We will start APIMEC Regional, São Paulo region. It's a pleasure to have Itaú Unibanco that is part of level one of the special segments of governance of a B3 and the entrepreneurial sustainability, which is part of the same group. ABRASCA Self-Regulation and Good Practices of Open Capital Companies. We salute those listening to us online. The material shared here will be available on the website of RI on itauunibanco.com.br. We have here with us Mr. Alexsandro Broedel, Executive Director of Finances and Relationship with Investors, Mr. Cândido Bracher, CEO, Mr. Roberto Setubal, Co-president of the Board of the Directors, Mr. Vassimon, the General Director of Wholesale, Caio Ibrahim, VP, CFO and CRO. Mr. Márcio Schettini, Retail General Director, Mr. Claudio Medeiros, VP of People and HR, Mr. André Sapoznik, VP of Information and IT. I'm Lucia Nicola, and I am a VP of the São Paulo region.
Mr. Roberto will open this session. Floor is yours.
Good afternoon. Let us start the 23rd APIMEC Itaú Unibanco.
I'll briefly touch upon two themes that are of importance to all of us, the shareholders of this bank. The first one is focus on the shareholder. The first evidence that I would like to bring to you here is the relevance of the shareholder of the bank to our reality, for our reality, for the performance of our actions. We have an exercise on. We work with the 100 bases that, in other words, is the zero point being the point of the merger between Itaú and Unibanco, CDI and the exchange market of Brazil, Bovespa, is very important. We see the plot in here, which is highly superior to indicators.
The second aspect that I would like to draw your attention to is the same comparison with a mix of Brazilian banks. Our competitors. You can see the orange line here, the line of the bank. We have the mix of our three main competitors. Our performance has been above the competition during that period. We pay a lot of attention. It's a variable that is of importance. It's extremely relevant to our reality, and it has to do with the level of respect and the added value to our shareholder. This distribution of results has to do with dividends that we announced last year in the previous edition of this very same event when we disclosed our policies for dividends. The dividends, the payout index, instead of being a fixed number, a percentage, it is a result of two variables.
The growth of our profitability, our OI, and capital consumed and the assets of the bank. Those are two variables. We have the Basel Index above 3.5%. That's how our appetite for risk is affected and is based upon. In other words, the payout index, instead of being absolute and fixed, has 35% of an established number, and profitability and capital consumption will affect those numbers. We do not have idle capital that was not consumed in our activities, in other words, and is not included in the 3.5% would be capital level 1 for 2017. That number translated into a payout above 80%, 83%, in other words. 83% was the number from last year based upon those lines. We have a dividend distribution and a payout index that is rather transparent.
2018 is above 40%, 45%, actually, so far, as you can see on the image that is up here. We have a policy for dividends that is clear and transparent. The counterpart in the management of the bank, incentives-wise, our executives are also treated as shareholders. It is all relevant for them because it has to do with their remuneration. The variability of different periods will affect their numbers. So it is personal for them. There is a group of executives that are part of the partners of the group. We have retention of up to eight years, and the percentages and the participation of the profits of the bank actually account for a period that may go up to eight years. Therefore, you see how we treat our executives and our shareholders. We hold them to the same standard. In other words, everyone is a shareholder.
It all has to do with long-term for all of us. We try to be as sustainable as possible. We have relevant concerning credits, how we provide credit and offer credit to companies. We will not offer credit to companies that have slave labor, for instance, which is still a practice these days, among many other aspects. We have other initiatives as well when it comes to sustainability in the aspect management of HR, ethics, relationship with the customers. We are focused, the bank is, on shareholders. Our roles show that our policy of dividends actually adds to what we have in mind, all that within a context of a good business practice that has to be sustainable. The relationship with you, our shareholders, we aim for transparency and interaction. We have had 26 conferences with investors in Brazil. With investors, that is. We have had 15 APIMEC.
This is the 15th this year. Only this year we have had six. That has not to do only with the results or sharing numbers and figures. It has to do with the interaction, the level of interaction we want. 123,000 shareholders, more than 1 million investors who invest through retirement plan funds and different types of investments. This is how we relate to the market, how we create value, how we add value via a policy that is clear, sustainable, and the market perceives us, and we want that to happen as transparently and clearly as possible. More than multi-tens of thousands of people have taken part in our APIMEC throughout the years.
We have been awarded many a prize, the best CFO, better relationship with investors, better metrics, and the transparency ministry has recognized our company as the most ethical company, the only one to be recognized as such so far. So we have a clear recognition of the way we choose to relate to the market. These are very important values to the bank, and we want to keep that in the long run. That is why it is important to point out those aspects. I would like to bring to you a piece of news. We have a new website for relationship with investors, this is focused on that. It is more flexible. It is easier to be used. You can watch conferences, talks. It is easier to handle than the previous one.
We have a new member in RI in our bank, with a new position, our virtual assistant, one of the first interfaces that you can have with the bank is via our virtual assistant. There is a talk online. Just bear with me. You can ask questions, you will obtain answers with online interaction with the market and people who are participating, and the stakeholders on all levels. We have many level of interaction on many a level that I would say with faster interactions, many of the questions that are brought to us are answered more objectively, and that's what our virtual assistant has to do. Carrying on, we are bringing the first podcast on RI in Brazil.
It starts today with an interaction via podcast as a channel, and it's a tool for the promotion of information less structured because the virtual assistants will cover other fronts. We can share information, detail aspects that we are discussing and presenting. I think it's interesting and of pivotal importance to open new fronts and new channels. I'd like to wrap up my talk here. Please log on to our website, check it out. There is a lot of information available. I would like to invite Cândido to talk about transformation.
Good afternoon. We are here to talk about Itaú Unibanco. I would like to talk to you about a bank, how we see the bank currently, how we understand your and our challenges, and what strategy we're choosing to overcome that. We have our whole executive committee here, 26 members.
Claudia Politanski, André Sapoznik, Eduardo Vassimon, Claudia, Márcio, and myself are here representing those. Mr. Roberto will talk about capital management towards the end of this session. The idea behind my presentation is firstly to have three different parts. Firstly, dealing with how we see the performance and the scenario of the bank, then we go into the context of the market, then we have the process of transformation that we aim to navigate in this new context. So how we see the bank, the bank, the largest bank in Latin America, 94 years of history, BRL 260 billion in market capital, BRL 1.5 trillion in assets, 19 countries, and 37,000, almost 50,000 cash dispensers. We have our highest concentration in Brazil, 86% of our HR in Brazil, 89% of our branches, 69% of the assets, 75% of the credit portfolio.
In Brazil, we have an ROI, return on investment that is above what we have in the bank as a whole. The way here wasn't done through numbers per se or numbers alone. As you can see here, it dates back to 1924. We are analyzing the volatility that has been a constant. That volatility has trained us in risk management. Our main activity has to do with managing risks, dealing with the uncertainty that we come across from time to time in the market and adapt to changes, and that's what we have been doing for such a long time, and that's why we have such level of performance. We are a bank that adds value to the shareholder. I'll hold on my presentations, or in other words, I'll step back so that you can understand where I'm coming from.
Generating value has to do with the profit of the bank minus the cost of the capital that the bank needs to have its actions in place. As per the Basel, I beg your pardon, there is a regulation for activity and the highest risk that is perceived in one activity, the highest or the more we need capital. There is a taxation on that represented in gray here, the gray line, that is the number defined by the market. In a first thought, that is defined by you because the theory behind the capital is that our investors will project or foresee the numbers for the future, and they kind of come up with what they expect as a return. 14.5% is the cost of the capital currently. That is easily attainable as a result and understandable because we have quite a few technical minds here.
That logic is applied internally as well. As per we do in other areas. We see the capital necessary per area that it is invested in. Not necessarily the activity that it offers the highest profit is the one that adds more value. If an activity has good profit but is risky, it is considered risky by the regulator, the capital will be more costly, if you will. Then we have profit minus capital. If we compare that to other activities that might not be as profitable, but neither is it more risky, there will be more value generation because we focus, especially since 2012. I will go into that in a second.
We have transformed value creation into our major goal. We manage the bank aiming to create more value. Value creation for our shareholders and also for society. In the last three years, we generated BRL 225 billion for society, 30% of which was paid to our employees, 30% was paid in taxes, 19% was paid to our over 1 million shareholders, direct and indirect ones in Brazil and abroad, and 19% of which was reinvested in the bank's activities. Very good. I would like to touch upon the recent evolution of the bank, actually over the last six years, since 2012, because it was when we adopted the strategy of prioritizing the value creation. What was the scenario in the end of 2011?
We had a default crisis, high default in the market, and we had clear indications of a slowdown in the economy, although unemployment was still low. At that point, our goals were established. Firstly, to create value for shareholders based on the concept I mentioned. Secondly, our results had to have low volatility. They had to behave in a steady fashion in terms of our results. It is important to say that there are some areas, typically like treasury, that can yield high results, but they have high volatility. Credit activities for the highest risk groups when you have higher interest rates also have higher volatility. We gave up the risky credit scenarios because of our risk appetite, and we decided to focus on service. As services are more uniform, they do not require as much capital. They have a higher value creation.
Finally, we sought to have a cost control that was more stringent. That was the tripod of our policy as of 2012. Having a risk appetite that was more restrictive, having focus on service, and stringent control over costs. What were the results that we have attained since then? In terms of credit, as you can see on the left-hand side, the profile of our products has changed. We reduced products of higher risks and increased our portfolio for products that are perceived as lower risk, as real estate credit. Not only products that changed, but rather within each segment of products, there was a migration towards the best ratings, the best credit ratings. Looking at the graph on the right-hand side, we had a substantial reduction in credit cost. Between 2011 and now, it dropped 7.5%.
Recently, it dropped even further because we had two years of severe crisis in 2015 and 2016. On the right-hand side, we have in yellow the credit provisions for retail and in gray for wholesale. Our intention is to show you the volatility that we had and the crisis in 2015 and 2016 that affected primarily the segment of wholesale. In these last six years, while our credit portfolio increased 32%, our credit cost dropped 7.5%. That was the impact of the risk appetite that we mentioned. From the standpoint of our focus on service, let's talk about our operating coverage. How much of our expenses can I pay exclusively by using our service revenue? This index has increased by 20%, from 52% to 72%. Now we are at 72.1%, which is the highest point since we started this process.
We have covered 72% of our expenses only with services, without needing credit. Finally, from the standpoint of cost management, we measured the efficiency index, which is at 46.5%. The lower the better, because it is the total of expenses divided by the total of revenues. Considering the 15 biggest banks, western banks, we are the bank with the best efficiency index. Another index that we consider is the efficiency index risk-adjusted. In addition to all the expenses of the bank, we consider the expenses with loss of credit. It was 60.9%, which is the lowest point since 2009. As a consequence of these three movements, being more stringent in terms of credit, better performance of credit, and the growth of our service revenue and cost control, value creation has increased threefold since the first semester of 2012.
It went from BRL 1.7 billion to BRL 5 billion. It's interesting to see on the right-hand side, those bars show value creation per activity. In yellow, it is value creation with services and security. You can see that the bulk of it comes from there, because the ROE is 14.5%, and credit activity destroyed value in many years, but it was profitable. The profits were lower than the capital cost that we had to apply in this activity, especially during crisis. Now we are celebrating the fact that in the first half of the year, we managed to create value in the credit activity after some time. It yielded 14.5% of ROE and the capital cost was 14%. Now it's 14.5%. We have to increase the profitability of the credit activity. Trading activity, which is lower because it is an activity that is volatile.
It's been yielding results, and it has been creating value, and it has a return of 34.5%. Finally, we have an activity whose return is never enough to cover capital costs, which is the surplus of capital that we have. It is the capital that we have in addition to the required regulatory capital, and Roberto will touch upon that later on during his presentation. That was the evolution of the bank in the last six years since we applied the strategy, the strategy that we have been enhancing on a yearly basis. What is the market context that we are up against right now? The world has been through some radical transformations that have drastically changed people's habits. We had the farming revolution, industrial revolution, many revolutions, and recently we still had some. But a few things have changed.
First, the speed of transmission. Because while the Industrial Revolution took place in England and it took centuries to spread to other areas of the world, nowadays, with the digital transformation, all countries are fast affected. Also the number of people affected by these revolutions has increased drastically. These changes have been impacting many more people in a shorter period of time, and they have been happening more often. This is part of the context that we are up against right now. How does that affect our market? We have changes in the regulatory environment, more technologies available, higher expectations of our employees, and changes in the habits of our consumers. First, the competitive environment. How has that been changing? Now we have fintechs. We have new companies that tend to focus on one product alone. They attain a level of excellence. They become highly competitive.
They compete for our customers, and they reduce the margins in this segment. There are several examples of that. XP is one of those examples, and we just acquired 49% of it. It's a company that innovated, specialized in the segment of investments, and it's been growing greatly in this segment. There are many other companies like XP that change greatly our competitive environment, and they require our constant attention. The regulatory environment, it's linked to the previous one because these fintechs, they focus on one specific niche, and they choose this niche where banks are less efficient and the services provided by banks are not so good, the prices are higher. By doing so, they draw the attention to the fragility of the banks. Not fragility in terms of power, but rather in terms of quality of service.
The regulators, they have a bigger appetite for regulations, not only in Brazil but globally. However, in Brazil, we have seen how many measures have been adopted in terms of credit cards in the last two years by establishing prices and also in other markets. From the standpoint of also aiming to assure there's more competition in all financial segments, the regulatory environment is becoming more difficult, if you will, more challenging for us. Available technologies. There are countless new technologies right now, and they are a threat and an opportunity depending on how you use them. The way we see them is a huge opportunity to gain efficiency, to improve the quality of the services we provide our customers, and you could just see our virtual assistant. Technology is a major opportunity, but later on, I can touch upon that some more.
Also, the expectation of our employees has changed. People who come to the bank today, they want to increase or work at a company that has a purpose and generates value to society and is perceived as positive in terms of impacts for society. We have to take that into account as well. It is very important for new employees. It is very important to consider the changes in the habits of our consumers, the number of electronic transactions, and they expect quick solutions, immediate service. It is user experience, as it is called. It is how much the user experience has to be enhanced constantly. These are all changes that we have been experimenting.
They started recently, and we have to adapt to them, and we have to use them in our favor positively in our market expansion and also in our efforts to generate value for our shareholders and for our society. The way I see it is, we saw that changes took place from time to time, but now they take place so fast that our evolution is not only in steps. You have a certain time for getting adapted, and then there is a new transformation, and then you move to go up one level and so on and so forth. The way I see it today is that we have to be constantly changing, and it is a cultural change as well. You have to transform the institution as a whole, and this is the bank that we are seeking to build, a bank that can constantly evolve.
Well, it is nothing new really to the bank, maybe just the pace. Itaú Unibanco has been evolving greatly for a long time. I showed you there were many uncertainties, but our bank had always been in the forefront of using new technologies and new methods and new tools in order to create value for the shareholders and quality for the customers. Now what is happening is just maybe the pace has changed, and we have to keep up with it. How are we tackling that? How are we doing our own transformation? We have six priorities. They are split into two groups. We have those fronts that are of continuous improvement. It is something that we already do, and we do well. We just need to constantly be improving.
The search for profitability, and we have the highest among our competitors and one of the highest in the world. It has a lot to do with efficiency and also risk management. Our business is about risk management, and it is everyone's role, not only the role of the risk areas and our internationalization process. Caio will touch upon that and Vassimon on internationalization. I am going to touch upon the transformation of fronts, which is not only about continuous improvement, but also it is about transforming. Claudia Politanski and Vassimon will delve into that. It is people's management, digital transformation and customer satisfaction. We are four to five partners or executive partners of the bank, and we have clear targets and constant monitoring for each target. What is our goal here?
This is our three-pillar transformation. To stimulate people to live the power of digital, to stimulate people, always aiming to transform the experience of the client. Those are the three pillars, the three axes of our transformation to stimulate people. What is to stimulate people? To aim to eliminate what is seen as a barrier in the work environment, to adapt the people more and more, fostering them to be productive in the way they are. That reflects our concern with the experience of our employee. The employee will transform the experience of our customers, our clients. Meritocracy that has to do with their evaluation and assessment. We will expect collaboration in the work environment. Diversity is relevant as well. Expectations have changed over the last years. In the past, we had much more competition. People value much more internal collaboration rather than competition. They expect a community.
Multifunctional teams are of importance, and that works better. For quite a few years, we have been encouraging those teams. Our digital branches are based upon multifunctional teams. The challenges within this tripod or tri-pillar is to strengthen our capacity to attract and retain talent, to address what those talented people search for, to engage and motivate different generations. We have baby boomers such as myself, and we have X generation people and the latest generation, which I cannot even name right now. We have to prepare our internal environment to have that transformation process in place within the people transformation access. To live the power of the digital, Itaú has always been known for the use of technology. This is the central, the spine, if you will, of our whole structure.
The only way to go ahead is to use technology intensively, and that is to do with serving people. We work for people, we serve people, and we do that through technology. We have invested a lot in technology to anticipate the needs of clients and customers. We see two examples here that illustrate that. To your left-hand side, data analytics or AI, artificial intelligence. We hired 50 data scientists, and we have our efficiency center for analytics. We are doubling the size of our team. We have twice as many people working. We have many projects. We have experienced improvements in our predictive models of credit especially, and we have increased by fivefold our data bank. To your right-hand side, we have more than 10 million individuals using our digital channels, companies as well. In the last quarter, we had 125,000 accounts digitally opened. It is increasing.
You see here the lower right-hand side corners of the quadrant, actually, 86% of our clients are identified by biometrics. It is expanding at a really fast pace. Technology, furthermore, we have made quite an obvious decision. We want to be a sole bank, meaning that we are not going to create a digital bank. There is not such a thing as a bank that is totally operating apart from that bank with a kind of division between what was the old model and the new model. Why? Because we mentioned earlier, we have to be constantly undergoing transformation and absorbing that. Now, stopping what you do and starting from scratch is denying your capacity for transformation. Whatever you are creating today might be obsolete. You do not want something totally new. Our option is transforming. We will get our system, and we will migrate onto cloud storage.
With the system, in the same way we've always worked within the fintech concept, having a legacy and clients with different profiles. That's our strength as well. Our ability not only to serve the client, but also to have the capacity not only of the fintech resources, but the diversity of our clients with level of our need for the management of different profiles. Using technology towards people, innovating, taking advantage of our capacity for transformation, providing a simple, clear, productive, and attractive to our clients and customers. Transforming our clients' experiences and how they experience us. We are not comparable or compared to the competition alone. We have companies that are not necessarily direct competition. Amazon, for instance. A client of Amazon is a client of ours as well.
When they experience Amazon on an excellence level, it also increases the quality of our experience, the experience of theirs with us as well. Companies are looking for more and more, providing higher quality services, increasing the demands towards other companies as well, and expectations towards other companies as well. Companies that do not deal with that properly, that do not deal with these high levels of demands and expectations, are not going to stay in the market. The size of the bank is determined by our clients. Their preference is what makes us a larger or a smaller structure. We have a cultural journey to deal with that challenge. We have to put ourselves in their shoes. Technology is extremely important. How we deal with our employees, with our clients, and the fundamental element of this transformation is attitude transformation in the people of the bank.
This attitude that assumes as essential the effort towards making and providing better services to be seen as excellent by our clients, our customers, and that should be at all levels, on all levels, product, control. It's a cultural journey, therefore, and we set off on that. We set out on that. Always measuring the experience of our clients. We are providing tools to measure this level of satisfaction per transaction made with us. What is our challenge, I'd say here? We want to be client-centered 100%, to evolve through Net Promotion Score, the capture of understanding of the feedback of our clients, redefining the journey of our clients. How there is a real estate financing or different services that we provide to make the experience and the application and interaction with the bank more and more positive. What's our main objective here?
To change our league, to go to a whole different level, a whole different league, to raise the bar, in other words. We want to be part of the best companies in the world in terms of services provided. That is the league we want to be part of. We compare ourselves to our competition. Our services are better than our traditional competitors, not better than our new competitors in these new sectors. But we're aiming at the moon. We're aiming for being better than other competitors, be them in the financial sector or not. This is our objective altogether. Mr. Schettini and Vassimon will clarify that further. Thank you.
Good afternoon. A little on our challenge with people here concerning people management. Cândido has shown you this tri- pillar with the[audio distortion]. Just an introduction. Now we're talking about the transformation and how it affects people management.
The changes impact all levels and in a relevant fashion, our 100,000 employees. When it comes to people management, we have to see to what extent we have to prepare our work environment to deal with this concept. The concept of constant transformation with processes that contribute and are facilitators of these changes, ensuring that we are a company that is attractive, that people desire and aim for as a career, and to retain the talents that we have. When we talk about these axes and these different pillars, we are talking about a rather long discussion. In order to summarize the main aspects and the most relevant ones, we elected or we chose three pillars. Firstly, the best version of ourselves, the best versions of our employees, the best versions of all of us as a group.
The third pillar that has to do with meritocracy, well put by Cândido. Meritocracy 2.0, that is what we have named it. I will go into each item. We will not go into much of the details in the interest of time. Let us talk about the best of each one of us, the best version of ours. To value people as they are, to value their experiences, their origins, their characteristics, features, different mindsets. Eliminating barriers that separate people from who they are and what we expect from them here as an institution. A few years ago, I learned from a consultant of ours when we were working closely, that he felt that the informal side of him had to stay back home. Back then, they had to wear a tie.
He said that he leaves his informality in his car when he is. That is what he told me at that time. It was acceptable back in the day or back then. We want people currently to come as they are, wholesome. We do not want them to leave anything back home. We want their best, and people only give their best as far as they can provide, as they can be themselves. Our campaign that has to do with the dress codes, I will wear as I am, or I will wear what I am. People dress as what they feel they are. They will present themselves as they believe they are better represented with always having a good common and fair sense of judgment here, privileging the autonomy of people and trusting them on that decision.
People know how they have to dress depending on the type of commitment or engagement they have that day. If they have a business meeting, they can wear more dress, more formally or otherwise. It has been very successful. I have some examples here. Posts on social media. This is their own social media accounts. It is not a corporate campaign. It is people sharing with their friends their images, how happy they are to be able to dress what they felt like dressing that day, that one day or during that time. When we are saying that we want people to align with this agenda, we are talking diversity as well, valuing and respecting differences. Differences adds to the whole, so that we have complementary parts. We have different genders, we have different generations, sexual orientation, mindsets, personal backgrounds. We have been truly trying to handle this diversity agenda very specifically.
We understand we have gaps to be dealt with. It's not easy to deal with. When we talk about the different backgrounds and different histories, people have to recognize where their prejudice lies. Where and what point is difficult for different people to accept. Only by recognizing your difficulty to deal with the different, you can actually be truly respectful. We are talking here respect, inclusion, and it has to do with accepting that by valuing diversity, we are abiding by a prerequisite to work with companies such as ours. It has to do with the relationship with our clients. Our clients are a diverse audience, so we have to be diverse to serve them properly. Further examples. Early this month, we have one week that had to do with LGBT cause, with a number of talks with our employees.
We see here images that show the color of Itaú, which is orange, but we are the rainbow as well. It was successful, but not only that, people felt valued.
They showed all that in social media, even among our employees. That shows how much the inclusion agenda is very well-perceived by people, and it's necessary. For us to move forward in this agenda to seek the best version of each one of us, we also have to consider an agenda of wellness and health, because the world today is highly complex. Some years ago, we never heard of recurring cases of diseases associated with stress or depression or burnout syndrome or anxiety. This is a reality now, and I am sure that many of you know people who suffer from these problems. The same applies to us. We worry about the health of our employees. That's why we've been really considering to implement this agenda. It's not an easy one, but we have been implementing some initiatives.
We are partnering with Hospital Sírio-Libanês for them to take care of the health of our employees here in São Paulo. This is a pilot project. They will take care of the occupational health, as we call it, and also assistential health appointments and recurring treatment. For complex procedures, all our employees from São Paulo will be able to go to Sírio-Libanês Hospital, regardless of their medical plan. We believe this will yield very good results. Also, we are partnering with Santa Helena Group for the integrated management of the health of our retired employees. It's a mega challenge because we know that people live longer, but healthcare costs have been growing, so it's important to provide them with care in this phase of their lives. Here you can see what we have been doing with our employees and this agenda is here to stay.
We still don't have all the answers, but just because we have been asking questions, I think we will be able to move forward. I have talked about the best version of each one of us, now I would like to talk about the best version of all of us as a group. The first thing is to make sure our work environment is not complicated and that is really in tune with our transformation agenda. Again, I can share some examples with you. The first one is for us to make our routine less complicated. It is a IU Conecta initiative. It is a platform available for all our employees in their mobile phone. They can have some travel requests so their managers can sign off things automatically. It conveys more agility for people to perform their daily tasks. It is available in both tablet and smartphones.
It has several capabilities that are being added on a daily basis. By doing so, we believe we can promote an agenda of productivity. Another example is the onboarding process. We have changed the way we recruit people. We started with what we call mass positions, and we started with a selection process that is fully digital, and the onboarding process is being overhauled now. It goes from the way new employees are instructed about the environment and who to report to, all the way to having their name tags available, the computers in the first days at work. Another fundamental aspect for us to have an environment that is not complicated is to look for new work ways. We have a pilot now, which is a home office regime, if you will. We have 726 people working that way.
It just cannot be for everyone and for all activities. It works well for certain activities and for certain profiles of people. That is why we have been trying different lessons here. But the conclusion is that for activities where it makes sense, it is highly appreciated by employees. Another different model that we have, that Cândido mentioned, is what we call collaborative work in a different environment. The work environment changes. It starts promoting the interaction of multidisciplinary groups, and it has some benefits in terms of furniture, like higher desks. People don't have fixed places. We have 30 communities in the bank, and the dynamic is completely different. We go away from the traditional model of command and control. It is much more horizontal. People are appreciated by their specialties, and they collaborate with their best in terms of experience or expertise.
We have been reaping very interesting results. These teams, they get organized around a common objective and highly motivational for the members of these teams. It is nimbler and more quality in terms of the deliverables. We have 6,000 people working under this new model. Last, to talk about Meritocracy 2.0, our third pillar. We have to really appreciate the collective approach and recognize people who make a difference. We have been dedicating time for this because it is pivotal for our transformational agenda. We have conducted several surveys and we have benchmarked with what is disruptive around the world. We created a model for the communities because our tools did not work for this model of communities that I mentioned earlier. Now we are going over our institutional model, the model that is applicable to all employees.
We are based on the assumption that our model has always been evolving, and really it was an evolution on a yearly basis. Now we decided to establish the assumptions based on which we would evolve further. You can see them here in this slide to ensure meritocracy, to ensure feedback. You have to consider different areas and positions. It has to be simple, sustainable, but also perceived as fair, and also fostering collaboration and teamwork, ensure there is an alignment in terms of incentives and a level of subjectivity, and also that it should be in the long run. So in sum, these are the initiatives or the pillars that we have been developing so that we can stimulate our people. So the best version of each one of us, the best version of all of us, and meritocracy.
Because we want people to renew themselves every day and to renew their desire to continue developing their career with us. We have some indications that we are going the right direction. This is what we call the Net Promoter Score, as Politanski mentioned, and Vassimon will delve into that. Basically, the question we ask our employees is if they would recommend Itaú Unibanco as a good place for people to work at. The results are encouraging. 77% of promoters and only 6% of detractors. Even globally speaking, few companies use these metrics, but the results place us in a very interesting position, but we are constantly seeking to improve that. Some acknowledgments that also show us that we are going in the right direction. Of course, I am not going to be here bragging. We will never settle for second best.
We want to go out of our comfort zone, and we believe this agenda is here to stay, and it is going at full swing. We want to promote the best environment so that people really want to continue working with us. So that was it. Now, André.
Good afternoon, everyone. It is a pleasure to be here with you once again to talk about our transformation journey. Both Cândido and Claudia talked about our agenda based on the people's pillar, customer's experience, and we just heard the pillars on people and the best version of each one of us, the best version of all of us, and the evolution of our meritocracy practices. But when we talk about technology, we use the expression that is about experiencing the power of digital. We separate this pillar into three major elements.
DigiWOW experiences, so digital to be more personal and digital at essence. DigiWOW experience. What is the reaction we would like all our customers to have every time they contact the bank? Wow is the reaction we expect from them every time they access our website, or use our app, or visit our branches. Because every click counts, every interaction counts, no matter how small it is, because it is an opportunity to provide them with a simple and productive and secure experience and enchanting. It is because we are searching for this enchantment that we are constantly updating our apps. They are updated two or three times a month. By embedding new features and fixing problems that we can constantly enhance our scores. Both by individuals and enterprises. But updating is not enough. We have to release new solutions that are powerful and impeccable.
In 2018, we launched the Itaú Keyboard. It enables our customers to make transfers using an app. We also launched digital portfolios, Apple Pay and Samsung Pay. Apple Pay, by the way, was the digital portfolio or the digital wallet, that was the biggest one in Brazil just one month after it was released. It is pivotal to include a third dimension in order to be perfect or impeccable, and banks and companies as a whole, they use for their solutions. Traditionally, companies look at two dimensions. If it is possible technically and feasible technically. With a technical solution and financially feasible, we would try to convince customers to use that solution. Now we do not have time for that anymore. As Cândido mentioned, experience has to be the best. That is why the user experience competence of being desirable has to be incorporated as a space for solutions.
It seems simple, but it has deep implications to the way we manage technology and manage the bank as a whole. It requires a change in the mindset because traditionally, a technology process was done in a sequential fashion, one phase after another, and people engaged specifically for each phase. The consequence is that we would have projects that would last months or years, and the customers would be able to use them just after they were completed. This is no longer reasonable. In today's world, speed is key. We have to manage technology together with the business. That is why we have joint accountability between technology teams and business teams through digital platforms, and they are constantly evolved in a collaborative fashion by teams that are very knowledgeable because they manage these teams very well.
The lead time, that used to be months or years, is now of weeks. This is how we build impeccable solutions, but impeccable is not enough. We have to be digital from end- to- end, not only in the interface with customers, but by digitizing all the process within the bank as well. Let me share an example with you, which is very traditional in banks. It is clearing checks. 100 million checks are cleared on a yearly basis. A relevant part of these checks can be deposited in the app, and it saves paper. Very soon, we will be able to have artificial intelligence algorithm recognizing signatures. With that, we will be able to have a 90% cost reduction in terms of cost and other tasks. Another example of being digital end- to- end is in vehicle financing. Traditionally, we have three players involved.
The dealers, the customer that is buying the car, and the information of the car. All the information had to be checked simultaneously. Now we have an integrated platform that only asks fundamental questions and uses data of customers that we already have, and the dealers, and the priceification tables of vehicles. So a process that would take up to five days, today takes less than one hour. Seven days a week, so 50% less in terms of operational work and cost. Our team now is free to do other businesses. These experiences that are impeccable on the one hand and digital from end to end, they yield tangible results, financial results that can be measured. We have over 11 million individual customers that are digital. The main relationship they have with the bank is through digital channels, and it has been growing exponentially.
In our legal entity customers, over 70% of them. The financial results generated by our digital channels has increased 18% in legal entities and 43% in individual customers. Digital is not only about a remote contact or cold contact. Digital is also the way we want to be more personal. I have three examples of several areas of the bank that shows that this transformation is something that is spreading all over the bank.
To equip our managers who deal with company managers through their e-tablets. It looks simple, but we are freeing our managers from being stuck at their desks and their desktops. They can carry the bank with them through the e-tablets, can help open accounts, seal deals, and to have video conferences if necessary. Through that, managers have more time to visit clients, and that has been impacting results, satisfaction. These portfolios that include clients served with e-tablets through the managers has made major advancements. Secondly, real estate financing. We always think bureaucracy, there is deeds, negatives, certifications, revenue, taxes, declaration, and documents that have to do with that. That was always a barrier.
Well, now we have a process that is digital, and the list of documents can be uploaded onto the internet, and the financing is like a process of purchase online, and their cart can be filled with that. It has been helping provide BRL 9 billion through that format. It is more personal. It is small in size, but large in the accomplishments. The pieces of information that only clients have current accounts for clients to reach, and the perspective in terms of payments that those clients have. We use big data. We have high level of computational processing and personalization, customization of images. Clients that would go into their overdraft to make payments. We have this customization informing that people will go into their overdraft to pay taxes. We offer that to clients. They can have a financing of some debts.
Of these cases have been very helpful, and 60% of the clients that received that offer actually bought, purchased that service. We have 14,000 clients, and there are many other experiences. By next year, we hope to have reached millions of clients. To be digital at Itaú Unibanco is not a matter of marketing actions. It does not have to do with making up for things. To be digital, we have to increase our investments, and we have done so. We have invested more than BRL 40 million in technology, but we need more. We need people, and the best possible people available. We have revisited. We are hiring people through hackathons, marathons of improvement of softwares. The best ones actually leave these hackathons with a proposal for a job contract.
15 million people actually have gone through these hackathons, and we have plenty of new people thanks to these hackathons. We have to develop these people further. That's why we have a menu of actions, of learning actions. More than 1,000 experiences of learning so that people are better and feel that they are going further. We are developing a module of management, much more disciplines, focusing precisely on our efforts directed towards the right points. The regulatory framework demanding a lot from our technology resources. Despite the high level of demand, our activities have increased by one-fourth, and we are spending less time of coming up with solutions, translating into benefits and generating profitability. We have been able to deliver projects twice as many as last year.
With that level of control and discipline, I can affirm that each penny that has been invested in this bank is at least tenfold. It translates into a tenfold ROI. Integrating technology the way we think technology from offer to demand. Offer is a traditional perspective. The technology team studies new technologies and upon going deeper and learning a new technology, they go after a problem to be solved in the bank through that new technology. It's like a hammer going after a nail. It is an analogy. When you look for something new, you have to be cautious. We have to look for an app, in this case, to develop an app, and you test that on different levels. That's costly, it takes time, but it's safer. It's an offer perspective and not demand.
Demand starts with a real problem based upon a real problem, the analysis of such, and with the radar of technology, new or old. We deal with specific problems, capturing value much more quickly. We invest less, and the development time is shorter. As of that demand, we started looking into the games industry, e-games. Tech tools that allows us to have algorithms of artificial intelligence that require high levels of artificial intelligence that in the past would take a long time to process. It's like the same challenges that the e-games industry faces. We have the processing speed to 100 x faster. 100 x faster from 0.5 seconds to 0.001 seconds in some cases. So you see how much improvement we have there. Data is the new capital of the bank. We are measuring the quality and the satisfaction of the clients. You have jumped off an airplane.
By jumping off an airplane, you disembark at the airport and upon turning on your phone, the companies actually question you, how was your flight? We do something similar. Currently, based upon what we have, we are developing AI algorithms in partnership with Stanford and MIT to help look into that more detailed. Those algorithms see whether the client is happy or not, how their state of mind is. We go into a sense of more clarity indeed, in terms of the satisfaction of the client. So data is the new capital here. The new capital of the bank has to do with the virtual assistant. To the left, you have the app as a search that is integrated in the experience of the client.
You say here, basically, you type the text, what you want, what you need, and integrate it with what you have, with your credit card, your loan, or whatever that is. Clients can also solve their questions, get an answer to their questions. We've been over the last four years developing that, and we are getting replies that are much more precise than in the past. With a subtlety, when the algorithm recognizes that the reply is not good enough, the question is directed to a person, to an individual. That's what artificial intelligence is doing for us, so that our client is not without a reply and it is a satisfactory one.
We've talked about people management, digital, all of the things that make viable the satisfaction of the client, transforming the experience with pillars that has to do with knowing well the client, the amplification and the betterment of the relationship with the client. Schettini will go into retail, and Vassimon will deal with wholesale. Cândido talks about an increasing, ascending curve that has to do with the evolution and its speed currently. We could be a 94-year-old bank and just assume that we have served most of the transformation, and little transformation is ahead of us. We are humble and we recognize that we haven't gone even halfway through the transformation that is ahead of us. We have the challenge to transform and re-transform if necessary. The bank will be as large as our customers desire. To talk about clients with you, Schettini.
Good afternoon.
It's a pleasure to share with you a little on what we have had in the bank, in this front of transformation. You've learned a lot from Cândido. It has to do with simulating the transformation power of people thinking clients, especially the wholesale clients. To talk the transformation of the experience that we provide, we are going to bring back the V- mindset that we have here. That has to do with our ambition and our intention to be leaders in the satisfaction of our clients. To be clear and to have the clarity that these different ambitions that we have are interchangeable and interdependent, and they are almost perfect. At different points, we look at them recurrently, performance-wise. I think it's important to look into the dimensions of the bank and our business. We have operations that is the result of priorities.
We have had an execution that has been very precise, reaching 2018 with 55 million active clients, individuals, companies, clients with accounts. Nearly 4,400 branches throughout the country with a credit portfolio around BRL 13 billion, BRL 620 billion in captured resources. We covered all fronts in wholesale. Before we go into the dimension of the business, it's important to engage the clients that we have. We have to see if we are efficient in the attraction of our clients and to get new business. This is what we have had recently in terms of the improvement of our new businesses. Individuals, our client base, it has been growing since last year, when it comes to individuals and companies.
It also has to do in the account opening process that we have expanded 35% above the numbers from a couple of years ago in individuals, and 15% above the numbers that we had in company accounts opened, credit cards. We are growing our client base because we have more capacity to have new relationships in this front. Credit cards-wise, in 2018, second semester, we increased by 32% our capacity to have new accounts compared to last year, a growth. Online or network-wise, we have been adapting to the new ways of making payments. By the end of the first semester of this year, we have regained our capacity. We have maintained our client base, and we have increased this base. That reflects upon our reaction in our market share in credits and debt management as well, especially compared to the last three and a half years, performance-wise.
In a world of payments and the worldwide web, we have new competencies that are competitive business-wise and performance. When we think portfolio, individuals and corporate, we have increased our assets. Our portfolio has grown by 8% in individuals and corporate 4%. You see the numbers here. It has to do with the granting of credit to individuals. Compared to two years ago, we have 35% more volume than two years ago. Corporate, 9% more than two years ago. Maintaining our risk policies and our interpretation in terms of credit policies. Working with the profile of clients that we would like to have, exploring within our room that we have available for making adaptation, we have been up to speed. Credit cards and portfolio in this sense, 23% compared to the same period last year and comparing the same basis.
In revenue generation vehicles, since 2012, there has been a process of restructuring in the market. Within our bank, it has not been any different. We have been able to restructure operations with operational transformation and the business model, regaining our capacity to provide proposals, increasing by 50% our capacity compared to two years ago. Slowly we regained market share, interrupting a cycle of almost six years of losing participation, market share, actually, in vehicles. Resources capturing, we have increased our capacity base 100 here, 32% growth leap. It has been a leap from two years ago to now. Our digital channel.
Giving rise to new accounts, we have increased our capacity threefold, and spontaneous accounts that are opening the bank, they are from the digital channel, but we know that half of the accounts that we open, they are spontaneous ones. The other half, they come from the payroll. We have 30% of them digital. Also, in terms of credit card, we have increased our capacity by sixfold and 18% of the accounts are generated that way. We also do business and we sell by means of our digital channels using our analytics bases of management.
We have increased our capacity to do business by 67% in individuals and 64% in enterprises, which shows that we have been making good use of our internal tools in terms of exploring new channels and at the same time bringing solutions that are more secure and simpler to our customers. I would like to talk about satisfaction. In Cândido's presentation, we could see the idea of changing our league, and I would like to delve into what that entails and why we want to change our league. Bear in mind that the data that we have obtained in recent years, they show that we stand out against our traditional competitors, and using the methodology of the NPS, the competitive one that measures us against other competitors without necessarily identifying who is taking the survey. Here we have three segments in retail bank.
We have Itaú Branches, our mass segment, Itaú Uniclass, and Personnalité. The way we stand out, it is clear every time we compare ourselves against our competitors. We know that our customers are increasingly exposed to more pleasant experiences that come with solutions, digital solutions that are not painful, and they do not generate any time consumption or anything. We have to reflect up to what extent can we actually reply to these demands, because very soon they will become the standard of requirements in all segments. Besides, we know, and we also address this as a rule in our bank, that every satisfaction score has a real value every time we quantify the satisfaction scores into all the business.
I would say that throughout 2018, we have had the ability to quantify and measure and understand how much we can really capture in terms of value for each additional point of satisfaction in the NPS indicator. The methodology, in addition to the competitive NPS, we have the global NPS, which is the overall satisfaction with the bank. We have the transactional NPS that measures the satisfaction level of our customers at each and every experience. We know today that a customer from the segment Itaú Branches, when they are satisfied, they have 10 x the value of a customer that is not satisfied. They can reconsider their time and attention allocation that we can increasingly invest in improving the satisfaction level of our customers so that it becomes value generation.
We go beyond here because there is a direct link between evaluating the customer satisfaction with the level of digitization or the digital experience that our customers have. Internally also, we have the ability to understand the actual value generated by each customer that is digital against a customer that is traditional. We know that digital customers, they have smaller exposure to pain points, if you will, or risks of failure in a transaction, which means that the more we digitize the journey of our customers, the more likely they are to be satisfied and the more likely they are to appreciate their relationship with the bank. How have we been addressing this process, considering our ambition to improve satisfaction and bring digital attributes and digitization to our journey?
We look at the bank spectrum, beginning here with the operation and the relationship branch manager account, beginning with the traditional world, bricks and mortar, and going to the other end, the digital world, where customers have a relationship with us that is remote and account manager that is remotely allocated. Also going through the segment of customers that claim to be self-sufficient. They can take care of all their needs themselves, and we know that for each interaction, we must be ready to start a new relationship to make transactions available and offer them information for consultation. Last, we have to serve them, of course. There's no other way for us to evolve in this digital journey unless we respect the five needs the customers have. Beginning with our physical branches. Branches that account for 65% of the revenues we generate.
In the beginning of the year, we introduced several measurements, and the NPS can be captured in each and every interaction of the journey of our customers. We can prioritize practical interference in terms of processes, and we have excellence in the service and satisfaction as our priority in the physical world. In our digital branches also, we have 22% of the revenues generated in this segment. We have covered Uniclass, Personnalité, and now introducing the segment of small enterprises at the end of the year. We are also introducing all NPS measurements. But we are aware we still have plenty of opportunities in terms of improving our customers' journey, especially the ones that are just partially digital. Last, we have a set of customers that feel they are self-sufficient.
They like self-service, and even with the available interfaces that we have in the Apple and Android world, and we rank first in all evaluations, we know that even here we still have pain points for improvement. We have a very rich agenda here. We still have a long way ahead of us. But this transformation permeates other areas also. Credit cards. In the beginning of the year, we had an important transformation in the credit card family. Now it is the family that sells more products. We have created an experience that is 100% digital with real benefits to our customers. We have proposals that were born digital, if you will, and they draw the attention of engaged customers and customers that truly want a simpler and faster experience.
The same applies in the world here, where we have just launched a new modality in terms of capturing electronic transactions. There is an extension of our Rede operations, and it's called POP Credic ard, and it addresses a gap of a population and customers that are also connected and they are demanding, and they wanted to have a simpler solution in the world of payments. Still in the world of payments, but in the second quarter this year, we announced our association with Apple, which goes beyond launching the tool Apple Pay in Brazil, but it also entails a much broader association with Apple. We're going to convey our customers more benefits in the Apple world, and in four days time, it's going to be made clearer to all. The world of payment is relaunched in Brazil now, and we have partners with us.
We have become a reference now in terms of introducing Apple solutions. Three months after launching the Apple solution, we launched the same for Android. Itaú started ranking first. 44% of transactions are made with tools and customers of Itaú. We also have the possibility now to complete our supply by serving customers with Android devices. We have a new association now with PayPal, completing our payment offers now focused on e-commerce. We have partnered with PayPal. Itaú Unibanco customers have preference in terms of simplified and safe purchases, fast purchases in millions of places globally, ensuring a percentage of authorization that is above average. From the standpoint of transformation, we are doing the same in the world of insurance. Itaú Unibanco is a major distributor of insurance products. We rebuilt our distribution platform, internally called multi-channel brokers.
Now we have started introducing products in our channels, regardless of being our own products or not. We have also conducted an important digital transformation in our world of vehicles. We have regained market share, and this transformation entails a redesign of our journey. Nowadays, not only the world of dealers, but our customers as well, they have unprecedented experience. With less than 10 clicks, they can have their financing approved, and what used to take 10 days is now taking less than one hour. Last but not least, completing our product shelf. A couple of weeks ago, we announced the initiative of investing in Ticket Brazil, and we are going to have the capacity to offer solutions in terms of benefits for meals, transport, and culture for our customers. It is about our decision to not have gaps from the standpoint of products.
This is the end of my presentation. Once again, I would like to reinforce the need to combine our agenda of transforming the journey of our customers to transformation so that this experience is really transformed, and the consequence of that is an improvement in performance, which in turn generates value to the entire bank. Now, Vassimon, the floor is yours.
Good afternoon, everyone. I am going to pick up on the presentation regarding customers' experience. Schettini talked about retail, and I am going to touch upon our wholesale customers. The profile of our wholesale customers and both individuals and legal entities, typically, they are sophisticated customers that have access to a wide range of products. Complex products oftentimes, and customers that have many options in terms of financial institutions they can engage with. In this context, customer satisfaction becomes our obligation.
A wholesale customer that is not satisfied or does not have their problems addressed quickly, they just move to another bank. It does not necessarily mean they will close their accounts with us, but certainly they will reduce their business volume with us. Okay. How are we positioned here? As you can see, we are the leaders in terms of customer satisfaction in several segments of wholesale customers. Bear in mind that for individuals, it is private banking, it is customers that have net worth above BRL 5 million of investments. We are 11 points above the average of our competitors. When we talk about legal entities, we have four segments. Wholesale, it begins with middle- market. It is enterprises with revenues of BRL 30 million all the way up to BRL 200 million. We can see we are way ahead the second players.
We have CIB, Corporate Investment Banking, that takes care of the bigger customers with revenues over BRL 4 billion. We are also leaders here as well, although our margin is smaller. Although we are very well-positioned, our objective here is obviously to continue increasing our customer satisfaction. That is why we have been implementing more actions. We have metrics to measure satisfaction for all segments, all wholesale segments. Not only the overall NPS that captures the customers' satisfactions, but also the NPS transactional. As the name says, it identifies the level of satisfaction in specific interactions that the customers have with the bank. It is what we call the customer journey. We are also expanding the perception of contacts that our customers have.
We are avoiding capturing just levels of the CFOs or higher levels, and we are interacting with all levels to also obtain the perception of these people in terms of their level of satisfaction, in terms of interaction with us. By doing so, we intensify our treatment in a more timely fashion regarding the feedback that we get from them.
We have fostered contacts between managers and clients, and whenever necessary, we redesign our journeys, be them concerning processes or products, always trying to have the client in the center of our focus, as the center of our focus. With this, we have the transformational front transformation. Claudia touched upon the topic people, André, digital technology. Schettini started and I concluded the topic concerning the satisfaction of clients. I will go into the continuous improvement front, internationalization, and Caio will go into risk management and profitability. Our objective is to reach in other geographies, the same level of management, the quality in management and profitability that we have in our operations in Brazil. Now, why to go international? Why to go beyond our boundaries, geographic boundaries? I will go into the reasons why we went overseas. We have gone international.
I will go into the capacity to replicate the model that we have here to benefit from the scale we have in Brazil, and to complement the product range offer. When we talk about going international and reaching new markets, we have the southern hemisphere with activities on an international level that search for new clients. We have complete banks and universal banks, Cono Sur and Itaú CorpBanca. Cono Sur, Itaú Argentina, Paraguay, and that region. Itaú CorpBanca is our operation in Chile, in Colombia, and we have partners, slightly less than 30% in partnership, ownership, 30%. Open capital companies require a whole different level and a different standard of governance. So we are dealing with universal banks. Northern Hemisphere-wise, it is distinct. We are talking Europe and United States of America. New products for the same clients that we have in Brazil.
Private banking, for instance, Miami and Zürich, where we have offered international clients the opportunity for investments in products that can be only accessed through international currency. I will go into the points that have encouraged us to go international, starting with the southern hemisphere, reaching new markets. We are universal and we operate basically fundamentally in Latin America. Brazil has precursors. We have a BRL 2 trillion GDP. Countries we work with add to BRL 1.5 trillion GDPs. All together, that all adds that, with a different potential for financial operations. More than 550 agents, branches, quite a lot of employees, 13.2 thousand, and assets in the order of BRL 57 billion. Chile and Colombia, mostly Chile, larger market, both with relevant position, Paraguay and Uruguay, relevant positions but smaller markets. Peru is a rep office, and Argentina and Uruguay, we are still modestly represented. What is relevant for internationalization?
Secondly, our belief in the capacity to reproduce, to replicate in other geographic areas, the same model that has been rather successful in Brazil. We have three blocks here that are management blocks: commercial, people management, and risk management. Commercial- wise, we are talking overseas, the same concept of franchising, individual and corporate, dealing with the clients according to their profiles. Another recent element that with franchising we have had for quite a few years in Brazil, digital branches, a new concept in Brazil, most recently implemented in Uruguay, and ongoing in Paraguay. We have had a good experience in Brazil. That is why we have taken it on to the next level internationally. People management. Claudia has mentioned that as well as a meritocracy and models of incentive that have been touched. Topics touched upon here as well.
Risk culture, a third point, and techniques behind management that would entail credit models, market risk, a set of techniques that we have developed over the last few years. Evidently, we do not have the arrogance to say that we are superior. We adapt, we are humble in that sense, and we adapt to the particularities of each country. The second reason is scalability. It is interesting to think that between 5 and 10 years ago, the concept of a retail bank, universal or worldly, was debatable given the particularities of each country, given their different regulatory frameworks and cultural characteristics that would redefine differently interaction with clients, differently from country to country. Now, from the last five years on to now, we have had two phenomena that have provided us with a different scalability for retail.
We have a convergence of the regulatory framework under BIS, the central bank of all central banks that has to do with the Basel regulatory framework. We have many more similarities among different countries. Another element has to do with the growth of the digital technology or technology in that sense. Individuals in Indonesia, Argentina, and the United States of America interact with the bank more similarly. Depending upon or relying upon apps or other models, clients are behaving more similarly. We are trying to replicate with the necessary adaptations what we have for retail in Brazil in other geographic areas, we have a digital accelerator trying to gather the experience of all countries, typically with all products and all geographies, and good ideas that have come up in other countries, and that can be improved and taken advantage of in Brazil.
That will help us work not only more efficiently, but also more agile. That has become an asset in retail on an international level. Going international, where are we? Talking Latin America here, we are talking here three blocks in terms of maturity of operations. Firstly, we have Uruguay and Paraguay, relatively small markets with major presence in the satisfaction of corporate and individuals. We have assets and groups. In Paraguay, we have quite a presence in the same attributes. We are mature. We have major presence, and we are ahead of the competition. We have major presence in fixed income. We have major potential. We have in this graph here, we have in retail, the criterion of credit portfolio, the total of the bank, and the average of the competition that is similar is 51%.
We do not have much of a room for growth here to reach the level of our main competition. The market as a whole is a good market that is a market of sub-banking. Judging based upon GDP, we have a smaller market than Chile and Brazil. Chile is fourfold smaller than Brazil. So we have potential for growth of banking and financial services to grow in Argentina and in Chile. We know the macroeconomic challenges of Argentina, especially most recently. In Argentina, given our presence in retail, our development goes through digital banking. So we are going deeper into plans to intensify the strategy that has to do with digital Uruguay and Paraguay. The third and last block is the Itaú CorpBanca. We have a corporate structure that is different, and we are near the consolidation endpoint of the process.
We have done a lot, and we have made major advancements in many an aspect that the integration and the merger has been in Chile between two high street banks has been major. In Colombia, we purchased operations from a recent merger between two high street bank brands. So we are talking here about a merger of not only brands, but also different cultures. We have to bring clients, we have to delight customers when it comes to services and we have to think about also the operational part, the consolidation of the operational aspects. Itaú CorpBanca is open capital. The shares, therefore, are subject to the variations of the exchange market. But we are certain that we are in the right way, in the right direction. Internationalization is done. Caio, if you will, please carry on with the talk.
Good afternoon, everyone.
[Non-English content] how do we imagine- How can we conceive the generation of value for you, our dear shareholders? History shows that over the last few years, we have been able to generate value in a very important fashion for our shareholders, even through economic recessions such as the ones of 2015 and 2016. Cândido has shared a lot of our strategy. I will focus on the first semester of this year, 22% of return on investment with capital costs, the minimum ROI of 14%, 8% of added value. In reais, BRL 5 billion, that would be the figures that would stand for that gain. Why BRL 5 billion is an important number in here? BRL 7.8 billion, only a share of the BRL 12.8 billion that we aimed for. Our share value would be close to what we expected.
When we have BRL 5 billion per semester, we see that our multiples, our value in terms of assets of the bank is around 2.2% these days. This is the importance of this delta, the delta variable. When it comes to the equation of value creation, the economic cycle actually sometimes is not always favorable, therefore, the importance of focusing on services and insurance, as you can see here to the right on top, so that you can understand why we stand out even at times of crisis. We have defaults, a lot of defaults, even though clients are not keeping up with their repayments, we are still doing well. We are starting our transformation. How can we maintain consistency? I will share with you a few actions that we have undergoing.
As Vassimon mentioned, I will have two points that are important in terms of risk management and profitability and what is behind. When we talk about risk- prioritized fronts, we are talking about integrated performance. Our managers have assessed risk, one of the main variables in this equation, so that we can focus on profitability. There is one new element. We have to be much more aggressive. We have to anticipate, and we have to redesign the way we have managed risk. Risk culture has to be our focus, and I will focus on that. Profitability, we are talking about being a leader when it comes to sustainable performance. We have been leaders in this sense, even in difficult situations, and our focus is the delivery of more and more value to our shareholders, even through times of transformation.
We have four important pillars in this new moment of the bank. Risk appetite, 2016, when our Administration Board, we had discussions on how this appetite would be. Vassimon mentioned Latin America in this sense, but he talks about this ethical standards, which is innegotiable for us. That leads us on to ongoing results with profitability. As of this lasting relationship with the clients, Schettini and Vassimon mentioned that our actions have to be client-centered, maintaining sustainability in our businesses.
I would include also the way we have our culture of risk. It is important to discuss risks openly, to act upon them, and most importantly, as Cândido put, we have 100,000 employees managing risks. It is a program that is going to take a few years until we reach excellence. We understand risks are part of our business, an important part of our business. Managing traditional risks of the bank is not enough. It would be what? Our reputational risks, risk associated with information security. We have an extra step in this new world of transformation. It is the strategic risks, business risk, and we are talking about fintechs, new players, and also traditional competition, and changing the habits of our customers and new ways to do business. Another important risk that we have anticipated is regulatory ones, changing the legislation. It is all part of the risk Management.
We talked a lot about investment in technology, there are some risks that are intrinsic to this journey associated with the legacy system, given the complexity and digital platform and all the management of technology also requires additional attention. Claudia mentioned the challenges in terms of attracting people. We have an important agenda here regarding our employees, considering new ways to go about their work with paying heed to that as well. We have to manage not only traditional risks, but also the strategy of the bank has to be more judicious. It summarizes very well what I have said so far, whether it is products or what is the value creation that we have here.
Well, to the right and higher, it requires more attention, especially for products and services that have a higher value creation, but they also bring regulatory risks that are more substantial. That is how we do the bank management now going forward. Talking about our business model and the risk appetite and the cost controls, what we expect from the agenda that we started in 2012, well, going forward, we expect more of the same. I would say that we are satisfied with the level of default that the bank has, default is at low rates now, historically low rates, and we are satisfied with the level of volatility. Less volatility from our credit portfolio. Another very important question, which is the focus on insurance and services. We have been growing 11% a year in these last five years, but we have been working strategically on this agenda.
Back in 2012, we acquired our share in the Rede, the card, and in 2016 we acquired the operation of Citi Retail and we acquired Recovery. In 2017, we announced acquiring XP, and this year we still have an intense agenda for services, partnerships such as Ticket and opening our insurance platform with a partnership with the main insurance companies in the world. There is strategy behind the good performance of the bank. When we talk about cost efficiency, I would like to highlight the second half of the year. For BRL 100 of revenues, we managed to get BRL 39 after costs, whether it is administrative or credits. Historically, well, this is a very good figure. We are pleased with that and we are going to remain with an efficiency agenda that is very strong going forward. Allow me to talk about profitability now and digital strategy.
We have talked a lot about technology. Here you can see the continuous and growing investments that we have been making in technology for next year, so the next year we can still remain growing. We can have additional resources of 10% against what we have already done in 2018. We have been closely monitoring the results of our digital strategy. We consider the channel and the customers and branches' visions. In terms of channels, we separate the bank into three dimensions: digital channels, remote channels and physical channels. Here you can see the importance of the digital for the results of the bank, both individuals and enterprises. They have a value creation that is much more representative when we talk about digital channels.
That is part of our strategy, and that is how we identify the value of all the investment and the improvement of services and better customer satisfaction and value creation for shareholders even through these channels. The customer's visions, the same applies. Although they have similar revenues, okay, both in digital and physical customers, the value creation by means of the relationship that we have with customers, digital customers, is much bigger. 70% of contribution in market, in value creation. The same when we consider the branches visions. The total of revenues in branches, physical branches, is bigger than in digital ones, but we invert that when we identify value creation in both. Digital branches, they contribute with 70% of the total in terms of value creation for the bank.
Therefore, we are going to continue investing in technology in our digital platform and the results will be visible when we have more convenient for customers through digital channels. At the same time, as you can see here, we have a growing value creation through the digital channels. Another important piece of information has to do with the data and models. Today, in 2018 actually, we are working on our models with 82,000 variables. It is a lot. Yes, variables can be from resources flows, networks or relationships, among many other variables. When we talk about implemented models, we have multiplied by five the number of new models running the bank against 2016. It is also an intense journey with a lot of technology and data.
With that, we expect to have an increase in the bank's results of BRL 1.5 billion now with the new models that we have developed in 2018. Of course, the potential result and this agenda, they entail several actions behind them. The first one is about expanding our credit portfolio. Another one has to do with the expansion of our customer base. How pivotal it is to have more accurate models and information so that we can expand our relationship with our customers. Also, we can see lower default, consequently, less risk for the operations because we have now more customized supplies, more according to the needs of our customers. Also we are more efficient in terms of our collection, and we can substantially extend or expand our relationship with the customers. Customers understand that we are more thoughtful, more attentive to their needs.
Here you can see an example of customers of Itaú Personnalité. Once they start, we apply models to establish a new level of relationship with them. Once we do that, we have a bigger volume of resources with them, so they work more intensively with the banks, and at the same time, we can attain better results from them. I am nearing the end of my presentation. The last pillar is very important. It is also associated with capital management. As you know, the Board has defined 13.5% as the adequate level of capital for us to manage the bank. Anything above that is okay. In June, we were 0.7% above 13.5%. We can identify possible uses of this capital, whether it is by growing our capitals and through acquisitions or dividends, and Roberto will touch upon that soon.
And this slide depicts very well how we have value creation in the management of the bank because all executives, they have their targets and the considerable weight. Actually, we have increased the weight now in 2018. So there is more alignment between the compensation of the executives and obviously the compensation of shareholders through the return of the bank. This alignment is part of our governance and is one of the important pillars so that going forward, we can continue delivering returns that are above the minimum level required by shareholders. With this very intense agenda of risks and profitability, the priority fronts of the bank, we expect to continue delivering returns in a sustainable fashion to our shareholders despite the environment of major transformations. Thank you. Roberto, please.
Good afternoon, everyone. It is a pleasure to be here with you once again.
I would like you to see that everyone that spoke before me talked about value creation, all of them. All of them touched upon that because that truly is the focus of our administration. The bank is focused on value generation. As Caio put very well, it is profitability above the profitability required by the capital market. So investors, when they buy a share, they expect a certain return, 14% nowadays, and everything that is generated above that is called value generation. You see in all segments, technology, customer satisfaction, all activities of the bank are geared towards that. So it is profitability above the capital cost. Profitability entails two things: profit and capital. I am going to talk about capital and how it can be generated to make sure the process makes sense. Capital management matches everything the speakers before me said.
We have two major goals here to manage capital. There is one that is particularly important for a bank, which is to ensure that the bank is solvent under stress. I am going to talk some more about that. Right after that, I am going to talk about optimizing the use of the capital of the bank, because the more capital I need, and well, I would have to ask for your money to not apply it properly. So what I mean is that I need to be able to manage that well. I can avoid investing capital, or regardless of the investment, it would not be below the capital cost, because if I did that, I would not be using your money very well, you as investors. So let me begin by talking about the importance of maintaining the bank solid and feasible in a situation of stress.
You can see the capital level that we have determined, 13.5%. That is the capital measure, like its Tier 1. So the minimum, the regulatory one is 6%. 6% is the minimum. Banks, unlike other activities, banks and the central bank and the regulators, they define how much of capital you need for your activity. All other activities, no one tells you how much you need. You do the leverage that you want. But in the banking sector, you have the regulators that say, no, for this size of operation, you require X of capital, because the bank is highly leveraged. If you compare a bank with an enterprise, a bank has 10x or 15x that capital with highly leverage. A company can have 2x or 3x only. So this leverage, this very high leverage that banks have, well, they have to abide by several rules.
The central bank has this concern about the solvency. It has to work permanently well, even under stress. They define the regulatory level. If the bank falls below that level, the central bank would have to intervene or something to that effect. On top of that 6%, there is an additional capital volume that is the buffer, the regulatory buffer defined by the central bank. When you are below that 9.5%, you have some restrictions in terms of bonus payments for executives, and you suffer some restrictions for the bank to get recapitalized. Okay? So that they can get to the minimum level of 6%. We have defined 13.5% as our minimum. Above that level, okay, when we are even above the regulatory buffer. We don't want to reach that situation. We defined another 4%. 13.5% of risk.
In more details, you can see that's for capital tier 1. This is the formula, okay? Tier 1 Capital. 13.5% because you get the capital level that you have divided by RWA. Tier 1 Capital is the net capital minus the dividends that are paid out. When the market requires and we have some very long-term debts, we can consider debts of up to, I don't know, it's a debt that can be used as capital. The sum of that defines the capital that we have in the bank. What is RWA? It is the sum of the risks of assets.
What I have in terms of bonds and loans, plus everything that I have in terms of market risks and how much in terms of interest and mismatches and some oscillations can generate gains and losses, and operational risks that I have, or even reputational risk. The central bank has defined rules for each item. Every month or at every quarter, we calculate the RWA and the capital, and we see whether or not the indicator is within the level of 13.5%. What determines each activity?
What is fundamental for a net asset calculation. We generate profitability, therefore our assets will increase accordingly. Jurisprudence alterations, we are talking about conditions of normal circumstances, especially when it comes to regulatory framework. Only rules and regulatory framework actually will change that more radically. Fundamentally, under regular circumstances, what really matters is the profit of the bank that will affect assets and will affect the loans portfolio and will affect the RWA. As the bank increases with more transactions, we have more operational risk. All that involves growth and increase in the number of operations are regular factors of banking operations that lead on to RWA. The more we grow, the more loans we provide, the more risk of market we have, the more capital we need, because RWA will increase. We need more capital in the bank.
There is the management that we provide rather optimizing the volume of capital. Under certain circumstances, 4% of capital and those 3.5%. Let's think of a situation of stress. Let's hope we can maintain our solvency level even under stressful situations. There are two factors that will affect that, and that may affect the assets of the bank. Bonds that are under a certain circumstance, especially in the long term, it will not affect profitability, but the calculation of volume of capital will consider the fact that bond it will be worthless. Brazil, with a portfolio that is rather large, whereby the bonds in Brazil are affected by the elections, for instance, in Brazil at this point. It affects things. What affects the indicator is the exchange rate in many a way. We can have many different possibilities of affecting that with the currency BRL.
Vassimon describes that quite well, assets that we have overseas, that RWA, my capital is in reais. If it depreciates, for instance, reais, let's suppose it's 20% of depreciation. That is the level of increase in terms of what we own overseas, in loans, for instance. Bonds may vary in terms of their values. That may affect the level of capital that we are trying to maintain at 13.5%. We have the policy of 13.5%, and we try to maintain the situation under control. When we have more stress, we never know when it's going to be over. We take action trying to maintain the level of capital elevated, and we hope that even under stressful situations, we maintain solvency levels. There is a simulation here. What are the impacts? June 14, we had the closing of the first semester.
We had a minimum level of a floor threshold of 13.5%. We distribute the surplus among our shareholders. We had a rather good distribution of dividends due to the volume above 13.5%. 13.5% is what we need. Therefore, if we are above what we need and what we have as our goal, we will share among our shareholders. We have simulations constantly ongoing. This is only one of them. What if the currency American dollar reached BRL 5? The capital of the bank would be affected accordingly. 14.2% with a dollar, the dollar unit at BRL 5. We would go down from 14.2% to 13.3%. We are looking at the market. We are thinking of elections, risks. We've been through this before in Brazil. We start preparing beforehand to avoid those elements that are variable, exchange rates especially. We want that to affect as little as possible our capital risk.
We've taken measures, and we would maintain the level of capital. What type of actions are we talking about? We are talking about hedge funds and other actions to maintain our levels at a rather smooth level, if you will, that we can control quite well. We look at stress, trying to minimize risk, and when we reduce risk, we cut down on the needs for capital. We are foreseeing a moment of stress, and we try to anticipate that in a way that we can maintain a level of solvency rather good, as we have been doing. This is the first part of capital management. There is a number of other elements that we analyze to keep up with a manageable level of risk.
Now, there is the part that is the daily basis, the use of the capital that has to do with the activities of the bank, and it requires capital investments on a regular basis. The managers of clients and results centers try to maintain a steady level of value generation. This is an interesting table, actually, that reflects what we do and how we manage all this. Columns here show credit operations, credit risk, therefore, trading. It is not that significant, therefore, I will not go into that now, but we have insurance services, activities that are not necessarily banking. We are talking here investment banking, private banking, fund management. They are financial activities at large, not necessarily banking. They do not represent risk to the bank. Loan granting may generate a risk because people may not repay it. Administration has to be done rather well, otherwise, we will lose clients.
We do not have credit risk at this level. Credit, that is to say that it is very risky in Brazil because the level of default in Brazil is rather high. Most of the capital is eaten by credit operation. Insurance and services requires much less capital. The first line is the revenue. You see here the numbers, 28.4% in credits and insurance and services, 25.2%. Profitability in credit granting was 4.5%, and insurance and services, 7.1%. You see that the profitability is at different levels here. The capital required is different. It is the first blank line. We would need BRL 61 billion in capital. I have less profit and a greater need for capital with a profitability that is inevitably lower, and it does not add value. It is just as simple as that. 0.5% of value added was the result of this year.
Insurance and services, BRL 35 billion in capital and BRL 7 billion in results, BRL 4.9 billion out of the BRL 5 billion that were mentioned here. Almost the total comes out of services and insurance. We are trying to develop the activities of the bank. Looking at that, you see that the profit is lower. We have the cost of credit granting, the 28% of revenue, the financial margin and spread and such, 7% was invested in losses due to credit. It may actually go even further if we are at a time of economic recession. If it goes worse than you expect, losses will increase exponentially. That is why the Central Bank of Brazil requires more capital to maintain the level of solvency, because they know how it will behave in case there is an economic recession. That is why we talk about value generation constantly.
All models of internal management of the bank take all those points into account. I guess you have heard that before. It is part of the DNA. This management is very important for you to maintain the optimization in the management of capital. This is a table, the last one I am sharing with you. This is a clear idea of what I was talking to you about before. On one hand, if the bank grows more than it has so far, the credit portfolio is steady, 7%, I guess, between 4% and 7%. Let us have an average, a median of 5.5%. The more I grant loans, the more capital I need. That capital invested means that we have less capital to share among yourselves, shareholders.
When we are not sharing, appreciating your shares, it means that we are retaining capital at the bank and invest in that, therefore, you will reap that in the future. Within this scenario, we have growth levels. We see here 5%, 10% and 15% respectively. That is the level of growth. 5% is the growth of this year's scenario. We might reach much higher levels, but Brazil is going through a difficult time. We do not want to retain capital unnecessarily. So depending on the level of profitability, for instance, 15% says 22%. We are around 22%. How much can we share of the revenue? How much can be converted into dividends? 5% with 22.5% of profitability. We could distribute 80% - 85% of the profits of the bank.
Now, if we were down to 15%, and if we were to grow on that level and that line, you see the numbers changing here accordingly. So you see 35% is the minimum, it's the floor threshold. We'll always maintain the minimum of 35% to be distributed. I think that's an important element of our management strategy, the use of capital. We are always looking at that, the way we use the capital, whether we are investing that appropriately. If we don't see opportunities to invest that in activities that will take us beyond the 14% that we have now, we'll return that to you. So you'll collect that, you'll reap that. Evidently we could, if we were to reduce the spread, have a different scenario. But if we were to do so, the portfolio that you see here would go into damage, liabilities. We would be below 14.2%.
This is our line of thought. That makes a difference when we think it over and we think the way we'll manage the bank in many a front. André touched upon technology. All investments are thought in terms of value appreciation. Schettini and Vassimon touched upon these different points. We measure satisfied and unsatisfied clients based upon that. So how much do we or must we invest in order to have a satisfied client? We've been working harmoniously. It's part of our DNA. With those words, on that note, I wrap up the session. I beg your pardon. We open for questions.
We have some questions via WhatsApp. You can do that in writing. We have some forms around. Our support staff is around, and you can get your forms. If you're leaving now, you leave your evaluation at the door. There are people collecting it there.
It's important for the event, and the meeting 2017 was among the 10 best compared to the previous year, and that evaluation is done based upon this form that you are to use to evaluate our work. We have a panel that is rather physically long. I'll ask the question, and I'll look at Cândido or to the other person, whoever is to deal with the question. Let's go on.
First question is about XP. Since the decision from BC, the central bank is recent, but how does that affect the results of the bank?
The decision of the central bank regarding XP. What is the business deal that we closed with them? We would acquire 49% of capital of XP at this point, and in three years' time, it could go up to 75%, but we wouldn't have the control. It would be more shares, but not the right to vote. Five years later, they would have the option of selling us the control, and we wouldn't have the option of buying that. They would sell it to us if they wanted. In 15 years, it would have the option of buying their control.
Since now, we would have the right to appoint three members of the auditing committee, and we would be entitled to appoint the CFO. That's what we arranged with XP and also what was approved by the Administrative Council for Economic Defense. The central bank said, well, you can buy 49% now, and you can increase that to 62%, not 75%. In three years' time, as long as you submit the request again and we approve it, and you cannot, or there cannot be the option for selling or buying that would entail the control transfer. Nor can you appoint the CFO or no interference in the company. You may have two members in the Board, and you may appoint three members for the Committee of Auditing. I think that's the interest of the central bank and all of us can agree to it.
Against the restrictions imposed by Central Bank, we still decided to proceed with the business. We acquired 49%. We're going to have two members in the Board and three members in the Auditing Committee, and that's it. How has that affected our strategy, right? That's the question. What is our interest in XP? XP explores the market of investment in such a way that we could not replicate. They have autonomous agents and experts, people who talk to the customers exclusively about investments and account load rate. It would entail more people than what we could have. They have a different way to serve customers, and it's a very interesting way as we see it. It's going to grow in the market. Since it's a financial product, it would match the products and services that we offer.
I myself found the central bank decision to be too rigorous because there was no risk for competition the way we negotiated with XP. To the contrary, I think the competitors are stronger that way. Anyway, it's the decision of the central bank, and it's up to us to abide by it and then decide whether or not to go ahead with the business. We still consider it interesting. We still believe that XP is going to grow and develop. There will be no meddling in the members of the board that we would appoint. They will not be executives of the bank. They will be members of our Board, but not executive, and then life goes on. I just would like to complement that. I think you described it very well. It started as a transaction that had a strategic fit, really.
And maybe eventually we thought that that would be part of Itaú. We just don't know how, but in 15 years' time, we would get there, we would take control and see how to go about it. Over the years, we would participate in the management of the company, and we would discuss the strategies, although we were not controllers. But what has changed greatly is that now we don't even know if eventually we'll be able to acquire that. The central bank did not accept that or the control, but in the future, maybe, but maybe not. More likely not. So it's not a strategic business anymore, not that it's going to have synergy, but it became much more an investment per se.
As Cândido said, we still believe that it's a very good business model that they have developed, that is going to grow, and it's going to be profitable. And we believe it's going to add value to our shareholders as well. So we are comfortable in the sense that XP is even performing above the value that we established when we decided to establish the amount. We did an evaluation and projections and all that, and they have been growing greatly. A little bit over or above what we had forecast in the evaluation. The operation is doing well. They're developing well. And the fact that they could announce that Itaú is a major shareholder, it conveyed more reliability to their operations, and it attracted people. So we are happy with the transaction, although we no longer have the possibility or the right.
We had a call option and we had the right to buy control. We no longer have that. So that has changed. So it affected the strategy.
Next question. Will the bank increase the focus on insurance activities?
Well, yes. The answer is yes. We've been gearing substantial investments to our insurance business, as I briefly showed in my presentation. And these investments are translated into the development of what we call a multichannel broker. And our distribution of products now becomes more evident. And we also have an agenda for the upcoming months, which is to include products that are not part of our shelf by bringing important players on board with us. They will start using this platform as an access channel. And we have delved into this project for the last three quarters.
We don't expect any substantial leaps in terms of results, but rather we want to create a solid distribution structure, and that should happen in two or three years' time.
Next question. How does Itaú see the fact that fintechs are not charging any fees?
The market seems to be following that direction. Well, that's called competition. That's something that we have been facing. We have always faced, and we've been doing well, as I said in my presentation. Well, the fintechs that work in specific segments of the market with a good quality of service and charging very low prices, though oftentimes they have losses as well, but it is their business model that is a different one.
It will compress the margin in those segments, and it is up to us to offer better products, a wider range of products, and that will enable us to be compensated by that. In our area of wealth management, we have reduced the fees to zero in terms of fixed income custody, among others. We use the tools and the weapons according to the market so that we can be competitive. In our projections, we have foreseeing that suppression of margins, and we have to compensate that by enhancing the quality of our products.
It is a question about risk. This afternoon, you touched upon the risk appetite for 2012. How can you go back to lending more aggressively? Who defines this appetite for risk?
It is defined by the Board of the bank.
It is important to bear in mind what the appetite for risk says in terms of credit risk. They say that they do not want to loan for companies that are more likely not to pay when it is the probability of default. For each company, they measure the PD of each company or individual. We want to be in the market of credit for borrowers that have a default probability below a certain percentage. When the situation is better, more people join that category, and it enables us to lend. Our portfolio can grow without changing our appetite for risk. The appetite for risk has to do with what I said earlier, where the PD is high. It is profitable also. You charge more and you have a profit. The volatility of results is much higher.
There is this volatility of results, and we do not want to expose our shareholders to that volatility.
Yes, picking up on what he said, I would like to link that to what I said in my presentation, because, of course, the higher the customer risk of not paying, he said there is a certain figure that is the maximum limit of probability of default. It is defined. Yes, and that is that. Although, as he said, we could accept higher PDs by increasing the fees. When you have a situation of stress or problems in the economy, these customers that are more fragile with a higher PD, yes, they go in arrears. In those ranges of higher risks and with a high probability of PD, if you start accepting higher probabilities, if the economy has a hiccup, you have more volatility.
It is about managing the capital, and you need more capital for these situations of stress. Everything is intertwined, really. It is not only about flowing the money like that freely. Everything is integrated. What Cândido said is important also because when the economy is better with more people employed, overall, if you consider the Brazilian population, the level of risk goes down. More people are eligible for the risk level that we are accepting. All that is intertwined, as I said.
If the scenario is worse, the default increases, so we would be misusing the capital of shareholders because the return, it would be very low. The last bonus of shares was not incorporated in the portfolio. Why and when do you expect to do so? It is a question by João Bosco. He is an investor.
I think João is alluding to the shares. The proposal was approved by the Board and also by the assembly. It's in the final stages of approval by the Central Bank, so I can say that soon we should have their approval. There is a question on dividends. I believe that Roberto's presentation has talked a lot about that. But in any case, Roberto, do you have anything else to say about the variables that determine the policy of dividends?
The policy is defined. It's the capital that goes above the 13.5%. Everything above that, we intend to distribute. But in June, we would have 14.2%. So that would be that surplus. It would certainly be paid out. So the idea is to pay out everything that is above that.
Now, a question on synergy, if you will.
You have separated credit from services and insurance, and I understand that the activities coexist. One cannot live without the other. So what is the level of cross-selling? Do you intend to join the market of peer-to-peer lending?
Yes, indeed. We have separated credit from insurance and services. And there is an interdependence among them. We serve our customers. Customers that take credit, they use our services, and they also take credit. But we have customers that only take credit and others that only use services. There's a bit of everything. So when customers use more of one of our product, it's what we call cross-selling. It's when you sell several products for one customer, and it's one of the advantages of being able to offer them a wide range of services.
Well, but I think I should say something important, something that we have implemented in the bank actually more than two years ago. It's a score for the quality of sales. Cross-selling can be excellent when you really meet the needs of customers and they use several products that are useful. It's convenient for them to be able to buy all these services from the same bank. But there is the bad cross-selling, which is when you require the customer to buy a product because you gave them credit, which is what we saw happening. It was mentioned here that allegedly happened in the U.S. with Wells Fargo and all the problems that you could see.
In analyzing the impacts of that, we analyzed a score for the quality of selling, and we see some indications that a poor sale, meaning the customer didn't really understand what he bought or some indications of that, or if the sales are canceled a few days later. So we measure them, and we establish a penalty every time it happens. We also call customers at random, and we ask them, oh, did you really buy that product? Are you satisfied with it? If the customer says no, then it affects the score. So each manager, each branch has this score of quality of sales. The worst scores are punished. They are dismissed. And every time we have implemented this over two years ago to date, the score has increased greatly, actually. So we can see that the behavior in the bank has been improving greatly.
Well, if we intend to join the market of peer-to-peer lending, we have no plans to do so. Itaú and other private banks have been showing a growth in their credit portfolio. Against the uncertainties of the macro scenario, how should we go about that? We estimate to grow our portfolio of credit from 4%-7%, and inflation is 4.5%. We have been growing in line with inflation. I believe that it is a modest growth of our credit portfolio and ideally, it should be bigger in the segment of large enterprises. We are not growing because the uncertainty-
It inhibits the loan granting to those clients. A good reason is that the capital market is growing, and companies have access to the capital market. Adding to that, I would not say it is time to take on more risk. That certainty leads on to the fact that taking on more risk is like betting on something. We manage the bank. We cannot be risk-takers constantly, and the uncertainty of the scenario makes us more careful. We are not going to be betting on the scenario eternally without a controlled scenario. We have to be disciplined.
Fintechs, how to make sure that there will be the focus necessary to develop and be competitive against fintechs when we think different margins than traditional products.
We believe that we have the capacity to compete in specific sectors. Business banking as a whole is of focus.
Many of our channels and segments provide us with a level of awareness rather above than the average in the bank. The efficiency in these channels and of services and products lead us on to seeing that our capacity is getting stronger. Those operations will be adapted to whatever we need to compete with fintechs. Companies, we operate differently. As we have seen here, the process of investment that we do here leads on to a level of precision, requires a level of precision that is adequate so that we have the level of investment that is necessary. We have used our digital channels, the use of our spontaneous accounts, 30% via digital channels, cards 20%, and it is clear that business is dedicated.
That will put us in the position that will have players, 100% digital is inevitable, and it is inevitable that we have lower margins with the same level of return that we wish, we have to take action accordingly. Competition will always be out there, but we are prepared to deal with that.
Does Itaú have plans for new acquisitions to grow in Latin America or other regions? If so, what are those plans by Augusto?
Out of Latin America, we do not see comparison. We can see in Latin America that we are not present yet. Peru, Mexico, for instance, and we have to consolidate the operations that we have in Chile and Colombia.
We have a long way to go, and our strategy to be relevant in the markets that we are part of means that we are between the third and the fifth most important bank in each country. There are therefore interesting assets that we can acquire timing-wise. We would hope better opportunities to be more ahead in time after we wrap up the actions that we are taking right now. We will have to have the discipline in the use of capital that we have explored so far. Roberto has touched upon that quite comprehensively. We will invest in operations that add value and investments in the overseas have an additional challenge. When we Brazilians invest overseas independent on the taxation that we have here or independent on what they have overseas in terms of tax levels, we pay according to the taxation system of Brazil.
The countries with a different tax system actually do not provide any advantage in that sense.
How is the unfolding of the Cubo project?
Cubo was started three years ago. We started a new building that we named big cube , four times the number of startups that we had before. We had 50-something startups. Now we have 200 or around that order in the location of Vila Olímpia, one of the largest ecosystems in Brazil. Most of the startups go through the Cubo. It is an environment that is bubbling with talent and opportunities. It is open for visitation. You can come show up whenever you feel. I have seen many a company that started there, some of them starting from scratch and gradually moving up on to higher levels of competence.
It is a satisfaction to have been sponsors so far, and we have seen many of these companies independent now, going independent.
How have you reached 14.5% of capital cost?
We have two ways to look at this. We have four formulas that take into account volatility, beta of the exchange market, profitability of bonds, Brazilian bonds, the difference between the inflation in Brazil and in developed countries. Very academic formulas. Four formulas that will lead us to an average that resulted in 14.2% or 5%. There is a gap between those formulas. We have an approximate number. It is not convenient to change the capital cost constantly. We do not want to do that on a monthly basis. We will make adjustments whenever necessary and extremely necessary. We have a checklist. We work with analysts, and we are always checking with similar institutions, what level of capitals they are using.
We always check what kind of level of cost they are using. It is not that far from what we do. Just a remark. We have the theoretical formulas. We have math formulas. The analyst is responsible for the projections, and according to those projections, there will be a comparison to those formulas. There is a calculation according to appreciation or depreciation of the worth or the value of shares. There is a whole logistic planning behind it. Brazil is going through a moment that we know is uncertain on many levels. We are going step by step, looking at one day at a time. At this very moment, we would be above 13.5% due to the uncertainty of the scenario. We do not want to take action at this point because we do not know what is coming up in terms of future changes.
The bank has decided to sell health insurance. It is based upon commissioning, and depends upon third parties, the outsourcing.
Now, image-wise and image damages with clients in the past, how have you overcome the impact of that past and decided to go back into that share of the market?
We will go into in parts here. It has not been a decision that was obvious. We invested time and effort to assess all levels of risk in many a line of product. For insurance operations, we taught health insurance, but we have dental insurance during the last one and a half years, especially. A couple of years ago, in association with Amil, we are selling health insurance. We have had a lot of caution in the structuring of the drafting of the contract. We made clear the level of the service. We stated responsibilities and rights rather well.
Service renderers and, in other words, services have our brands. There is a contract and premium that has proper documentation. The fact that we have brought back to our portfolio products that were actually discarded has to do with research. When the client acquires a certain product, the possibility of acquiring other products from the same distributor is something visible and easy even to make viable. Auto insurance is one. Home insurance is a whole different kind. So these range of offers has to do with the possibility of attaching that to other products. It is important for us to have the insurance as a partner. We have to have quality. We have to have size, and the operation has to happen well. This partnership has to do with very specific criterion that will make it successful for different areas.
Given the advancement of time, we will go on to the last question. RI is a very important point for us. If you have not had your questions answered, forward it to our RI department. Claudia: With the transformation in the behavior of collaborators, the bank has been able to measure the evolution of the satisfaction of those.
As I have mentioned, we are using a tool to measure employee NPS, employee network performance. The levels started very high. Clearly, this evaluation does not reflect this whole process of change, its reasons. The satisfaction, clearly speaking, a Great Place to Work research showed levels of satisfaction rather elevated, and we continued going above 80% of satisfaction. Therefore, we had to change the type of questions that we were asking. NPS, therefore, is a methodology that has been of importance.
An index of satisfaction, not so good as we have with [far] and frankly, what we expect from now on with all these changes of environment and work model and inclusion agenda and valuing of our employees, we hope that this indicator is still going up.
I will remind all the participants that it is important to fill in the assessment form, and I would like to by giving the floor to my colleagues, and we are going to give you the Platinum Seal, 23 years that Itaú Unibanco has been holding these events with investors and partners. We thank you for being our partners, exceptionally this year with this cycle of meetings in São Paulo, and I am here taking the place of my role, regional counselor, if you will. Thank you for your support. All the support on APIMEC Markets and Capital, held in São Paulo in August.
I will hand the Platinum Seal in recognition of your support. I think the floor is yours. I would like to thank APIMEC for the accomplishment of one more edition. Thank you for believing and trusting in us. Thank you for helping us be excellent.