Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Itaúsa's conference call to discuss 2018 results. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will be given at that time. Should you require assistance during the call, please press the star followed by zero. As a reminder, this conference is being recorded. The file will be available at the company's website at www.itausa.com.br/en at the investor relations section. This conference call and the slide presentation are being transmitted via internet as well. You can access the webcast by logging on to the company's website, www.itausa.com.br/en. Before proceeding, let me mention that forward-looking statements are being made under the safe harbor of the Private Securities Litigation Reform Act of 1995.
Actual performance could differ materially from that anticipated in any forward-looking comments as a result of macroeconomic conditions, market risks and other factors. I inform that during the presentation, the questions can be sent by webcast, and it will be answered in the question and answer session. With us today, we have Mr. Alfredo Egydio Setubal, CEO and Investor Relations Officer at Itaúsa, Mr. Henri Penchas, Chairman of the Board of Directors at Itaúsa, Mrs. Priscila Grecco Toledo, CFO at Itaúsa, Mr. Bruno Brasil, Investor Relations Manager at Itaúsa, Mr. Alexsandro Broedel Lopes, Executive Finance Director and Investor Relations Officer at Itaú Unibanco, Mr. Guilherme Setubal Souza e Silva, Investor Relations and New Business Manager at Duratex, Mr. Julian Garrido Del Val Neto, CFO and Investor Relations Officer at Alpargatas. It is now my pleasure to turn the call over to Mr. Alfredo. Sir, you may now begin.
Thank you. Good morning. It's a pleasure to be here again to explain about our fourth quarter and annual results of Itaúsa. Following the agenda on page three, we have four divisions for this presentation. The macroeconomic scenario, highlights of subsidiaries, the Itaúsa numbers itself, and Q&A as a part for the end of the presentation. On slide number four, macroeconomic scenario. We expect a growth of GDP for this year in Brazil of around 2%. It's better than last year, but below the expectations that we had at year-end of 2018. Inflation of 3.6%, and the Selic rate is stable during the year for 6.5%. In this environment, it's not as bad as some years before, but it is better. We think it's good for the companies, for the stability for our business, for credits granting, and possibly with this new liberal government policies, opportunities from privatizations.
We will follow up very closely the jobs and income recovery. We expect this job recovery to be very slowly and gradual, but anyway, we will continue. We will follow the news and about the tax changes that can be or not be proposed by the government, especially in terms of tax and social security reforms. We think it's essential for Brazil to grow in a sustainable and more powerful way from next year and ahead. So in our view, it's essential that, especially the social security reform, they have to be very strong to really reduce the public debt, to make more room for growth in Brazil in the coming years. On page 6, we see highlights from our subsidiaries, starting from the bank. Last year, the bank had a very good year again. We started to see more growth in the loan portfolio.
That increased 6%, mainly from individuals and in very small and small and middle-market companies. Default indicators continue the downward trend that we saw the last years. Probably this growth of the portfolio with individuals and middle-market companies will drive the growth again this year in terms of credit in the bank. The payoff of the bank reached almost 90%, including share buybacks that were done during the year. The total dividends interest on capital paid was BRL 22.4 billion . In terms of digital transformation, the main strategy of the bank for the coming years, 76% of the payment transactions are carried through these digital channels. We transformed the fiscal council in a permanent basis. It was elected every year. Now it is permanent. Only the members can be changed according to the shareholders.
We bought 11% minority interest in the ticket company for Fruttis. The Central Bank approved the XP business with some limitations, in relation of the deal signed between the shareholders of XP and Itaú Unibanco. Anyway, it was approved by the Central Bank. ROE of 20.4%, a little growth from 2017. The loan portfolio for small companies showed a growth of 14%. The credit for individuals that grew 10%. On slide number seven, we see highlights for Duratex. Duratex made many changes, especially in the Wood Panels division. We announced a JV with Lenzing for investment in dissolving wood pulp, using a forest that we were not intending to use for panel products. So we found a very good use for these forests.
We sold land and forest for Suzano, that land that we were not using for the wood market panels, and the sale of facilities of wood fiber boards in Botucatu to Eucatex. In terms of Ceusa, we announced a plan for double the production, the capacity of Ceusa in the market, an investment of BRL 94 million . In the fourth quarter, we did impairments of intangible assets and other non-recurrent effects, a total of BRL 300 million to make our assets more clean for the company. All these positive and negative non-recurrent revenues and expenses was BRL 8.8430 million . Net debt reduced in operational recurring basis for 2 x EBITDA. If we consider all the money that we received from Suzano, the net debt is 1 time EBITDA at the year-end.
So we did a very important deleverage for Duratex during last year, with the results and the sale of forests. On page eight, Alpargatas. We hired some external consulting firms to help us in terms of strategic movement, especially outside Brazil, and for operation plans here in Brazil to reduce costs that we believe we will be able to do in the coming quarters. We redesigned the organizational structure of Havaianas. That is the main brand and product of Alpargatas, with a geographical division into dedicated units, supported by global brands. So we did that under the new CEO, that is Roberto Funari, that assumed the company in the beginning of this year. Alpargatas also announced a JV in India to start business there. We sold part of our business in Argentina of Topper brands in terms of articles for sports.
Also we sold at the end of the year, the line of professional boots that was a very traditional product of Alpargatas, but was very small line of products, so we decided to sell it. In terms of net income, we have a little reduction in the year from BRL 362 million - BRL 332 million.
Got you.
The recurrent EBITDA increased from BRL 504 million - BRL 555 million. This year, in terms of Alpargatas, we expect better in terms of sales, but we will continue to sell and to arrange more the strategy and the assets of the company, preparing the company for more sustainable growth in the coming quarters. In terms of NTS, this is our participation in the gas industry. The highlight for the company was a debt restructuring. The company redeemed the debenture that was issued when the privatization of the company from Petrobras. Itaúsa holds some investments in the debenture. So we received BRL 442 million from NTS. NTS reduced the cost of debt with a new debt for the company in a much better cost. We continue to receive dividends and interest over capital from NTS.
The total last year was BRL 202 million, including a capital decrease that NTS also did in the total amount of BRL 694 million, the total for the company, and Itaúsa received BRL 53 million from NTS in this capital decrease. Total revenues of the company, BRL 4 billion and EBITDA of BRL 3.6 billion. Net income, on the right side of the slide, increased 6.9% to BRL 1.9 billion. As I said, the total received by Itaúsa in terms of dividends, interest on capital and capital decrease, in a total of BRL 202 million, an increase of 17.4%. On page 11, main event for Itaúsa. We announced a dividend and interest on capital yesterday to complement. So the total that the company paid related to 2018 was BRL 8.4 billion in total, almost BRL 1 per share, 28% increase when we compare to 2017.
That means a 94% payout and a 7.4% dividend yield using the quotation of the end of December 19, 2018. We do not see this year any capital increase related to Itaúsa. Another event was the divestment in Elekeiroz. It was a company of the chemical sector that we sold. Total amount attributed value, enterprise value of BRL 160 million. We finished the investments through Itautec in the Oki company. We sold the remaining 10.3% of the investment that we had as Oki Brasil. We finished our participation. An important issue is the end of deal with Itaú Unibanco shares. The shares that are allocated in the capital of IUPAR, that is the holding of Itaúsa and Moreira Salles family that controls the bank. That term end after 10 years. From November, Itaúsa is paying also the taxes over the interest on capital received from IUPAR.
That means that Itaúsa will have BRL 120 million extra in PIS/Cofins this year in a cash effect. The expenses of the company this year will increase BRL 120 million. In terms of capital markets, we achieved 130,000 individual shareholders with an increase of 83% over 2017, a market value of BRL 101 billion, and we bought back shares, 3.5 million preferred shares of the company. On slide 12 Profitability, the result for the year achieved BRL 9.4 billion, recurring result BRL 9.3 billion. That means in terms of net income, an increase of 15.9%, a ROE of 18.2%, a dividend payout, as I said, 94%, and a dividend yield of 7.4%. On page 13, we continue the practices of paying to shareholders the same amount received from the bank on an accrual basis. We are paying exactly the same amount that we receive from the bank.
All other dividends and interest on capital received from the non-financial companies are used to match the expenses that Itaúsa has itself, that is an amount of around BRL 550 million - BRL 600 million a year, including taxes, operational expenses, interest expenses from the debentures and so on. That is why we continue to be able to pay the same amount received from the bank. On page 14, capital composition. As I said, the main liabilities of Itaúsa are with the shareholders. The only debt that we have is the debenture that we issued when we bought the participation in NTS of BRL 1.2 billion. That is on the right side of the table, we can see the conditions, and the amortization starts on 2022, BRL 400 million in 2022, BRL 400 million in 2023, and BRL 400 million in 2024. On page 15, the portfolio of Itaúsa.
In the market value of BRL 143 billion, the participation in all subsidiaries that we have, and the market value of Itaúsa of BRL 111 billion, what means a discount of the sum of the parts compared to the market value of 22.3%. On page 16, we talk about sustainability and corporate governance of Itaúsa. Sustainability, we highlight the continued participation in the Dow Jones Sustainability Index, the participation in the ISE, the sustainability index of B3 here in Brazil, and the CDP, where we were leaders of transparency with a score of A minus. In terms of corporate governance of Itaúsa this year, as I said, the permanent fiscal council was approved by the shareholders in the shareholders' meeting. We approved and we renewed new policies related to transactions with related parties, relationship with private entities and public entities, and policies for corruption prevention.
We updated our code of conduct and created an independent reporting channel for our employees. On page 17, we talk about sustainability and corporate governance for our subsidiaries, for the companies that we participate. First, Itaú Unibanco, also the continued participation in the Dow Jones Sustainability Index, also on CDP, leader in transparency, and the participation in the ISE index of B3. In terms of corporate governance of Itaú Unibanco, the permanent fiscal council, also approved by the shareholders, and the creation of digital advisory board, Latin strategic council, and the social responsibility committee. All these three linked directly with the board of directors of Itaú Unibanco. In the case of Duratex, also the leader transparency in CDP, especially in the efficient water management. Also participation in the ISE index of Bovespa.
In terms of corporate governance, internal restructure for operational efficiency, especially in the Wood Panels market division, and also a creation of our IT and digital innovation committee, also directly linked to the board of directors. In the case of Alpargatas, developing the first carbon emission inventory. We are starting also more actions in terms of sustainability for Alpargatas. In terms of corporate governance, election of the new CEO, and the election of independent members in the board of directors and all these independent board members coordinating some of the committees of the company. Also, advisory and strategy and management support from specialized consulting firms. On page 18, that is our last slide, Itaúsa and the capital markets with good performance when we compare 10 years, 5 years and last year compared to Ibovespa with the BRL and the interest rates.
That is the end of the presentation, and now we are open for questions from all the shareholders and investors. Thank you.
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. If you have a question, please press star one . If at any time you would like to remove yourself from the questioning queue, press star two. Please restrict your questions to two at a time. Our first question comes from Jason Mollin, Scotiab ank.
Thank you very much for the opportunity to ask questions. I have two questions. My first is on the strategic initiatives for Itaúsa, the outlook going forward. We've seen you talk in the past about targeting a percentage of the portfolio in Itaú Unibanco shares. Can you give us an update now that you're looking at if there are other potential investments that we should expect in the coming future? My second question is on potential tax changes in Brazil and if you're expecting the deductibility of JCP to be removed and how that might impact Itaúsa and how you might react to that change, if in fact, it turns out to be the case. Thank you.
Well, Jason, Alfredo, thank you for your question. I think two questions very important for Itaúsa. We expected this year to make some investments. We didn't do anything last year. The conditions of the economy, uncertainties, and so on, we are not able to continue, but we continue to study all the opportunities for this year. So probably we are going to have some investment this year, probably at Itaúsa because we expect this better environment in terms of economic and politics for the approval of the reforms and so on. With all that, we expect that also the cost of capital of Itaúsa to be reduced. Today, we are considering 14% in terms of cost of capital.
We believe that this number, if everything goes well in Brazil in terms of approval of reforms and better and strong economic growth, this number can be reduced to something around 13%. So this will probably, we'll be able to analyze more investments for this portfolio of non-financial companies that we are building in the last years. That said, I would say that the bank will continue to represent more than 90% in all the lines or all the comparables that we can make, even be in terms of assets or market capitalization or profit because the participation of Itaúsa in the bank is very huge. You know that. It is more than 38% of the total shares of the bank. So we are building a portfolio of investments. We already have three investments.
That is Duratex, the traditional one, Alpargatas, and NTS, and probably in the coming years, we will continue to build this portfolio. Always we said that this portfolio has to make sense and also has to be profitable and create value to the shareholders. So we are not in a hurry to build this portfolio. We will find and look for opportunities. I think we found two good opportunities with Alpargatas and NTS, and we will continue to search. All said, I would say that the bank probably will continue to represent more or around 90% of assets and more than 90% of profits because the ticket that we are searching is a ticket of an investment around $500 million - $700 million. So this is important to make a portfolio of non-financial companies.
But when we compare to the size of the participation that we have at the bank, this will not The bank will continue to represent more than 90% of the results, of the debt, and the market capitalization of the companies. In terms of your second question, about the possibility of a change of the tax over companies and over dividends, and I don't know if the Juros Capital will continue. We don't know exactly because there is no official proposal from the government about that subject. We expect that this will appear during this year, and probably something will change, and it will be approved by the Congress, probably in the second semester. What has been said that is reduction to around 20% in the corporate taxes and an increase to something around 15% the dividends.
Just to remind, I don't know if you are aware or not, dividends in Brazil were taxed until 1996. In 1996, because of the end of the inflation and the real plan and so on, what created the Juros Capital And then at that time, the corporate tax was increased, and the tax over dividends was zero. And Juros Capital was created with a tax of 15%. So we expected something going back to 1996. That reduction of the corporate tax, some increase in the tax over dividends. And we don't know exactly what the government will do with the Juros Capital. So there are many uncertainties. But if everything that I said happens, and if the Juros Capital continues, the reduction on corporate taxes and the increase on tax on dividends will be good for Itaúsa.
We will reduce our tax payments that we have today a lot, that this year will be around BRL 400 million. The profit from the companies with lower corporate taxes will increase. So for Itaúsa, it's not bad at all. But the dividends probably will be charges for especially individuals. Probably foreign investors will be not taxed. So for Itaúsa, maybe we will reduce some of the inefficiency that we have as a holding company to be taxed over our revenues, especially Juros Capital.
Ladies and gentlemen, as a reminder, if you want to pose a question, please press star one. This concludes today's question and answer session. Mr. Alfredo, at this time, you may proceed with your closing statements.
Thank you for the participation. I progress to restart the presentation with sorry about the delay in issuing the information. We had a problem with the system between Itaúsa and the B3 and CVM. We were just able to upload the financials of Itaúsa early this morning. Sorry for that. It was not our fault, but it happened. We are here, our investor relation team are here to attend, and if you have any question after a more detailed reading of the financials, we are here open to answer your questions. Thank you for the participation.
That does conclude our Itaúsa's 2018 results conference call for today. Thank you very much for your participation. You may now disconnect.