Santander Brasil(US:BSBR)2023-07-26 20:00Financial Data and Key Metrics Changes - The company reported a net income of BRL 2.3 billion for Q2 2023, representing an 8% increase quarter-on-quarter and an ROE of slightly above 11% [20][32][35] - Total funding increased by 3.4% in the quarter, reflecting the strategy of increasing liabilities [34] - The CET1 ratio stood at 10.6% at the end of the period, with an expected increase to 11.2% due to regulatory changes [35][89] Business Line Data and Key Metrics Changes - The corporate segment grew with a 7% increase in revenues and a 21% increase in loan operations year-on-year [26] - The Agro portfolio reached BRL 42 billion, with 79% coming from free resources, indicating strong growth in this sector [27] - The consumer finance business maintained a leading market share of 22%, with 84% of new originations made to high credit quality clients [28] Market Data and Key Metrics Changes - The company maintained a 25% market share in trade finance and continued to lead in foreign exchange operations for the ninth consecutive year [13] - The high-income segment, Select, grew to nearly 900,000 clients, with a goal of reaching 1 million by the end of the year [23][10] Company Strategy and Development Direction - The company is focused on expanding its strategic businesses through cross-selling opportunities and enhancing customer loyalty [7][9] - A strategic partnership with SAP was announced to improve product digitalization and client connectivity [13] - The company aims to enhance its digital ecosystem and customer experience through technology and data utilization [15][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to grow the loan portfolio and business over the next 12 to 18 months, supported by a healthier client mix and improved cost of credit [39] - The focus remains on maximizing profitability through customer loyalty, particularly in the high-income segment [20][39] Other Important Information - The company acquired 100% of Toro and divested part of its stake in Webmotors, maintaining exclusivity with Carsales [54] - The company reported a 12% increase in revenue per loyal customer over the last 12 years [9] Q&A Session Summary Question: Quality of the portfolio and provision reversal - Management explained the provision reversal was due to improved performance of new portfolios and the conclusion that a conservative position was no longer necessary [41][44] Question: Accelerating credit origination - Management confirmed plans to increase origination in a selective manner, focusing on secured portfolios while maintaining soundness [47][48] Question: Market NII expectations - Management indicated that market NII is expected to show gradual improvement due to asset repricing and favorable market conditions [50][61] Question: Impact of regulatory changes on capital - Management stated that the recent regulatory change would positively impact the capital ratio by 60 basis points, bringing it to 11.2% [89] Question: SME portfolio outlook - Management highlighted the SME portfolio's relevance and performance, indicating a focus on quality and ratings in future growth [110][111]