Good morning, and thank you for waiting. Welcome to discuss Banco Santander (Brasil)'s Q1 results. Present here, Mr. Mario Leão, CEO, Mr. Ángel Santodomingo, CFO, and Mr. Gustavo Sechin, Head of Investor Relations. All the participants will be on listen-only mode during the presentation, after which we will begin the question and answer session when further instructions will be provided.
If you need assistance during the presentation, please call the operator by pressing star zero. The live webcast of this call is available at Banco Santander's Investor Relations website at www.santander.com.br/ri, where the presentation is also available for download. We would like to inform that the questions received via webcast will have answering priority. If you wish to ask a question via phone, please press star one. Once your query is answered, press star two to leave the line. Each participant is entitled to ask one question.
Before proceeding, we wish to clarify that forward-looking statements may be made during the conference call relating to the business outlook of Banco Santander Brasil, operating and financial projections and targets based on the beliefs and assumptions of the executive board, as well as on information currently available. Such forward-looking statements are not a guarantee of performance.
They involve risks, uncertainties and assumptions as they refer to future events and hence depend on circumstances that may or may not occur. Investors must be aware that general economic conditions, industry conditions, and other operational factors may affect the future performance of Banco Santander Brasil and may cause actual results to substantially differ from those in the forward-looking statements. I will now pass the word to Mr. Gustavo Sechin to introduce all the participants. Please, Mr. Sechin, you may proceed.
Thank you, operator. Good day, everyone. Welcome, and thank you again for joining us for our Q1 conference call this morning to discuss our company's results. Here with me, I have our CEO, Mr. Mario Leão, our CFO, Angel Santodomingo, and our Investor Relations team. Now, I'm going to first turn the call over to our CEO for his comments. Please, Mario, you may proceed.
Thank you, Gustavo. Thank you all for joining our first quarter results and this call. It is a pleasure to be here for the first time as CEO of Santander Brasil. I'll kick off with a very brief overview of the context we're in, then I'll go over some of the strategic priorities I have outlined for Santander Brasil in this next growth cycle, upon which we are already all working on as a group. Starting with the context, we already noticed in the second half of 2021 the beginning of a deterioration in the credit portfolios resulting from the worsening macro conditions, mainly inflation and interest rates. Given that perception, we've taken several measures to adjust our risk appetite in several portfolios, mostly individuals and small SMEs.
That has already been evidenced in our fourth quarter results last year when we grew our portfolio less than our peers and is reinforced now with the portfolio relatively flat to that in December, as Angel will present to you in more detail. These measures allowed us to have solid performances in some of our core businesses, such as cards, where we grew fees close to 30% Q-on-Q to a record figure. We believe we have a very good combination of a growth-oriented culture with a good capacity to react to signals such as those we are now experiencing. Therefore, our risk management culture is considered one of our key assets here at Santander.
We still have around two-thirds of our retail portfolio collateralized, and we keep expanding our secure businesses with new products such as our home equity, already a market leader within private banks with 23.4% share and BRL 3.4 billion in assets. Our auto finance portfolio, one of our most relevant, has improved its loan-to-value from 54%-46%. We keep focused on growth and expect to resume a faster pace in the second half of this year. In terms of our strategic priorities, we have set an ambition to become the best financial services consumer company in Brazil, 100% customer driven, and we're now positioning our teams and our energy towards this goal. In practice, we will focus on four interconnected pillars. The first one, as it should be, customer centricity.
We will incorporate the customer advocacy mindset in everything we do, focusing on the client experience throughout the consumer cycle, presale, sale, and post-sale, designing strong and more integrated sales channels, improving our customer's ability to self-serve and our own resolution capacity, developing dynamic and personalized pricing models based on more intelligent CRM data and segmentation, and shifting our orientation from the typical banking classic product to consumer pool, a critical cultural change that will mean less cards and mortgages and more customers and experience. We exist to increasingly help our customers improve their lives and fulfill their dreams. Positioning ourselves as our true customer advocates will transform in several ways how we operate, and will allow us to maintain our growth, our results, and our returns. Second pillar is culture and people.
We could only aim at this goal with a truly horizontal culture, which we already have, where empowerment, meritocracy, and diversity represent key pillars, and all pieces of the engine think and act as business units, not following the traditional front office, middle office, and back office definitions, and having marketing as a critical component of our culture. We have been the first financial services platform to launch NPS on a full scale, all channels perspective. We started at 40 in 2017 and are now running at 57, aiming to achieve 60+ before year-end. We are shifting our compensation models towards variable payouts based on consumer experience and results, where each of our 50,000 employees are sales persons and are trained to and evaluated by how they understand and serve our customers better than any other consumer company. The third pillar is our integrated sales channels.
We will build the best sales platform in Brazil, focusing on an integrated sale and post-sale offering, through which our customers will be served 24/7 at any format they want, with simplified offering and processes. We truly believe in the benefits of an omni-channel approach, where our digital channel, where our customers increasingly choose to be served, represents a key pillar, but not an independent one of our offering.
We will keep advancing in transforming our traditional customer support team into a powerful and cost-efficient remote sales channel. We will expand considerably our recently reorganized external channel, achieving several new regions of Brazil in efficient forms. We will keep reinforcing our physical channel, a key pillar of our integrated sales strategy and an edge comparing to digital-only players. Our cross-sell and credit recovery capacities, for example, are considerably stronger at the stores.
We are already designing our vision of store of the future. A concrete step is our Bank2Go initiative, where we are capturing the ATM flow into our stores with a tablet-based offering, bringing more speed to our store customers and mobility to our salespeople. We will continuously look at the best cases within the consumer space and serving our customers where they are and how they want to be served. The fourth and final pillar is innovation and capital. We will seek this transformation into a top consumer company with a continuous focus on organic innovation. The last example was our Buy Now Pay Later, so-called Devo Pix in Portuguese offering, where customers for the first time can pay in installments their instant payments transfer, the Pix, and 90% of the volume so far has been on new personal loans customers.
Our UseCasa home equity product was only launched in 2020 and is already a market leader, as I mentioned before. We've just launched our digital channel for supply chain financing, SX Integra, which will reinforce our position as a market leader in receivables-backed financing. We keep innovating on other products, such as mortgages. We have substantially reduced our delivery time on personal mortgages to a market-best 19 business days, and we'll continue to add innovation to traditional businesses.
All that capital deployment has been centered around delivering strong shareholders' returns and payouts, coming from a low teens ROE six years ago to a consistent 20+ ROE on the last few years, one of the best globally. With these four cornerstone strategies, we plan to differentiate ourselves from our peers, not only banks, but consumer companies in general.
Our evolution keeps based on stability, senior leadership and management model with focus and an obsession with speed. Our recent succession represents our culture, frictionless and improving our metabolism, meritocracy and ambition even further. We feel proud to have one of the highest levels of career opportunities in Brazil, and the creation of our first technology company represents that well.
We keep very focused on the SME space with multi-channel services, offering personalized solutions when necessary. We keep expanding our agribusiness footprint as a whole and reinforcing our wholesale platform with strong businesses such as our energy and commodities desks. Overall, we will keep representing a continuous transformation and growth story. Now our leadership couldn't be more excited with the years ahead, including myself. Thank you very much. I'll pass it on to Angel now.
Thank you, Mario. Good morning, everybody, and welcome to this Q1 results presentation. First thing to share with you is a kind of a summary of what we are presenting today. As you may see, we continue to deliver sustainable and profitable growth compared to the past and during the last years. As commented in Q4, as Mario has mentioned, a combination of higher inflation, increased interest rates and the level of family indebtedness has provoked a deceleration in portfolio growth. Revenue continued to grow consistently, as you will see in the next slides, partially offsetting the impact of rising inflation-related expenses on efficiency, reaching 36% in that ratio.
Net income continued to be above or at BRL 4 billion, with a return on equity that maintains healthy levels at around 21% or 20.7%. All those numbers and results have been translated into a consistent shareholder remuneration. The board approved BRL 1.7 billion of dividend, which means an annualized dividend yield of almost 6%. Next slide. All this is achieved through client expansion, but more importantly, monetizing that flow, as you can see in this slide. Our total customer base increased by 5.8 million people in 12 months. Again, our focus is not only on the number of customers, but on how to turn those customer base into a more loyal and profitable one.
Loyal customers, and when I mean loyal customers, I am saying those with more than six products, so we are being quite aggressive in that measure, grew more than 2x , 2.2 x faster than customer acquisition. Which means 27% year-on-year. This means that we are not only enlarging the client base, but specifically making it profitable. Revenues derived from our loyal customers rose by 12%. Acquisition through the digital channels, as you may see also, is again showing a strong growth. All in all, a strong growth in clients, a strong growth in revenues, monetizing and making it profitable. In next slide, as you may see, we keep enhancing the user experience and boosting engagement as shown by the numbers.
Examples of these are 70%, for example, of all new accounts are activated within four months, and 25% of new customers become loyal within six months. Loyal customers make up 27% of our active customer base that, as you would imagine, are 5.6 x more profitable than the non-loyal ones. Next slide. We have spoken and shared with you the omni-channel or the four channels strategy, so that the client may choose how to transact, how to make a relation with the bank. Speaking of the four channels, the physical channel, I have shared with you in the past that we have close to 15 million people going through our branches, through our shops, every single month. 50%, half of that are non-customers.
We also have what Mario said, Bank2Go. Bank2Go, which is already in almost 90% of our branches. We have reinvented how we address customer needs and flow on our physical channel, increasing manager mobility at our branches, and innovating the way we bring our products and services to customers. This is a service that we have where the ATMs are before you enter, actually on the branch, and we activate and make a more speedy way of serving to the clients. On the digital channel, more than 92% of our customer transactions are already occurring through that channel. 17% of our digitally acquired customers were previously unbanked and chose Santander to establish their first banking relationship.
This is another example of how ESG travels in a recurrent way across businesses and areas in the bank. The remote channel is a critical part of our integrated offer to our clients. Sales increasing more than threefold in just one year reflects what I'm saying. Quite important to see that almost half of the transactions occur outside commercial hours, outside from 9 P.M. to 4 P.M. Finally, our external channel, which recently launched a new platform, allows us to enlarge our offering to a larger number of Brazilian areas. Channel availability and integration enable us to boost that commercial activity that you have seen in the previous slides. As you may see, cards continue to grow at a rapid pace, with over 95% of cards being used by current account holders.
This is important for our quality of risk discussion that we will have later on. Toro, our digital investment brokerage platform, added over 90,000 new clients in the first quarter, clearly outpacing the market. Our sustainable business reached BRL 5.2 billion of production in the quarter, with our microcredit portfolio experiencing a strong growth of 47%, almost 50%, while our market share of CRAs issuances reached 56%.
Again, as you may see, these ESG example, something that has coexisted in the bank for at least 20 years now. Moving to the digital front or side of business, the streamlining of processes has boosted our productivity, resulting in a faster time to market for new products and services. Some examples are 76% of our processes running in the cloud.
74% of all personal loans were granted through the digital channel in the first quarter. Lead time for different products has clearly dropped. Fast improving NPS, as you will see in the next slide. Continuing with a long series of efficiency improvement, cost to serve digital customers declined by 25% year-on-year to BRL 24.6 per month. As I said, continuing a long series of drop in cost of service. In Slide 13, we have been repeating this through different quarters, but our focus is and will continue to be attending properly. Making the customer the center of our attention and focus and its satisfaction.
A satisfied customer, a promoter, generates 7x more revenues than the average in our case. We have been publishing our NPS score for some time now. It reached 57 points, as you may see, which is a measure based on more than 11 million messages being sent to our customers, as well as direct conversations from our commercial units and management.
Those 11 million messages mean approximately between 30,000-40 ,000 messages per day in all our channels. We are measuring it on a daily basis throughout the different channels. Next slide, let me insist about our diverse and supportive culture. We continue to make progress on the women in leadership roles and in the proportion of Black employees in our workforce. Ambition in this regard continues to be to reach 40% by 2025.
We have a training model based on internal multipliers that has helped strengthening our corporate culture, and that I have shared with you in several quarters. Finally, we have recently launched a new corporate guidance named TEAMS, as you may see in the bottom part of the slide. Slide 15, before going to the numbers, I mentioned a little bit about ESG in some of the slides, and we try here to make a summary as it is an integral part of us, of our strategy, as I mentioned, for the last two decades. We are carbon neutral, for example, since 2010, and an ambition of achieving net zero carbon emissions by 2015.
We invested more than BRL 280 million on sustainable crops in the Amazon region, and I would like to emphasize also our objective of relying solely on renewable energy by 2025. Currently, this source of energy accounts for almost 59% of the energy used in our operations. You may see in this slide different commitments we have communicated throughout this year, across with recognitions that we have received lately. Moving to results. On Slide 17, we detail the P&L we presented to you this morning. On net profit, our net profit totaled, as I said, BRL 4 billion, up 3.2% in the quarter and flat year-on-year.
The quarterly increase can be attributed to a better performance in NII as a result of a better mix in funding results that helped to offset a higher cost associated with the transition to more normalized asset quality and stronger commercial activity. Let me highlight some of the annual figures on the revenue front. NII rose by 3.8% in the year based on higher customer NII. Fees increased almost 6% over the year. Here, our customer base growth and higher activity boosted revenues from a wide variety of items, including costs. On the expense side, provisions grew by 46% in a quarter, in line with what I mentioned in the last two quarters' results. General expenses increased due to the collective bargaining agreement and inflation.
Besides that, we were able to have a good performance, Q-on-Q, with a drop of almost 2% or 1.5%. The efficiency ratio came in at 36%, which improved in the quarter, but obviously, with the pressure of higher expenses that I mentioned. Finally, return on equity, we have maintained at 20.7%, as I also mentioned in the beginning. Going through the different parts of the P&L, next slide, this slide displays the evolution of our NII with a strong protagonism on the client side. Customer NII is growing at 13.3% Q-on-Q, which is a clear reflection of all what has been said about client growth, loyalty, activity, et cetera.
Thus, in Q1, product NII advanced by almost 9% Q-on-Q and 25% year-on-year, benefiting from favorable volume dynamics and a better mix, in addition to obviously stronger funding results. Consequently, spreads increased by around 130 basis points on the commercial side. On the other hand, as I have been sharing with you for some time now, market NII is reflecting our negative sensitivity to movements in the yield curve with an offsetting role from our treasury side or desk. I mentioned in the last quarter that we were already taking limiting decisions on production since September 2021, reflecting the adverse economic cycle we were seeing. As a consequence of this, our loan portfolio fell by 1.6% Q-on-Q, down to BRL 455 billion.
Without the currency effect, that -1.6% would have been barely flat, around 0.6%, -0.6%. Individuals continue to outperform in the year with mortgage, payroll, personal loans, and credit card explaining part of the growth. It is important to underline that 67% of the individual's loan book is secured, is collateralized. SME remained virtually stable in the quarter, but performed well in the year, expanding by 12% thanks to the recovery and demand. Given the Forex impact, migration to capital markets, and a few amortizations, corporate lending dragged down the growth of the total loan portfolio. Our funding also had a positive performance year- on- year and remained stable in the quarter. In this regard, we believe that the rise of interest rates will lead to higher demand for traditional banking products.
At the end of the quarter, as you may see on the right side of the slide, our core capital stood at a comfortable level, reaching a Common Equity Tier 1 ratio of 11.7% and a base ratio of almost 15%. Moving on to fees. Despite the Q1 traditional seasonality, we continued to grow on an annual basis, supported by the expansion of our active customer base and stronger loyalty. Current accounts and capital markets were the top performance in the quarter, while cards remained the best performer on a year-on-year basis. Looking at expenses, we again show our strong commitment to control this part of the PNL through a decrease of 1.5% in the quarter.
Let me remember that last September we had the salary agreement increase of almost 11%, so we start to control costs on a Q-on-Q basis. Even with that, in the year, although we have an increase of 10%+, they are growing below inflation. We continue to be focused on efficiency, as you will see in the next quarters. As a consequence of all this, and as I mentioned at the start of my presentation, our efficiency ratio ended the quarter at 36%, a healthy level despite pressure from inflation and a stronger commercial activity. At this level, we may well remain again the best in the industry. On the next slide, we can see how our asset quality has evolved.
Quality had a deterioration aligned with what was expected and with what we have been announcing to you in the previous quarters. No surprise here, I'm afraid. We continue to see the trend marginal and not exploding, but a trend. Important to say that we shared with you the situation in the Q4 results, and that we took measures starting last September that are having their effect on PNL as expected. Our cost of risk grew to 3.5% in the quarter. This performance is directly tied to a migration to more normalized levels in the evolution of riskier loan products in our mix last year. We are currently running in different ratios at almost or around pre-pandemic levels. We have also released BRL 0.8 billion following our overlay, following what it was built for.
Credit recovery once again performed well in the quarter, reaching BRL 740 million, thanks to both continued solid management and the sale of written down portfolios. Now, let me revert to you, Mario, for the closing remarks. Thank you.
Thank you, Angel. Just wrapping up, in terms of strategy, we aim to be the best financial services consumer company in Brazil with four key pillars, as I mentioned before. We will be centered around the customer. With customer advocacy mindset in everything we do, we will focus more and more on customer experience throughout the cycle, not only the sale, but post-sale. We will have integrated sales channel on an omnichannel approach, whereby each channel represents a pillar in itself, not independent, but in an integrated mindset. We have 50,000 people within our culture which think themselves and behave themselves more and more as salespeople. We're shifting compensation towards allowing these people to be remunerated by the way they serve, the way they listen, and the way they act.
In terms of innovation and capital, as I mentioned before, we keep focusing on organic innovation. We have very good examples live as we speak. Some things we launched a few years ago are already market leaders. All that with a capital orientation throughout, we deliver some of the industry best payouts and return on equity to our investors. We have delivered consistently over the past few years. We're delivering again in this first quarter. The ROE of 20.7% represents that. We keep adding clients, so part of our customer centricity relies on how we bring customers, how we make them more loyal, how we make them interact with us more and more. We're doing that. We keep the loan portfolio under control.
Our risk-oriented culture allowed us to have a very positive quarter, as I mentioned, in some of our key portfolios, such as credit cards and a few others. We keep having responsible growth throughout Brazil as a whole, throughout the society, and with a clear-cut focus on ESG. Overall, Santander Brasil will keep being a strong and continuous growth story, shifting more and more to a customer centricity, customer advocacy mindset. With that, we're now open for Q&A. Thank you very much again for joining this call.
Thank you. We will now start the Q&A session for investors and analysts. I will now pass the word to Mr. Gustavo Sechin. Please, Mr. Sechin, you may proceed making the questions sent via webcast.
We're gonna start the Q&A. Our first couple of questions is regarding our asset quality and comes from Yuri Fernandes, JPMorgan, Gustavo Schroden, Bradesco, and Tito Labarta, Goldman Sachs. They are requesting us our view for NPLs in 2022, and also if we continue to see the return to 2018 levels or if we see a more challenging outlook given the early delinquencies increase in the Q1 2022. They request us to comment on the increase in provisions in the quarter.
Okay. Thank you. Let me elaborate on quality as I have tried to do a little bit through my presentation.
Let me remember what we discussed in last quarter results and what I have been discussing with you throughout this quarter in the different meetings we have had. We started to take limiting production measures last September 2021, which meant that as you saw in the performance of the portfolio, of the loan portfolio in Q4 performance, we are already growing at a lower speed. In this quarter, we do have growing pieces, as you may have seen on the retail side and part of the SMEs, et cetera. But the portfolio barely remained flat. Why we did that, and that is something like six or eight months or nine months ago, is because we started to see the different variables a little bit more tensioned, okay? What is happening right now?
We are in the moment in which we have already taken those measures. We think that the measures we have taken are enough. Those measures are starting to have some impact on the P&L, but still provisions are reflecting the vintages that we had before the production limitations. Which means that that kind of timing process in which you start to see the effect on the provisions and you can recover from the activity in terms of loans will happen in the next quarter. How we see this is, yes, we are more or less. If you see cost of risk, if you see over 90, those ratios are approximately below the pre-pandemic levels. We have lived two years space of high liquidity.
We think that those measures taken will have the impact clearly in second semester, and that will mean that we have controlled and we are comfortable with the evolution that both the portfolio and the credit quality is having. The message here is clearly, we keep on growing on the different portfolios that you have seen, and those measures were taken in the past and will have its effect in the near future.
Just adding to what Angel said, Yuri, Gustavo, and Tito, thank you again for the question. Two things I wanted to emphasize. First one is, from middle-sized SMEs towards the very large corporates, we're having very good performances in the credit portfolio. So those portfolios, we did not take any actions on those, and we will keep growing those as we see profitable levels of returns. So we are not gonna grow per se. We're gonna grow with profitability in those portfolios, but we don't see any concerns since last year, and we remain not seeing any concerns in those mid caps upwards portfolios.
The second comment is on the small SMEs, as I mentioned before, and individuals, even on those portfolios where we took measurements in terms of risk reduction since September, October last year. In some of those portfolios, we are already taking new measurements to resume expanding the portfolios again using CRM data, using personalized pricing and risk validation. We are improving our models as we speak so that we can already resume some of those portfolios growing back to levels as we saw last year. Given our growth orientation, we will keep the risk mindset, the risk mentality, first line of defense, as we say. We're already looking at true CRM data and personalized segmentation. We're already looking at expanding the portfolios again.
Thank you. Thank you, Mario. Our next question comes from Thiago Batista in UBS and Marcelo Telles from Credit Suisse, and are related to the credit. Thank you, Thiago. Thank you, Marcelo. They are requesting to comment on how much loan growth should expand in 2022, if we see the need to further reduce in our risk appetite or tighten credit standards.
Okay. Thank you, Thiago and Marcelo. We have a country this year that will currently grow in GDP nominal terms at around, depends on how we end the year in terms of inflation, but around 8%-9%. Seeing volumes growing at low double digit or close to double digit, I don't think it should be a surprise. We continue to see that kind of capacity in terms of growth. We see the retail side growing during the next quarters, probably the SME side, as Mario said. On the large corporate and corporate segments, there you have competition from capital markets, competition in terms of investments, how the policy of investments is done, how the geopolitical general situation is gonna evolve.
You have other variables on top of the discussion around volumes and quality, et cetera. Do we see more tightening? Not at this stage. As was mentioned, we are reopening in some cases in small parts of the business. We are considering the growth capacity of our commercial kind of framework. We don't see immediate decisions at this time. I think we took it at the right moment, that is some time ago, and that has worked perfectly as it was in the past. Remember that in 2019, we did the same thing with credit cards, and it worked really well.
Thank you, Angel. I think that we have some connection issues in the first question, so I will make the question again. Angel and Mario relates to the asset quality. The question was from Yuri from JPMorgan, Gustavo from Bradesco, and Tito Labarta from Goldman. Thank you, guys. The question is related to our NPLs in 2020, 2022, our view, and if we continue to see it return to 2019 levels or if we see a more challenging outlook given the early delinquencies increase in the Q1. They request us to comment on the increase in the provision in the quarter.
Okay. I'm sorry about that. I'll try to repeat my answer from before. Thank you, Yuri, Gustavo, and Tito. What I was saying was that we took, and I shared this with you, if you remember in the fourth quarter results and in different meetings that we have had throughout this quarter. We already took the measures we thought we had to take starting September 2021. Okay. Those measures on production were taken. If you remember on the data on the 4Q, Santander Brasil, we had a lower growth in terms of the loan portfolio, and the one that we have presented today means that barely the portfolio is flat in terms of amount, in terms of growth.
As I said in the previous question, we think that the measures we have taken are enough, that they were taken at the right moment, that is six, eight or nine months ago. Now we are in the moment in which those measures, remember, they have a duration of one year on the loan portfolio. That is excluding the mortgages. We are in a moment in which the decisions obviously are limiting the growth of the loan portfolio, and we still have the cost of risk impact of the provisions for the production that was taken before that. We are in that moment in which provisions are still reflecting the previous reality and the loan portfolio growing at a lower pace.
What we do, we see looking forward into the next quarters or months, we have already reopened part of the production. In parts of the portfolio production will recover because we already, as I said, took those decisions some time ago. At the same time, we think that the cost of recent provisions, et cetera, should reflect all those measures going into second semester of the year. Mario, you had also some comments.
I just wanted to emphasize what just mentioned. Using, like I mentioned before, using CRM data, using personalized segmentation, both for coverage and also risk modeling, we are already taking steps to reopen some of the risk restrictions we enacted for the past six months. We are already re-expanding some of the key portfolios in our retail division. From our MidCorp supports in terms of the corporate segment, we did not foresee any issues last year. We keep not foreseeing. We're gonna grow based on profitability. The opportunities arising, we will be there. We have loads of credit lines available and obviously funding capacity to keep expanding our MidCorps and large corps businesses.
It has been tougher given the competitiveness of local capital markets, and obviously companies are funding less given lower levels of investments. Those portfolios remain very healthy, and we will keep expanding those as opportunities arise.
Thank you, Mario. Thank you, Angel . The next questions come from Gustavo Schroden from Bradesco BBI, Thiago Batista, UBS, and Gilberto Garcia from Barclays, and are related to NII. What should we expect in terms of NII with clients and NII with markets in the coming quarters? Can we assume that the Q1 2022 is a proxy for the coming quarters?
Okay. In terms of NII, I tried to underline what are the main metrics that are below what we presented today. As you said, and as you saw, NII from clients has performed strongly, and this is based on several things. It's based on volume linked to, obviously to mix, is also linked to spreads, and it's also linked to products within the different segments. The three variables work very well, along with NII from the liability side. That with the interest rate levels obviously is also helping in supporting that number. That is the basic explanation. Again, we are in terms of, remember, in terms of transactionality, in terms of client number of clients, in terms of linked clients, I gave you all the numbers throughout the presentation.
We are growing much more in linked clients than in total clients, and also we are growing a lot in total clients. We are not only growing clients, but monetizing and strongly linking them and transforming those clients into loyal clients, loyal clients meaning more than six products, which is quite appealing. NII from clients is strong and should continue in the direction throughout it. NII from markets. I explained at least in the last two quarters, that NII from markets will start to perform lower given our negative NIM sensitivity to movements of the yield curve. Last year, we had the strongest yield curve movement in—I think it is, like, 20 years. We had 800 basis points of yield curve movement. You know the sensitivity that we have because we have always done.
We have BRL 450 million for every 100 basis points movement. If it is a parallel movement, given that it was not, you have different impacts there. That means that the results from the ALCO portfolio will be much lower during the normally during the first year and a half, depending on the yield curve and on the movements of the yield curve. That is basically what is happening. You have an offsetting position from our treasury activity that has had a good quarter. Going forward, what I would say is that I would explain what I said to you in the last quarters, clearly reflecting that negative sensitivity to movement in interest rates, which is what is happening. Nothing abnormal in terms of performance. Except that the comparison always is a little bit strange because you see strong movements.
Thank you, Angel. Our next question comes from Gustavo Schroden in Bradesco, and then Yuri Fernandes from JP, and are related to other revenues and other expense and also non-operating results. We could see a better performance in the other lines and non-operating income. Can you explain what is included in these lines and which line had a positive impact on that? And also, can we please explain this CIP disconsolidation? Does Santander plans to divest from this asset?
Thank you, Gustavo and Yuri. In that line, I have always explained to you. You have different kind of inputs and impacts, positive and negative. It's always, I understand, perfectly, your situation in terms of it is difficult to estimate it because it has certain volatility, as has been in the past and will probably be in the future. What is inside, I've always said to you have different labor and civil provisions. You have actualizations in terms of interest rates. You have a little bit of impact from the Forex exchange rate. Importantly, you have transactionality costs there. The larger the transactionality improves or goes, the more impact you will have, et cetera.
You have recurrent and non-recurrent items there that make that volatility clear throughout the quarters. We already had also the CIP operation. This is an accounting movement in terms of moving from costs to investment in terms of how you account for it, and that was also included there. Again, difficult to say for further or for next quarters, the evolution of that line.
Our next question comes from Flavio Yoshida from Bank of America. The strategy on cards growth is focused on checking account holders. How different are NPLs from non-checking account holders from those who have checking accounts at Santander? Should the trend change in the short, medium term? Is the bank lowering card limits for riskier clients?
Well, as we presented, cards continue to be an important part of the business in several areas. What we have done with credit cards, as I said, is that 95%, the vast majority of the cards that we are selling today, and those are cards being sold to current account certain clients. That means that we know the risk profile, and we know the evolution we have to have with them. We commented in the past, I mean, for example, open wallet credit cards or digital credit cards, they tend to perform worse. That is true. But with already clients that are Santander clients, we know their profile. This has also been quite active through the different channels. For example, on the remote side, we presented the numbers.
One year ago, we were selling almost 300,000 products per month. Now we are selling 800,000 products per month. Those products are, a large part of that includes the credit cards. The strategy continues to be well positioned in that sense. We are applying efficiency to the product also in terms of the offerings that we have for the products, and we will continue in that line. Mario, I think you want to make some comments here.
Yeah, just to add to what Angel just mentioned. Cards is one of our " monoliners". Historically, it's a 85-point NPS product. It's one of our key pillars for sure. We want to integrate all our " monoliners " to a totally integrated offering. Again, customer centered, with a customer advocacy mindset. With that in mind, we have shifted our strategy over the past few years towards card holders which are account holders as well, which means clients customers which are fully customers of Santander Brasil and through which we can explore our offering on our integrated channels. That strategy is not only with cards. We're doing the same with our consumer finance company, our auto loans, which is the largest in Brazil.
Our consumer finance company for goods and services as well. With that integration of our entire ecosystem, we believe we have a very strong growth line to develop here. We are already doing that with cards, as I mentioned. We will do so exploring all synergic opportunities we have within our ecosystem. We will talk more about this in the coming quarters, and we believe cards is a very good example of how we should operate as an integrated offering to our clients, our customers, and not necessarily independent monoline of approach.
Thank you, Mario. Thank you, Angel. Our next questions comes from Tito Labarta, Goldman Sachs, and Gilberto Garcia from Barclays and are related to taxes. Can we also comment on the relatively low tax rate in the quarter and what we should we expect going forward?
This has to do, I mean, as always, it has to do with interest on capital. I remind you that we have the dividends that we have announced, part of those dividends are interest on capital, which have a good tax treatment. We will continue to optimize that throughout the year. We always give you a guidance of around 30%-33% approx on the tax rate that we should have throughout the year, with ups and downs, depending on that interest on capital on the quarter.
Our next question comes from Mario Pierry from Bank of America. The question is: We noted that your branch network declined by 10% quarter-on-quarter, but your headcount remained relatively stable. Can we discuss the outlook for further branch closures and if they should be eventually followed by a reduction in the headcount?
I'll take this one, and I'll be very brief. As I mentioned a few times already, we have been and we keep being a growth story, and that growth story is represented by a very strong sales channel, which we will keep improving, and a reliance on our physical channel, which we truly believe is one of our key advantages, not legacy in the bad sense. We believe it is one of our differentiations, and we will keep expanding our physical footprint throughout Brazil, both in terms of new cities and regions, and also in terms of new neighborhoods in cities which are expanding. We will do so with the mindset of looking at the portfolio we have and potentially merging stores and looking at whether we can relocate stores so that we serve better our clients.
We're closer to them, we're closer to the flow, and that will be a continuous exercise. This number, this figure, Q-on-Q and year-over-year, the reduction per se is not a reduction of stores. Mostly 99%+ of that number represents the consolidation of branch codes, which we're now joining into one code. Formally speaking, it's a reduction of branch codes, but it's much less a reduction of physical stores than, as I said, a branch code. It's more a formality and something we're doing to basically clean up the number of branch codes we have, which is a formal figure we have with the central bank.
Again, it is the mindset is that of an expansion throughout all channels, including the physical one, and we will keep talking about our expansion in the physical channel throughout the quarters. Thank you.
Our next question comes from Thiago Batista from UBS. Can you confirm to us if the portfolio holding this quarter impacted the NPL ratio and how much result it has generated?
We do all these kind of portfolio sales when we do them. They are fully written off, so we only sell fully written off portfolios. You know? Let me make that quite clear. It's business as usual. We do it every single year. We have them in some quarters, in others not. In this quarter, we did have a sale, a portfolio being sold of around BRL 100 million, if I remember well. Again, this is something that is an ongoing process with fully written off portfolios.
Thank you, Angel. Our next question comes from Carlos Gomez-Lopez from HSBC. Could you give us an update on your views on two areas, auto lending and investment platform? Do you expect to maintain your market share in auto loans or is it becoming more competitive? And what are your aspirations in the investment areas? Will you compete with XP or BTG?
Okay, let me try to address both areas and probably Mario will also want to join us afterwards. On the auto sector, as you know, is clearly going through difficult moments in terms of volumes. The total number of cars is dropping by around, depending on the month, 15, 20, 22 percent, which means that the activity in itself in the sector is low. What has been our position, along with the measures I already said before, starting last September, et cetera, what we are doing is we are building, or we have built, in fact, it's already done. We have built capacity to address
Different publics and clients that we were not addressing before with the same capabilities and the same capacity of growth. This is as I speak today, so this is happening in April, and we will continue in that direction. We continue to build a full ecosystem. We are leaders in the country, and we want to keep on being leaders. We don't want to go in and out of that sector. We want to structurally maintain the activity in the lending, and that means not only our financial unit, for motos, the different acquisitions we have done, Car10, solution for fleet, that we have announced go in the direction of having an strong platform. On the investments side, this is one of our core strategies.
I mean, we are going into that field for some time, and we will continue to grow into that field for some time. We are building a new platform, et cetera, et cetera. But we think that when we speak of linked clients, it also means linked clients through the liability part of the balance sheet. Again, that is something key and totally important for us. Mario?
Just adding, specifically to the investments platform, like Angel mentioned, this is one of our key strategies for not only this year but the next few years. We are closing a very important step now in terms of technology offering. We are delivering, as we speak, a much stronger investment platform for our clients and sales people within Santander that talk to clients about investments. That's why the year will provide a big leap forward in terms of our technology offering and experience to our clients. In terms of sales efforts, we already have the advisors. We have a 250+ advisors team already talking on a much more personalized basis to our select and Van Gogh Plus clients, which are wealthy in terms of assets.
We will expand that platform within Santander, not through external offices. We will expand through Santander four or fivefold across the next two years. That will be a big investment we're gonna make in terms of providing more personalized content and an approach which has to be on a personalized basis as well. That together with the technology platform that I mentioned before will provide a very big step forward towards our investment platform, and we will be even stronger than we are today, expanding the product offering as well, but mostly focused on the distribution channel and technology platform. Yes, we are very focused on that, and we will keep expanding here. Thank you.
The Q&A session via telephone is open now. One question per participant only. Please wait while we gather the query questions. Our first question comes from Pedro Leduc with Itaú BBA.
Thank you guys for the question. Good morning, everybody. A bit on NII. Could you help us understand a little more what drove the treasury results so close to zero and just to help us see how it will carry on to the next quarters. Still on NII, on the product portion, we wonder how far you think you are in terms of repricing the credits, the new credits to the cost of funding and cost of credit reality that's upon us. Do you think you're already halfway or more in the final rounds of repricing the new lines? Thank you.
Thank you. Well, I tried to explain on my previous answer, basically negative sensitivity to movements in the GLQ, which is a negative impact on that part of the P&L, positively impacted by our results interest. That's basically the summary of what I tried to explain to you in the summary of the numbers that we saw in terms of the market results. This is a trend, as I mentioned, in the last two quarters, at least. I don't know if more than that, but for sure the last two quarters. This is a trend that will continue throughout 2022.
Again, given our duration of on the asset side and given the GLQ movement and the GLQ shape that we have today, this should last one year, one year and a half, depending how it moves from now on. Remember that we hedge the commercial units in terms of cost of funding, okay? This is how it is reflected in our business model. The second part of the question was...
Pricing.
Pricing. Sorry. Yes. We have already on the spread side, you have two impacts. The funding side or the liability side and the client price, how it is evolving. What has happened is that during 2021, as the cost of funding was going up, that spread was pressured, okay? We finalized that transfer throughout Q4 and Q1. I would say that now on, the movements on the GLQ will probably be more positive on that side. But are we done with the price evolution? It will depend on how things move in terms of the GLQ. In terms of transferring what has happened up to now, the answer is clearly yes, but that was already as such during the last at least two quarters.
Thank you. The Q&A session is over. I will now pass the word to Mr. Gustavo Sechin for your final considerations.
I would like to thank you very much for joining us today. We know that we have a couple of more questions, but, given the hour, we will try to answer you later. Also, again, we are fully available here for any further questions. Thank you. Have a nice day. Bye.
Banco Santander Brasil's conference call has come to an end. We thank you for your participation, and have a nice day.