Santander Brasil(US:BSBR)2021-10-27 18:49Financial Data and Key Metrics Changes - The company achieved an all-time high return on equity of 22.4% and a net profit of BRL4.3 billion in Q3 2021, representing a 4% increase from the previous quarter and over 12% year-on-year [6][28] - Net interest income (NII) grew in the quarter, reflecting a better mix and stronger market activity, with fees increasing by 13% compared to the same quarter last year [28] - The efficiency ratio remained stable at 35.7%, and the recurrence ratio reached over 88% [29][30] Business Line Data and Key Metrics Changes - The loan portfolio grew by 2.4% quarter-on-quarter and over 13% year-on-year, reaching BRL450 billion, primarily driven by retail lending [31] - Consumer finance grew by 1.7% quarter-on-quarter and 9% year-on-year, while SME lending increased by 3.7% [32] - Credit card transactions grew by approximately 31% year-on-year, supported by higher transactionality [34] Market Data and Key Metrics Changes - The total customer base grew by 9% year-on-year, with 1.6 million new clients added in just one quarter [9] - The digital customer base expanded by 25% in one year, translating into significantly higher revenue per customer [17] - The company reported a strong performance in digital channels, with over 70% of new clients acquired through these platforms [12][51] Company Strategy and Development Direction - The company continues to focus on expanding its customer base and enhancing customer loyalty, with a strong emphasis on digital transformation [10][17] - The strategy includes a commitment to ESG initiatives, with over BRL2 billion in ESG-linked loans and a goal to generate 100% of electricity from renewable sources by 2025 [22][23] - The company aims to maintain a strong risk management framework, ensuring that the cost of risk remains within a comfortable range [39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining loan growth despite weaker GDP estimates, highlighting strong retail growth and a focus on client acquisition [46][49] - The company acknowledged potential challenges in asset quality but emphasized its ability to navigate through economic fluctuations [58][89] - Management noted that the bank has consistently outperformed consensus estimates over the past several years, indicating a strong operational position [86][88] Other Important Information - The company has been recognized for its workplace culture, with 94% of employees expressing pride in working for the bank [18][90] - The bank's commitment to social programs has reached over 800,000 people in the last three years, demonstrating its focus on community engagement [24][25] Q&A Session Summary Question: What supported the growth in trading gains this quarter? - Management indicated that treasury and wholesale banking activities performed well, but volatility in markets could affect future results [41][42] Question: Are new clients coming from expansion into new regions or other banks? - The majority of new clients are being acquired through digital channels, with a significant portion being unbanked individuals [47][51] Question: What are the impacts of rising interest rates on results? - The bank is sensitive to interest rate changes, with an estimated BRL400 million impact for every 100 basis points change, but expects better performance on the liability side [60][61] Question: What is the outlook for asset quality and loan growth? - Management remains cautious but optimistic, noting that the cost of credit is still below pre-pandemic levels [58][66] Question: What drove the decrease in the effective tax rate in Q3 2021? - The decrease was primarily due to the payment of interest on capital, which significantly impacted the tax rate for the quarter [79][80]