Banco ABC Brasil S.A. (ABCB4) Q4 FY2025 Earnings Call Transcript & Summary

Good morning, everyone. Welcome to the results conference of the fourth quarter and the year of 2025 of Banco ABC Brasil. I'm Ricardo Moura, and I'm the Director of Investor Relationship, Proprietary M&A and Strategy. We are going to start our presentation with Sergio Lulia. Later, we are going to have our traditional Q&A session. So if you are watching this broadcast in English please click in the interpretation button at the button at the bottom right of your screen. All the content including the presentation will be available at our website. So please download the content that is also on your screen. And to continue, I'll hand the floor to Sergio. Thank you.

Thank you, Moura. We are going to show you the results of the fourth quarter of 2025 and the entire year of 2025. So the net income reached BRL 1 billion, a very meaningful number that puts ABC Brasil in a very selected group of Brazilian companies reaching this level. This is a result of a collective effort of many people who came to work with us during 30 years of history, dedication, discipline, efforts, and they made these results possible. I would like to thank you all, especially 1,300 employees we have today working every day at the bank. The ROAE reached 15.2% during the year. And in the last quarter, it reached 16.3%. It was a year in which the seasonality was a little bit bigger than we expected. We started with 14.8%, something like that, and it went up. And we delivered 15.2%. It's the fourth sequential year in which the bank delivers an ROAE above 15%. We may have a higher number, we will have, but this has been stable for more than 4 years. The financial margin reached BRL 2.5 billion, a growth of 6.8% in relation to the previous year. The NIM ends -- finishes the year in 4.3%. It's a number similar from 2024, but that also presented throughout the year, just like the ROAE, a recovered trend. It started below in the quarter, below 4%, and it recovers quarter-by-quarter, last semester 4.7% and the year margin, the average is 4.3%. About our portfolio based on the coverage ratio. So we have here 501%, when we consider the provisions divided by all the past due over 90 days. And when we talk about the total provisions over Stage 3, 93%. A lot of discipline here, a year that we faced as a challenging year in relation to credit granting due to interest rates that were so high for such a long period, an economy that was a little bit no longer accelerating and here are the results. The portfolio finishes with BRL 54.7 billion and a growth of 3%. And that alone is a growth that is not exactly what we expected, but the year was focused on discipline in credit granting and also in the allocation of capital and prices. Prices charged in our transactions. This number does not reflect the segments. When I show you, this will be clear. The strategy will be clear. So if we check this slide, this number is clear. While the bank grows 3% in the expanded credit portfolio. Middle is growing 15%. And this year is about the take of the Middle bank growth. And now we fit the [ basis ] and what does that mean? It means that we reviewed our commercial strategy. We reviewed our credit strategy. We reviewed the product families. I have a perception that today, we understand the clients better than we did in the past, and that allow us to uptake the growth, resume the growth in a very constant manner. The corporate growth 3.4%, aligned with the average growth of the portfolio. And this is the one that has largest volume and larger corporate due to the reduction of margins. This is a small drop almost constant in relation to the previous year. The sectorial part here is quite diverse. The most representative sector is the same, agribusiness 23%, almost constant. The second sector, energy, a small drop in relation to what we had in the past, 11.7%. Services and commerce with an increase in relative participation. Here, we have a seasonality. So the fourth quarter is a little bit -- it is a little bit stronger. And then we have financial, transport and logistics, civil construction. So our portfolio is quite diverse and pretty healthy. So here, we have a graph that we have shown you in the last years. And it's a graph that is a result of a consciousness effort. And we divide revenues in 2 blocks, one that we call high use of capital and the other one with a low use of capital. The increase of participation in low use of capital on one side represents a higher presence of the bank and the clients with more products, serving clients with more -- in relation to their needs. But on the other hand, for me and the share -- for us and the shareholders, it means more meaningful returns in relation to the capital used and less volatility in the cycle. So when you have a larger family of products, depending on the cycles, sometimes one are better at another moment, the other one is better. And in average, we had an ROAE that is less volatile. This one with a lower use of capital, they have around 30% of the revenue with clients and they grow and they reached 2024 with 45% and 2025, 46%, a little bit above. And in practice, it means that almost half of the revenues coming from clients, they have no or little capital allocation. Looking at the financial margin, in fact, the net interest margin, we see the highlights of the quarter. So the financial margin rose 14% when compared to the same quarter of the previous year and 9.4% when compared to the third quarter of 2025. And paying attention to what comprises it, revenues with clients, they are almost constant, and we have BRL 393 million versus BRL 389 million. And we have the revenue with the market, it's almost the same. It had suffered a little bit, but it recovers in the last quarter. And the CDI capital also is almost the same. And here, those accumulate throughout the year. There is an increase of the margin with clients from BRL 1,431 million to BRL 1,495 million. And you can see that they are a little bit less, the financial margin with the market, and they were compensated by the growth of revenues coming from the CDI compensated capital. And NIM, as I have stated, we had 4.2%, 4.3% in 2024. There was a drop in the first quarter of 2025 and an effort to recover gradually, growing 0.3 percentage points in each quarter, reaching 4.7% in the last and year compared to year, 4.3% versus 4.3%, a proper level that allow us to expect an ROAE above what we expected. So now revenue with services, they had a very good year, BRL 125.9 million and in their compounds, they had a stability in all the guarantees and with the guarantees issued the best quarter, only below the last quarter of 2024 that was a record of the investment bank. We are going to go through that. And the insurance and fee brokerage, they had a constant growth when we check quarter-by-quarter as we compare year-by-year. So year versus year, the guarantees issued, BRL 158 million to BRL 167 million investment bank. It was a good year in 2024, but below the performance of 2024. And as I've mentioned, the insurance and fee brokerage, you can see a growth from BRL 117 million to BRL 133 million, and it's more consolidated and important in our customer offer. So the quality of the credit portfolio, we can see here the provisions. The provisions reached 0.9%. So it's a percentage above what we had, and this is due to the volume of credit recoveries and if we get the year 0.7%. And if we look ahead, we will project this case of recoveries. So the expected credit loss, so around 2.4% of the portfolio as a whole, an improvement in the Middle expected credit loss due to the improvement of the portfolios for the new [ crops ] we have. All the past due over 90 days operations, they closed in 0.5%. It's a great improvement in relation to the beginning of the year when they were around 1%. So it's a ratio that is very low and it improved not only in the Middle sector, but also in the Corporate sector, as I've mentioned, and that's our highest volume. So Stage 2 and 3 operations, this level is almost constant, representing 6% of our portfolio, Stage 3 plus Stage 2. And quarter-by-quarter, we can see certain stability. The provision rates, we can see the coverage ratio here due to the past due over 90 days. And we say that the provisions, they don't have a relationship with the past due over 90 days. And it relates to the default probability and the loss expected in case of default. So the provisions are quite constant than the past due over 90 days. So anyways, despite the metric you are paying attention to the provision levels are quite comfortable. In relation to our expenses, I may say that we did a great job during 2025. Expenses resulted in 5.6% in the middle of the review guidance. It's a number that is pretty close to the adjustment level in relation to the banking, employees union. So it's an average what we were expecting according to our characteristics. Revenues on the other side, they were a little bit frustrating. They grew throughout the year, 2.2%. And with the market and the investment bank revenues and a certain difficulty in relation to rearrange the spreads throughout the year, that makes us entering 2026 with a better condition for revenue generation than we expect -- than we had in 2025. The consequences of those 2 numbers is an efficiency level ratio of 39.2% according to the guidance that was around 39% and 40%. So our funding here, it's a very comfortable number throughout many years that we have been around. So it's a funding that is quite diverse in relation to the group of investors as well as inside each group, that is this scattering. There's no concentration, the deadlines, they are all above the assets. So there's no problem in the cash. Prices are quite competitive, and they allow us to compete with major banks in very similar conditions. In relation to our capital, our Basel ratio is 16.3%, 13.8% Level 1, 2.4% Level 2 capital. And throughout the quarter, there was a small reduction that is explained mainly by the repurchase of Level 1 and Level 2 capital instruments as we had previewed to you in the last quarter results. But you can see that not taking into account that the generation of results the bank has is enough to distribute all the provisions to the shareholders, and we are in the middle of the recapitalization of the dividends that were distributed and that may cause an increase. So we can see here, Level 1, a total of 16.3%. And after this occurred, Level 1 capital is around 12.4% and the total around 16.3%, giving us a buffer to grow as we deem appropriate. Here, above, a summary of what we mentioned. So all the history that happened throughout the year, the net profit that net income that comes from BRL 63 million margin with clients, a lower contribution of margin with market, the CDI net revenue and then the provisions, and there is a growth of 3.2% in the profit of 2025 when we compare the profit of 2024. And here, we have our guidances. The guidances that were revised for the bank. So if we have the expenses growth, we can see that we have 3 now. The expenses growth, 4% to 7%, we had 5.6%. And the efficiency ratio, the updated guidance, 39% to 40%, we closed in 39.2%. So the revised guidances were all met. And here, we show which are the guidances for 2026. So here, we have a guidance of the expanded credit portfolio growth, and that shows our trust that this segment will be growing in a more meaningful ratio. So the portfolio as a whole, 6% to 10%. The middle specifically 12% to 18%. And obviously, this will impact NIM and ROAE throughout the years that are yet to come. Expenses growth, they are quite -- 4% to 8%, and the efficiency ratio of 37.5% to 39.5%. And keep in mind that we had 39.2%. You can see that we have a trend to believe that our efficiency ratio will improve. So that's what we had to introduce. So I'll hand the floor to Moura. Moura, the floor is yours.

Thank you, Sergio, for an overview of the results for the last quarter and the year of 2025. I thank everyone who's watching us. Now we count on your participation in our Q&A session.

And here with us, we have Sergio Borejo, CFO of ABC Brasil. Welcome, Sergio.

Hello, Ricardo. Hello, Sergio, everyone who's watching us. Thank you for the opportunity. It's a great pleasure to be here once again in our call of results.

Thank you, Borejo. [Operator Instructions] So we are available to answer questions. So here, Brian Flores from Citi. Brian, thank you for your participation. The floor is yours.

Congratulations for the results. I have 2 questions. The first one is that clearly, as Lulia mentioned in the guidance, you have a risk appetite that is a little bit larger, bigger. So as he mentioned, there was some readjustment in the capital base, the middle market demands a little bit more of capital. So I would like to ask you if we should expect any readjustment in the dividends. So about the capitalization of the bank, you've mentioned that, and also to speed up the credit portfolio. And then I will ask my second question.

Thank you, Brian, for your participation in the conference and for the question. Well, I don't know if saying that we have a risk appetite that is a little bit bigger is the way I would describe it. In fact, yes, that is a perception that mainly due to the beginning of the cycle of -- and the flow that we have seen for emerging countries in general, including Brazil, maybe the financial conditions will improve, and that will bring this willingness to companies, and that's an opportunity for you to expand your credit portfolio a little bit more. On the other hand, we should not forget that we come from a long cycle of a hard moment and default, they work pretty well, but we have some companies with a higher leverage. So the guidance reflects a growth that is more consistent, growth that is more accelerated than we had before. And in the more traditional segment, we have large corporates, the verticals, agribusiness and real estate. The specialization that allows us to find great opportunities. In relation to capital, for many years, since 2012, we have this policy that is combined with our controller in which us as a minor shareholder, and we are committed to that, if necessary, the profits generated in Brazil will stay in the institution. So there are moments in which we are growing slower, and there's no reason for us to distribute the dividends and the shareholders will have the resources available. In moments in which we see growth that is a little bit larger. We propose the recapitalization of the dividends they have, their parts we have our part. And usually, the minor shareholders, they are present in their majority. So you have small injections of capital throughout time, allowing the bank to grow without leaving the capital idle for longer periods. So what we are doing now, as I've mentioned, it will bring 50 basis points of Basel ratio and our Tier 1 capital will be above 14%, pretty good.

Brian, do you have any other questions about that? Would you like to ask your second question?

Yes, quick question. I would like to understand about the spreads because as you've mentioned, that is a competition, not only for banks similar to your size or also incumbents. So I would like to understand how will you deal with the spreads as the volume are also going up without jeopardizing the assets?

No, Brian, that's the challenge. Considering our size, we say that we are a price taker than a price maker. So the spreads, in general, they are established by major banks. It is a pretty competitive market, it has always been. Last year, we managed to have a recovery of the spreads and a maintenance of a good portfolio quality. And that caused a little bit of our growth. We grew 3%, excluding the exchange rate. Otherwise, it would be 5.5% almost 6%. But if we were too rigid with the spread, we would have grown more. This year starts with a spread in our portfolio that is above what we started last year, and we start with Middle in a better rhythm. And then this compression of spreads in the Middle didn't happen as we had in other segments. So within the guidance that was provided with a growth from 6% to 10% in the portfolio as everything, and to 12% to 18% in the Middle segment. Well, I would say that today, our better -- our best expectation is to maintain as it is today.

Next question now, Eric Ito from Bradesco.

Congratulations. I have 2 questions. First, a follow-up from what Brian asked. You mentioned that you expect the maintenance of the spreads as they are today. But thinking about the future, 2026, your mix, a better growth in the Middle. But on the other hand, we have a reduction in Selic that will affect the CDI PL, but what could we expect that? Can we expect any increase in the fourth quarter 4.4%, full year, 4.3%. So how things will be in 2026?

Okay. So I'll start, and then I'll hand the floor to Ricardo, Borejo, so he can calculate the NIM. That's the expectation to have a relative growth in the Middle portfolio that has a NIM above other segments. What is evolution? Well, it happens step by step. It's slow. So probably the guidances that are delivered will result in an increase in the Middle participation of 1 percentage point, I think. So the NIM will depend on the middle growth. That's what we mentioned. The mix of products, there's always an effect today. We have a family of products that is bigger than we had in the past. This product dynamic matters a lot. I believe that in the beginning of the year, we are going to see some exciting numbers. It depends on the Selic ratio. Selic, we had a call that was more optimistic than the average of economists. We reviewed that. And the perspective is 50 basis points in all meetings from March on up to the end of the year and 11.5% at the end of the year. So those are the pieces. And what does it represent in relation to NIM? Ricardo, please?

I would say that if you get the speed in which we rearranged NIM last year, we still have this vision of a NIM expansion. It's going to be more gradual and depending a little bit more, as Sergio mentioned, depending on what we have, intra-segment spread and the competitive market dynamic influences a lot. Second, the mix we have of segments inside the portfolio as a whole and middle grows a little bit more, then there would be a gradual expansion of the NIM and the mix of products. So as we have products that have a better spread, this would be positive for the NIM. Of course, we have wind that is blowing against us that is CDI PL. But you should not forget that once you have a Selic that is going down, you should have 2 factors that would affect the dynamics of the P&L. First, you have a little bit less pressure in PDD. And the second is that it should be a little bit easier to grow our credit portfolio. The major issue is all these factors, how do we see the NIM growth? It should be positive, but in a way that is consistent but gradual throughout the year. I don't know if I've answered your question.

Yes, yes, it's clear. My second question is in relation to a follow-up, thinking about the mix and everything and the PDD, a little bit more pressure. So this quarter, you showed very positive indicators. So I would like to understand a little bit more what you could share for the expectations of 2026, larger growth for Middle. So how will be the asset quality?

Okay, Eric. So we started the year pretty well as we've presented a health portfolio with a level of default that is pretty low, a very provisioned portfolio with good levels of coverage. But as I also mentioned, we know that this high interest level harms the economy and the companies. Considering that, we work within our budget with a default that is our average number, 0.7% per year based on the expanded credit portfolio. There's no expectations of something worse than that. But in order to have a consistent improvement of this 0.7%, there should be signs of monetary relaxing and something more precise than we have seen so far.

Next question, Olavo Arthuzo, UBS.

I have 2 questions, and they are pretty quick. First one in relation to the guided credit that we saw throughout 2025, the portfolio helped the system to grow. And I would like to understand how is your appetite in relation to this portfolio? Because last time we've talked about that, it was the second quarter call, and you've mentioned about a gradual increase in the appetite, thinking about FGI. So I would like to hear from you a little bit an update about that. How is your mindset in relation to this portfolio? But then if you can show us a north star of what do you see in relation to the total penetration percentage of the portfolio for this year, it would help us. And my second question is in relation to generic provisions, you still carry in your balance sheet BRL 190 million, if I'm not mistaken. So if you could give us a glimpse of how is your mindset in relation to all that, the use of such provisions and an increase of the pace of our economy, thinking about the second half of this year and the beginning of the following year, if we could start thinking about a reverse of the provision.

Thank you, Olavo, for your questions. In relation to the government lines, you are right. April, May, well, we started to intensify the use of such lines, especially in the Middle segment, but also what we call the low corporate. This growth comes quite consistent. Those are lines that are quite adequate for this profile of clients because through that, clients have access to a debt profile that they wouldn't have in relation to deadlines and everything. I don't have the percentage here by heart. We can check in case you guys know about it, we shared not only FGI lines, we had a good performance in the second half, especially in other lines that are managed by BNDES, we exported many clients that were affected by the situation. Now we have Renovação da Frota, a line from BNDES that has cost conditions that are quite competitive for carriers who want to renew their fleet. So we are historically speaking, active. And in the second half, we resumed that and they can, for sure, be a driver for growth throughout 2026. In relation to provisions, we have the generic BRL 190 million, and this has a cyclic provision. It seems to be -- well, you can have the provisions and you may use them throughout time. And seen today, I don't see us increasing the provisions, neither using them. So probably in the next quarters is to have the provisions in a fixed number.

Next question, Antonio Ruette from Bank of America.

Two questions here. First one, I would like to explore the details of what changes the SMIs in the next expansions in relation to the previous ones you've tried that in the past. So do we change segments? What is the approach? And the second, a follow-up about the provisions, but the higher provisions that were explained with higher interest. So I'm just thinking if we shouldn't have seen that in Stage 3 due to severity of the macro market. I don't know if you could follow your macro expectations in which you are setting the prices. And we saw Stage 3, for instance, Tier 3 of the portfolio quite stable, but provisions, they increased a lot. If you could explore a little bit this rationale, it would be perfect.

Thank you, Antonio. Answering your questions in relation to Middle, I would like to say that those are more execution adjustments understanding in the everyday business than a strategic repositioning. The segment is the same. We started middle market, the second [ attempt ] in 2019 with companies that have a revenue from BRL 30,000 to BRL 300,000. And this year, we went for BRL 500 million. But if you get the inflation from 2019 up to today, we have these numbers, unlike what other banks do. And internally, we subdivide that in 2 subsegments. But from BRL 30 million to BRL 90 million. They are inside that income and the other one from BRL 90 million to BRL 500 million, and that's where we have most of the bank exposure. So what evolved throughout this year is the credit line. So we started in the Corporate segment, large corporate from something that was based on credit reports issued by analysts. We entered the Middle with a digital approach. And then we realized after 2020 2022, those models are not as robust as we expected. And today, we have a hybrid model. Most line is digital with processes that are quite scalable. But at the end of the process, there is a checkpoint in which an analyst will stop and check that will analyze and write a report. So at the same time, this model allows you to leverage with low cost. But at the same time, you have a check from an analyst. Someone who knows the segment, who has the experience to understand if that limit given by the automated process made sense or not. We changed a little bit the products. We haven't created products that we didn't have, but it's about how and when to offer the product. We increased convenience products, the [indiscernible], those in which the guarantees are formalized before. So the limits are easier to be used by the clients. And in the middle market client, this is an important characteristic. We increased the offers that are guaranteed by governmental lines as the question asked by Olavo. So we have proper products. And we have a team. We had a team in other segments that had been around for many years. Most of them were trained internally, others that came from the market with the culture, the commercial culture of how to serve the clients, how to relate to them, they were consolidated throughout the years. And in the Middle, when you have a new segment, you bring people from the market and those market professionals, some adapt to us, others not. And there is a larger rotation. And throughout time, this settles, and we have a team today that is quite fine-tuned with the way the bank thinks, there is a strong commercial approach, a good commercial relationship. So those are adjustments, adjustments that were done in the commercial and the product and credit lines that allow us to grow in this segment in a way that we can trust better than a couple of years ago. In relation to Tier 2 and Tier 3, those were clients that were in such tiers, and we decided to increase the provision level due to the default probability. So there was a little migration of clients from one tier to the other. There was no increase of provisions caused by macroeconomic readjustment, but a provision that was done based on specific number -- names, sorry.

Now next question, Yuri Fernandes from JPMorgan.

Congratulations for another year. I would like to go back to capital. And I know all questions are approaching the same subject, but we -- you always have navigated the risk scenario here in Brazil. In many crisis, the bank has always been pretty good. The scenario is not a crisis scenario, but it seems that you are very careful the capitalization of dividends. I believe your message was 11% in the past. And then the capitalization, well, it made sense that you are paying a little bit more, but you go more than 12.4%. So the provision Tier 3, so an additional one. Where do I want to get? Do you see something we don't see. The scenario asks us to be so careful because on the capital side as well as in the reserve side and even for the growth appetite, well, it doesn't depend only on you, but it depends on the quality of the price, the spread. And I can see you pretty careful. So I'm going to ask the same questions in a different way. Just to check if you are more careful. And then I have a second question.

Yuri, thank you for your participation. I think that in relation to capital, the fact that we proposed the Board and they approved the recapitalization, I would read on the other way. It's that we can see possibility of growing in a faster way, a more accelerated way because if we were considering a more conservative scenario with a growth difficulty as we had last year, and capitalization wouldn't be necessary. You would have an idle capital. We are pretty capitalized. We have great ratios, and I wouldn't increase my level of capital because that gets in the way of the return. So it's just like half full, half empty because one side, a higher Selic ratio affected all the financial documents in companies. Well, we are going to have another cycle. And as you've mentioned, we've been through many crises. Usually, when we have these companies, you can grow your portfolio, your credit portfolio. So [ before ] it's down, the cap of the market helps the capital market is pretty rich. So I would see this increase on the risk then counter risk. In relation to the provision, well, our provision except the millions that were asked, the rest, you have a case-by-case assessment per sector, per client that will make us have this fluctuation of more provisions, less provisions. So if you get from one year to the other, it's pretty low, 0.1%, 0.2% of the expanded portfolio. So there's no reason to have a different expectation.

Great. Good balances is never bad. So a follow-up in relation to your guidance from 4% to 8%. Checking the closed year, you were pretty well, great performance. The expenses grew close to 6%, close to the inflation. But checking the market we had quarter-over-quarter, there was a high number. So was there something specific? And checking 2026, especially your guidance, 4% to 8%, where Lulia, this delivery will come? Of course, it's to have what you had in 2025, but is there any special line less expenditures? Is it a little bit more personal? So just to understand a little bit your approach.

Help me, please, Borejo.

Yes, Yuri. Well, talking about the quarter, basically, we had seasonal expenditures mainly in training and technology. Those were the main expenses we had for this fourth quarter. Nothing, as you've mentioned, that would get in the way of the year, the year is solely aligned with what we had imagined. In relation to the next year, well, what is the idea? To keep on investing on where we had invested in the last years: training and technology. Those are the 2 major expenses. I believe that the headcount is pretty similar. a little bit more maybe, but nothing that will get in the way our NII. So basically, we have inflation, a little bit more, a little bit less. That would be the level of our expenses for 2026. So that's the risk we expect.

One thing about the agribusiness, a pretty relevant portfolio. The size of clients are pretty high, but some peers are having a hard time. And you have this new situation, a good segment, but now as we have a certain specialty. How do you see this portfolio Borejo, Lulia? Is it behaving well? Major companies are well and the problems are related to small farmers. So just double checking the message for the agribusiness portfolio.

Okay. It is a portfolio. First of all, agribusiness is a broad name. We have the industry, different industries. We have sugar and alcohol. We have animal protein, fertilizers, seeds. We have companies for oil, juice. All that is in agribusiness and also rural farmers, same thing. You have different crops, grains, sugarcane, coffee and so on, few also major cooperatives in the South of Brazil, major clients. And agribusiness as we see today, well, we have tough years. And for what I understand, 2026 will be a tough year once again and mainly for the center west grain farmer. And in the South, since the climate problems, they haven't recovered so far. So in those 2 segments, we have a lot of care. We have a small exposure, but we see an opportunity of growth. Considering that it's easier to grow and access clients when situations -- credit situation is worse and the increments are retracted, then to penetrate in a market that is over offered and low spreads and so on. In all other areas of agribusiness, the thing is good. The business is good. Our carryover, there was a reduction in price. The plants are pretty capitalized after good crop and the cooperatives in the South are pretty well. They are professionals. They are diverse in their revenues with new industrial plants built in the last years. The animal protein chain is pretty fine. There was a consolidation of companies that are way stronger than we had in the past. So as a whole, we have to be selective. Agribusiness in Brazil is a very important segment, and it requires credit. So if you are a bank that funds the production sector, there's no way you won't dedicate yourself to the business. And it's a segment in which Brazil is quite competitive. So even with better years and worse years in average, Brazil is pretty well. You have to be careful. You have to choose your clients. But I believe this is a good year with this care of the grain farmer.

Now our next question, Carlos Gomez-Lopez from HSBC.

Two questions. The first one, we haven't mentioned about the spreads in the capital market that in the previous year had an important event in relation to the portfolio. During the year, we said that things improved. And how are we this year? What was the master bank effect for capturing and the corporate spreads you had? And the second point, if you could recall us the effect of regulatory aspects in the capital, 4966, the operational directive. So what could we expect?

Carlos, thank you for your questions. In relation to the spread, mainly in major companies, spreads are low. That's why when we look to 2025 compared to 2024, we reduced our portfolio in 0.9%, almost the same. There was a small drop of 0.9 percentage points. The year starts in the same rhythm. We have seen an increase in offers for major companies in the capital market. We are trying to participate. You know that we are good in the debt capital markets and seeing this large corporate segment today, this is a year that will be more active in the capital market of fixed revenue and less active in operations for bank balances. The Corporate and Middle segments that added -- represent more than 80% of our portfolio, well, we have had this maintenance of a spread or a recovery throughout 2025. It was stable in September, November, and now we have stability. Your second question about Banco Master, that's not relevant. We didn't see the bank and I haven't seen -- I think that there are 2 or 3 that we saw, but it was -- well, a bank that was not present in the corporate world. And in the cases, it was involved. It was as partner than a bank that related to such companies. It was a low impact. And your other questions, the impact of 4966. Would you like to help me?

Yes, sure. 4966, we are already -- we have already implemented it. The tax -- you can see our balance sheet, the assets, the taxes, they were constant. And even if you got our equity, it reduced a little bit. So I have the capacity to absorb all the fiscal losses that may arise when we had these changes. And nothing changes to the bank. So I believe we are working with that already. There's no meaningful effect, Carlos, in our balance sheet in relation to that.

Thank you, Carlos. And now we close our Q&A session. Thank you all for participating. And we are reaching the end of our broadcast for the fourth quarter and 2025 results. So Lulia, the floor is yours for your final comments.

Thank you, Ricardo. It's been a pleasure to have the chance to be part of this meeting once again. And I'm available in case you may have any further questions. Thank you.

I would like to thank you all for your presence, and we are starting a new year with good perspectives. As you've seen, we are pretty excited with this year, and we hope to bring good news in the next meetings. Thank you very much.

Thank you, Lulia. Thank you, Borejo. I would like to thank you all you who have followed us. The presentation is available in our Investor Relationship website. The video of the broadcast will be available at our YouTube channel. And if you want to hear that as an audio, it's going to be available in ABC Brasil's Spotify account. If you have any further questions, our team is available to answer them and see you in our next results conference. Thank you very much.