Caixa Seguridade Participações S.A. (CXSE3) Earnings Call Transcript & Summary

[Interpreted] Good morning, ladies and gentlemen. Welcome to the video conference for Caixa Seguridade for the first quarter of 2025. This video conference is being recorded, and the replay can be accessed at ri.caasseguridade.com.br, where the presentation will be also available for download in English. [Operator Instructions] We have Mr. Felipe Montenegro Mattos, CEO of Caixa Seguridade; and Mr. Eduardo Oliveira, Director of Finance and Investor Relations for the company. Now I'd like to give the floor to Mr. Felipe Mattos, who will begin his presentation. The floor is yours.

[Interpreted] Good morning, Mattos. Good morning, everyone. Thank you for attending Caixa Seguridade's results presentation. Today, we will present the company's results for the first quarter of 2025. On Slide 3, we start with highlights connected to the 2 branches linked to Caixa's core business, Housing Bank. At the beginning of 2025, both housing insurance and residential insurance continue to benefit directly and indirectly from the pace of growth in Caixa's housing loan portfolio. These lines of business achieved their best ever performance in terms of premiums issued in a single quarter. Housing insurance showed another quarter of consistent growth, reflecting the products taking characteristics ending up following the performance of the housing loan portfolio. We closed this quarter with BRL 962 million in premium written, an increase of over 12% if compared to the same period last year. These results give Caixa Seguridade as the absolute market leader in this area. In home insurance, the volume of almost BRL 268 million in premiums is for the fourth consecutive quarter, the record for issuances, representing an increase of more than 26% compared to the same period in 2024. This performance is the result of the strategy implemented to increase the length of time clients stays with us, making results more resilient, predictable and sustainable. In this sense, we saw an increase of over 47% in the residential coupled with housing modality, which has the same duration as real estate financing, benefiting from the stacking effect and generating long-term results. In addition, we had an increase of almost 5 percentage points in the insurance renewal rate compared to the same period in 2024. Concluding this slide and always seeking to meet the needs of our customers with the best value proposition, I would like to highlight the Parcela Nbuso campaign launched in the fourth quarter of last year, running until February this year, which accounted for over 8% of residential issuance this quarter. During the campaign, the first installment of this 3-year insurance policies with the option of automatic renewal paid for with the Caixa credit card was only BRL 1. This partnership with Caixa Cards in addition to generating a base of long-term home insurance with low defaults has strengthened the synergy between the companies in the conglomerate, bringing benefits to clients of both companies. On Slide 4, I will talk about welfare and assistance for this quarter. In social security, we recorded BRL 7 billion in contribution in the quarter, an increase of over 8% compared to the same period last year, contributing so we could reach BRL 179 billion in reserves, an increase of more than 12% in 12 months. During the quarter, we made processes to adjustments to allow the product to be used as a credit guarantee for individuals at Caixa. This way, while the customer gets the benefits of more attractive credit rates, we increased the customers' permanence in the company since the pension application must be maintained while the loan is being amortized. And pension is also a way of saving for the future, for the future of families. In addition, we have made new fund options available to private clients, including more sophisticated options to meet the specific needs of this public of the clients. Also noteworthy on the screen is the steady growth in revenues from assistant services since the start of the investees' operations in 2021. In this quarter, there were over BRL 68 million in revenues, especially RapIX, a product that grew over 55% compared to the first quarter of 2024. Slide 5 shows that in this first quarter of 2025, we have reaped the rewards of the strategy adopted with a focus on consistent long-term results for consortium and capitalization. Starting with consortia, a product that has performed robustly favored by the current scenario of high interest rates since it presents itself as an option to traditional financing. The volume of letters of credit maintained an upward curve, reaching BRL 5.5 billion, an increase of almost 38% compared to the same period in '24, with real estate consortium standing out, growing over 51% in this quarter. And we also covered over 3,500 letters of credit, totaling more than BRL 475 million in goods delivered, an increase of 33.2% compared to the first quarter last year. For capitalization, the focus on monthly payment process has been generating good results with more sustainable results requiring less redemption, provisioning and consequently has a better operating margin on the investment. In the quarter, funds collected grew by almost 9% compared to the same period in '24. Collections in the monthly payment modality grew by more than 55% in the same comparison year-by-year, generating an improvement in the operating margin of more than 30% year-on-year over this period. Moving on to Slide 6. We highlight the public offering completed in March '25. Through a successful follow-up, the company now meets the minimum percentage of 20% of shares in circulation, fulfilling all the requirements of B3 regulations, standing to show an improvement in the liquidity of its shares. During the quarter, we improved ESG Vida Mulier insurance for women and Previ women for were reformulated to make it possible for trends, gender women to contract these products and to include women support assistance, a service designed to support women in situations of domestic violence. Also during the first quarter, Caixa Seguridade implemented new initiatives related to responsible business practices with sustainable processes in all operations, promoting an inclusive low-carbon economy. Among these initiatives, we have the development of training actions on the gender agenda and combating and fighting violence against women as well as expanding actions in the field of female empowerment. In terms of climate management, the company acquired carbon credits that guarantee the offsetting of 3 years of emissions for the holding and the brokerage houses. Finally, the inclusion in the ICO2 index reinforces Caixa Segura commitment to efficiency in the emission of greenhouse gases and the adoption of management practices that lead to greater efficiency in these emissions. As a wrap-up of this first part, let's move on to the company's big numbers. We achieved a net profit of over BRL 1 billion in the quarter, an increase of more than 9% compared to the same period in 2024. Now operating revenue reached BRL 1.4 billion in the quarter, representing an increase of more than 10% in the same basis of comparison. The result has an impact on our main indicator, ROE, which ended the quarter at 58.6% or 0.2 percentage points higher than that achieved by the end of March 2024. Discounting the dividends of the fourth quarter of last year approved in the last AGM and due to be paid next week, ROE would be 62.2%, an increase of almost 1 percentage point on the figure recorded in March last year. Finally, in line with the practice we adopted last year, our Board of Directors yesterday approved the distribution of BRL 930 million in profits for the first quarter of 2025, a payout equivalent to 92%, higher than the 90% level we have adopted. Now Eduardo Oliveira will continue talking about the financial and commercial performance of the first quarter of 2025.

[Interpreted] Thank you, Felipe. Good morning, everyone. I will now present more details on the financial, commercial and operational performance of the company's businesses. On Slide 9, we begin with an overview of the company's major figures. In the first quarter, operating revenue grew by 10.5% year-on-year, reaching almost BRL 1.4 billion. Out of this volume, 56% corresponded to revenues from equity investments, up 9% on the same period last year. I would like to highlight the historical results of Caixa Consortium, Caixa Residential, Caixa Capitaliza o and Caixa Assistantia. The remaining 44% of operating revenue refers to distribution, which showed an increase of 13% compared to the same period in 2024 with an emphasis on revenue from the housing and residential insurance branches as well as the Construction segment. In the quarter, net income exceeded BRL 1 billion, equivalent to a growth of 9.2% year-on-year. From an accounting perspective, following IFRS 17, the profit of BRL 11.5 million corresponded to a growth of 22.8% this quarter with an ROE of 58.6%, an increase of 0.2 percentage points compared to the same period, as Felipe mentioned. And we consider the distribution of dividend for the fourth quarter of 2024 to be paid next week, the adjusted ROE would be 65.2%. Now moving on to Slide #10. Let me talk about the commercial performance of Caixa Seguridade insurance businesses. Starting with premium written, the highlights were the housing branch with 12% growth, a record performance that reflects the progress of Caixa's mortgage portfolio and the residential branch with a 26% growth, a record for the fourth consecutive quarter. This result is -- has to do with the strategies adopted by the branch and highlighted by Felipe. A focus on consistent and sustainable long-term results is a pillar of the strategy of Caixa Seguridade. In addition to the positive and expressive results in the housing and residential segments, new sales in the quarter regarding life insurance with monthly payments showed an increase of 93.4% compared to the first quarter of last year. Although this was not visible in this quarter as premiums remained stable. This dynamic will translate into an increase in premiums over time. On the negative side, we have the credit life insurance, whose premiums fell by 33% year-on-year, reflecting a very challenging macroeconomic scenario with higher interest rates and therefore, lower affordability for commercial credit clients, both individuals and companies. In the graph -- on the right, premiums earned for the first quarter of '25 grew by 7% compared to the same period in '24, which reflects the resilience of our business. I would like to highlight Prestamista, which despite the quarterly drop in premiums issued, maintained the level of premiums earned in the first quarter of 2024. Now moving on to Screen 11. Here are some operational performance indicators. Compared to the first quarter of 2024, the loss ratio indicator increased by 3 percentage points. This movement is due to 2 factors: the return of the credit line indicator to a normalized level after an atypically low fourth quarter last year, which was already expected and the increase in the loss in the housing runoff due to the one-off recognition of provisions for high-value legal claims totaling BRL 16.4 million and a greater number of notices in this quarter. Regarding commissioning, the dynamics remain within historical levels with no significant variations. As for operating margin, the first quarter of '25 was impacted by the lower volume of premiums written and the volume of claims in the insurance segment, leading to a decrease of 1 percentage point in insurance share of the company's total business margin. On Slide 12, we see the performance of the accumulation verticals business by segment, including social security, capitalization and consortium. Starting with social security in the first quarter of '25, the gross contribution grew by 8.5% compared to the same period in 2024, contributing to total reserves reaching BRL 179 billion, an increase of more than 12% compared to the end of March 2024. Moving on to capitalization. It's possible to see the effect of the strategy of focusing on the monthly payment modality whose representativeness in total collection increased in the quarter. Sales with monthly payments grew 55% year-on-year, which contributed to an 8.7% increase in funds collected compared to the first quarter of '24. The result of this dynamic is an improvement in the segment's operating margin, as Felipe pointed out, and the capitalization reserves, which exceeded BRL 2.6 billion grew 48.4% year-on-year. Finally, letters of credit sold by Caixa Consortia reached a stock of BRL 36.6 billion by the end of the quarter, accounting for a growth of 62.2% compared to the first quarter of '24. Of this total, BRL 5.5 billion came from sales in the first quarter of 2025, of which BRL 4.1 billion or 3/4 of the total corresponds to real estate letters of credit. Now talking about accumulation business on Slide 13. Operating revenue grew by 15.6%. The main highlight was consortium, which showed a significant growth of 34% between the period. With regards to the operating margin of the accumulation vertical in the first quarter, we saw an increase of 13.6% compared to the same period in 2024, with growth in all segments. Although social security stands out, it's important to note the increase in the relative share of consortium and capitalization in the quarter. As a result, the representativeness of the total operating margin, which also takes into account the amounts earned from the risk and distribution businesses increased by 1% compared to 2024, totaling 26% in the first quarter of '25. Now we have more details on the distribution business, our brokerage business. The distribution business includes results related to revenues from access to the distribution network and use of the Caixa brand, BDF and revenues for brokerage, our intermediation of insurance products here considered together as brokerage revenues. In the first quarter, brokerage revenues grew by 13.1% compared to the same quarter in '24. On the table on the left, you can see the performance broken down by insurance branch and accumulation segment, highlighting revenues from housing insurance with 32% residential insurance, 31% and consortium insurance with an increase of 59%. As for the distribution of brokerage, 21% of the total revenue was used to pay Caixa employee and partner award fees and 12% was used for Caixa service fees. 67% of the amount paid by operating companies remained with the brokerage house this quarter. The operating margin grew by 3.6% this quarter with an emphasis on the same lines I mentioned above. In total, the distribution business represents 28% of the total operating margin, of which 22% refers to the insurance vertical and 6% refers to the accumulation vertical. On this next screen, the KPIs, the operating indicators are represented as a group, considering the percentage of Caixa Seguridade's economic stake in each investee company. The administrative expenses index in the first quarter of '25 remained stable in relation to the same period in '24 with a slight variation of 0.1 percentage points. This variation is due to the administrative expenses in the former partnership of Caixa Vida and Providencia. The combined ratio, CI grew by 2.6 percentage points in the first quarter compared to the same period, reflecting the increase in the volume of claims in the housing runoff of CNP Holding and in credit life at Caixa Vida and Previdencia. The extended combined ratio, ICA saw a growth of 1.6 percentage points compared to the first quarter of '24. Now moving on to Slide 16, we can analyze the operating and financial results and their representativeness in net income, considering the effect of all shareholdings, net of taxes and proportion due to Caixa Seguridade. The financial result of the first quarter of '25 was higher than that seen in 2024 with an increase of 37.1% in relation to the first quarter of last year, reflecting the increase in the Selic rate, volume invested and improvement in the portfolio's profitability. So the financial results accounted for 31% of Caixa Seguridade's management net income in the quarter. Regarding the group composition of the investment portfolio, we present its accumulated profitability and historical composition in the group view, weighted by the percentage of participation in each company. In the first quarter of '25, the total of BRL 14.2 billion in financial investments, BRL 47 billion was in post-fixed bonds on papers, 35% in pre-fixed, 13% in inflation index and 5% in other types of funds. The average return on the fixed rate portfolio was 12.4%, an increase of 100 bps compared to December '24. This concludes the presentation of results for the first quarter of 2025, and we'll soon start the Q&A session. Thank you all very much.

[Interpreted] [Operator Instructions] So our first question comes from Arnaud Shirazi from Citibank.

[Interpreted] I would like to talk about the Raista insurance. There was a drop in the year-over-year seen in the competition and the impact of the semester was also important. And last year had some impacts lower than -- that make it lower than for this quarter. But which are your perspectives? What -- and how this product is being structured according to the dynamics of the market?

[Interpreted] Thank you for your question. Well, the audio was a little low. So maybe I haven't heard all the complexity of your question, but let me talk about the money lender service, the so-called Prestamista service. Well, Prestamista, this line was -- we had a drop in this first quarter with a drop of the emission of premiums with a drop of 33% year-on-year. This was due to macroeconomic effects. We could tell that the increase of the interest rates and increase of funding and credit services would lead to a reduction in the credit volume of credit provided by Caixa. Even in those operations that continue that remain even in them affordability of the ability of clients of acquiring a Prestamista loan, the service would be impacted. So we saw this and even more than we could imagine. There was a slight drop related to the production of commercial credit in the bank and also a drop regarding the penetration of this type of loan, the Prestamista loan in individuals, also in entities and companies and also rural loan operations. So these dynamics, what the -- the situations that led to this impact should continue. We expect them to continue. We try to work on some factors to make us believe that this will be dealt with throughout the year, but we have still the same macroeconomic situation. And so this increase that we see, if you compare quarter-by-quarter, this is due to a more typical semester situation than necessarily an increase in this quarter. According to our point of view of this drop in 20% in Prestamista in claims, I mean, this is a good reference for us in terms of the product standard number of claims. So this variation, it doesn't worry us. It doesn't concern us so much because last year, it was below the average. So for us, this level of claims around 20% is a good reference for the year. I do. Let me tell you that the main take-home message is that if the scenario is a little strange or different if compared to last year, since the past quarter, we were talking with analysts and showing that, well, we had a very strong third quarter last year, but we were landing little by little. And now we are following the expected road. We had a plan for this impact on the Prestamista loan service given the macroeconomic scenario. But Caixa is very strong in loan concession in credit granting. And in every segment, Caixa works. Security, Seguridade will be fully integrated to the strategy. Thank you very much.

[Interpreted] And I have a follow-up. Well, second question comes from BTG Pactual, Ricardo.

[Interpreted] We could not hear you. Can you repeat your question, please? -- we cannot hear you.

[Interpreted] This is Ricardo from BTG I have 2 questions on my side. First question, still talking about Prestamista premium services. You talked about a drop of 33%, 34% and the premiums paid only 2%. So let me understand this difference a little better. Is this mostly related to the duration of Prestamista agreements and contracts or any other effects that could explain this more premiums paid in this semester? And also, could you talk about the contract duration in the segment, so we could think how these premiums will evolve from now on or -- and also, we saw an increase in expenses in the holding around 15% quarter-to-quarter. Could you explain the factors that led to this increase in expenses, please?

[Interpreted] Thank you for your question. Let me start talking about the Prestamista loan service. Well, this difference between premiums issued and premiums earned is what we always try to reinforce and discuss because this is one of the characteristics of our business that provide us or provide Caixa Seguridade with resilience because premiums earned is how much we accrue from the sales of premiums in that in a given period. So what we sell in premiums in the Prestamista segment, it's discounted in the time. So if a payroll loan with 36 months is made in the Prestamista system, we will have -- in the first month, we have a total emission of -- but it will represent over 36 because it's 36 months. So we will be checking this premium paid. So when you see a drop in premiums, this reflects that we sold less insurance than in other periods. However, the result referring are related to the sales of previous period, they sustain the earned premiums regarding the Prestamista segment for this first quarter. So it means that if we have a lower performance in a given quarter, just like in this first quarter, this is dealt with by the effort made by Caixa Seguridade in order to dilute this drop in sales as time goes by. So as we recover, as we increase the sales of Prestamista service, we will find a balance and get closer to the levels of between issued premiums and earned premiums. Regarding the duration is around 3 years for the Prestamista service. It's relatively short, a short period. Usually, clients rely on a longer period. But for this Prestamista, usually, it's 3 years and some of the clients, they pay up the service in less than 3 years. Can you repeat the second part of your question, please?

[Interpreted] We saw an increase in expenses and cost of your holding. When you look at the holding P&L in the order of 15% if we add the 2 of them and compare quarter-by-quarter. Can you explain this increase in expenses?

[Interpreted] Yes. Thank you, Ricardo. Actually, this increase in costs and expenses, it was not related to the holding administrative expenses. It is related to expenses in commercialization, basically, the fees that our brokerage service pays to Caixa referring to the cost of service, almost reimbursement Caixa Seguridade pays to Caixa referring to the cost of Seguridade services in the bank's channel and the premium fees to Caixa employees, which is a way to motivate and incentivize our commercial partners and employees to sell the Seguridade services. And this dynamic follows the sale mix. There are products whose premium fee is very low. Let me give you an example. like the housing loan, it's mandatory. It's a mandatory loan. So there is no premium paid for the employees. However, pension plan demands -- demands the employee to put a lot of effort to sell these products to clients. So because of that, different fees are paid according to the product and how hard it is to sell the product. So these differences in costs regarding the holding has to do with this mix. In this first quarter, there was a very strong sale, robust sale in consortium, which is a product that carries a higher costs regarding the fees paid and also lower sale of Prestamista, which has a lower cost of service. So the very mix of sales determines whether this relative cost increases or decreases. So in this quarter, we sold many products with a high cost of sale. This is why the related cost increased if compared to other quarters. Arnon, I'm sorry, I couldn't listen to your audio before. I would like to open the floor for you. You had a follow-up, right? Sorry, I interrupted you before.

[Interpreted] No, no problem. Great. I have a question regarding Prestamista, and there is a follow-up. Well, it's clear that the origin is weaker and the trend in the short term is this. But regarding the stock of this contracted product, can you see any attempts of cancellation in these accounts? Or are clients trying to cancel?

[Interpreted] No, nothing different regarding history or other years. So if the credit operation is paid up, that is we made a calculation if the clients pay up before the end of the contract, this difference between the premium paid regarding that it's given back to the client if they pay up before the end of the contract. This is usual for the Prestamista service, and it's aligned with historical levels. And it varies segment from segment. In the first semester, there was an increase for individuals, but a drop regarding companies, especially in rural, loan, rural credit services. So depending on the segment, they present different dynamics. On average, at Caixa, there was a slight drop. Caixa will be able to give you more information when they release their results. But there was not only a drop. There was a drop in the generation of commercial products for the bank, but followed by a reduction in the penetration of the Prestamista service, especially among individuals. So as this macroeconomic scenario decreased affordability, the client were willing to contract, acquire Prestamistas through a payroll loan with a higher cost of this funding, their willingness to contract the service decreases or the level of coverage decreases. So there are these 2 elements. There is less origin and less penetration, especially among individuals that led to this reduction of premiums issued for Prestamista service.

[Interpreted] Now moving on to Antonio Huyt from Bank of America.

[Interpreted] First question regarding premiums. Could you explore a little further in other products besides residential, other avenues for growth. The residential shows your effort in terms of commercial campaigns and in terms of cross-selling and new products. and it was very successful. So can the same approach be applied to other products like Vida, the life insurance product, you're selling more with monthly payments. Are there any other initiatives to other products using or relying on the same strategy, maybe capitalization on consortium. So how can we work to decrease a drop in premiums in spite of a lesser origination of credits? And maybe a second question, a quick question regarding the financial results. In the past quarters, you had 100 bps of points increase at SLI. Could you update us on these figures, please?

[Interpreted] Antonio -- it's always a pleasure to talk to you. Well, regarding premiums, we have a natural trend. We look more to what's not going so well than we do to what is going well. So Prestamista was -- didn't perform as well as we expected, but the other lines that you mentioned were spectacular. The residential line had a record growing over 26%, if I'm not mistaken here. The housing product, 12% growth and the characteristic of stacking for the housing segment, 12% is not something to be discredited. This is very good. It's a very good level of growth for Caixa. And we understand it should keep on showing a strong performance throughout the year. So we see the loans and I mean insurance products, there are 2 lines moving up, residential and housing and also the life, the Vida product. It has the potential to contribute so that this scale, this equilibrium between positive and negative results tends to a positive side. Our expectation for the rest of the year is that this gap opened by Prestamista decreases through the year. We know this is not easy -- not something easy to do, but residential and housing and also life, the Vida service will bring positive contributions throughout this year. So we believe that we'll have an increase in the emission of these premiums. And this decrease in Prestamista service was -- it calls a lot of attention, but we hope that it will not keep as negative for the rest of the year. And as we mentioned, there are other increased leverages. And even for the Prestamista, Caixa started by the end of April, selling the Prestamista loan in payroll -- private payroll services operations. So it has the potential to close this -- to bridge this gap regarding the Prestamista service. It's still too early to know how much this gap will be closed by the sales in this commercial loan or commercial credit segment. But we see this as a positive factor this year, especially from May on, from June on, the second semester, too. And regarding other lines, other products, let me tell you, Antonio, that every day at Caixa Seguridade, we work on a daily basis. We work 24/7 here to identify opportunities regarding new products to identify new cross-selling opportunities, a channel maybe that is not performing so well or not taking full advantage of its potentiality. So this is something that is continuous here at Caixa Seguridade along with Caixa, along with our private partners and our -- the companies we invest in. So we have a rollout roll segment here that is very strong. And these products individually, they will not solve everything. There is no silver bullet. There is no magic formula, but the set of new launches, this mix of new initiatives will help us -- will make us increase our results in the long run. And as Felipe mentioned, during his presentation is that our focus is on the long term. If you have a product that has a better result in the long term, even if it cannot be seen in the short term, we will give priority to the product that will provide us with a sustainable growth, a solid growth in the long run, bringing the financial results to Caixa and to our shareholders that will be more relevant through time. Thank you, Edu. Edu left me a question here regarding the -- an update regarding the bps. -- each 100 bps, how much of return we would see in terms of financial return. We do not focus on financial return. It's very important. We know, but we focus on the operational return. And we would like to talk about new forms, new ways of improving our operations as we have done. Our focus has been on the operations because we are very profitable. And this is our function to generate more value to the society, always trying to align the best strategies to serve our clients. So every 100 bps, we have something around BRL 40 million increase in the financial results. There was a slight increase if you compare quarter-by-quarter. Unfortunately, regarding the Selic scenario, we expect this figure to increase a little bit through the year.

[Interpreted] Now moving on to Kaio Prato from UBS.

[Interpreted] I have two questions. First of all, I would like to listen more about the brokerage margin and costs, commercial costs. Well, Edu talked about the NIPS effect. Prestamista was negative for this quarter. This was the quarter with the lowest margin. You had a coverage of 70% and the lowest level had been or was 76%. So were there any review regarding brokerage? Or is this just a mix or a lower result for Prestamista? Or should we wait or should we wait for an improvement or recovery? Or should we keep on working with this margin for the whole year?

[Interpreted] Thank you for your participation. Well, regarding brokerage services mix is the main factor. There is a second element that derives from the mix, but let me highlight this. regarding consortium. Consortium services, they have a dynamics of having a higher acquisition costs. The premium fee in the consortium is high if compared to other portfolio products. And if we have a quarter that grows a lot in consortium as we did, this is -- this becomes more apparent. But there is another characteristic of consortium that should be highlighted. This cost is really concentrated in the first month after the sale. So this payment of this premium fee, especially it usually takes place in the fourth first month after a consortium service or product is sold. When you have a quarter that has a lot of sales and you carry some of the cost of sale of the previous quarter. And in the past quarter, we had the best quarter last year, the fourth quarter of last year, we sold almost BRL 7 billion in credit or loans products. This goes into -- this carries into the first quarter. And you asked if this is a trend moving ahead. Well, we understand that this consortium dynamics will keep on being strong. However, if we think about this dynamic of appropriation of the cost regarding the brokerage results, this first quarter is supposed to be the worst because you have the situation in which you have a record from the previous quarter with a lower production of products with low fee in this first quarter. So there is this component. Maybe this will be the worst quarter. And looking ahead, we always say that, that ratio this average ratio of 20% or 10% of premium fee and 10% of Caixa fee is a good reference. This was the first quarter, as you said, that in which this mix of features made us move up this level. So we believe that we will be back to the historic levels in the next few quarters. We believe this figure was atypical. How can I say? In this first quarter, it was -- it's supposed to -- it was very -- it was hard to pay in this quarter and it's supposed to increase.

[Interpreted] And now I would like to talk -- to ask your opinion. You started working with private payroll. [Technical Difficulty] Talking about Prestamista insurance, you started operating this from the private payroll service, right? And could you talk more about how this experience is unfolding? And what are your expectations for this year? Do you have anything to share on this topic?

[Interpreted] As Edu mentioned before, this is a new experience. It started now. We changed it from an integrated system, moving on to Caixa. We have -- we do not have sufficient elements or enough elements in terms to talk about penetration and how this market will be because it's a new market. When you talk about this product, we always are very cautious. We are very cautious because we will be able to talk more clearly about that when you have more data about the penetration of the product, the acceptance of the product. As soon as we understand how this product will behave, we will be able to discuss it. It's too soon for us to understand it. In the second semester, we will be able to talk more about that. [Technical Difficulty]

[Interpreted] Now moving on from Tiago Binsfeld from Goldman Sachs.

[Interpreted] I would like you to discuss pension plan, your expectations for redemption. This is a very resilient line in your portfolio. And could you talk about -- more specifically about your expectation for the pension plans to guarantee credit services? How -- do you see this initiative moving forward to guarantee your results?

[Interpreted] Tiago, thank you for your question. I will start and then I will continue. The pension plan is a very resilient service, a very resilient product connected to our image, the image of solidity that our company has. This is very important to us. And when you talk about what we expect in terms of pension plans, we expect it to grow steadily just like in the last quarter and also in this first quarter, also reflecting a high Selic interest rate and also a natural trend following the dynamics of the Caixa sale channels and the needs of the bank. Our strategy is always coupled with Caixa's strategy. And when you talk about pension plans and guarantees and the idea is to maintain the client. This is one of our main focus because pension plan reserves. I mean, the worst scenario is the client applies or puts his money or their money in this pension plan and then they remove, they withdraw the money. We know sometimes life requires people to do that, but we want to make everything we can with lower rates, with cheaper rates so -- or to help clients to maintain their money in this plan, so they can guarantee their future. Our volumes, just like in the Prestamista service, our -- we cannot yet say how the demand will be. We do not have enough data to talk about the demand yet. But the idea is to secure this option for our clients. And the strategy is to maintain our portfolio with almost BRL 180 billion administrated place us as one of the main companies in the market -- and naturally, other companies will attack those who have more reserves in pension plans. So our idea is to maintain our portfolio and also discuss portability and cash back in the beginning -- in the middle of this year, we will have more opportunities to do that, benefiting clients who decide to come to Caixa Previdencia through this portability services. So there will be natural advantages and also financial advantages connected to that pension plans. Caixa and Vida Previdencia brought us new practices, new access to private ISG funds and new funds. So clients who are not satisfied with their investments and applications, they can have better adaptability or better focus concerning what they expect for the future.

[Interpreted] Well, I think Felipe has said it all, but let me highlight one point here, precisely our expectation regarding pension plans. We've had 2 very challenging years, '23 and '24 regarding pension product. Caixa Seguridade is a strategic alignment with the bank. The bank duly prioritized a focus in working with funding for housing products and pension plan was maintained as a second priority for the bank in these 2 years. So this dynamic will be a little different this year. Last year, some changes were made. There were -- for example, the launching of the Tier 4 of Minha Casa Minha Vida, the government housing program. So there are some initiatives taken by the government and some initiatives taken by Caixa. So this housing funding will be better equated and dealt with and the pension product will thus gain more priority in the bank in the bank channels. So if you consider the last quarter of '24 in this first quarter, if you consider this, we can see this trend, and we believe this positive trend, this optimistic trend towards pension will continue right after these 2 difficult years, as I mentioned.

[Interpreted] Next question comes from Guilherme Grespan from JPMorgan.

[Interpreted] My question has to do with consortium. I would like to ask you about your perspective for this year and the sale of consortium is very strong. Do you expect this speed that we see in the first quarter to continue throughout the year? And my second question also made in the previous call, but just an update from you guys. You have very good wins, positive wins from this accrual. We do not see the results of consortium because there is a long-term accrual perspective. So we can -- for me, it's a little hard to understand the administration fee. What about its normalization? Can you remind us how we could work with this consortium administrative tax in the steady state as the product gets into this sustainable growth period?

[Interpreted] Guilherme, thank you for your question. Well, consortium -- I mean, there's nothing that tells us that things will change regarding the situation for consortium. Caixa Seguridade has grown a lot in the consortium and our consortium growth more specifically in the housing service. Our portfolio is 60-40, but in the first quarter, there was 73% in housing and the rest in motorcycle and heavy-duty vehicles and so on. So this portfolio has more longer duration, more presence of this client within the bank with us. And also this high Selic interest rate makes it harder for clients to get access to real estate services because 30%, giving 30% is not easy for everybody. So -- the idea is to complement the strategy followed by Caixa, so we can sell more consortium services meeting our clients' demands. It's another modality we provide to our clients that has been growing in Brazil, especially at Caixa Seguridade. Our portfolio started back in 2021. When we talk about share, market share, obviously, we do not appear so well in the statistic. But when you see the volume of sales, it has grown steadily significantly in a way that provides or that meets the clients' demands with lower rates, we have reduced installments, good consortium rates, products that we have launched through these years with excellent penetration and demand in the market. And in fact, clients really use this or like this because it makes easier for them to acquire products and real estate services. 2 and 3 rate is when it's normalized, we can expect this when the consortium is normalized. Thank you, Guilherme.

[Interpreted] Well, the Q&A session is hereby closed. Mr. Felipe now will wrap up this meeting.

[Interpreted] Thank you very much. I'd like to thank Matt and everyone who took -- devoted a little bit of your time to check the results of Caixa Seguridade. It's a very important company to us. And when all of you, the investors, shareholders and clients take part, when you participate, you help us to improve our services, improve the governance of our business. So thank you very much to each and every one of you. I wish you all have a wonderful afternoon, a wonderful day. Take care. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]