Good afternoon, everyone. Ladies and gentlemen, welcome to Banrisul's video conference to discuss the results for the third quarter of 2025.
Essa conferência.
This video conference is being recorded, and the replay will be available directly at the IR website after our event. Please note that this presentation has simultaneous translation into English. If you wish to listen to the interpretation, please click on the interpretation button. This event will be divided into three parts. We will start with the first section. Mr. Fernando Lemos, our CEO, will address the initial context of our bank and results, and then Director Gonzaga will detail our performance for the first nine months of 2025 and the third quarter of 2025. As usual, we will close this event with our traditional Q&A session. This presentation will be available in the Zoom chat. It is already on our RI website, available for download. Mr. President, our CEO, please. The floor is yours.
Thank you, Nathan. Good afternoon, everyone, our directors, all the participants in this chat.
It's an honor to be here with you today to talk about Banrisul's results of this quarter and the first nine months of this year. Certainly, we have reached two years; I have reached three years as CEO at this bank. We have worked for the past two years, and we are very satisfied with the results achieved in this past nine months, period. Which shows the potency of power of Banrisul, almost BRL 1 billion, and it shows the strong work and the positive effect of this work, the teamwork by the treasury, the loans, portfolio, administrative control, recovery, all the range of new products developed by the bank, all the services, 215,000 new accounts opened by our digital app, almost 300,000 by the end of November, which showed the strength of this digital front to renew our bases of customers. We are digitalizing everything we can.
I'm sorry. It also shows how strong the economy of Rio Grande do Sul is. Two years ago, as you may know, there was a flood in Rio Grande do Sul, but the state has recovered very fast, very strongly, and it shows the entrepreneurship spirit of the state, and our bank keeps up with that. We still have faced some setbacks, of course, but we are effectively very pleased with everything we have done to gain productivity and profitability of our bank, in the improvement of our performance among customers. We have over 80 robots working in the bank using AI with very high standards of productivity. For those repetitive jobs or repetitive activities, we have replaced them with digital services. It also shows an expansion of our main networks of services, the Vero Network. We have brought it definitely into the bank business mix.
It's not only isolated anymore. Today, it's a formally integrated product to our bank, which allows us to advance the bank in the opening and acquiring new clients in the world, especially in the level of retail in Rio Grande do Sul. Today, the presence of Vero is in the main stores, in the main points of sales in Rio Grande do Sul. We see the bank working very strongly on this side. We have the expectation to continue to do that. In exchange, in foreign exchange, we have evolved. Rio Grande do Sul exports a lot, and as we have said to our people, to our team, we have been saying that we are a complex bank, several lines of products, and we have everything in the digital services. We are aligned with any other fintechs. We are not below the competitors.
It has become a leverage for our customers, our individual accounts, and also to work with payrolls systematically, getting to work with new companies, other companies' payrolls. All of this work is the result of a focus strategy on the mix of our portfolio. We are not dependent on only one product, on one service. We want to multiply that, and we have advanced in corporate loan. We have now aligned with specialized, we have been specializing in our managers to work with corporate clients, and this has helped us leverage our results. It's a pleasure to welcome you here, two years after I started working as the CEO. These numbers show that we are on the positive side.
Our ROAE has reached two digits, and we hope to keep up doing that, facing default, facing other setbacks that are normal, but we are very cautious regarding all of these fluctuations, and we are very rigorous in terms of the management of our portfolios. The first thing operators do today is to look at portfolios at the beginning of the day to check them and work profitably with them. The floor is yours now, Mr. Gonzaga. Thank you all.
Hello. Good afternoon. Let's talk about our main highlights. In the nine-month period, we have had a result of BRL 948 million, 50% above the same period of 2024, with 66% in the third quarter in comparison to the third quarter of 2024. 66.7% increase in net profit and net income. Our ROAE has stood out, especially in the year-over-year compared to 2024, with 4.4 percentage points.
In the past quarter of 2025, BRL 377 million against the BRL 328 million that we produced in the past quarter till the end of September, we had a small decrease of 2.1 percentage points. Our net interest income in this third quarter was BRL 1.6 billion, with 11% increase in the past 12 months. Regarding last year, 2024, in the third quarter, the increase was BRL 377 million and now BRL 328 million. We have a decrease of 2.1% in the net interest income. In our loan portfolio, we had 11.1% increase in the past 12 months. In the past quarter, it was stagnated in line with the figures disclosed in the third quarter. Cost of risk is in line with the past 12 months, 1.4%. It is under control in terms of cost of risk.
In the third quarter, it is the same, 1.4% in cost of risk in total. Our funding has always been a strong suit of the bank. We have a very good performance, 14.6% in the past 12 months, BRL 107.2 billion in funding, in all the services, in all the main products in funding. Our administrative expenses have been contained rigorously, especially those expenses which we can better control. Headcount has grown regarding the agreement. According to the management work, we have contained these expenses, especially considering the collective wage agreement. It is BRL 1.2 billion. Sorry. In terms of profitability, we have 66.7% versus the second quarter of 2025, moving on to 12.9, getting to the third quarter of 2025, in the second quarter of 2025 versus the third quarter of 2025.
In the year, in the nine months, as I told you before, we reached 50% of growth in the result, BRL 948 million versus BRL 632 million in the nine-month period versus the nine-month period of 2025. Very good results, substantial result according to the work we have done in terms of containing expenses and increasing the revenues from tariffs. This is the trajectory that formed this result. Our ROAE, 4.4 percentage points in the past year. We had in the Q3 2024, 7.8%, in the second quarter of 2025, 14.3%, and now in the third quarter, it is 12.2%. It is a two-digit ROAE. In the past quarter, there was this small decrease of 2.1%, which leads to an increase of 3.4 percentage points if you compare the nine-month period of 2024 to the nine-month period of 2025.
In terms of net interest income, we've had 11% third quarter of 2024 versus the third quarter of 2025, and 2.1% decrease regarding the second quarter of 2025 in comparison to the third quarter. In the nine-month period of 2024 versus the nine-month period of 2025, there was an increase of the net interest income of 10%, notably the best balance and pace in terms of revenue growth. In terms of loan portfolio, 64.1% versus 57.7% in September 2024. It is a very stable figure in the loan portfolio. There was a slight decrease in annualized portfolios, and we've had commercial loans in corporate portfolio increase, 9.2% increase in physical or individuals. Corporate accounts have grown more, and we have worked on this area in the margin established by the market of Rio Grande do Sul. We have penetrated more in this market, notably small and medium-sized companies.
For individuals, we have a collateralized individuals portfolio of 70.1% as of September 2025. According to our idea, we have a foreign exchange initiative with an increase of 45.8% as of September 2025, 2.39.8%. Our state exports a great deal, and we have worked very strongly to make this foreign exchange initiative grow. We have worked to decrease our default ratio to make it get to zero. In terms of our asset quality, 2.6, 2.8, depending on the individual versus corporate accounts. For a stage, we have 95, I mean, 92 in the past quarter, 30 of September, 92.9 in tier one, and 5.9 in tier three. According to tier two portfolio, 27% has to do with tier three, but it is a healthy portfolio, no default. We have actively worked to recover these assets, which is part of our strategy.
In terms of cost of credit and collective wage agreement, it's around, it's in the order of 5.68%, BRL 191 million of collective wage agreement in this past period, which contributed to the final performance of the bank. We have these quarters and nine-month periods in comparison. In service fee, we had an increase of 1.3% in the past nine months, 5.8%, which is the collective wage agreement. In the total, it is 3.4% growth. If you separate the expenses with headcounts, human resources, and administrative expenses, 3.4%, but administrative expenses outside of human resources was 1% against the IPCA of over 5%. We have managed to contain costs, and we have worked to do that, precifying ranks and removing all the costs that we can cut, as our CEO says. We want to do that.
We want to follow this strategy to cut costs, and we have focused on that. This is one of the axes that contributes to the bank performance. We have personnel expenses, 5.7%, and other administrative expenses in the order of 0.6%. We also have the lines of expenses that account for 3.4% and BRL 3.4 billion in the nine-month period of 2024. We have BRL 3.5 billion in the nine-month 2025. Some expenses are necessary, like marketing and expenses with sales of products to market our new products when we launch a new product. Marketing and media are part of the business. In terms of service fee, we grew 1.3% in the past nine-month period. If we compare this nine-month period of 2024 and nine-month of 2025, we grew 0.4% comparing Q3 2024 to Q2 2025 and 1.3% comparing the Q2 2025 to Q3 2025.
The central bank controls the expenses with some of our products, so we have to work with the products. They provide us more freedom to do that. Specifically, Vero, we have mobility of price, but the competition is high and strong. We have to work with a feasible price for the market and also have exchange services. We have some degree of freedom, but we have to control this to retain your clients. End users have to find this appeal, have to find this useful in foreign exchange. In funding, in spite of the good growth in funding, we have maintained the cost of funding, the CDB 82, I mean, 83.3% versus SELIC with 85% of cost of credit. Our funding is very good. In terms of cost, we have managed to maintain a good cost.
We had a performance of 3%, but there was an operation of BRL 1 billion of Financial Letters that we have captured, which is within this balance of BRL 107.2 billion with a growth of 14.6% annualized result in the first nine months of 2024 versus the first nine months of 2025. 14.6%. We have worked for the LIM of the bank. The rate risk is nearly zero. Our prefixed funding is constant to give funding to our prefixed assets. Savings has remained stable. It does not grow. I mean, this portfolio does not grow so much. It has been stable. If you do not make it grow, we will lose capacity to provide loans. That is the market. In terms of savings market, we have had a good performance in our administrative portfolios, BRL 25 billion against BRL 18 billion in the third quarter of 2024.
I mean, in the third quarter of 2024 versus this quarter. With the prefixed portfolio, we have CDB, our account, the residual accounts. We also have specific lines with prefixed CDB, paying market price, and financial letters, financial bills, which are also prefixed. We have managed to make this offset, this balance, without investing in derivatives for the capture or to manage liabilities in our assets. We have worked in these accounts. Today, we will reach the end of the year. We will have an offset between liabilities and assets in terms of indexation of interest rates. We want to maintain the cost of risk at this level that we have managed to do. In terms of capital, Basel ratio of 17.9%. There was a change here due to financial letters' emission of BRL 1 billion. They are subordinated financial letters. This is what leads to these results.
We have this LFSN in the order of BRL 1 billion with a 10-year maturity date, maturity term, according to the Brazilian market. We prefer to do this operation instead of an operation in dollars. We wanted to work with a local market, good price. We have good price of funding, acceptable interest rate, for a better and more comfortable position. LFSN has this indexation that is good for us. In June 2025, this ratio achieved 13.3%, and in September 2025, 13.6% as of now. These are the main macro figures of our bank. Now we will, after, go to our Q&A session.
Thank you very much, our Director Gonzaga and our CEO, for your presentation. Before opening the floor for Q&A, just let me give you some announcements. If you want to ask a question, please choose the raise your hand button.
If your question is answered, you can leave the queue by clicking on lower your hand. Let's start our Q&A session. The first question comes from Antonio Huerto from Bank of America. Hello, Antonio. Can you hear us? Hello everyone. Can you hear me? Yes, we can hear you. Thank you. Please go ahead. I cannot listen. Sorry. Technical problem. I'm sorry. I'm sorry, Antonio. There's something with your microphone. We cannot hear you properly. Is it better now? Yes, it looks like it's much better. Thank you. Can you help me? I have two questions. First, in terms of risk appetite, cost of risk, we are approaching a year of election. We have some incumbents discussing that we cannot think about credit portfolio acceleration. How do you see that? The macroeconomic outlook or scenario, I'd like to know about your coverage.
In terms of capital, you are doing well. How do you face these perspectives? Considering the agro business, maybe it will improve next year. My second question has to do with assets and liabilities. Mr. Gonzaga was talking about that today it is much more about the indexing figures of these liabilities and assets. They are much closer, which is the potential benefit of an interest rate drop.
Thank you very much, Antonio. In terms of credit appetite or credit increase, microphone is off. I believe your microphone is off. I'm sorry. Let's change the mic. Okay. Can you hear me? Yes. Thank you. Good morning, Antonio. Good morning, everyone. Regarding credit appetite, credit growth, we will continue this strategy focused on operations with receivables, cash flow, small-sized companies. We have a portfolio of BRL 2.4 billion in this portfolio, which is the single account, the Conta Única.
In terms of digital, we have BRL 270 million. We have been collateralizing the operations with credit card flow, making business involving Vero. We have accounts receivable and accounts payable within the bank. Regarding individual accounts, we will focus more, I mean, from next year on, when these payroll and payroll portfolios become more stable and more informatized, we will start working more with payroll portfolio. We understand this market share is interesting for us. Regarding the agribusiness, the bank's strategy is to help make the cash flow of rural producers viable. We have been focusing on the financing of their costs, and we have been avoiding funding operations with a strategy to help and to support, give them the necessary conditions so rural producers can make their productions viable and feasible without removing the flow of working capital of their harvest, 2025 and 2026 harvest production.
That's the bank strategy. As the market has seen, we are aligned with the market. Our appetite is not so big in terms of operations without collaterals. We have been watching the market. We have been watching the economic macroeconomic environment is stagnated. Inflation is under control, but interest rate is high. Companies have not demanded a high working capital, and they are rethinking when it comes to look for loans with banks. Thank you. Second question has to do with mismatch with interest rate. In the past quarter, we have had reduced performance in terms of credit. Regarding liabilities and assets operations under index, first, we have a balance. We have achieved a balance between liabilities and assets. That is very good for years now. It's the best in years. What we have applied in assets and treasury.
What we hope for is that the SELIC interest rate will not go up or will not go higher than what we have. We have a precipitation margin for operations that are prefixed operations with fixed rates, which are not based on CDI. We always work with a certain margin, 15. We always place a smallest coefficient to precipitate our assets to be on the safe side. Given the scenarios, given the outlooks for the quarters of 2026, I hope the SELIC interest rate reaches 14% or is decreased slightly. We do not know how the economic agents will behave. It will have elections next year. We have different factors that will affect the macroeconomics outlook. We hope that this SELIC interest rate will be below 15. Everything that is below 15 will be better for us.
It will be a profit for us because we have worked with this 15% idea. We hope we can take advantage of this decrease in the interest rate that is expected and improve the spread we have today. Maybe to help us with some level of default that may always happen. We have this margin. We have very good control over default, however. We hope that this drop in the interest rate will turn into benefit for us. If you allow me, just for a follow-up regarding credit and loans, in terms of SELIC, we see your company growing in double digits, CMI growing. We have seen several cases and several companies suffering with the interest rate. I would like to know if you want to make your corporate portfolio grow. We've been focused on small and medium-sized companies.
This was a market that the bank was not adhering to, was not penetrating so well. We have designed a good strategy to look for these companies, making the best choices in the market with receivables, collaterals, and bringing accounts payables within the bank with payroll services to grow in terms of individual accounts too. We do not have any concerns now regarding a possible RJ in this next period because we have been working with these small and medium-sized companies. We do have some big companies here in Rio Grande do Sul and in Santa Catarina, but these are operations that bring within themselves a percentage of collaterals and guarantees because of or due to these working flows of these big companies. In terms of interest rates with Conta Única, single account, and the monthly installments that are being amortized in these credit operations. Thank you, Antonio.
Now, another question from Matheus Rafaeli from Itaú BBA. Hello, Matheus. Can you hear us? Hello. Can you hear me? Yes, we hear you properly. Thank you. I would like to explore with you the dynamics for payroll services. The portfolio is not in your focus this year. According to the dynamics showed by several banks, there was the problem with the INSS, but we have seen some banks retaking the uptake of INSS and checking or solving their problems with biometrics. What about your bank? What about the INSS? And if you want to make this payroll portfolio grow next year, if you reconsider private payroll and INSS?
Thank you, Matheus, for your question. Regarding payroll, our portfolio today has a significant proportion of the state public payroll. To explain this to you, this portfolio, we operate 120-150 months going up to 45%.
Some months ago, the state prefixed this in 38% in 84 months. We will readapt to it because we need to work with the amortization of the significant amount for clients to come up with that. When this portfolio was created, we had the SELIC interest rate varying from 8% to 10%. Today, in the precipitation, it is above this level. You have an impact. Regarding INSS, we have had the biometrics problems we all know about. We have made the necessary adjustments, and we hope that in the near future, we will make this portfolio grow. Regarding CLT payroll and private companies' payroll, we have adapted our platform, and we are waiting for Dataprev and strategy. Next year, we hope to have a better development in this portfolio. Of course, we are not going to work in the long run.
We know some banks are working with 120 months, but we will work with a smaller period, a shorter period, because this needs to be a certain turnover in the short run in a more adequate way so clients can feel the liquidity of this and reinvest as they need more resources. Thank you very much.
Thank you, Matheus. Let me read one question from João Vitor, our analyst from Warren. Dr. Ivanor, he was talking about that. Can you comment on the performance of private payroll portfolio and your appetite for this product in the coming quarters? I believe you have already answered that. The second question has to do with Banrisul's payroll or any change in the VA VR card rules.
You know, Ivanor, we have decreased the payroll for 84 months, but the state has implemented a deep change.
The margin today removes, I mean, if the margin is 35% over BRL 6,000, for example. So 35% on average of the debt was removed. This is very good because the portfolios that are coming will be very strong and healthy portfolios. I mean, these portfolios will be related to what employees are able to pay or spend. According to the state, we have until the end of the year, December 31, to decide to buy. We are working with audit companies for the compliance services. We have to work with the members of the board and to deal with the operation. We have some more audits to run to precipitate the portfolio in another audit service that will work in compliance with that price to check if the price is compliant with the market price. We will be negotiating with the state of Rio Grande do Sul.
Our idea is in the five or ten-year period to let's wait to see how this operation goes. The federal is paying 103% on the liquid amount. So if it's BRL 10,000 in the payroll, BRL 3,000 are discounted, and the federal government pays 103% over the net amount. This is a parameter of negotiation we can take into a negotiation with the state. PMT is paid over time, and then we can check how things go. We will try to find the best price possible considering the market for the payroll portfolio. We have to take into consideration the major change that has happened in this payroll market, which is the freedom of portability. Employees now have a freedom to take their portfolios, whatever they want, and the resources they can have access to their resources in 24 hours if they want to get that payroll.
All of these factors are taken into consideration. Capacity to charge for fees from employees is also a factor. We did not have that in 2016 when we bought this payroll service. There is a table of interest rate for overdraft that we did not have in the past. We have a price for credit cards. There is a series of variables that this market is now very limited, very restricted in terms of profitability we can achieve. This is good for the end consumer. This is good for the consumer. More and more consumers will have a better idea on how much they can spend, and we will be better able to provide services to our clients. Everyone has to be very smart about personalized and customized service we provide to our customers.
If you do not take good care of our customers or clients, they will look for other banks. Yes, we have several variables to consider in this negotiation. It will depend. We will give our price and see how much they can pay for this service.
Thank you very much, directors and CEO. This was the final question in this call. I would like to thank you all for your participation. Thank you, everyone, for taking part in this video conference. See you next quarter. Take care.