Investor Update

Apr 15, 2020

Slides

Thank you all for attending our web conference. First, I don't know if you're going to present the slides, Carlos, or okay. First of all, let me start saying that I hope everyone is healthy and safely. First time we do this web conference, so let's see how it goes. The purpose of this conference, as Lazar already mentioned, is to give you a quick update about the COVID-nineteen crisis. So going to the index here, yes, this slide. We are going through some initiatives that we have done at XP regarding the crisis based on five topics, main topics: our employees, our clients, our IFA network, our platform and, of course, the social responsibility. Then I'm going to quickly present a new business we just launched in the middle of the crisis, XP Well Service. I'm going to talk a little bit more about it. Then we are going to present the main KPIs for the Q1 2020. And we go for some selected Q1 preliminary results, financial results, basically gross revenue and adjusted net margin. And finally, I'm going to end with the closing remarks and open for Q and A for Domingos and Jorge. So moving forward, I'm going to try to be brief here. Regarding the crisis, first, our employees. That's our main priority, health first above everything else. We, as probably you know, I don't know if everybody in this call knows, but we got the second case of COVID in Brazil. So we moved really fast since the beginning, right, in the middle of Carnival time in Brazil. We started with basically the 1st week like approximately 90% of our employees at home office, the 2nd week more than 95%. Now I believe we have something around 98% of our employees working from home. Also, we did some anticipation of benefits to help part of our employees and also we got involved in this non DELITA or do not layoff initiative, making a commitment that we are not going to layoff anybody until May. Actually, we are doing the opposite. We are hiring. I'm going to talk a little bit about it. Of course, the pace of hiring after the crisis, it has slowed down. Basically, because of the onboarding process, it's a little bit harder. But for new people new people that came and joined us last week. Talking about our clients, we are closer than ever. We believe that in times like this, especially when we talk about investments, it's a natural human nature to retreat. People are losing money market to market. It's a tough conversation with clients sometimes. And here in XP, we believe in the opposite. We believe that we should step forward. We believe that we should be even closer to our clients, increase the touch points, the connections. And because we have also our digital platform that enable us to provide a lot of information and content regarding the crisis to help our clients and prospects to get information through us. And what we can tell about that is we have amazing numbers in terms of how these touch points has increased during the crisis. We selected like 2 examples here. If we look at Infomani, more than 14,000,000 unit visitors, That's amazing. We are in all time high. If we look at our retail research platform, same thing, we score more than 2,000,000 unit visitors. Our social media has been well demanded by a lot of people. We hit only in XP brand more than 1,000,000 people in Instagram and so forth. So the main message here is get closer to the clients, understand their needs, explain everything you can, look for opportunities. In any crisis, We are going to have opportunities. This one is no different in that sense. So that's what we've been doing. Moving forward, talking about our IFA network, we just from the beginning, we launched an initiative program, incentive program for them. We got to take care of our IFA network. They are really important in our ecosystem. They've been doing a great job also keeping them we have approximately 7,000 IFAs as of Q1 2020. The exact number is 6,887,000. So a lot of IFAs, we need to keep all of them energized and motivated because our clients, their clients, they all need these information and closer relationship. So we established this package at total maximum we reached BRL50 1,000,000 and it's basically to give them support and also incentives to keep performing. Also talking about our platform, we had in the Q1, as you're going to see in our numbers, a very good numbers in terms of volumes traded and so forth. You probably saw that through BTRIM as well numbers. So it's record volume because of the volatility and because of low interest rates, different reasons. And as you can see below in those charts, we kept our leadership intact in the retail equity business. So in terms of custody, we have 23%. It's larger than the 2nd player with 20% of total equity custody in retail. And when we look at traded volume, we have kept our market share above 50% in the Q1 this year. So those are good numbers. We believe our platform what happens in times like this is that usually we already have an investment program throughout the year. What we did, we anticipated a lot of things that we were supposed to do on the 2nd semester to this 1st semester, improving a lot of things in our platform to help and absorb this huge amount of volume that we have seen since the crisis started. In the social responsibility, we announced a program called Juntos Transformamos or Transforming Together is an initiative that we intend to we selected some ONGs that can take food, especially food for those that need the most. And we want to gather our clients, our stakeholders like independent asset managers and so forth to get together with us in this program so we can make we know the crisis is going to be tough for a lot of people and we want to do the best we can to also help them in some way. So this is the program we are incentivizing. Now talking about the XP Wealth Services. What is this? So most of you probably are familiar with this slide. It's basically our ecosystem. When you think about XP model, you got to think about this ecosystem because it's everything connected. It's the retail with the institutional investor, with the corporate client through issuer services business altogether based on the foundation of education, financial education, a lot of events, info money and so forth. The wealth service business is aimed to help a new business line for family offices, family offices. It's like a management account. We believe that this new business can be very relevant in the future. We can disrupt in the family office business. We can help to disrupt this market as we did with our IFA network. Basically, we are providing for a family office that wants to manage an account. We can provide all the services and the benefit to be plugged in our ecosystem through our platform. And we launched this new business totally digital, all the tools you can do. We have created an app, so you can onboard and do everything in a digital way. And that's just new, just one example. Now going to I'm moving fast because I know there probably are several questions and I want to spend more time in the Q and A than in the presentation. Talking about our main KPIs. As you know, we have 3 main KPIs that we usually share with investors: AUC, active clients and our NPS. In terms of AUC, we can see we had a drop from BRL409 billion in December 2019 to BRL366 billion in March 2020. That's approximately 10% drop. If we take into account that, for example, the stock market in Brazil dropped almost 40% in the Q1, it's I believe that we were able to have a very healthy base of net inflow. So when we look at the bridge, we discount the market depreciation. We had market to market impact not only in equities, but also in fixed income, and they totaled that BRL58 1,000,000,000. Then we had a one off corporate outflow, BRL21 1,000,000,000. This outflow just for you to understand, I don't know if you remember when I talked about a few clients that have 1,000,000,000 with us that represents in total less than 10% of our AUC. Some of them are corporate clients that the custody is related to equity position. And this equity custody, it talks directly with the retail revenue, basically on the stock loan business, derivatives and some other businesses that we do in our platform for our retail clients using this equity custody as a buffer. And we had a few clients that they were they did this corporate restructuring and they could not keep the custody in our platform. So this is a one off and that's the reason we highlighted that this one off in this presentation is for you to understand and not project that in the future because it was really one off. So when we take that out of the equation and we look at the net inflow, broadly speaking, we had approximately BRL36 billion of net inflow. When we compare our Q1 'twenty with Q4 'nineteen, the pace of net inflow was even higher in the Q1, dollars 12,000,000,000 compared to $11,000,000,000 in Q4 2019. And when you look at the product mix, remember that I told that in December, we had approximately ballpark 30% of our total AUC in equity custody. That number now is down to 22%, 23% depending on the market prices of all the equity positions that we have in our platform. So yes, it decreased, but it decreased basically in a function of market depreciation. I can talk later about what we have been seeing in our platform, in our fund platform. And the good news is that we have been seeing a good inflow in equities compared to other products still despite the uncertainty and the market movements that we have seen. Then funds represents 31% and fixed income 25%. This is a breakdown based on a photo of March 2020. Those numbers, they vary. As I've been saying, those three components, they are the most relevant one, equities, funds and fixed income. And in others, we have REITs, we have insurance, we have floating, We have structured notes. We have other products as well. So in terms of active clients and NPS, active clients we reached. We are thrilled to say and honored for our clients to say that we got 2,000,000 more than 2,000,000 active clients as of March 2020. When we look at the charts on the right, new active clients per month, we had a sharp increase in Q1 this year. We got 112,000 clients per month on average compared to 55,000 per month in the Q4. So that's more than 100% increase. I believe one of the explanations, I mean, the first explanation for that is the potential of the market. We keep saying that there is a huge potential in the financial service business in Brazil, especially investments because of the high concentration in the banks. But I also believe that the crisis and the search because of the low interest rates, the search for information and how to invest, it's something that it's just going up. I don't have the number here by heart, but I believe that B3 announced that more than 2,000,000 individuals in B3 trading stocks. So during the crisis, this number has increased in B3 as well. We have seen the same thing in our platform, and we believe that's a trend that is here and it's going to continue. And our NPS was pretty much stable, 72 points, and that's one of our main KPIs. Now when we move to the financials, we don't have our financials still. We are going through audits. We need to go through our audit committee, our Board. So we don't have that finalized yet. We are going to have and present all the numbers to all of you in May 12. That's when we intend to release our Q1 numbers. But we thought it would be important to share what we already can share. In terms of gross revenue, very strong quarter. We believe we're going to see more than 60% increase year over year. And when we look at our adjusted net margin, we believe it's going to stay above the top end of our midterm guidance of adjusted net margin between 12% 2018%, I'm sorry, 22%. We believe we're going to be above 22% and above 60% increase. And we have kept our internal targets that is not disclosed to the market because we don't want to guide anyone for the short term. We always try to put a spotlight in the long term. That's what really matters here. So you don't miss the big picture of the size of the opportunity at least we see ahead of us. But 2 important things to mention here. Number 1, our midterm guidance stays the same. We don't see despite the seriousness of this crisis and the world is already in recession. It's going to be a tough second quarter probably for everyone all over the world. We are not diminishing the size of the problem we are facing right now. But we do not see a reason to change anything in our midterm guidance for now. The main reason for that, I believe, is the size of the opportunity and the high concentration in Brazil. Those that participated in our roadshow when we were going for our IPO probably will remember me saying that we don't need the market to grow to keep growing, because 90% 90% of the investments are still inside 5 banks. We believe our platform offers a much better value proposition for all the clients. If you want to invest risk on, risk off, you tell we have all the products. We have the right suitability. We have the right approach and a different experience for all our clients, everything in one single platform, in one ecosystem. We believe that's very powerful. We are 100% focused on our clients. And I believe that's what explain our conviction that we are going to get out of this crisis stronger than we got in. So that takes me to my closing remarks. This is a common slide that you're going to see a lot in our presentations. The reason is what I just said, aim to the long term. Put the spotlight where it matters. And we believe that what matters here is, number 1, the size of the opportunity is huge. It's according to Oliver Wine was DKK8.6 billion. This number now is lower because of the market to market of the assets. But you put KR8 1,000,000,000 and KR7 1,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000, and the concentration is too high. And the money of Brazilians is invested mostly, I would say, like more than 80% in fixed income. And most of this money in high cost fixed income products. And through our platform, we have no doubt that you could invest taking the same risk and getting better return and a much better experience. That talks to the second point on the right, the differentiated tech enabled platform. We have been investing a lot in terms of new initiatives, new products and customer centric. That's so you got to be focused on our customer. That's what we have been doing during this crisis, as I said, even more than we were doing before the crisis. When we go to the bottom, the DNA mission driven culture, we believe that XP's culture is a competitive advantage, I would say. And that talks also directly to our behavior during the crisis. And the only different points that we brought up here that during the IPO we had in our slide presentation this one is the strong balance sheet position just because after the IPO with the primary resources that we got, we have we are very well capitalized more than BRL7 1,000,000,000 in cash. And that's important. Why that's important? Because in other crisis that we faced, we were in a very different position in terms of cash and balance sheet and our balance sheet. And when you don't have much money, probably you might delay some efforts that in terms of business sense, it would make a lot of sense to instead of delaying step up or accelerate. But it's a cash need. You cannot do it. You just postpone. Now we have a very comfortable cash position that allow us to evaluate all the initiatives that we have, the new business, the financial services that we are going to launch, our digital bank account payments and especially the credit card business. And we can take our decisions based only on business sense. We don't have this cash restriction upon us. And that's a very good thing in terms of our business. So to finalize and open for Q and A, I believe the main message, as I said, are huge opportunity still intact, our differentiated platform, our culture and our Q1 numbers, I believe what we already can share with you and that's what we are doing tells exactly this, the potential that we have ahead of us, especially in times like this. And we all believe that we are going to get out of this much stronger than we got in. So now, thank you all and I'd like to open for Jorge and Domingos and Lazar. You are the moderator, so you tell me what to do here. It's with you. Thank you, Bruno. So let's start right away the Q and A session. I'm going to ask Jorge Curi to please make his first questions. Sure. Absolutely. Thanks, Bruno. Thanks, Carlos, for the opportunity. Let me ask 2 quick questions on the results, on the preliminary numbers that you provided. One is the revenue yield seems to have picked up quite a bit in the Q1. So the question is, can you give us a color around that? What drove that? To what extent that is sustainable? Or did it was it helped by extraordinary trading given the high volatility in the quarter? And what should we expect going forward? And then the second question is on your net inflows, which indeed was quite strong at €36,000,000,000 also in line with very strong client adds. Could you help us understand January, February versus March, for example? Was there a change in the trend as soon as things started to get more complicated? That will be awesome to try to figure out what's ahead. Thanks. Okay. So revenue yield and net inflow. Yes, the revenue yield we expect to go up. It's a function of numerator and denominator, right? So the denominator has gone down. I didn't mention, but that the corporate AUC outflow, it does not talk to the revenue. So this kind of large equity positions, not necessarily they have a huge impact in the revenues because, as I mentioned, it's like stock loan business or derivatives and other businesses that depends on block trades and things like that. So this is specifically outflow that we had. The relevance in terms of revenue, basically irrelevant. So you reduce the denominator, you increase the take rate. Also, as you mentioned, the trading part, it's skyrocketed. And now the volume traded and the number of people coming to the platform into the market as a whole, it has increased. So we have seen some shift in terms of revenue. That's the nice thing in our business model in my perspective is that we are not it's important to understand we are not a risk off risk on business model. We are an investment business model. We believe that there is not one size fits all. It's more about the individual preference and needs. And that's what we are focused on the client. And then when we talk about investments, you have all kind of investments that you can choose that are suitable for you. So either a REIT, a fixed income directly, funds, hedge funds and equities or structured notes, anything in terms of investments we do have in our platform. So you might see from time to time a shift in those revenues. So some parts maybe is not the hotspot for the moment, others become the hotspot. And that keeps going on and on. So the revenue yield, that's why we like to talk about total AUC and a take rate because the volatility of the take rate times total AUC and the revenue yield, it's a lot lower than if you go product by product. It would be much harder in my view to forecast product by product because it's really different. So going back to your question, Jorge, revenue yield should go up, I believe. Net inflow, yes, we haven't seen a huge impact in March compared to February or January, okay? Usually, January is a very strong month. That's a seasonality that we have in the business of investment. So if we take that out of the equation, it was pretty much stable, I would say. What we have seen, it's a little bit decrease going further, I believe, in the second quarter, basically because of this lockdown effect. I don't know if all of you are familiar, but the banks, they demand that the client goes in person to a branch if you want to wire transfer above a certain amount. So even if you are transferring from your account, A, to your account in other place. B, the banks, they demand that you go physically, even considering we are in a digital world. I believe that kind of restriction does not make any sense, especially in the days we are leaving right now. Because if you demand that and someone wants to wire transfer his or her money, you're putting this person into risk. And in sometimes, I mean healthy risk and sometimes you cannot even do it, because you have this lockdown effect imposed by the authorities. So because of that, what we have seen in April is the number of wire transfer for higher amounts they have reduced. And our belief is that the main cause is exactly this imposition I just mentioned. And why am I saying that? Because when we go for the number of wire transfer for lower amounts, they have increased. So they have even increased in January in April, I'm sorry, compared to the previous months. So that's one point that we might see a little bit of reduction in terms of net inflow going forward in the second. Thank you. But that doesn't change the long term, okay, because that's something that's going to be it's going to be like if it doesn't happen in the second quarter, it's going to be like a blip when everything resumes and people start to because the branches in Brazil, the bank branches, I believe is around 20% only open because of this imposition. So when things start going back to normal, we believe the clients are going to just wire transfer their money to our platform. Bruno, before giving the word to Domingos, let me also ask we received a question here from the audience as well. Just regarding the specific questions about revenue yields, if you understand that the reduction on the interest rates will impact the revenue as a whole. I don't know if the question is regarding the floating part of the revenue specifically. Exactly. Okay. I don't think so. And why is that? There is a direct impact, which is pure math. So if interest rates are lower and you multiply that by the floating, considering the same floating, then yes, it would have this negative impact in the revenue yield. But on the other side, we in Brazil, we were used to invest our money on a daily basis. So you could not let your money still in your account because you would lose interest. But that was a time of double digit interest rates. Now at 3.75 and probably go even down, down even further. I mean, this kind of behavior, it's not the same, I think. So people are so what I'm saying is like, it's a combination of a lower interest rate and probably a higher floating number. And then what's going to be the math, the results to be seen. Okay. Domingos, please. Thank you. Thank you, everybody, for the invite. Very good presentation. I think actually the advantage of me after Kuri is that I get to ask follow ups on his questions. So one thing you didn't comment was actually the net inflow in March. I remember in the conference call you said in the 4Q, I think January February, you're tracking around €11,000,000,000 In the presentation, you put €36,000,000 So I can only assume March was very similar to January February. So if you could add a little bit to that. And adding one question here that came from the audience. I remember your financial income is driven by 2, right? Yield on Celiq on float and spread over, right? When you buy, carry in your balance sheet like fixed income and etcetera, which I think in times of more financial stress like we're living today, your spread might actually go higher on those. So I guess adding to that question, lower Saliq but more risk, what's the breakdown or what's more relevant in your financial income spread over on products you carry on your balance sheet or just money sitting in your floating accounts? Okay. Yes, the net inflow when I give that number ballpark, it's all around. So $11,000,000,000 $12,000,000 $10,000,000 $13,000,000,000 $13,000,000,000 it's around that number. And as I said, January was stronger, but it is usually stronger by nature. So the message is we haven't seen anything unusual in our platform up to March because of the COVID-nineteen crisis. What we have seen in the beginning of April, and we are I mean, we are just in half of the month, is the impact of those wire transfers because of the lockdown imposed by the authorities and the consequence that demands that the banks do for clients to wire transfer even to their own accounts, which again, I believe it shouldn't exist. I believe the Central Bank should do something because it's you're imposing you're taking people to take risk if they want to wire transfer their money, if they want to pay whatever, if they want to buy whatever, you're doing something that can harm the health of those people. So it makes no sense in my personal view. But based on that impact or that restriction, we might see a decrease of the net inflow in the Q2. That's what I'm saying. And going to your second question, Dominus, regarding the spreads and how it works in a very volatile market, yes, usually in a very volatile market, the market maker activities, usually you have higher spreads. Actually, the spreads in the fixed income, for example, it has gone up even for AAA rating companies. So it was a little bit dysfunction at the beginning. Now it's normalizing. So yes, that's a component of our revenue stream. If I may just ask a different way, the same thing like in as far as like clients, I guess the market is trying to assess like if it is a risk on mode business or if it is investment platform and all that. And I think another way to look at it is money redeem. Any data you can share on that like post COVID in March, how much money wired out of XP versus a couple of months before? Just try to netting out the effect of market prices. Yes. You mean money going out of the platform in terms I mean, the churn, that's basically Yes. People basically saying, you know what, I quit, I give up. I don't want to invest or take risks anymore. I'm just wiring my money out. Okay, got you. No, that's an interest point to share. What we have seen, it's a very good behavior from retail investors in our platform. That's something really encouraging in my personal view. We just to give you one example, when we look at our funds platform, the equity part of the platform is the one that is benefiting the most. Despite the drop down in market to market that we have, the net inflow for equity funds is positive even after the crisis started. What we saw in our platform was that the fixed income part is the one that suffered the most basically because the market movement was really strong and fast, right. So people realized the depreciation of their positions in market to market And probably they were trying to make liquidity in the daily funds and in the fixed income part as I start. And the equity, as I said, it's a net positive up to April today. So the behavior of the retail investor has been really good. The numbers of B3 is the same thing. You saw the inflow of new individuals, although it's nothing when we look at the size of the population in Brazil, EUR 2,000,000 EUR 2,500,000 EUR 3,000,000 is nothing. But it's I think it was more than 500,000 new individuals in the stock market, which is something really good, different than other crisis we had in Brazil. This time, interest rates are lower than 4%, can go even lower than 3%, I don't know. And that and the information, education, it's something that we never had in Brazil, as strong as we have today. To give you one example, we launched as an initiative, we launched a free course in our platform to learn how to behavior, invest and learn from past crisis and so forth. In matter of weeks, we had more than 200,000 people taking the courses. More than 80% of those rating this course as top notch, maximum rate. And people are really interested. We see that all over our platform. We see that in our digital content, in the research platform, inform money, in our social media. So I believe that the information, the low interest rates because people are going to invest, so you're going to invest in what? In government bonds with interest rates at 3%, 3.5%, The market has dropped down considerably. So you might see opportunities there if you are a long term investor. So you're going to have to deal with volatility. That's a thing that always exists and we are in a period of high volatility. I don't believe the market is going to stay there forever. We need the crisis to pass and will pass. I don't know when, how long it's going to last. I don't have that answer. I believe nobody has. But the thing is that I think the tailwind in terms of people learning how to invest and looking for other options considering that as I said before, more than 80% of the investments of the Brazilians plain vanilla, fixed income, high cost. High cost, high management fees paid by the clients. So this framework is still the same. And I believe it's going to change. It's changing. Thank you. Thank you, Bruno. We are receiving a lot of questions here. So before I give the word again to Jorge, let me also put the credit in the first question that I did for you, it was from Marcelo Telles from Credit Suisse. Now I have one from Felipe Salomao from Citibank. How issued services activities have been performed during the recent weeks? Are you noticing a significant deceleration in these segments? Can you comment, please? [SPEAKER STEPHEN ROBERT BINNIE:] Yes. We have noticed deceleration. We do. And when we have a very high volatility in the market and when the secondary market is not functioning well, then the offers, they got frozen, right? So the answer to your question is yes. When you look to our numbers in 2019 in Issuer Services, just bear in mind that, for example, the equity component of that revenue was still low, was lower than 15% of the total Issuer Services business. The main component there, it's DCM and securitization. I mean, I believe the window is going to open at some point. We are ready. We are same thing we are doing with our clients and I mean our retail clients in terms of touch points that I mentioned get closer. We are also doing with our corporate clients. So our sales team, they are connected with our clients, our investment banking team. They've been doing a lot of lives, they've been talking to owners of the companies, to entrepreneurs trying to help see what we can do. So it's the same approach. I believe that when we have the window open again, we are going to see that revenue line picking up. I don't know when it's going to be. Okay. Jorge, please go ahead. Sure. Thank you. Perunno, continuing on the topic of assets, not now not inflows, but rather just mix shift. What type of asset mix shift are you seeing over the last 30 days? How do you expect that mix to change over the next 6 months or so? And how does that impact your revenue yield? And my second question is on expenses. Help us understand what percentage of the expenses are fixed, what percentage are variable, how rapidly in the short term can you react to short fall in revenues by curtailing expenses? And how much investment you still need on the platform that you can't really postpone? And what does that do to your ability to manage expenses through this crisis? Thanks. Okay. So the mix, the product mix, it's the one that we presented there. The picture that you saw as of the end of March, it's pretty much the same thing as of 15 days later. So it hasn't changed considerably. As I mentioned, in the fund platform, we have seen a positive net inflow toward equities and a reduction in fixed income so far. That can change going forward. So the way I don't have a specific answer for you, Jorge, in terms of how the take rates and the product mix is going to be because there are so many variables that can change that mix. But I believe that I don't know. I would assume it would stay stable the way it is. But again, it's we are in the middle of a crisis. It's hard to make predictions here. I think the important message is no matter what the product mix is, we are going to have the product and the best one to offer for our clients respecting the suitability for sure. That's I think it's the better answer. Going to expenses, that's also a good point to highlight. We have a very asset light business model. So when you think about our cost structure, we have a strong cushion that can absorb any decrease in revenues. The best way I like to think about it the following. We have 2 main expenses: commissions in our cards and personnel in our SG and A. When we look at in our personal and commissions, it's basically a function of the revenue, okay? So if revenue goes up, commissions goes up. If revenue goes down, commissions tends to go down. So it's a natural cushion in terms of the revenue. When we look at personnel people, more than half of the expenses, it's variable. So when you take the bonus, the variable component of personnel and you add to the commission, our total expenses, roughly 60, percent, six-zero percent of our total expense is variable, just taking these two metrics into account. Of course, we are going to have other expenses that are variable and we are going to have savings, for example, travel. Think everybody in the world is saving money in travel, right? Events, we are doing events like this one. If we were going to do in a specific place, we would have to hire to we are not paying anything. We are just doing this web conference here right now. Our sales team is doing a lot of lives that usually it would cost and it's not costing. And after the crisis, I believe one thing that is going to stay with us after this crisis is this home office a trend? Because we are learning from it. All of us here in this conference, we are all learning from it. In the case of XP, because we are a digital business, we are already very tech in a way to say. We can measure our productivity at home office from different areas. Our CHRO and his team, it's all over it to measure the productivity for different areas. So we might see a reduction going forward when things come back to normal whenever that happens. We might see a reduction in terms of the space needed for us to keep growing our number of employees, which by the way, we are going to keep growing during this year as I said before. We might see a reduction. We might have a rotation in terms of home office and be more productive. I don't know about you, but for me, this home office has been working really, really well in terms of productivity. In terms of the meetings, they have a time to start, a time to end. You've got to be objective, pragmatic. All people can attend whenever they are. So it's working really and Teams from Microsoft, amazing. You can share a lot of things. And so we are learning from it. I believe it's going to be a good thing when this crisis ends. Let's move ahead. We have another question from the audience here, Mario Pierry. The AUC per client has declined since Q4. Can you please discuss how it went to increase in clients among the 3 platforms, the 3 brands? Mario, thanks for your question. But we do not disclose per brands. And again, of course, we do have those numbers. And what I can tell you is that XP brand by nature has a higher AUC than Ricoh. And Clear and Clear, it's more for the traders. So AUC there, it shouldn't be that relevant. Ricoh is 100% digital for the new entrant in the market. So by definition, it should have a lower AUC and XP where the IFA network is plugged. It has a higher AUC because it's a business that involves advisory as well. You tend to attract a higher AUC. The IFAs, if they do not have a certain amount of AUC, it's not going to pay off for all the expenses they have in their own businesses. So that's what I can tell you in terms of the AUC breakdown. And an additional one from him. It's what specific measures did we take in terms of the incentive plan for the IFAs? No, the specific again, we don't want to disclose the specifics, but I can tell you that we selected some products that we believe are good products for us to address right now. For example, we are not probably April, we are not going to see offers in the market. So think about the IFA network that used to be focused on a lot of offers coming to the market. Now they can focus on different things. So the incentives that we created is related to those kind of opportunities that make sense to address because we do have a huge potential in all segments, in some more than others. And sometimes, the channel get, how can I say congestion? So now because there is no offer congestion the channel, we can step up in other initiatives that we were not stepping up as we would like to because of this kind of congestion. So it was about that. Also, we helped the IFAs with working capital for them. We have a lot of IFAs. You see our numbers growing. So they are entrepreneurs starting the business, investing in their own business. So we gave some additional breadth up to 6 months in terms of the credit lines that they have. Nothing significant in terms of balance sheet, but something important the way we see to be side by side with our FA network, help them to go through this without having to worry or reducing the pace of investments in their own businesses, basically. Domingos, please go ahead. Bruno, another question like trying to poke holes a little bit in the story here. As you know, a lot of questions we get are along those lines. I'm assuming the first SKU didn't have a lot of performance fees, right? Often 0. 0. It's only in basically in June and in December. You might have, just to be technically correct here, you might have a small part in January that's kind of a slip over that you just charge in January, but it's referred to the 2nd semester of the previous years or in July, but that's a technology that is very irrelevant. So and low performance here. Perfect. No, super clear. That's just to put that one to bed as well. And the second one is on M and As. During those sell off times, sometimes we have assets that present themselves as opportunistic investments. We hear locally even like ETFs and some trading platforms to be for sale. You have a very relevant market share now in trading. So anything on the platform for trading makes sense or looking or any other sector? We do have our M and A proprietary segment and we are always looking for opportunities. What I can tell you in regard of M and A opportunities is the following. Number 1, in the short term, I would not expect any huge M and A, okay? But we can have some Fintechs that make sense for us. They can complement several initiatives in our ecosystem, speed up other initiatives that might make sense for us. Like payments, a lot of opportunities. Sorry? But like payments for just the broad areas like payments, more like credit, debit or more like a trading platform or more like risk intelligence or I cannot comment on that. I have to pass that one. Sorry about it. Okay. Thanks. Well, we are closing to the end of this web conference. I'd like to thank you once again, Jorge Curi and Domingos. I also would like to say sorry here for the ones that we couldn't answer, but myself and Andre from the IR team, we will be touching bases with you as soon as possible. And please, Bruno, your final comments. I think we've said everything. I mean, thank you all for being here, interested in our story and asking questions. I think this initiative, we intend to do more often because we understand there is a lot of uncertainty going on. So it's important, we believe, as we are getting closer to our clients, all the stakeholders, we should get closer to our investors as well in times like this. So we are going to have 1 month from now our Q1 release and we are going to comment on the crisis and how the platform is going on throughout April and May as well to try to give some color. But keep the focus on the long term here. I believe that, again, we are confident we are going to get out of this crisis a lot stronger than we got in. We try to look at any crisis as an opportunity. In 2,008, we were in a different scenario. Of course, the crisis was a different one as well. But XP saw an opportunity in that crisis and it helped a lot our business after the 2008 crisis. And in that time, we created a slogan like transform the crisis in an opportunity and attracted a lot of potential clients to become clients and to look for opportunities in terms of investments and so on, among other things, with a huge difference when we compare to the moment we are living right now. In 2,008 in Brazil, we had, number 1, double digit interest rates. Now it's going to 3%. Number 2, our business model was basically a mono product business, retail equities, only retail equities that was more than 80% of our business in that time. And number 3, we didn't have the cash, right? So when we look at this crisis and I'm not diminishing the potential impact of the crisis, it's going to hit hard. It has already the real economy. But when I look at our position nowadays compared to other crises that we have faced and we have always gone out stronger than we got in, I think that we are in a privileged position in terms of cash, in terms of business model, in terms of people, in terms of DNA culture. So I'm confident that again we are going to come out of this stronger. So thank you all and any questions you might have Lazar and Andrea would be helped to answer and myself as well. Thank you very much. Thank you, Jorge. Thank you, Domingos. Thank you, guys. Thank you.