Good morning, everyone, and we welcome you to the Porto Seguro Fourth Quarter 2024 Earnings Results Conference Call. Please be advised that the presentation is being simultaneously recorded and translated into English. The slides presented are available for download on the IR website.
Choose audio in English. For those listening to the conference call in English, there's an option to mute the original audio in Portuguese by clicking on "Mute original audio." [Foreign language] .
After the end of the presentation, we will start the Q&A session. We suggest that you send your name and company through the Q&A icon at the bottom of your screen. By default, your names will be announced for you to ask your question live. At this point, a prompt to activate your microphone will appear on the screen. If you do not want to open your microphone, please write "No microphone" at the end of the question so it can be read out by the operator. Forward-looking statements made during this conference call regarding the course of business prospects are based on the beliefs and assumptions of the company management and on information currently available. Forward-looking statements are no guarantees of performance. They involve risks, uncertainties, and assumptions as they relate to future events and depend on circumstances that may or may not occur.
The overall economic conditions of the business sectors in which Porto Seguro operates may impact the company's future performance. I would now like to turn the floor over to the Porto executives to begin the presentation.
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Hello, good morning. I'm Paulo Kakinoff, and it's a pleasure to be here with you to present the Fourth Quarter 2024 results for Porto. Also here with us are Celso Damadi, our CFO, Domingos Falavina, IR Director, CEOs of the verticals, and the head of Porto Asset. Our strategy of diversification through the strengthening of the fourth business unit of Porto ecosystem are fundamental pillars for the results that we will present now. I would like to highlight the following, therefore. In the fourth quarter of 2024, Porto reached total revenue of BRL 10 billion and an increase of 14% vis-à-vis the same period last year. All the figures here in parentheses represent the variation of the same period compared to a year before. Porto Group reached BRL 37 billion in total revenue, a growth of 13%.
Recurring net income totaled BRL 710 million, and recurring net income BRL 2.7 billion BRLs, a growth of 18%, which brings us an ROAE of 21.5% for the quarter and 20.3% for the entire year, with a growth of 0.6 percentage points vis-à-vis 2023. Now, two figures that allow us to feel very happy in the growth is the historic record reached in the fourth quarter this year: 18 million clients and 30 million in the Porto ecosystem, posing a greater potential for the growth of our business verticals through cross-selling in the ecosystem. Here at Porto, we have a proprietary technology for management to manage risk and prices, and it is through the combination and quest for excellence that we believe that we have attained growth in all of the business verticals with some figures that truly merit highlight. Before we go into the details, initially, we have reached R$16.6 million items or lives in the Porto Seguro Health, a growth of 10% vis-à-vis last year, and the loss ratio at a very healthy level, 56.5% in auto, a growth of 0.6 percentage points vis-à-vis last year, thanks to this discipline in pricing and execution and a healthy competitive environment where we do not foresee any disruptive or inconsistent movement on the part of the players of this sector. In Porto Saúde, 132 lives were added to our beneficiaries, also with a loss ratio that is quite adequate for the segment, with a drop, a significant drop of 0.7 percentage points.
In the bank, a growth of revenue of 21% regarding default, with a drop of 1.4 percentage points, complemented with the results of Porto Serviços, a vertical with a high pace of growth that already has reached BRL 103 million in EBITDA with a 16.1% EBITDA margin. Now, we will speak about the details of how we attained these figures. We will explain this with more richness. For this, I invite Celso Damadi. Well, thank you, Caqui. A good day to all of you. It is a pleasure to be here with you. Then to go into greater detail about our 2024 results. Our revenues grew 14% in insurance, 4%, reaching BRL 5.6 billion. As Caqui mentioned, the loss ratio behaving very well and our ROAE very good, above 25% in auto.
What happened this year is that the number of items in auto remained stable, grew a bit, but our cost is doing very well. We always have vintages of this looking at the next 18 or 24 months. So we have been pricing with discipline, looking for profitability, and we're working with our portfolio above 25% in insurance. Our portfolio grew somewhat less in 2024, but we have life and corporate portfolio growing above two digits. Insurance also with significant growth this year. Porto Saúde, BRL 1.9 billion practically in the fourth quarter, a growth of 34.7% during the period. In the bank, a growth of 21% for the year. So Porto Saúde and bank accelerating and the diversification that we have shown you in the last quarters. Porto Serviços, BRL 640 million revenues in the fourth quarter. Our ROAE of 20% does have some components.
For example, part of our default margin from one year to the other, when we do not take into account our surplus capital, our ROAE reaches 30%. Here you have Porto Seguro with 30%, the bank with an ROAE of 26%, 27%. When we take away the surplus capital, the figure is 30%. This is also due to productivity gains since 2020. We have a decrease of 3%, equivalent to BRL 3 billion per year in savings. And in 2024, we had a productivity gain of 0.3%, representing a cost reduction of BRL 115 million per year. This thanks to several projects we have put in place. We invest BRL 400 million since 2020 to 2024, and we're delivering relevant structural projects. We had three plans for auto, Itaú, Azul, and Porto. This year, we have unified all of these plans. And for home insurance, everything is being done at Porto Seguro.
So these structural projects bring about a better experience, better costs, and of course, allow us to grow in the future without increasing our costs in several areas of business. Here you see the growth, and we can see that the health vertical in the bank has an exponential growth vis-à-vis the profit of these portfolios. And this is the diversity and profitability we also have in other business verticals. Insurance with an ROAE above 28%. We maintain the ROAE, but we increase diversity, making our results ever more resilient. Here for the year, healthcare with 8%, 20%, and R$ 2.7 billion in profit. The bank with 22%, as you can see here. So we see the diversity in the quarter and in the year, making us more resilient when it comes to our results. Our profitability on CDI was of 90%.
In the fourth quarter, we had a rollover of the prefixed of approximately BRL 800 million. We increased the duration of our investments and also took advantage of the rate of 12% that we had at the end of the year to 60%, enhancing the duration. This meant we had to spend BRL 30 million in 2025. Dom will speak about the guidance and increase in financial revenues that is significant forecast for 2025. I give the floor to Dom to speak about our results in insurance. Good morning, everybody. Thank you for attending today. We're going to go through the verticals very quickly. Our largest, Porto Seguro, we end the year with BRL 5.6 billion premiums and for the year, BRL 21.4 billion. Last year, we spoke about our priority for larger subscription margins. Auto portfolio with a growth of 1.5%, life and P&C growing at two digits above 10%.
Now, this growth is beneficial for ROAE as the loss ratio and the return on equity will be higher than in auto. To speak about loss ratio, we ended the fourth quarter with 51% below the guidance and 51.4% for the year. When we look at the diverse sectors, auto standing at 56.5%, P&C 38% with an improvement and stable in the life segment. Now, these levels are deemed to be very healthy, generating those returns. If we look at the distribution of subscription, life 10%, P&C 20%, auto 65%. In this quarter, in the insurance operation, almost 30%. When we go to the health operation, we grew by BRL 132,000 in the last three years. The company has been able to maintain the growth between BRL 100,000 and BRL 120,000 in the period. This is not a singular result.
It's due to consolidated premiums at BRL 6.6 billion BRLs and net income standing at BRL 394 million. When we look at the breakdown of growth, we had growth of 24.3% in beneficiaries in health and a growth of premiums of almost 40%. We have broken this down to show you net income, including positive non-recurring events. During the quarter, the result was BRL 139 million with a ROI of 38%. If we were to adjust the BRL 15 million that come from our partnership with Oncoclínicas, our ROAE would be 30%. For the year as a whole, there is a trend of improvement leveraged by gains of scale, better pricing, better G&A with an ROAE at 27%. In the Porto Saúde operation, the loss ratio with a trend for improvement for beneficiaries and also in the dental sector.
Now, if we go to the bank vertical, the great highlight here is the continuous growth with revenue diversification, BRL 1.6 million in revenue for this quarter, almost BRL 6 million this year, with a net income of BRL 162 million. Now, we have some non-recurring events that I will disclose in the coming slide. Our cost of credit, the provision cost, had an increase from 8.3% to 9.1%. We took the decision of selling off portfolios that were no longer our focus. They were outside the Porto ecosystem. The impact was approximately BRL 60 million. The portfolio is worth BRL 300 million. If we made adjustments, our provision cost would drop to 7.7%. In terms of efficiency ratio, we're very similar to that of digital bank. And well, it's important as we don't have branches. On the part of default, the same effects that I mentioned are valid here.
We had an improvement in defaults above 90 days of 6.4% to 5.2%. Even if we were to make adjustments, we would have an improvement and we would continue to maintain a better index than the market average. The loan portfolio growth 9.8%. Had we not sold the portfolios, the figure would be 12%. We go on to Porto Services. We don't have a comparison base because this is a very recent vertical, but we highlight the number of services maintaining high-quality rates. This quarter, BRL 723 million services with an NPS of 81 points. We wanted to diversify revenues and those revenues that are part of the Porto ecosystem reached 26% this quarter with a growth of 25% year on year. One of the reasons was the creation of the vertical.
In terms of margin, BRL 103 million of EBITDA with a 16% margin, very healthy, and similar margin for the entire year of 16.4% and BRL 411 million in EBITDA with BRL 251 million in income. In terms of net income and profitability, this is an operation with a low need for fixed assets. Because of past acquisitions, the company sees that our net revenue for the company is higher and the accounting effects of amortization of past acquisitions and the gain in efficiency allow us to have this consistent trend of increase reaching 26% in the quarter. Let's go on to the guidance and the general message here. I'm not going to read it line by line, but we foresee a very robust growth for most and almost all of our business units, and well, the market is the one that will specify the level of growth.
In Porto Bank, we have 20% growth. In health, 25%-40% range. And in the financial results, because of the portfolio adjustments and higher CDIs, we're expecting net financial results of between 1.2% and more, higher than the 920 that we had reported in 2024. Here we compare our market shares in segments where we are more mature. In auto, 27%, residential 20%, P&C around 25%, consortium 13%, landlord protection 56%. And in the next slide, we show you the growth. We still have incipient market shares of 2.8% in credit cards, growing by 12 points, while the market grows 10% in consortium. We only have 2.6% market share with a growth of 40% in truth and 6.2% for the auto consortium. In health and dental, the market growing 12%, we have 1.8%, and in life, 9% growth vis-à-vis a market that is growing at 13.2%.
With this, I would like to conclude the presentation, and we can now go on to the question and answer session. Here we will now go on to the question and answer session for investors and analysts. Should you wish to pose a question, send your name and company through the Q&A icon at the bottom of the screen. Should you not wish to open the microphone, write "no microphone" at the end of your question. You can also click on the raise hand icon. Please wait while we pull for questions. Our first question comes from Daniel Vaz from Safra. Your microphone has been unmuted. You may proceed. Good morning, Caqui. Good morning to all of you. We would like to focus on the health vertical. You recently announced that you're seeking a majority sale with a partner, a strategic partner.
What do you foresee by selling off a stake to a partner? And what would be the procedure if there's a focus on investments in the health vertical or if you're thinking about something different? Thank you very much. Good morning, Daniel Vaz. Thank you for the question and comment. Let me give you a broader context when we look at our long-term planning that contemplates avenues of growth for each of the verticals. When we carry out calculations, thinking about more optimistic scenarios, we have our own resources within the group to foster that growth without the need to having to access the market or foreign capital. This applies to the four verticals. Now, we don't have a proactive approach, or at least we haven't had one for some time throughout last year, for example, for any movement referring to attracting investors. This is happening as a reaction.
Luckily enough, our businesses, especially in the bank and health verticals, we have seen a search, an increase in demand that comes through banks with approaches that are interested in investing in the businesses. This is something natural. Now, we are willing to engage in this with partners who could truly add strategic value to the company. The communiqué we launched 15 days ago, referring to health specifically, confirms that we have been approached by funds. We have initiated conversations that are non-binding and not exclusive with some of them, and what allows us to be enthusiastic about these conversations is that with at least two of the funds, we could have an addition of strategic competencies for the health vertical. Throughout the world, we have interesting practices that are happening, the intensive use of new technologies.
If we foresee that a movement like this one could accelerate the process that is already underway to enhance the performance of this vertical by adopting more advanced technologies, this would be one of the two necessary conditions so that we can turn this into an investment. Secondly, of course, the pricing of this asset at levels that would make sense to the company. Of course, we have a way of assessing our asset. It's such that the value is much higher than what is implicit in the group as a whole. We are underscoring that. In the valuation movements, this should become clear when an investor wants to make investments, and it should be in accordance with the pricing. These would be opportunistic movements that are not necessary but could add a great deal of value. Thank you. Thank you very much.
The next question comes from Gustavo Schroden from Citi. You may proceed. Your microphone has been unmuted. Good morning, everybody. Thank you for the call and congratulations for the year results. I would like to speak about the guidance for the banking business. You show an increase in revenue income. What is implicit there when it comes to the growth of portfolios and the spread? Because if there's a growth of 14%-20% as a range, I believe that this is high growth compared with what the ecosystem is pointing out, especially in credit cards. So perhaps you have greater optimism for the system compared to what you have for the credit card. Good morning, Schroden. Thank you for the question. If we look at our bank operations results, we don't only work with loans or credits.
We also generate taxes, consortium, Landlord Protection, and these have been growing significantly. We don't offer guidance on portfolios, of course, but to respond to your question, we observe growth. If you compare our guidance for 2024 and 2025, the orders of growth are very similar. There won't be a significant or radical change in dynamics in the components of growth regarding loans. The banking market as a whole is perhaps somewhat more cautious. I was going to say concerned because of default. Our guidance for provisions, therefore, contemplates a scenario with greater uncertainty and volatility. That is why we have set forth that guidance for the bank. Thank you. If you allow me a very quick follow-up in terms of capital allocation, you have surplus capital that the company has shown. And is this a regulatory matter? Is it because the company is working in a conservative way?
Because you could have a high leverage here in terms of ROE considering this capital surplus. And with the ROAE of each of your verticals, it could be 25%-30%. The company is reporting only 21%. Are you considering the sale of a stake, health, for example? And in capital allocation, if you can speed up the payout of dividends, returns to shareholders, and perhaps a certain improvement, enhancement in your capital allocation. Thank you for the question, Gustavo. This is Celso. Our businesses in health, for example, we show that we have returns above 25% in all of the business verticals, even in services that have had an ROAE above 25% in the fourth quarter. So the holding capital is used to back up the growth of all of these verticals. The company is becoming quite large, and we have this capital to aid and abet the growth.
Now, your question makes sense. Last year, we paid out 38% in dividends. This year, we have deliberated this at the board. The payout will be 45% in dividends. So the trend is for the percentage to grow somewhat in 2025. Perhaps we could pay out 50% in dividends because we're reaching figures of surplus, not regulatory, but because of our policies regarding risk, our internal calculations. And we believe we are at a satisfactory level that will enable us to pay out more dividends. This year, it will be 45%. The coming year, if the guidance fulfills itself, we will pay out 50% in dividends. This is an in-house policy, a healthy one that maintains an ROAE around 20% and that will enable us to maintain our profitability. This is how we look upon this policy for capital. Would you like to add something?
Now, when Damadi speaks about how we work in-house, when we look at our payout of 45%, we're calculating the JCP of the net that we are retaining. We're very close to 50% this year in our last assembly. And the cost of capital, of course, includes the SELIC cost. And in terms of accounting with a higher SELIC, we will have lower dilution. We have a capital surplus at 8% of return, and the average is 20%. The operations have to reach 25%-28%. With a higher SELIC, we should continue to grow, of course, but the cost of carryover of this capital, not that it will grow disproportionately, but this will not play against us. Gustavo, we attempt to have very good foreseeability about the market regarding our movements that, of course, could impact the attractiveness of our shares. And dividends is one of the main ones here.
So we think about the increase of payout, thinking in longer horizons, not just one year. In other words, we don't want to have great variations in our payout percentage going forward. So there is that positive pressure to increase the payout, as we just heard. But on the other hand, we also are very aware. You can also become part of this awareness by simulating the higher curve of our guidance, the higher ranges of our guidance. If we simulate that, the higher ranges of growth, and if we replicate this in the coming two or three years, we will see that this surplus capital could have excellent application within the group itself in that time horizon that we are referring to. So we're seeking a balance.
We don't have the need to have additional funding in our capital to make feasible the pace of growth that the company already has. It is a high pace of growth, above 20% for some of the verticals, and a level of payout that will be high and relatively stable without significant variations year on year. We consider these two parameters to have a more efficient management of our capital allocation. That was very clear. Thank you very much, and congratulations once again. Our next question comes from Eduardo Nishio from Genial Investimentos. Your microphone has been unmuted. Good morning, everybody. Good morning, Caqui, Celso, Dom. I have two questions. The first question about the other businesses. You had somewhat greater losses this quarter.
If you could share with us the reason for this and if your balance is clean of the units that are being discontinued and how we can look upon this line item going forward? My other question refers to the guidance for insurance. You had an increase for loss ratio in the insurance vertical compared to 2024. If you could remark more on the scenario, if you think there will be an exacerbation in the loss ratio? Nishio, thank you for the question. I will answer the first one about other businesses. We released our balance, and in the fourth quarter, we had non-recurring adjustments, especially in the Mobitech , where we had provisions we had to make for the closing of the operation. We're ending that operation. And during 2024, we ended the Texas operation for the lease of mobile phones.
These two operations jointly without taxes brought about losses in 2024 of BRL 100 million. This means that in 2025, we will no longer have that line item with losses, and it will become a line item with profit because we have other businesses like Renova and others that are already profitable businesses. That's good news for 2025. The non-recurrent losses of BRL 100 million in 2024 will not be repeated this year. If you could speak about the loss ratio, Celso, it's important and useful for the modelings that you work with. With the closing of those operations, Porto concludes a disinvestment cycle in the last years. The effects mentioned by Celso only exist until 2024. Going forward, all of our businesses are active without any outlook for disinvestment. Now, about Mobitech, we paid the last liability that we had. We had cash to do that.
We anticipated the debt of Mobitech. We paid BRL 255 million, closing the operation, and our indebtedness has dropped to zero. This will not generate financial expenses. Now, regarding the loss ratio, when we prepare a budget, and this is not in the guidance, we want balance between profitability and growth in insurance operations for auto, for corporate life, and residential. We want this to be at certain levels. In our premiums, we're going to grow more than the guidance, and this will impact the earned premiums in 2026. So there is that balance between profitability and growth. And 2024 was a year with very low loss ratios, especially in the corporate segment. We work with low loss ratios to have more competitiveness, to grow more, and to enhance our premiums in 2025 and 2026.
We also have the adventure of the Porto Seguro Fund because of the flooding in the South of the country, which also impacted our loss ratio. Thank you. Thank you very much, and congratulations for your results. Our next question comes from Kaio Prato from UBS. You may proceed, sir. Good morning to all of you. Thank you for taking our questions. I have two questions in truth regarding Porto Bank. In the presentation, you spoke about why you increased provisioning in the quarter. If you could give us more details on the portfolio that was sold in the quarter and to move towards the guidance, do you expect to have more sales during 2025? Has this been included in the guidance? And if you contemplate stronger expansion in credit cards, something more risky during 2025? My second question, in the guidance, you speak about efficiency.
In the mid-guidance, you see a drop in the bank efficiency. Which would be the drivers of this? Hello, Kaio. Thank you for the question. When we speak specifically about that portfolio, in Porto Bank, we had a portfolio that is no longer a focus for us. Operations that were sold to clients outside of our ecosystem, our addressable ecosystem. We anticipated the losses and sold off the portfolio. We have a focus on other products. We want to maintain our strategy regarding our portfolio and work more with the audience we have originated in the last two years. That is to say, clients within our ecosystem or aquarium. In our case, it was a one-time event and if there is the sale of a portfolio, the situation will be the same, but not with this strategy of trying to adjust our portfolios to what we are selling at present.
The efficiency rates and levels, we see a growth of revenue in the guidance, about 18%. We have absorbed a pension operation, and we're working with businesses where we're developing our products and processes in the mid-range. If you compare this with mid-year, the changes have not been significant. They have remained in the same range. What are we imagining after this adjustment and the sale of portfolio? We have a resilient portfolio that could resist eventual crises, and we are prepared with a strategy. As part of the Porto ecosystem, our strategy gives us the safety that we can continue to grow the acquisition of cards, as we did within 2024, as part of our credit policy, of course. Thank you. Simply to confirm, regarding 2025, there's no expectation of significantly changing the profile of your clients.
You will keep within the clients you have in the Aquarium. Absolutely that. The environment and the circumstances, it wouldn't be the right time to think about changing our credit policies and working with people outside of our Aquarium. When we look at the opportunities within our ecosystem, this decision is a no-brainer. We can create more value by exploring our own base. Allow me to further remark on your question on the sale of portfolio. We sold out other portfolios during the year. We do this normally, but the sale of the portfolio doesn't impact our results like this one did. We had a quick deterioration in credit. That is why we sold it. The model that we have for provision did not capture the losses 100%. The models are more recurrent.
We work with well-known clients, and these provisions are of almost 100% or more than 100% of the portfolio, and when we sell off the portfolio, the effect is one of a creditor. Now, in this portfolio, we captured the losses in 2024, and it shouldn't have had that negative effect we had in the portfolio as we did in the fourth quarter. Kaio to speak about insufficiency, which is one of our main indicators, and we're dealing with it very passionately through Loução and the directors of the bank, and thank you for the question because we have to highlight the movements like that of 2025, where we're structuring the platforms that will enable us to maintain the pace of expansion of the bank. Of course, this will have a momentary impact, something momentary in our insufficiency index. That is why we have the variation. Thank you.
This is done habitually. You can't see the figures, but we create scenarios. At the bank, we're working with BRL 3 million on the positive side, BRL 3 million on the negative side. This year, we had to make a decision, and the impact was larger. It was BRL 16 million. We work with negative, positive, high, and low scenarios, and it's irrelevant when it comes to the result. Thank you. That was very clear. Thank you very much. Thank you. Our next question is from Thiago Pisfeldt from Goldman Sachs. Your microphone has been unmuted. Good morning, everybody. Thank you for taking my question. I would like to go back to the guidance for the insurance. If you could speak about your breakdown of expectations, which are the segments that you're going to be more cautious with during 2025? Thank you. Once again, we don't offer guidance by business line.
To help you, Thiago, what I can say is that we don't foresee changes in dynamics in the insurance operation. If you look at the backdrop in P&C, they grow more than auto to tickets. And as part of our guidance for premiums, well, the dynamics is similar. P&C with a higher growth as well as life, and in auto, a lower growth. This is what is happening. If you could speak about the dynamics of the different branches of how the market is in truth and where we have a trend for higher growth, others that are more stable. This is Rivaldo Leite. Thiago, good morning. In auto, we have very strong competition. We have been able to survive and survive well with good profitability, and we are looking at a more calm market in the last three months.
The year began well, and we want to grow well in the other segment, residential with strong growth, corporate life with growth, and all of those portfolios with very good results and with significant returns. We look upon all of this cautiously, but this is a very good moment, and the insurance vertical is highly structured. We carried out a restructuring in different areas, and it is our understanding that it is well positioned in the guidance that we have just presented. When we speak about Porto Seguro, even though the auto has had a reduction in terms of its relevance or percentage in the total result of the vertical, this is due to the faster growth of other areas and not due to a slowdown in auto.
When we speak about what leads to a higher volume of premiums in auto insurance, the automobile industry and the network of dealers, the sale of the automobile and the sale of used cars points to a beginning of year that is quite intense. And of course, this is reflected in our production volumes. As a summarized message, as we see what happens in the Porto Seguro vertical and the other verticals, a very fast growth of the other verticals gives us that illusion that the insurance market is stable. And in general, it is. It is growing significantly, but in our internal analysis, the other branches are growing faster than the auto segment. As Rivaldo mentioned, the level of competition is much worse in the auto business. That was very clear. Thank you very much. The next question comes from Jitendra Singh from HSBC. Mr.
Singh, you can proceed with your questi on.
Hi. Thank you for taking my question. Just wanted to double-check on Porto Bank, so particularly on Resolution 4966, which impacts banks. I know Porto already reports under IFRS, but I just wanted to double-check if it impacts Porto Bank's operation in terms of provisions or securities portfolio. And if yes, could you just quantify the impact? And second, I just wanted to quickly check on your effective tax rate, which was slightly higher in the fourth quarter. What are the expectations for the effective tax rate for this year? Thank you.
All right. So on the first one, Resolution 4966 of the Central Bank, we're going to have the actual impact in the first Q of 2025. Our initial analysis of it is that we should not have a material impact in the income statement. We will have a slightly higher capital allocated, so we should see a little bit of a Basel requirement. But our initial analysis should be below 5% of impact, probably way below 5%. So at this point, what our analysis indicates is nothing material as far as ROI impacts or profitability.
On the second one, we provided our guidance for effective tax rate standpoint, so you can reference that. But I want to explain just a little bit of the tax dynamics in Brazil. What happens is we had slightly higher ROEs in the fourth year, and especially in certain units. And because of interest on capital tax deductibility, the higher the ROE, the lower is your tax shield on a proportional basis. So it's kind of the positive of the higher tax bracket of the higher ROE ended up driving a slight negative of higher tax bracket. But it's a good problem to have, I would say.
Thank you.
Our next question comes from Guilherme Grespan from JP Morgan. Your microphone has been unmuted. Good morning, everybody. Thank you for the presentation. We have two questions. One, a follow-up on the portfolio sold. How much of that portfolio was renegotiated? I calculated. Is it represented 45%? Well, that level is quite high. And do you have a significant number of portfolios being renegotiated? The second question is about your service vertical. Now, in the last three years, you have had a very good evolution in health. You're no longer in strategic planning. You're now in the execution phase. The bank has a very interesting history because of the Itaú platform. You're offering a full ecosystem. But which is your game plan going forward in the health vertical? I'm not sure about some of your initiatives.
So how should we think about the service vertical? It is somewhat difficult for me to understand the products and how the service vertical will develop going forward. I will give the floor to Marcos Loução and then Lene Araújo. Thank you for the question. Our renegotiation portfolio has grown in the last two years because of our collection policies, so that we can have an adequate collection that is in accordance with the profile of each of our clients. That is why you see that there has been a growth in renegotiation. In the portfolio, a large part of the portfolio was no longer being negotiated. We anticipated the launching of losses, but it was a portfolio that had similar behavior. What was different? It was from an audience, from the open sea, outside of the aquarium, completely out of our strategy. So we immediately sold that portfolio.
Good morning, Guilherme. Thank you for the question. It's a good opportunity to explain what Porto Services did. We worked last year integrating our operations. As we mentioned, we expanded our portfolio, and this year we have very good clarity in terms of the different rights that we have in the different segments. Now, what gives us this confidence? The equipment that we have, the structures that will make feasible two or three points. The first point are the strategic partnerships, the partnerships B2B, B2C. We service clients from other segments, and we can work within the ecosystem with assembly companies, supermarkets, the entire retail market, and other segments, enabling us to offer additional services. We already have 56 partnerships that are a significant volume, BRL 600 million in revenue. Last year, we began to carry out the test activating the Porto Seguro brand with some of the partners.
One of the partners had a growth of almost 100% in revenue when we include the brand of the service, and an example of our daily routine: you buy a TV set in the retail market or a washing machine. You need to conclude the journey. You have to install the equipment, so we're working with the retail market, and we're going to put our brand in the site as part of that final journey. The retail market is an interesting, addressable market. Now, in B2C, we're concluding the upload of all of our services into the sales system. This is a processing that will enable us to have exponential growth. As an example, last year in January, we had the sale of 2,000 services a month. We ended in December with 7,500 services per month, so this shows us the appetite to acquire these services.
Which are the services in B2C? The Porto client has electrical services, hydraulic services. We can install air conditioning, maintain the gas heater. We have cleaning of couches, and very soon, we're thinking about training our network to set up furniture. So there is an interesting market in B2C. And we're working with the Porto ecosystem. We have a large number of clients that we can offer this to at a lower cost of acquisition per client with a very simple and digital journey. We received the WhatsApp of a client that was satisfied, stating how happy he was to be able to do everything through WhatsApp to set up the service. They can take care of the house, the car, and the daily life of people. And this allows us to be confident with the health structures that we're growing.
We have more than 300 units that enable us to offer additional services to the client. We're very enthusiastic. That is why we speak so much about services. Now, the service portfolio is being expanded in a very careful fashion. In the example that you mentioned and what Lenny described, I think you can see how we strategically justify the expansion of Porto Services in Carro Fácil and Mobitech. These were far from being businesses that were adjacent to ours. They were new configurations. We were exploring new segments. We had to make high CapEx investments. In all of the examples that Lenny mentioned, we're using the CapEx that has already been made by the company. We have the largest service structure in Brazil, especially in roadside assistance. It's interesting for all of the automotive companies because of our coverage index and portability.
And the same applies to the services that are included in our policies to offer that same policies through strategic partnerships with significant retailers or through independent purchases. We have 18 million clients that we work with every day. They have demands for air conditioning, the cleaning of couches, cleanup of their gas systems, or electric repairs. So we're very enthusiastic with the growth we already have in the service vertical. It demands very low CapEx. It has already been made, and it has a high latent demand. The challenge is how to maintain the pace of expansion without increasing the CAC, which is naturally low because we're working with clients that are in our Porto ecosystem.
And finally, when we speak about the auto and CapEx, this is a structure that has already been set up, and we think that we can expand those services more intensely for clients that need a repair. We will have novelties this year in that segment. Thank you. That was very clear. If you allow me a last very quick question, I was looking at your financial results in the insurance vertical with losses of BRL 30 million quarter on quarter. Your technical reserve is flat. What explains that drop in your financial results in this vertical? What you have there, Grespan, I don't remember this, but we have installments in the credit card and others, and any change in that mix of the payment proposal could have an impact. Celso, do you remember? You're right. Our model pays out 100% of the CDI. And there are other components.
Additionally, we have extended our payment terms to 10 times without interest on the credit card for other acquirers. We do this with other credit cards as well as our own. And of course, this led more people to buy without interest rates, and we had a drop therefore in our own interest rate. I see. Thank you very much. Our next question comes from Antonio Ruette from Bank of America. Your microphone has been unmuted. Good morning, everybody. Thank you very much for your time, and thank you for the guidance. It's very useful for modeling this year in this new horizon. I'd like to continue on the service vertical. I understand that part of the CapEx has already been invested, and you now have a diversification of revenue that will come from new strategic partnerships. I would like to better understand the part of M&As.
Is this an opportunity for that surplus capital in the company? You had the acquisition of Unigás some time ago. Do you foresee anything of this sort? And a follow-up on the question by Vaz on your health movement, if it would be interesting if a buyer would bring a strategic advantage, a competitive edge, if you could give us more color in terms of the upsides and the potential that this could bring for you. Thank you very much. Will you begin with the M&As? Well, thank you, Antonio, for praising the release, for participating in the call. To respond to your question, we have a discipline in capital at Porto. We negotiate in multiples that you calculate better than we do, eight to 10 times normally. So our capital discipline has to be consistent with our valuation.
We have an internal capital that we also consider, and our assets in the Porto ecosystem have to generate a significant gain. Oftentimes, when you analyze a portfolio as Porto has that pride of having quality service, that NPS of 81 points comes with pricing that we're not willing to charge very little for because we are offering high-quality services. What we observe is that we have received calls at Lenny's operation for services from clients who are using another service renderer, and the client is willing to move away from that at a better price to have the Porto service. A dilemma we have faced often is about that. The growth that we see in the operation was 25% year on year. Is it worth bringing in an M&A? That company that we're rendering services for, aren't they willing to join the Porto ecosystem at higher prices?
This is a dilemma. It is a difficulty we have. We want to set ourselves aside in terms of quality. We continue to search. We continue to analyze several factors. If these businesses are complementary to ours, if the service quality is similar to ours, we could look at this. For the time being, we haven't found anything yet. Now, in the field of service, Antonio, this is very difficult work when analyzing M&As. When it comes to inorganic growth, we wanted to expand the service portfolio, include them in our repertoire to have services that we were not offering to the client so far, and that would be materially relevant in the results, or expand geographical coverage. What happens is that these are very fragmented sectors in Brazil, and we have to analyze huge numbers for the M&A.
And even though we're looking at dozens of businesses, the main requirement would only make sense if it would add something superior to us in terms of return on capital. So that filter is extremely stringent, and our expectation is that we will work with very few movements at a pace that is very similar to that of past years. We had the acquisition of Unigás, CDF. We can't tell you how many we will have per year, but we analyze a great number to bring in very few, especially because of that comparison between acquiring and developing in-house. In several cases, we have been able to have an expansion in geography that is faster if we had done an acquisition and at lower costs because most of the CapEx has already been invested. So that's the balance, and that's the pace.
We analyze several companies, but we only bring in one and two that will tilt the scale significantly in terms of health. To give you an example, it's almost a cliché to speculate on the impact that AI will have in the different businesses. There are some initiatives from funds where the investees are well advanced in that AI agenda and using it in the health sector. This is one of the examples that we would be interested in if we could somehow have a structured access to that technology. That would be one of the examples of a partnership that would lead us to signing or making feasible an investment in Porto Health to accelerate that specific dimension. That's very clear. Thank you very much for the answers. Our next question comes from Thiago Paura from BTG Pactual. Your microphone has been unmuted. Good morning.
Thank you for taking my questions. We have two questions. The first referring to the guidance of your financial results. If we take on the mid-range release and we compare this with 2024, there is significant growth. Of course, you have included the increase in premiums, the higher SELIC rate, the debt profiling, the rolling of the debt. So it's normal to understand that magnitude, but simply to double-check if there's a change in the strategy itself for investment regarding the preservation of capital, if you're being more aggressive on this front. If there's something that I missed out on, and then I will ask my second question. Thank you for the question, Thiago. I think you captured things well. There is no structural change in our investment strategy. We carried out some allocations in prefixed that rolling at attractive rates that we were able to do in our portfolio.
We have liabilities that are linked to inflation, and we also have a significant part in CDI. Now, this is the set of allocations that we have, besides the increase in assets and the excess of assets leading to a capital surplus and the reduction in indebtedness as we have paid all of the debts of Mobitech, so we are reducing liabilities, increasing assets with an increase in the average interest rate, and all of this together leads to that increase, and we will maintain our conservative behavior, our ALM pace with our assets. There's nothing aggressive in that financial result. It's a set of things that I just mentioned now. If you allow me to ask the second question for the health sector with incredible results of this vertical in all quarters, these are two questions in one, simply to remind you the impact of Oncoclínicas.
We had an impact in the second quarter and in the fourth quarter to know if this will be recurrent. The other refers to the growth in number of lives. The pace of growth in 2024 was very strong. According to your guidance, 2025 should be a very good year. Is there other beneficiaries that were not in the system coming along, which is a dynamic that you foresee? Will there be a geographic expansion or other particular items? Our guidance doesn't have non-recurrent effects for health, simply to underscore this. Hello, Thiago. Oncoclínicas has been a very good partnership for us. In fact, we have several effects that are part of our results. We have a line of integrating the medical team at Porto with the medical team at Oncoclínicas. That is very cost-efficient. The best treatment possible within the cost we have set forth.
This is more transparent, but very difficult to quantify, and recurrently, we have dividends from the JV, the JV where we have 40% and they have 60%. We participate in the incremental margin that our beneficiaries and insured people leave at the Oncoclínicas system, and of course, this is relevant, and we had goals in terms of volume that is not part of the future goals, and we won't have these in 2026, but this gives us a great deal of breadth, and we have the certainty that we will continue to grow, treating our oncological patients very well and very efficiently from the viewpoint of growth. As Dom mentioned at the beginning, growth has been quite consistent, an average of 120,000 lives a year. This year, somewhat more.
Perhaps you will recall we had quarters with a growth of 1,000 lives , 2,000 lives , 3,000 lives where the larger policies were not renewed. Other quarters with 30,000 lives , 40,000 lives. What we are seeking is technical and healthy growth that will create a company that is very robust and sound for the long term. And this has to be a technical growth backed up by three new product lines: the Porto Saúde line, the Pro line, and the Porto Básico line. And you are right when you ask compared to our traditional lines, especially in Porto Básico and basic, part of our lives, although a small part, part of our new lives come from companies that previously were not offering health plans. And this is something that enables us to be very proud, and we're very careful in terms of the pricing of these lives.
The price is something that is quite sophisticated, is ever more sophisticated, and helps us to differentiate the results that you mentioned. Well, thank you. Thank you very much. The next question comes from Daniel Vaz from Safra. Daniel, your microphone has been unmuted. I don't want to lengthen the call, but this is an important issue. You announced a buyback of 10% of your float. I saw this at the CVM. I don't know if there have been comments on this. It's significant if we compare this with the total number of shares. When we compare this with that 45%-50% of payout, is this number included? I imagine that it isn't. Simply to clarify this issue. Thank you. Thank you for the question, Daniel. The payout that we're speaking about has not included this value. We have the buyback of shares for executives.
We remunerate them in shares, not only executives. We have a program called Porto in Action. We pay 100% of our employees with variable remuneration according to the fulfillment of goals. So the program has that broader goal. Not that we don't buy back additionally to this program if we deem that it is necessary and if we think that the share has an attractive price. They're independent things. The payout is one thing. This program has a different aim. It's very clear because sometimes the companies include that in their total figures of payout. Thank you. As we have no further questions, I would like to return the floor to the Porto executive for their closing remarks. You may proceed. Well, on behalf of our team, Porto team, thank you for your interest and time, especially for this call that was somewhat longer.
It allows us to be very satisfied. We have created this structure to receive the highest number of questions and suggestions. It shows your growing engagement with our thesis. Thank you very much. Have a very good afternoon, and I wish you a very good year. The earnings call for the fourth quarter 2024 for Porto has ended. We thank all of you for your attendance. Have an excellent day.