Thank you for the opportunity to question and congrats on the results. I guess there were no large deviations from our expectations, so try to explore a more broad subject here. You currently don't disclose original breakdown, right, of revenues. So it would be very, very valuable to hear what's the current share of revenue coming from Latam. So which countries do you see as the most promising? What's like an ideal share, maybe, of revenue you want to achieve in the medium term versus Brazil? So if also any major acquisition looking forward to do to penetrate in any of specific market. So thank you. That's all.
Thank you, Daniel. Qualitatively, all of our Latam, let's say, geographies are actually having record years, having very, very strong performance. So we're very satisfied with the growth. The truth is, Brazil, in the last few years, has grown very strongly, so that, to some extent, had decreased the Latin participation from, let us say, the historical 15%. But I think that over time, as Latin has been performing strongly, we think that going back to this roughly 15% coming from, from Latin is something that, that we expect will happen naturally as these businesses continue to, to perform. And it's important to note that these, these geographies have been performing very strongly, even in very challenging macro environments, right? And the, the countries, all of the countries, for different reasons.
So that makes us even more confident on the quality of the franchise and the, and the quality of the business that we have in each of these different countries. So we're very satisfied. We had seen this percentage decrease over the last few years, but now we're seeing it slowly grow back, and we believe it will go back very soon to this historical 15%.
All right. Thank you for the, the color.
The next question comes from Renato Meloni at Autonomous Research. Please go ahead.
Good morning, everyone. Thanks here for the questions. I wanted to follow up on the sales and trading revenue line. We're seeing some risk on movement in Brazil in the past couple of weeks, at the same time that you reported your lowest VAR or second lowest VAR, historically. So going back to your comment that you expect a better second half, do you see more opportunities here to deploy more risk, or this improvement will come from more trading from clients? And if you allow me for a second question on the corporate lending side, you're still performing ahead of the expectation that you had at the beginning of the year when it comes to loan growth.
So I'm curious here if you see, the lending book growth ending the year above 20%, or, we can see some deceleration here. Thank you.
Thank you, Renato. On Sales and Trading, I would actually say probably both. When you have a risk-on scenario, clients become more active, so that helps the franchise business, and then you also feel more comfortable probably allocating a bit more VAR. So I would say both. But both of these, we expect to benefit the Sales and Trading line. And on the Corporate Lending, yes, we do think that, again, we don't want to give this as a guidance, but I think it's very reasonable that we will finish the year with a bigger than 20% growth in Corporate Lending.
Thank you.
Thank you.
The next question comes from Brian Flores with Citi. Please go ahead.
Hi, Sallouti. Thank you. Thank you very much for, for the opportunity. I wanted to, to do two questions. First is a follow-up on, on the strategic side. You mentioned you are very confident on sequential ROE expansion. Could you elaborate a bit on this? Is there any particular line or segment that gives you a bit more enthused going forward? I think that's the first question. And then on my second question, have you had any updates regarding the negotiations with Banco Pan? Anything on that front would be really appreciated. Thank you, Sallouti.
Thank you, Brian. So, of course, we are confident because the investment management franchise has been very strong. We're confident the corporate lending has been very strong. But, when you talk, where do we have space probably to perform above what has been the growth of these units as we talk? There's probably sales and trading, where, as I mentioned previously, we have been stable revenues in a very challenging environment, and we think that the dynamics we're seeing leave us comfortable to see some growth in sales and trade. And at the same time, you're also seeing a ramp-up in Banco Pan, because Banco Pan has been holding more of its portfolio, they're less willing to sell.
That means that we probably, BTG will buy less, so there's less of this netting effect that we have to do. And at the same time, that it will continue to accrue, let's say, results that it has been showing, and we also get the accrual. So we're confident in this ROE expansion, both because of the very strong performance of all business lines in general, and specifically because we think sales and trading will go back to growth and the Pan ramp-up will continue. And on your second question, no, there have been no developments in Banco Pan. Nothing, nothing to disclose here.
Thank you.
The next question comes from Gustavo Schroden with Bradesco BBI. Please go ahead.
Hi, good morning, everybody. Thanks for the call and to take my questions. I have a couple of questions. The first one is regarding the Eneva transaction. Well, correct me if I'm wrong, but I believe that there will be some capital gains from this transaction. And if it is correct, can you share with us if that will be recognized in the second half of this year? And if you can share with us more details, especially about the amount that we should expect, and if that will be booked in the Sales and Trading revenue line. And my second question is on the Corporate Lending, just a follow-up here.
Just, I can see that the SMEs is growing in line with the total loan book, which means that it represents 12% of our total book. It's the same participation compared to the last quarter. I'm trying to understand here, if what is the target for SMEs? Should I expect that this is the level that you believe it is appropriate, so something around 10%-12%, or SMEs should gain more relevance in the coming quarters? Thank you.
Thank you, Gustavo. So on Eneva, we of course, the impacts on the results will depend on how long it takes for the transaction to close. And here you have both the recurrent income that comes more or less every quarter, plus the results that will be linked to the transaction, which the time is uncertainty. But, assuming that everything closes by year-end, yes, it will probably impact both quarters. We don't disclose exactly the amounts. We're not even, to be sincere, we also have to understand all the accounting treatment that this will do.
But what we are seeing right now is that, yes, there will be some results in the next, assuming it closes by year-end, in the two quarters, but even at that, we will be still book Eneva in our balance sheet, significantly below market value, and this will be impacting the sales and trading line, as you asked. On corporate lending, we do not have a specific target for SME, neither market share, neither as a percentage of our total portfolio, because we operate the SME portfolio the same way we operate our corporate lending business, which is on a, an allocation of capital or risk-return, analysis. So if we think there are good opportunities to grow, we expect to continue growing.
If we think that the market is too competitive, the spread is too tight or the underwriting standards too loose, too loose, we might even shrink the portfolio. So we do not have a specific target, but we're always looking at this, especially on the portfolio side, from a good, let's say, underwriting and risk allocation. But what we do expect to see growing more and more in the corporate lending and business banking side is the business banking revenues. And this is. We're seeing this grow quarter after quarter, and this is what's making us very confident from the business. So we expect an increased importance from business banking, but not. It's very hard to give you a guidance on the percentage of the portfolio, which will be SME, because this will be much more dependent on market conditions.
Very clear. If I may, just to follow up on the first question, you were very clear, but these potential impacts of Eneva, it is, they are included in your ROE budget for the year, or that will be, like, a non-recurring item?
Even without, if we did not have an Eneva transaction, let's say, events, we would still expect an ROE expansion. So if, of course, they will impact, but even if they didn't, we would still expect the ROE expansion to happen.
Super clear. Thank you very much.
The next question comes from Tiago Binsfeld with Goldman Sachs. Please go ahead.
Hi, good morning, everyone. Thank you for taking my question. Just one from our side. Looking at the liability side of the business, you have close to BRL 150 billion in deposits. You mentioned a 28% exposure to retail funding base. So where do you see most wide space to improve? Is it in share of wallet in retail clients? We're trying to understand here if there are any levers you could pull to either decrease the funding base or to reduce your average funding cost. Thank you.
Hi, Tiago. Actually, it's across the board, but specifically in the next few quarters, we do expect retail funding as a percentage to grow. As you guys have probably seen, we have a very successful capital markets transaction targeted towards retail, which was the CDCA issuance. We continue to see very strong net new money, both in the high income retail and the Wealth Management platforms. We continue to see very successful expansion of both the personal banking and the business banking activities. At the same time, we continue to see BTG getting bigger credit limits in institutionals and in corporates, and accessing new larger limits in pockets where we did not have big exposures, such as multinationals in the past.
So I would say that we continue to expect funding growth, funding base growth, growth across the board, as well as we continue to expect a percentage of retail to grow in the next few quarters.
Thank you so much. Is there any target you can think of if you're today at 28%?
No, we don't really have a target, but we do think that over the next few quarters, it should be above 30
Okay.
For retail.
Thank you. Thank you so much.
Thank you.
The next question comes from Pedro Leduc with Itaú BBA. Please go ahead.
Hi, guys. Good morning. Thank you for taking the question. On, on Wealth Management, we had strong net new money, stable pay rates growth, which is, you know, great and, and almost counterintuitive given the rough market. So if you can elaborate, give us a little more color on how to be able to sustain this, this stable pay rates. That's the first, main question. And then second, on, on the credit side, corporate credit, you know, we here have been, you know, writing that your, your coverage had been lagging a little bit, and now you are getting money back from Americanas in 3Q or, or 4Q. If you can help us understand that, and, and I, I believe it, it brings your coverage back to, to where it was before. Just, want to get some, some color on that. That'll be great. Thank you.
Thank you, Leduc. So on Wealth Management, yes, we are quite confident with both the continuous growth in net new money and also, I would say, stable to as over time, even expanding the return on assets. You have to remember that we are penetrating as we have been having very strong net new money. Sometimes it takes a while for you to generate revenues on the net new money, because many times they already come invested or they're not very active. So as you mature these assets, they start generating revenues, and at the same time, we continue to expand our product offering. And I think the most obvious case is personal banking. The more we're able to penetrate our client base and have them bank with us, that is additional source of revenue that we did not have.
So we're very optimistic. We think the product is very good, the NPS is very good, the client feedback is very good. So we're confident that if we travel along and we continue to deliver good service, good, good products, good technology platform, we'll continue to see both growth and stability to even maybe a slight increase in the return on assets. On the corporate lending portfolio, given that our portfolio is mostly a corporate portfolio, we're always doing an analysis on a name by name. It's not statistical. So as we always mention, we're very comfortable with the provision levels, and we always look this on a very, let's say, deep case-by-case basis.
I have to confess to you that I don't even know the big numbers, which I think is what you're probably referring to, because we're very always looking at this from a case by case. So as I said, we were very comfortable, and we continue to be very comfortable with our provisioning level.
I agree, and it seems like you're getting some money back, right, from the Americanas recovery. I'm wondering how we should think about it flowing through your results or balance sheet. Thank you.
Hi, Pedro. As we mentioned, I think we were with the right size of provision on our remaining exposure. Most of the largest part of our remaining exposure, we already received in cash. We received some part in the ventures and a smaller part in equities. Obviously, there are still some moving parts there, but we expect to have marginal gains there related to this exposure. So you shouldn't expect any major change there.
Yeah, because whatever remaining exposure, we're going we'll continue with significant provisions.
Yes.
That's right. Super, super clear. Thank you, guys.
Thank you.
The next question comes from Antonio Ruette with Bank of America. Please go ahead.
Hello, good morning. Congrats on the results, and also thank you for your time. I have two questions. So first on SMEs, a follow-up here. Could you please, please explore a little bit the competition, the segment? How do you perceive evolution of spreads and also appetite from peers here? You mentioned that, you mentioned cross-selling on with banking clients. Are you also growing on non-BTG clients? Will you pursue this? And after this, I can make my second question.
Thank you, Antonio. On the competition side, I'm going to speak more broadly than just specifically on the, on the credit side, on SMEs. We think that we had a huge competition on the consumer banking side with many new entrants, and it was very disruptive. I think we are in the early stages there in SME, and I think here we have the benefit of being the disruptor. We are the newcomer. We have a-- We are building a very robust product offering, both on the banking and the credit side, a very good client experience, and we've been seeing significant growth in clients and client activity quarter over quarter, which leaves us very confident that this will continue for quite a few years.
I think here, the competition is much more from the incumbent banks renewing their offering and improving their offering than from newcomers, which was the case in the consumer banking side. So we see some segments where we think spreads are very tight. For example, the discount of credit card receivables, and we see other segments which have larger spreads, but we're being very cautious, for example, on the clean credit side, because we have to make sure that we have the correct information and credit modeling to expand this. So we're in no hurry here to expand it, but we're very confident with the increased client activity that we're getting in the segment.
Oh, okay. Okay. So, my second question here goes on consumer banking. Is there any metric that you could share with us to help us to measure the evolution here? I know that you already mentioned that no update on the discussion with PAN, but would you say that PAN could help you to speed up your growth on consumer banking? That's it. Thank you.
Yeah. Well, we separate very clearly, right? The BTG Pactual serves the high income and Wealth Management segments, and we report that in Wealth Management and personal banking, and PAN is our vehicle for consumer banking. PAN has been growing, and we expect it to continue to grow, has also been revamping its banking offering, which leaves us quite confident for the future. So yes, we're definitely very optimistic in both the high income and Wealth Management segments with the BTG Pactual brand, but also in the consumer banking segment with Pan.
Okay, thank you.
Thank you.
Thank you all very much. 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.
So thank you, everybody, for joining us on this Q2 call. We hope you guys have a great rest of the week, and we look forward to being with you again at the end of Q3. Thank you very much. Have a great week.
Thank you. This concludes today's presentation. You may now disconnect your line at this moment, and have a nice day.