Good morning, ladies and gentlemen. Welcome. In these extraordinary times, against the backdrop of the COVID-19 pandemic, Itaú Unibanco has set up these extraordinary webcasts to address the measures it is implementing to manage operations and support employees, clients, and society. These webcasts will not address actual or projected financial results. This information will be presented, as usual, at 1Q 2020 Earnings Conference Call. Before proceeding, I would like to clarify that in the face of such a strong uncertainty scenario, any statements made on business prospects are indeed mere prospects based on management's expectations and which may not come to pass. These expectations are highly reliable on the COVID-19 pandemic rollout and related impacts. For this reason, these expectations are subject to change. This webcast is being recorded and transmitted on our investor relations website, www.itau.com.br/investor-relations. The presentation slides are available on Itaú Unibanco's website.
Today, we have with us Mr. Candido Bracher, President and CEO, Márcio Schettini, General Director, Retail Bank, Caio Ibrahim David, General Director, Wholesale Bank, Milton Maluhy Filho, Executive Vice President, CFO and CRO, André Sapoznik, Executive Vice President of IT and Operations, Alexsandro Broedel, Executive Finance Director and Head of Investor Relations, and Mário Mesquita, Macroeconomics and Research Director. We will start with a presentation and afterwards our executives will answer the questions posted in writing on the internet. Now, I hand over to Mr. Candido Bracher.
Hello and good morning, everybody. Thanks for joining us in this extraordinary call where, as said, I mean, we will not talk about financial results or performance. The idea is to tell you, I mean, how we have dealt with this crisis for this past month, so for these past three weeks. So, on page four now, I would like to draw your attention to the fact that the crisis was totally unexpected. It would be absolutely not correct, I mean, to say that we have prepared for it. We have not prepared for this crisis, and yet, after the onset of the crisis and seeing how we reacted to it, we noticed that many of the things which we had been doing before the crisis had prepared us for it in a very positive way.
I think that the main fact, the main aspect which enabled us to deal with the crisis is that we have six people, an executive committee which is experienced, used to working together, working in a very good environment with no star members, everybody working together with a lot of dedication, a lot of effort. We have also been investing a lot in the relation between the executive committee and the executive directors of the bank so that communication is very fluent and very fluid, and so is the delegation. I think this is the main factor which has been enabling the swift functioning of the bank in the past few weeks. But there were also four other aspects which I think deserve being mentioned. The first one is technology and people.
So, we have been digitalizing our clients for quite some time, which enabled most of them to use our services through digital channels, and digital channels activity has increased by 50% since the onset of the crisis. Also, our workforce has been intensely digitalized over the past months. We were already experimenting with home offices with many people. We had been working in communities where technology people, product people, and commercial people worked together, getting more intimate with one another and with the aspects of one another's activity. So, all this prepared us for this moment. Secondly, we have always had a very intense focus on risk management. And for some years already, I mean, we have developed very clear and effective tools of risk reporting and control, every type of risk: liquidity risk, market risk, credit risk, operational risk, reputational risk, risk of continuity of business.
These tools, they have a very clear governance which is permanently tested and used, and it continued to be so during the crisis. I think that these two are the factors which have allowed us to react very fast, changing completely the routine of the bank in the morning of March 16th, when we canceled all the regular meetings of the bank and have replaced them for crisis committees which have been working strictly since then. There are also two other events which deserve being mentioned. One is that we feel that in this crisis, the identity between our collaborators and our culture has increased significantly and also has the sense of loyalty to the institution.
I think that in a moment like this, when everybody feels how serious the moment is, when the institution takes measures in order to protect its people, I mean, these values and ties are strongly reinforced, and the fourth aspect which I would like to draw your attention to is the cooperation among the financial system. Different from crises in the past, from the crisis of 2008 or even others like the initial Russian crisis, this crisis has not been generated by the financial sector, nor has it had the financial sector as its main affected area. On the contrary, I think the financial sector was healthy at the onset of the crisis and will be much more part of the solution than part of the problem.
We have seen here in Brazil, I mean, a very intense cooperation among financial institutions, very notably, I mean, cooperation between Bradesco, Santander and ourselves in these first weeks of the crisis, where we have been discussing measures among ourselves, discussing measures with the government in order to keep liquidity flowing into the economy and, I mean, to fulfill our task as, I mean, dealing with the financial aspects of the crisis. If we move now to slide five, we have three main goals in this crisis, so every action we make is directed to one of these three main goals. The first goal is to take care of our clients, to cater our clients in the best possible manner, digitally or physically in our branch network. The second is to guarantee the normal functioning of the bank in exceptional circumstances.
And this includes financial aspects such as liquidity and flow of funds, etc., risk control, technology, remote digital liaisons, everything. And third, to protect and tranquilize our workforce, to let them feel that they are taken care of, that they are protected, that they can, in this difficult scenario, perform their tasks to our clients, not having to worry too much about themselves, about their safety, about the security of their position. Turning to slide six now, I will get into detail of how we are fulfilling our tasks in relation to each of these three aspects. So, first, serving our clients. We, on the first day of the crisis, declared that we would renew every maturity for 60 days at the same interest rate they paid before. We will do this. We may even renew this again if the quarantine is extended for a longer period of time.
We have been intensely encouraging the use of digital channels through mass communication on TV, communication on social networks, every weekend with tutorials. We have been seeing an increase in the use of the digital channels so as to relieve our branch network from too much demand, from too much traffic. We have taken collective initiatives jointly with other banks. I think the most significant of them was the idea of credit lines for companies with sales up to BRL 10 million a year to finance their payroll, 100% of their payroll to workers, I mean, up to two minimum wages for each worker. This line of credit is a 36-month line of credit with a six-month grace period, and each credit risk is bought 15% by the government, sorry, 85% by the government, and 50% by us.
Besides that, there are ongoing discussions for that regulation in order to facilitate the supply of credit to the companies. Now, if we move to slide seven, here, I mean, we, in terms of functioning normally in extraordinary circumstances, I mean, the first worry was with our people in the branches. I mean, we reduced in-branch personnel. We also reduced personnel in call centers, sending those recruits to home office so that there was more space among them in the call centers, reducing the risk of contagion. We also have reduced the working hours of the branches from 10:00 A.M. to 2:00 P.M. In these past seven days, we had an extra hour from 9:00 A.M. to 10:00 A.M. to deal exclusively with the retired population. In terms of infrastructure, I mean, we bought infrastructure to support operations in a remote environment.
We have over 40,000 people in home office right now, and dealing with the cyber risks and the fraud risks that occur in situations like this, I mean, we have all risk people intensely looking at this. I think that what made it possible to deal with all these aspects of the crisis so immediately is that we had been working for some time in being more flexible. We had been testing with home office. We had been working in communities in being an agile method so that people from different areas were working together and getting more intimate with other areas' problems, so I think all this, which we had been making before when the crisis arose, I mean, proved to be very useful in order to deal with these aspects and to enable us to maintain a normal function.
If we move now to slide eight, this is what we did to taking care of our people. We have a phrase in the bank. We say that people is everything for us. And so, we have immediately had these 40,000 employees working from home in order to reduce the risk of contagion. We asked our workers, I mean, if they considered themselves to be in one of the more fragile groups, I mean, because of being over 80 or over 60 or because they had high blood pressure or diabetes or any other factor which made them more fragile to the situation. And those who said yes, I mean, we either put them in home office or in vacations immediately so that they didn't have to come to work. We assured job stability during the crisis for all of our workers.
We anticipated the payment of the 13th salary, which was normally paid in May and November, because we realized that there could be exceptional expenses derived from the crisis. We are communicating very intensely with them with daily information, formal information, and weekly video that I make and that is distributed to them every Friday. Besides doing, I mean, all these things which are more related to our normal course of business, we know that as a corporate citizen, we have to do more. So now, on slide nine, there is a list of what we have been doing since the onset of the crisis. I mean, through our foundations, I mean, we have made a BRL 150 million donation, which is being used to build emergency hospitals, ventilators, respirators, essential items, security items for people, and to help needed families in this situation of crisis.
Also, jointly with Bradesco and Santander, we have bought five million detection tests from China, where we had the help from Vale. We have also bought, in general, a program of making masks, 50 million masks, which are made by microentrepreneurs and will be distributed to the people. And this all totaling BRL 250 million so far. And we have also expanded our Read for a Child program in order to help parents to deal and to entertain their children at home during this time of quarantine. With this, I now pass on the word to Milton Maluhy Filho, who will talk about risks.
Thank you, President. First of all, to say it's a pleasure to have you here in this conference together with my executive committee colleagues. And the idea here is to share with you what we have been doing and what's our agenda throughout this period of crisis.
Moving to slide 11, I would say that, first of all, I would like to highlight that our governance and risk management practice are well established and incorporated on the day-to-day at the bank. They have been very important to maintain these trends of our balance sheet and are essential in supporting our long-term strategy. We have a classic risk management model with three lines of defense, as you can see in the left-hand side. The first line are the business areas. They are responsible for managing the risk that they originate. The second line is the risk area. We are responsible here to assure that the risks are managed through the use of proper tools throughout the organization.
That means using our risk appetite, policies, and procedures, and the third is the internal audit that responds directly to our board of directors and has the mandate to evaluate all the activities developed by the bank. And I can tell you that the three of them are working together for many years now, and I think we are very, very comfortable with the level of work and the culture of risk that we have disseminated throughout the organization. I also think it's important to emphasize that our risk appetite is well established, and it's disseminated in the entire organization as well, and it's divided in five dimensions, as you can see in the right-hand side, and for each of these, we define the nature and level of risk that are acceptable for the bank.
We are constantly monitoring all this framework with predefined metrics and with action plans in the case it's necessary. The risk appetite is defined by the board of directors, and for that, we have monthly meetings with a special committee with board members, including one of the co-chairmen, and we discuss all the risks and metrics. And for those, only the board has the power to change any dimension or metric. What I can say here is that our risk management models are being tested, and they give us the reassurance that our risk management structure and governance allows us to navigate, I would say, with serenity through the current scenario. Now, if you could please move to slide 12. Here, I would say that since March 16th, we instituted a completely different governance model.
The executive committee is working remotely together with the other 40,000 employees, as Candido just mentioned, and with an intensified agenda of crisis management, and this is very important to say that it's without losing the agility and the decision-making capacity. We have established the most important pillars to follow very close. First, the safety of our balance sheet. Second, the level of service of our clients. Third, the safety of our employees and service providers, and last, our governance and public image. As you can see in the chart, we have many boardrooms and meetings. I can say that since the institutional crisis management committee, where we monitor all operations in order to centralize the strategy and allow quick decisions, minimizing risks to a daily risk checkpoint meeting in order to follow market, credit, liquidity, and operational risks. Now, moving to slide 14, please.
I would like to highlight, first of all, the recent government measures through the Central Bank of Brazil and Ministry of Economy, as you can see on the left-hand side, bringing more liquidity into the system. Then it's important to mention that we have increased our cash and liquidity in line with our risk appetite for this moment of crisis, and it is reflected in our LCR and NSFR metrics being short- and long-term indicators. And this increase has begun with a very active credit activity, and Caio Ibrahim David will mention it in a moment. We have been perceiving a positive inflow of deposits, both in retail and wholesale segments, and we see a migration coming from more riskier assets and funds and also a flight to quality behavior here. Okay? And last but not least, I would like to emphasize our robust capital base, which is also defined by the board.
We run constantly severe stress tests, and we are very comfortable with the absorption capacity that we have here in place. Okay? Now, moving to slide 14, please. The key message here is that we have been able to maintain the same level of corporate security even with thousands of people working remotely. Okay? All the employees are working with corporate equipment and systems, and they have our security standards. We took the opportunity to reinforce communication to our clients and teams about fraud risk due to the increase in use of digital channels, and our specialist teams are fully working on mitigating those risks as well as cybersecurity risks. Now, moving to slide 15, please. I would say here that credit risk management at the bank is part of the risk. I'm sorry. Credit risk management at the bank is part of the risk appetite framework that I mentioned before.
We have well-defined parameters for the diversification of portfolio exposure by sector, economy plan, products, and client credit score. We have built a control platform for onboarding and also for monitoring the credit risk of our clients based on real-time information of behavior patterns and credit quality, and since 2010, it's a very important message. We have been working with an expected loss provision model that has been continuously tested and improved. This model anticipates provisions and takes into consideration macroeconomic variables that influence our overall portfolio. This is very important because, of course, in moments of crisis like this, it's expected that we will see an increment in provisions levels. Now, with that, I would like to invite André to talk about technology and operations. Thank you.
Thank you, Milton. Good morning to you all. I'm glad to be here with you on this webcast today.
I'd like to convey three messages from the technology and operations standpoint. The first one on slide 17 is a message of robust infrastructure. With all the investments that we've been increasingly making in the bank's infrastructure over the last few years, we found ourselves in a relatively good position to move to home office, to move remotely a very large number of employees in a very short period of time. As you can see on the graph on your left-hand side, on the upper side of the page, we had about 400 employees using virtual private networks, VPNs, to remote access the bank on March 15th. In a very short period of time, actually in five days that very week, we were able to scale that up to about 35,000 connections.
We currently have about 40,000 of the bank's employees from administrative offices who are working from home in home office situations with the bank's equipment and fully secure connections. That doesn't use even half of our available capacity, which is about 90,000 connections. We're well under our max capacity for this kind of remote working. With that, you can see on the bottom left that the number of calls between team members and meetings through video conference has skyrocketed, and the infrastructure has gone really well. As a result, we actually can manage the bank. The bank is safe and sound operationally for everybody who needs to access our corporate systems. Everybody who would be in our offices is now at home, but for a small fraction of employees who still have to come physically to our offices, and that's about 5% of our workforce.
One interesting feature of all this movement was that we were able to keep on hiring. We're still hiring professionals, for instance, for our technology group, and we were able to select people and hire them remotely, and they do the onboarding remotely, and they get integrated to the bank's culture remotely, and we have people starting, as we speak, to work at the bank in productivity conditions, which are similar to the teams who are already working at the bank, so this shows a lot of robustness in our infrastructure. Now, turning to page 18, the message here is about the operational capacity, the management of the day-to-day in the bank. Whenever the crisis onset in early March here in Brazil, we were very quick to allow the part of our workforce who consider themselves in a more fragile situation, as Candido put it, to remain at home.
Everybody over 60 years of age, pregnant women, and people who would have pre-existing conditions such as high blood pressure, diabetes, and other kinds of conditions were allowed to stay at home. With that measure and the remote, the home office capability I just talked about, we're able to have 94% of our workforce avoid coming to our offices every day. The 5%-6% which remain coming to, who keep on coming to our offices, they are able to do so in very secure conditions. We have increased the levels of hygiene keeping, and social distances at our offices, and very aggressively promoting policies of cleanliness and security so that people feel safe to come to our offices whenever they actually have to. As far as our contact centers, this is probably where we're facing some of our greatest challenges.
With the policy of letting people stay at home if they have any particular conditions, we saw 25% of our workforce go home, and we then stayed with 75% of the workforce on our contact centers, and that happened at the very moment where customers were accessing us in increased levels because they wanted some kind of orientation with their financial life. They wanted to know about the postponement of installments that we offered them for 60 days, so a lot of doubts here, and people were calling more than they used to, and we had a smaller workforce, so our service levels were down, and they're still down, but we're still being able to cope with a little bit of patience from the customer side who are being kept informed of the challenges that we have here.
What we were able to do in about one week is to develop a different technology solution which allowed our contact center operators to effectively work from their homes. So right now, as we speak, we have about 1,600 of our agents who are servicing clients from home as if they were on our own premises, insofar as vendors and service providers. And this is very important for us. We have about 60,000 people who indirectly work for Itaú Unibanco. They report to 15,000 vendors and service providers. We extended to these people the exact same policies that we are practicing with our own employees, and we're keeping daily contacts with the 300 or 400 most relevant service providers to understand continuity plans and contingency plans, financial equilibrium, financial balance of the contracts that we have with them.
We were able to keep everything working with no concerns on this front, although it does deserve daily monitoring. Finally, on page 19, the message I would like to share with you, to convey to you, is about our digital channels. We have always, as you probably know, we have always been very keen on promoting digital channels very actively. By digital channels here, I mean the internet banking and mobile banking. You can see on the top left that the number of customers who routinely use our digital channels has been growing in the last three years. That was a 50%+ increase. Of course, from January, February, to March, the numbers have increased as well. We are keeping those channels up and running.
You can see on the bottom left that the availability of those digital channels is at one of its highest levels ever. We have about 99.8% of the customers who come to our digital channels not being impacted by any downtime. This is something that we're measuring very closely, and the availability, the quality levels are even up from what they used to be in January and February. On top of being able to keep the channels up and running, on the right-hand side of this chart, what you can see is we have diverted a lot of our technology efforts to develop new features, new transactions, new customer journeys, which would allow customers to avoid having to go to a branch or to call our call centers or contact centers, which, as I told you before, are impacted by levels of service.
We've been churning out new solutions in the space of one week. Some of these were even developed over a couple of days. With that, we are ensuring completeness of digital channels to better service our clients. I'll just highlight two of them. One is our credit card PIN code recovery. This is something that would have to be done at one of our branches usually, and that we just launched on our app. A customer who forgets or has any problem with their PIN code can actually retrieve the PIN code from the app directly. The second one, which is at the very bottom of the page, relates to check deposit. This is a feature that we have implemented for Itaú Personnalité customers and which we rolled out to basically every individual customer at the bank and for SMEs as well.
And we've seen a 70% surge in use of that very feature so that people can actually use the bank and do their customer journeys without actually having to come to our bank. With that, I'd like to invite Márcio Schettini, who heads the retail bank, to keep on talking about how we are handling customers during these difficult times. Schettini.
Thank you, André. Good morning, everyone. Now, we'll cover the retail bank, and we'll share with you what we are doing in this segment. As Candido said before, we are focused on three main initiatives in this process. The first one is to provide the best solutions to serve our clients. The second is to keep normal operations under these exceptional circumstances. And third, ensure the well-being of our workforce, clients, and service providers.
At our branch network level, we can see all these three key initiatives being put in place in a very clear way. We have adapted our opening hours to manage the customers' inflow and serve in a more suitable way clients within the risk groups. We have also adopted prevention protocols which safely distance among our workforce, clients, and service providers, and have continuous mitigation procedures in order to keep our employees also in a much better safe way. We have implemented weekly people rotation, and we start this week to provide protection masks for our employees. In our digital branches, we put in place remote work following the same standards used in our central administration areas. The same for the SME business branches or platforms.
On the next page, we can see what did happen with the interactions that we have with our customers in terms of use of channels. We have seen a huge change in the use of our channels, beginning with an increase in access of digital channels for queries, transactions, customer service, and businesses. Regarding businesses, we have seen an increase through digital channels for credit solutions and also investment options with more demand for low-risk investment options or fixed-income products. Our mobile banking app was the main channel, followed by our internet bank website, and now the use of WhatsApp as an alternative channel. Going to the next slide and regarding communication, we believe that we must keep a straight, clear, and simple communication with our customers during this period.
We enhanced the interactions with all segments with the proposal of updates about our branches, opening hours and services, guides about the use of digital channels, offer specific solutions for this period, more precisely related to credit, and share our vision from our investment consultants during this period of uncertainty. Going to the next slide and concerning our offers, in order to help our customers to cross this period of uncertainty, we have put in place important and relevant initiatives. Regarding credit, we have decided to not increase our interest rates during this period, and we are operating at the same level that we were operating at the end of last year. For individuals, we have offered new payment terms and extended grace period. Up to last Friday, we had achieved more than 300,000 customers served with this offering.
Beyond these credit offerings, we have postponed the expiration of exemptions of fees and reward points under our loyalty program umbrella. Additionally, for SME clients and beyond, the new payment terms and extended grace period, we will start to offer this week special credit lines for payrolls and working capital together with BNDES, the state development bank. For customers that use our merchant acquiring solutions through our company, Rede, we offered free of charge new POS machines to support delivery service. We also kept and postponed the expiration of special offers and also kept the prepayments for small customers in two days without interest rates or zero interest rates. We are also working with local partners like iFood in order to offer special conditions for indirect customers. This is what we are doing up to now at the retail bank.
And now I pass to Caio, who will cover the wholesale bank.
Thank you, Schettini. Good morning to all of you. It's a pleasure to be here in this conference. So as you all know, we are facing a crisis with no precedent due to the direct effect of the vast majority of companies, which means our clients, and different sectors of the client. So in that context, liquidity has become the number one priority not only for financial institutions but also for our corporate and institutional clients. In the last 20 days, we had a chance to increase our credit origination by four, which means we are closing pretty much all sectors that we have here from auto manufacturers, clothing, chemicals, food, and so on.
When I talk about institutional clients, I would like to mention that we support them through their position around the [adoption of AI and financial assets as a way to provide liquidity to asset managers to run their business. Actually, in addition to that, we have been able to support our clients in different ways in terms of the credit portfolio management, which means postponing some of the loans we start in the coming months. Also, creating new lines of renegotiation as a way to allow our clients to better manage their cash flows. We are also providing to the middle market clients a three-month grace period also to support them in their cash flow management. Overall, as you know, our credit concentration is something that we take care and always stress with you.
Nowadays, the top 100 largest sectors in our portfolio represent 15% of the total retail investors' portfolio. And also, when we take a look by sector, we see that that exposure represents only 3.6% of the total service. So that's important to mention because diversification of the credit portfolio in this period of crisis is even necessary. Moving to the next slide, what we have is some information about the treasury, wealth management services, and investment banking. In terms of treasury, as you can see in those two charts, volatility is all over the place, not only in terms of the equity market, but we have seen the same volatility in the fixed income, the credit, and also in some specific markets such as FX. That volatility is pretty much a result of the uncertainty in terms of the GDP growth, not only Brazil but also for the entire world.
And I would expect that volatility will still remain for a while until we have a clear view on what would be the impact in the economy in Brazil. Talking about wealth management services, two points to highlight here. First, the migration that we have seen from equity to fixed income assets, which is a bit of a movement that's extremely important as a way to manage the investments of our clients. And one good thing is that we're seeing some of our funds performing extremely well even in this scenario of high volatility. So we are happy with some of the performance that we saw in March from those funds.
In terms of investment banking, what is important to mention is that we're not seeing capital markets since the beginning of March, which means there is no way our clients can access capital markets due to the volatility that we're seeing, and of course, we're going to be able to maintain our robust pipeline that we've used in the last three or four quarters as a way to support our clients once we have a better volatility and reopening of the capital markets during this fiscal year. The next slide is to mention one important thing that we are doing in terms of providing content generation to our clients through different channels.
It has been extremely helpful to them to bring in new information with the leaders in the market, especially, and in your opinion as well, politicians, CEOs, economists, and some others to talk about the situation that we are facing and how they are planning the future of their companies or the future of new policies, credit policies that would play around. So overall, we have been able to reach thousands of clients through those podcasts and lives that we are providing, especially to private clients, Personnalité clients, and institutional clients as well, and of course, the society in general. And finally, I would like to mention about what's happening in the next slide. So the first important information to share is that the liquidity and the capitalization level of each one of those countries are compatible with our definition of what would be those levels.
We are quite comfortable with them, especially considering the strong movement that we saw in the market, but we are managing quite well those two metrics, and it's important to mention that we have a diversity in terms of complexity in each one of those countries, so just to give you an idea, Paraguay, Argentina, and Colombia right now are in total quarantine, which means there is only a special service in those countries, which is different when we compare it with Brazil, that Brazil is not in total quarantine right now.
The most important thing that I would highlight to you is that over the last four or five years, we have been able to build a franchise with an integrated framework that allows us to manage not only our Brazilian operations but also the operation in those countries pretty much the same way, of course, respecting the local particularities. But we have been able to address, especially in this crisis, the key points in each one of those countries as a way to provide the best policies and the best initiatives in each one of those very coordinated with the Brazilian franchise. So that's the key point that has been able to support us in terms of managing Brazil throughout the region. So based on that, I would like to ask Mário to share his view about the matter. Please, Mário.
These are indeed exceptional. Thank you very much, Caio.
These are indeed exceptional times. We are following developments in Brazil. We showed that in slide 31. The number of deaths is rising here, about 500 people already. It's not the worst case by any means, but it's still relatively early days. So we will see how this progresses going forward. One of the consequences of this pandemic is that one of the reactions is social distancing, and one of the implications of social distancing is that combining economic statistics, economic data becomes a bit more tricky than usual, and in order to help with the decision-making process of our executives, we are more and more relying on our own data. We have established or developed an internal daily activity measure for Brazil.
This shows a tremendous drop in the mid part of March, followed by some stability that is based on data that we can see in the bank regarding spending on goods and services and also consumption of electricity by manufacturing in Brazil. Activity is now some 35% below what it was before the crisis. We think it's also not the lowest point we've seen. It was weaker than that a few days ago. It recovered a little bit, but we think as long as the lockdown measures continue in Brazil, activity is going to suffer some more before we start to see a more sustained recovery some weeks down the road. We are in an extremely uncertain period. And we highlight that in the following slide, in slide 33, we show that in the lines there, we have different dates for the lifting of the lockdown.
And on the columns, we have different speeds for the recovery from the third quarter. And what you see is a sea of red, number of negative numbers, right? We are going to have a recession in Brazil, a recession that can be from -0.5%, is not very likely, to a much deeper recession if we have a protracted lockdown followed by a slow recovery. And one thing to notice is that in this table, we tend to move diagonally from the top right-hand side to the bottom left-hand side, meaning that the more protracted is the lockdown, the weaker the following recovery tends to be. Again, an extremely uncertain environment, unfortunately, dominated by the prospects of a significant recession in Brazil, significant to severe recession in Brazil this year. With that, I pass the word again back to Candido for his final remarks. Thank you.
Sorry, I'm having trouble unmuting my phone, so I think that this chart shown by the people on page 33 gives the degree of uncertainty of the times we are living. I can't think of another time in Brazil when in March or in April of a given year, you will try to forecast the GDP growth for the year, and you would end up with a 6% disparity between the lowest and the highest drop, -0.5% to -6.5%. So what we try to show to you during this call is that despite this very high uncertainty, we have been able to react to the crisis on a very swift and efficient manner.
This was enabled by our previous work with people and technology, our governance and risk control, the strong ties, cultural ties among our people and the bank, and the ability of the financial system, we and other banks, I mean, to work together in proposing solutions that will enable the banking system to insert liquidity in the economy as a whole. So with this, I conclude my remarks, and thank you for your attention. And we'll move now to the questions and answers.
Now we start the Q&A panel. Please enter your questions on the webcast and click on Submit Question. Our first question is to Candido Bracher from Jason Mollin of Scotiabank. How would you compare this COVID-19 crisis shutdown versus 2018-2019 financial crisis in terms of, one, liquidity and, two, expected loan losses for the banks? Three, main segment, corporates, SMEs, and individuals?
The sound was not too good. I understand that the question is to compare this crisis with the 2008-2009 crisis in what concerns liquidity, loan losses in the segment, and this, so in terms of liquidity, I think we could clearly see that authorities, not only in Brazil but in the whole world, have learned their lesson of the 2008 crisis. The reaction was much faster, much stricter. The crisis met a financial system which was much more capitalized, less leveraged than in 2008, so this crisis was much easier to deal with from the liquidity standpoint, and the regulators in general have been much faster to react. In Brazil specifically, this is true. The 2008 crisis, as you know, in Brazil was not as intense as it was in other developed markets, but the Central Bank of Brazil in this crisis reacted very fast, injecting liquidity in the market.
So this is a much lighter crisis in what concerns liquidity. In what concerns loan losses for the banks, expected loan losses for the banks, it's too early to say how will this crisis affect the loan book? how will this crisis impact the loan book of the banks. It will depend on two important variables, one being the duration of the quarantine and the other being the amount of fiscal intervention in the economy by the government. Having said that, you remember that in the 2008 crisis, Brazil was not too severely hit, but we had the problem of the derivatives, what we called then the toxic derivatives, which have provoked a huge indebtedness in some corporates, especially large corporates. And this, I mean, impacted the loan book of the banks during some time. In this crisis, we have nothing of the type.
I mean, there was not a high leverage in the economy. I mean, we didn't see the corporate sector very much leveraged, leveraged but in normal terms, neither the individuals. On the other hand, this crisis is much more serious in the sense that companies and people, I mean, stopped working. So they stopped selling. The inflow of cash will be severely reduced. So these companies will need rollovers, will need liquidity to their debts, and sometime in the future to be able to repay them. So I think, I mean, depending, of course, on the intensity of the crisis, we will live with the credit effects of this crisis for at least the whole of 2021.
Our next question is to Márcio Schettini from Mario Pierry of Bank of America. Can you discuss the impact of your fees from the crisis? How effective is the app mobile in generating new businesses versus the branch? How much has your branch traffic declined?
Okay, so thank you, thank you, Mario, for the question. Regarding the impact in our fees, as we have anticipated, so we will not bring figures related to the end of this quarter in this call. But I can answer the two other questions related to the effectiveness of our digital channels and also what did happen with the volume of transactions in our physical branches. We have today, as a baseline for individuals, our digital channels being responsible for something like 16-17% of our total revenues. And we have seen an increase of almost 30% in the use of our digital channels, so we expect to have an increase of revenue generation through digital channels.
For SMEs, the contribution for digital channels in terms of revenue generation is around 30%, and we also had an increase of 30%, so this 30% will probably come up to 40% during this period, during this crisis. Regarding the volume of transactions in our physical branches, we have seen last week, compared to our baseline, a decrease of 50% in terms of volume of transactions in our physical branches. We were not seeing this up to the beginning of last week, but we finished last week with this drop, which means that we have seen a change or a shift for electronic and also digital channels.
Our next question is to Milton Maluhy Filho from Nicolas Riva of Bank of America. Does the announcement today from the Central Bank mean that you cannot pay any dividends until September 30th or that you cannot pay any dividends above the 30% minimum payout? Two, assuming you cannot pay any dividends, does this affect your ability to pay the coupon on your perpetual bonds? Thank you.
For the question, first of all, what it says is that we cannot pay dividends above the minimum that we are obliged to. So I'm talking about 25% minimum that we can still pay. And the second question is if it affects the coupon of our bonds. No, it doesn't affect the coupon. They're treated as debt. So even with this restriction, we can keep on paying the coupon of our bonds.
Next question to Candido Bracher from Eduardo Nishio, Brasil Plural. For the past few years, regulators and politicians have been pressuring for the system to increase the competition to higher taxes for banks. Away from the usual stance of a solid financial system, this particular crisis has probably proven that having a solid financial system is paying off. Still, we see political initiatives to increase the CSLL from 20%-50% at this point of the COVID-19 crisis.
Thank you for your question, Nicolas. I think you are right in noticing that, I mean, the fact that the financial system is sound and capitalized has been fundamental for the swift way which is reacting to the crisis. And I think this is valid for Brazil. This is also valid for other parts of the world. But this is especially valid from Brazil. It's really showing the value of a solid financial system in a situation of crisis like this.
When you mentioned, I mean, the initiative to increase social contribution from 20% to 50% and other measures like this, I think this is democracy work. You cannot expect that every Congress member will be an expert in economy and will know how to evaluate the consequences of the measures, the economic consequences of some of the measures which are proposed. But this is why, I mean, the Congress then has all the commissions and has the way of discussing the things. And I think, I mean, common sense at the end prevails. Of course, I mean, lifting the taxes to this level, I mean, would be very damaging for the economy as a whole in as much as it would hamper the possibilities of the banks to deal with the situation, to insert liquidity in the economy as they are requested to do in a situation like this.
Question to Márcio Schettini from Flávia Furlan Nunes, Bloomberg Economics. What have been the impacts of the crisis on the card payments business? Can this situation lead to consolidation or a new round of decreasing fees?
Thank you, Flávia. We have seen a huge impact on the dynamics of this market during the last three weeks. We have seen a decrease around 50% in terms of sales, what impacts the issuing and also the acquiring business. And it is the same for debit and for credit. We have also seen a huge demand for working capital for all kinds of segments on the acquiring side, what put us in a very, I think, competitive position to serve big customers and also medium and small customers. And we expect to continue to see this trend during the next two months.
Regarding the last questions where you asked about some impacts that came to stay, like the decrease of fees and things like this, I think that it's very early for us to anticipate any trend. And it's also difficult for us to also imagine any consolidation move on payments and also on the card business.
Next question to Caio Ibrahim David from Jason Mollin, Scotiabank. Can you talk about the details related to the acquisition of financial assets from corp clients? What that BRL 2 billion you mentioned, what did that market prices reflect in the recent declines?
I think Caio is having some issues with the connection. Caio, can you hear us? Okay. So let's do the following. Caio will be connecting. I can give the answer now to that. And if Caio wants, he can complement.
The Central Bank of Brazil released one of the credit lines in the market specific to do repos with assets that could be bought in the secondary market. So those BRL 2 billion, most of it has been done with those lines. We did an important amount as well with our own cash flows. All the assets were bought with market price. So yes, market price, we used our own liquidity to give liquidity to the secondary market. And also the Central Bank released a line to grant to the banks to do repos in the secondary market, repos specific assets as well.
Our next question comes from Rob Dwyer to Candido Bracher, Euromoney. Question on corporate banking. As they search for liquidity, even large, highly rated Brazilian corporates are reporting a large increase in the cost of new credit during the crisis, around 3x spreads compared to the pre-crisis. Do you have any comments on this? And do you worry it will change the notion of corporates' sense of what a relationship bank means after the crisis?
Thanks, Rob, for your question. I think it's an important one. I've had all my career in corporate banking, in wholesale banking. It's almost 40 years now. And I think we have always, in every place I worked, characterized ourselves as a relationship bank. What does it mean to be a relationship bank in a situation like this? It means basically to be present to your clients, in this case, to your corporate clients.
It means to take the calls, to be open for discussion, and whenever possible, to have credit lines open for them. These companies, in the past two or three or four years, have gone to capital markets rather than to bilateral loans with banks. And this was very good. Capital markets in Brazil have flourished. They have supplied the need for these companies for large corporates, especially the first-class corporates, the need for cash. And this was very good. When the prices of bonds now, in the beginning of March, you have seen, we all have seen, the spreads in these corporate bonds increasing tremendously. We ourselves have a perpetual bond which was paying about 5%, was yielding about 5% a year before the crisis. With the onset of the crisis, it came to almost 15% a year. And now I think it's around 9%.
The same thing happened with bonds from Petrobras, from Vale, and from every other important Brazilian corporate. So in this moment, in the first moment of the crisis, most of the companies wanted to do a test of liquidity. And we were there to help them do this. The increase in spreads in large corporations, spreads are dealt case by case, was but a fraction of the increase in the risk perceived in capital markets, which was transparent in these bonds. So I am very confident that all of these companies see that they have in Itaú Unibanco, in Itaú BBA specifically, a relationship bank which will keep on being their partner for the times to come.
Thank you. Next question to André Sapoznik from Geoffrey Elliott, Autonomous. Are there examples of practices which you expect to change permanently following the epidemic rather than go back to normal after COVID has passed?
Geoffrey , that's a great, great question. And this is one that we have been entertaining during our spare time, not that we have a lot of spare time during this crisis, but something that has given us food for thought. We've all been reading that the world will never be the same after this crisis. And I certainly agree to that to a certain extent. Some of the things or changes in practices that we're seeing that I would like to comment. First is digital adoption. Every time that our customers, both individual and commercial customers, are inclined to adopt digital solutions and digital journeys to make the relationship with the bank very effective, what we see after those moments is a very interesting residual value.
The first thing we see is that we're probably having a surge in digital adoption and digital practices in contracts being done digitally. We've seen a lot of flexibility, not only from our customers, but from the society in general, from courts, from regulators, to accept digital transactions with the same value that physical transactions would have. The first thing I would comment on is digital adoption. The second thing that occurs to me is ways of working. What we've seen is that, and it's the widespread adoption of agile management and agile development. Some of our consultants linked us with partners of the consulting company in Asia and in Italy to learn what financial institutions in those geographies had seen from their day-to-day operations.
One very interesting comment which was made by the Asian partner of that firm was that all the banks who were already working in Agile shifted to remote Agile very fast, but all the banks who were working in a very traditional way, a Waterfall way of developing products, had a lot more difficulty in adapting to home office, so we have been investing for a couple of years in making our workforce work in Agile and integrating technology people with business people to develop the solutions, and we see that as a very important lingering effect of this crisis. Also, in the ways of working, the adoption of home office, which I would say that we were doing timidly, shyly, and testing and very worried about how we control the environment, basically we had to take the plunge here.
We had to actually very actively promote home offices and remote working, and it's working very well. We've seen the productivity levels be the same as they were before and in some cases even better. We understand that the adoption of a widespread home office solution, and that may be shared between physical presence and home presence and keeping the ceremonies and keeping teams connected, that is also something that the crisis is probably bringing us for good. A third comment I would make would be efficiency. I mean, in this crisis, one of the things that you have to do in a very pragmatic way is to go back to the basics, to understand what is key, what are the needs to have, and what is nice to have, and actually be very efficient and become more efficient than you were.
And there's a lot of lessons in efficiency that we are driving from this crisis, which will probably be with us for a long period of time. A fourth comment I would make is a consolidation and an advancement of the culture of the organization. We're seeing a lot more pragmatism. We're seeing a lot of leaders emerge and leadership practices which connect people who are in different geographies. We're seeing a lot of collaboration, intense communication, and to a very interesting extent, solidarity, people helping each other across organizational lines. And we think that builds a better culture for a better bank. And the fifth and last comment I would like to make is on the institutional dialogue.
We've seen that working together with other banks, with competitors, with regulators, and with the government to actually build the solution, as Candido put it, and actually trying to help the society as a whole overcome this very difficult crisis has increased the level of dialogue to a new level, which we understand is where it should be all the way. So we hope to maintain that institutional dialogue on a new level.
Thank you. I must remind you that you just have to enter your questions on the webcast and click on Submit Question. Our next question is to Caio Ibrahim David from [Mariana Taddeo], Wells Fargo. Itaú Unibanco, similarly to other large Brazilian banks, counts with Financial Bills or Letras Financeiras for funding. Have you seen any reduced liquidity in this market? How do you expect the availability of this funding source to behave during the crisis? Thank you.
Hi, Mariana. I hope you can hear me well here. Thanks for your question. Of course, as you know, Letras Financeiras is one of the most important funding sources for all banks. And it's also great to see something that you didn't know. But what you're seeing in this crisis is a question of pricing. Of course, you have a chance to go to the market through this instrument. Of course, there is a pricing moment for the banks. But overall, what you're seeing is that, based on our high liquidity, we do not need to go after those Letras Financeiras. Actually, on the other hand, you're seeing a really -
Caio. Caio.
Yeah.
I'm sorry to interrupt you. Your line is very bad, and we can't hear what you're saying. So I'll return back to the webcast. They will pose one question to Milton now, why they try to change it to another line. If they can change it to another line, then Milton can take this question. Thank you.
Okay. Thanks.
Can we go to the next question? And then it's the case if Caio cannot connect, I can answer that, please. So now, Milton, the next question from Carlos Gomez-Lopez, HSBC. On the dividend again, the legal minimum for earnings distribution is 25%. But we understand the bylaws of the bank have a higher level, 35%. Does the central bank ruling supersede the bylaws? And can the dividends be paid as interest on own capital?
Okay. So, Carlos, thank you for the question. First of all, in our bylaws, we have 25% of dividends which is in line with this resolution of the central bank. Okay? So the answer is we will keep the same definition of the Central Bank of Brazil. And this is also valid for interest on capital, not only dividends. Okay? For both.
Excuse me. We are now ending the Q&A panel and the webcast. I would like to hand over to Mr. Candido Bracher for his final thoughts.
Thank you very much. So thank you all for your interest, for attending to this call. We hope we have been able to convey to you, I mean, our position in the crisis and how we are working in order to be prepared to fulfill our role, our important role in the economy in this difficult time. Thank you very much.
Thank you. This Itaú Unibanco Holding webcast is closed. We thank you all for participating. Have a good day. Thank you.