Itaú Unibanco Holding S.A. (ITUB4) Earnings Call Transcript & Summary

[Foreign Language] The sustainability of our business and the care for our environment. We are consciousness of the impacts of our actions. And we make an effort so that they are always positive and that they fulfill the objectives of stimulating the social and economic development of the country and it has been like this for 97 years of history. Itau is an institution that has over 60 million clients and 500,000 direct shareholders. Now to open this meeting we will have the special presence of our co-president of the Board of Directors, Pedro Moreira Salles, and Roberto Setubal that will share with us their perspectives on the financial industry and that is transforming substantially over the last few years. Thereafter, we will have, for the first time, the participation of all the members of the Executive Board. Starting with Milton, our new CEO, which will share his priorities and how we are leading in this great transformation from Itaú Bank. At the end of the morning, around 11:15, we will also have the Q&A. Please direct at any time your questions through the specific function of WhatsApp. If you're watching through the YouTube channel please also use the WhatsApp number or the QR code that is appearing in your screen. If you don't get to have your questions answered live, then our Investor Relations team will answer thereafter. And now we'll leave you leave you with Pedro and Roberto, and we'll see each other later. Pedro and Roberto, welcome to Itaú Day. Floor is yours.

[Interpreted] Well, thank you, Renato. Have a wonderful morning. Well, Roberto, let's complete now 13 years since the fusion of Itaú Unibanco. It is a long story. And you were there as the CEO, and I've been there -- you've been there for 8 years in that effort to actually join these companies in a single business, that would make sense. So you could react to the market conditions and everything. What changed in that period? What have you seen? What is different here?

[Interpreted] From when -- since 2008, we did that wonderful business together. Well, first of all, I would like to tell you, Pedro, that we had an enormous efficiency in that fusion and an integration. I think that we can gather both banks very well. We joined the cultures, and we really took over the market and really it was a great success. And we knew what had to be done at the time. And since that time, since that moment, 13 years ago, everything is very different. I think specifically, we have a very important enormous impact in technology. A lot of things change in that sense. I believe that today, one of the big competitive differentials that we had at that time as we had agencies and a very broad knowledge of our business and our clients, I think that all of that changed with the new technologies, and I believe that now the number of branches decreased. It's important. So I think that data and availability also changed a lot, and this made all the challenges ever more challenging, more ever bigger. But looking up ahead in the future, how do you see the competition with fintechs and in this new world that we are discussing up ahead?

[Interpreted] While, in fact, it's a new world. But if we look to the past, the bank is going to be 100 years old soon. And we have obstacles, and we have had risks which every country, every company actually has to go through periods of good and bad. And we had new -- we always had to face challenges. And we shouldn't decrease the degree of concern with what is happening with the pandemic, of course. A lot of things that were proprietary that were built all through all the time today probably are less proprietary than they were in the past. I think that the network of branches, as you said, it loses a little bit of its importance, even though the capacity to combine remote services with the physical service. Today, the terminology omnichannel is a very big differential that we have. And the competition they are trying to find access purely phygital. And we are hoping for the success here, and I think that everybody that can transform their physical service making it more working -- winning a role better than we can compile these things.

[Interpreted] Well, I think that there are a few advantages here. There is -- there were -- we still have a lot of clients, customers. We have a quality and portfolio of services that is very differentiated. And I think that these are the financials that we need to explore. And now you should see that we are doing a transformation. From the bank, going through the digital channels that is spectacular, the speed with which we are changing is very big, and we are all moving to the cloud, which is essential microservices. And I believe that this change, technological change will give us the level of competition of -- competitiveness actually that we need in the digital world. I'm very optimistic in regards to that. And we are -- we can see that the Board of Directors is really working out this change very well. And how do you see Milton working as a CEO and the new Executive Board, I believe that Milton can press -- can implement a rhythm, like you said to the bank, in a very short time that we realized, we can see the degree of enthusiasm really from the organization. And as you said, we are gathering extraordinary conditions, the brand talent, the client, the customer basis. And what we need is to react. We need to react to the times in our position and our -- as -- we have been the leaders and now as the leaders, we not only have the competition, traditional competition that we've been facing, but we knew we have new competition. In the end, this new competition has a new business model, and this makes us become the target. And as we become the target, you have a target of providing market share talent -- customers margins. And at the first time you need to defend your market share because you don't have the tools to leave the defensive that is backing you against the ropes, and then we can move to an attack moment. I think that we're preparing the bank for some years for that, as you said, we are working with the cloud. This is a project that we've worked for over 2 years. And at the end of the year, 50% of the bank will be processed in cloud. I think that the focus on the client, the introduction of NPS has been -- has changed the perception. And the importance of -- focus on the client and customer that needs to improve. And I am certain that the bank is -- well, Milton will get your point that he will be the captain of this come back to the market with more aggressive tone in the sense of growth than what it was over the last few years. And in fact, we are trying to react. And this is not a good reaction. And I think that we need to do things in a correct way and all of this goes through a profound cultural change. So the business model changes, and you have a lot of changes that you need to change, internal processes, technology, and last but not least, the culture. I believe that Milton is the right leadership and the team that they brought to -- that he brought to be part of the Board of Directors is ready. Everybody will be at this new -- we are seeking the new growth cycle for Itaú Unibanco. I am very excited. I am very motivated. Not only the Executive Board, I see that all the teams, all the business units are very motivated. Milton has taken over the bank for a very short while. He -- and he has a lot of knowledge of the bank. He knows wholesale, he has gone through risk in several areas in the Mexico. He has a very good basis. And he has a capacity to motivate people and a good leadership. So we are very optimistic. And I see that he form an executive board that is very competitive -- very confident. We have the best thinking minds of the bank with him. And its young Board of Directors. He's a young guy, and he's open to changes. And this is the moment that we are living right now in the world, where the changes are taking place in a very quick -- with a lot of speed. So having a Board of Directors that is open to changes and young leadership that is open to changes. And I think that me -- you and I are giving incentive to these changes. Because we know that the bank needs to change, and we are changing. Therefore, all of this is part of the culture that is arriving through the digital world, and it has to be more open. It has to be more informal. And I think that Milton is the right person to implement this and to bring this very presently to the bank. So I see these changes that are happening very well in the way that things are -- all of this is working out very well. The culture that we have here in the bank that changes and the bank are really moving on to the right direction. And the bank is and continues to be very attractive. For youth, we've just won yet again awards saying that the bank is one of the more attractive starts for their careers and the cultural change that we will bring new people that will change, that will help in the cultural transformation. And these people need to think about the youth, and we are thinking about fintechs and the technology companies that navigate in the world and they are our new competition, and we have very big challenges, too. And investors notice there is an incentive way to incentivize the growth of these companies. And we have this market share and market cap war, as I'd like to call it. But this has to do with this perception of the lack of balance between what we have to follow and what they follow as far as rules, I can say. Specific segment should have similar rules applied to them. So there should not be so much asymmetry between the rules applied to us and them. And these advantages will go away, I believe. And the capital markets will make that happen at the right time. So this is how I see it. This is substantially, it's great. We need to understand what the customers and clients' needs are and provide them with what they need. And there is a world of opportunities. And I think the whole team has grasped that. Not only the Executive committee, but the whole bank. These of data goes through TED to remember that the organization follows this has been following on that before -- a long time before. Well, the Dow Jones Sustainability Index was created at the end of the '90s, I believe it was 1999. And since its first edition, we've been there since the inception. And we are the only company from Brazil that has been there since the beginning with facing really of the pandemic. And as you've known, towards the end of the year, we announced, along with 2 other institutions. We are showing how we're concerned that we had since before with the environmental issues. So the bank has -- not because it's something fashionable, but because we believe that this is important in and of itself, and are going to present -- they're going to present a lot of things to do, the actions that we are doing to build the bank of the future. Milton, the floor is yours and as well as for the floor is of the executive committee.

[Interpreted] Good morning. Good afternoon to many of you that are connected here. Thank you very much for your availability, and it is a great pleasure to share the strategy, and we can have this talk with you today. And also, we need just -- on people. And we have a very committed team, very qualified team, and I reinforce the conviction every time that I talk to the team. And more than that, the ownership posture of every one of our collaborators is historically well-known, and it generates a lot of trust in everything that we do. Now we have an operation that is very broad with the biggest financial portfolio in the markets to service millions of customers and all of their needs, our businesses. We are talking about free digital bank experiences. And I'm not just mentioning to the financial sector, the use of technology. And here, I'm using the word in a very broad sense, has improved and simplified our experience and the most main things, which is watching a series or watching a movie or requesting food or any online purchasing. And our customers expect the same experience when they look at the relationship that they have with our bank. And the regulation of the sector is also evolving. We are becoming ever more dynamic. We start with the base of customers that we start with 60 million customers that interact through us -- through our different channels. We have over 4,000 physical branches, apps with great evaluations from the 24 million digital customers and WhatsApp and so on and so forth. Well, I had told you that we have all the tools that we need, and that's why the transformation has to be cultural. We need to build a bank that is more efficient. That is simpler and is satisfying the relationship with our customers. All throughout this presentation, you will see further stock. We will see, we will talk that in the wholesale world, we are offering a completely different experience to our customers, regardless of the channel that they use to access us. We are a very relevant player in payments but we need to evolve every more. We have an enormous potential to use data to deepen into the understanding and the behavior of the customers of completely digital, have cultural and operational factors is to differentiate them from the competition. And to us, to be digital means to be able to service our customers when, where, when and how they want to be serviced. For some, this means taking care of all the needs, banking needs, through our Super App, but also for some others, this means having a very specific service with a financial consultant that will help the customers who make the best decisions with the offering of the best products and services. First one is in use -- in terms of use of technology in all the areas of the operation. This is a simple automation and also the new creation in new ways to interact with the customers. The application of technology has increased and new capacity to create new products and experiences that are really differentiated. Secondly, innovation has to be a part of the day-to-day of everyone inside the bank. And not just the task of a team or a group. Thirdly, we need to have more agility in the development and the implementation of new solutions. Therefore, decreasing the launch into the market, time to market, adjusting the timing to the customer whenever needed. And fourth, we need to organize ourselves into multi-disciplinary teams, using new ways of working, which is the integrated communities as part of that. We have to have obsession for efficiency, as I mentioned before, using technology to leverage our potentials -- commercial potentials and increasing our capacity to offer products and solutions that are more competitive for our customers. We are trying to find and seek -- we are trying to build a very diverse team to gain more autonomy and service our customers better. We know that we have a few challenges because of structural issues, but this is also a priority agenda, and we've advanced in a very important way. We -- the solution -- the problems of the customers is a mission of all the collaborators of the bank without exception. And we have a long and broad way up ahead. We want to grow. And for that, we want to be sustainable, establishing relationships that are healthy and in the long-term with our customers. Managing our risks, our core activity of everything that we do and generating positive impacts for the environment and society. Now my colleagues from the Board of Directors will do a deep dive on all the themes that I mentioned. And I believe specifically that in group, we will face all the challenges that we have up ahead, specifically cultural transformation. I'm very happy that the Board of Directors is a very qualified team, very qualified group, very trained. They have great capabilities, and it's great that you get to know every one of them. They have enthusiasm. And it is -- this group that will allow me to conduct the bank all throughout our journey with the 90,000 collaborators. Everybody is responsible for this transformation before I give the floor to Broedel to talk about the financial expectations and our efficiency program, I would like to give you -- to show you our new marketing campaign is bringing a new change. From one word that displays our position in the market and makes a difference and shows the new moment of Québec. You will see that this work starts with everything that I mentioned up until now. But more than that, it brings a lot of humility to the way that we should face our challenges. Thank you very much, and I will come back to close the event ending part. And through the Q&A session. See you in a little bit. [Break]

Recommended investments from Itaú but also from other institutions. Itaú has over 1,000 investment products from Itaú and from other in solutions as well. I would love to invest my money in one of these technology companies. I didn't know that Itaú didn't know it. Itaú has some technology investments. How did -- they don't know about that? We know those foreign technology companies. Itaú has a number of funds that invest in them. Itaú was made for you. Let's -- so Itaú. I don't feel good about giving my credit card number on the internet. Well, you can generate a different card on Itaú just for that specific purpose, a digital card. Where does Itaú find these great ideas? Well, they find these great ideas from the clients because the clients give them these ideas. I don't know how the clients come up with those things, so.

[Interpreted] Thank you, Milton, and good morning, everyone. I am Alexsandro Broedel, and I am the CFO of Itaú Unibanco. And to start my presentation, I'd like just to briefly talk about our expectations for 2021. As you know, our guidance was published at the start of the year. And a lot has changed since then. We believe that the economic effects caused by the pandemic are going to be overcome as the vaccination rollout improves. And we need to understand how the current scenario has impacted our expectations for the year. Our guidance still has the best expectations for the bank. Starting off with the credit portfolio. In our most recent -- in our latest earnings call, we saw a 4.2% growth. This was supported not only by individual credit portfolio, but also corporate credit portfolio, and that was the surprise. This performance in wholesale has to do with the activities in the capital market, especially in the issuance of debt, and that created a good opportunity for our credit operations. In the coming quarters, we expect growth to continue, boosted by the individual credit portfolio, especially real estate loans and vehicle loans. And also because we expect credit to go back and current accounts as well. Our expectation already thought of a slower growth at the start of the year. That was based off of not only the negative impacts and the seasonality of the period, but also on the expectations. For the coming quarters, we expect our financial margin to be accelerated not only because of the credit portfolio growth, but also because of the specific individual credit lines that we expect to grow as well. At the second -- in the second quarter, we already see a growth in these lines and that underscores our expectation for the rest of the well-positioned and that allowed us to navigate well through the greatest volatility we had in this period. Now when you look at credit costs, we saw a 31.9% reduction in the quarter. That is an impact of the credit quality we have in our portfolio. Delinquency over 90 days is a good reference. We have had our best figures ever despite the challenging economic scenario. We can see then that is reasonable to expect that we're going to be very close to our credit cost guidance. As for our fees and insurance results, we expected a weaker first quarter, especially due to the slacker economic activity we have had in the first quarter in comparison to the fourth quarter last year. And performance this quarter was close to what we expected, but with a different composition. These results were boosted by the pandemic effects, especially the credit card and debit card chains. They were offset by the investment banking in broad. Our income tax rate was extraordinarily higher this quarter because of the lower credits that we had. That, naturally, is not to be repeated in the coming quarters when we'll probably have an income tax rate that is going to be lower and better normalized in line with our expectations. And I'd like to change topics and talk about important pillar for the bank. As our strategy is concerned, which is efficiency. We have always focused on cost efficiency. And other subjects that have been mentioned by Milton are going to be explained throughout this event. Well, it's clear now that what has brought us this far is no longer enough to keep on sustaining it from now on, we have to go beyond what we have already achieved. And to do that, we need to strengthen our efficiency culture on every level of organization. We need to constantly question what we do and look at possibilities to automate workflows and processes. This is not a beginning, middle and end activity. This is a new way to conduct business and to make choices. And this is now part of our everyday life. We currently have 16 work streams for efficiency, each of which is sponsored by a senior executive, and we have meetings periodically to monitor how they have been progressing. This is a careful process and one that is already presenting good results. We already have 1,200 initiatives planned over 400 already being rolled out. These initiatives can be minor activities to reduce waste as well as major restructuring projects. As you've probably seen, we have a nonrecurring allowance that was made for this first quarter relating to our service models and the retail bank. And this is to be carried out in the coming 2 years. And this is going to yield great results in quality and efficiency. In the first quarter of 2021, our initiatives for -- our initiative program already led to a BRL 500 million drop in expenses quarter-on-quarter. All of these changes in our approach regarding efficiency has one single objective, which is to better service our clients while also keeping us more competitive with our products and more agile in performing our projects with simplification and digitalization of our processes. I am adamant that with all of the changes that we are bringing about, we are on the right path to achieve our objective, which is to reduce sequentially and nominally, our operating costs in the coming 3 years. And now I'll turn the floor back over to André Rodrigues for him to go into the details around the transformations that are being carried out in the retail banking segment.

[Interpreted] Hello. I am Andre Rodrigues. I'm the head for retail Banking. And I'm also in charge of products, digital channels and CRM. So we just heard about our efforts in seeking more efficiency, and that is directly related to customer service as the bank simplifies its structures, it becomes lighter and more agile, focusing on what really matters. For that reason, to be able to be part of the new competitive scenario and to meet the needs of our clients, we are developing very much in retail banking, reorganizing all of our operations. We have [indiscernible] so I -- retail. We are reorganizing our businesses. There's an integrated business approach which was based on customer feedback and analysis that we carried out, a multidisciplinary organization -- of the organization without any fear of questioning the status quo, and we have launched the [ I version ] 2030, and this is already being rolled out and implemented. This is a very challenging journey of transformation, and we have prepared in a very special way. We created the transformation office with dozens of our best people, 100% focus on [ I version ] 2030. We have changed dozens of people. And tools for them to focus on -- hundreds of people, rather for them to be the multipliers. And at the end of this year, we're going to have about 75% of the project already rolled out and implemented and the rest of it will be completed and concluded in 2022. And we believe that to keep our strategy up-to-date and in-tune with what clients need and what the market requires, it's crucial that transformation -- the transformation office becomes a permanent department so that we can continue to continuously improve and change. I'll highlight 2 points caused by the -- the digital initiative. And the omnichannel strategy. And then the e-commerce project through its digital channels are going to be bolstered with our digital sales capacity being multiplied. And at the end, I'm going to share with you a real case, a concrete case that shows you how powerful this transformation can be as the [ I version ] 2030 look. This is the SMEs project with Itaú Unibanco. The first one has to do with how we service our clients, being phygital and omnichannel. Being phygital means that the client can choose how they want to interact with us. We're going to offer them a bank that is 100% digital with the convenience of the physical branches, the brick-and-mortar branches. So we have not only the digital channels, but it will have their managers available at extended hours on whatever media they choose. WhatsApp, e-mail, telephone, and they can go to an Itaú branch that you're interested. We believe in the complementary aspect of digital and physical worlds. And we believe in the ability to address the clients' needs. We're orchestrating our new channels with clients creating an omnichannel strategy that is quite practical and pragmatic. With that, we can create new points of contact and have conversations that are well in context with all of our clients that using the technology and data the bank has. So say a client is using one of the channels of the bank, say the ATM. And they want to simulate the acquisition of a product. That information is going to be used, that data is going to be used to generate context for other channels. It could be a push on their app or a physical activity, maybe a manager calling them. So that, that can give clients better support. And increased conversion rates in comparison to it, cold calling, for example. This type of approach will increase conversion by 3 to 4x, sometimes even more. And that will make the clients much more interested and much more comfortable in comparison to other traditional approaches. And our clients can already request support from a specialist or a manager online on our digital media. We call it Click to Human. That has already been increasing our sales conversion two to threefold, and that should continue to grow in the course of time, especially with products that call for more specialization. The credit or insurance, for example. This online/offline connection has led to an increase in BRL 2 billion in new products. This stresses how good the physical strategy is, physical and omnichannel, of course. And our app is to become a very powerful e-commerce platform. We are wherever our clients are. And we know that our clients want to do banking on the phone. So the phone is the preferred channel of our clients. So it has to be our priority. We have been increasing investments on the Itaú App so that it will become a one-stop shop, giving the client all of the client -- the products they may need. This digital journey includes co-creation with clients, a test-and-learn culture and best-in-class solutions with an end-to-end user. And clients can already recognize this change. Our NPS of our app is 78 points. And it is our mission to quadruple our sales on digital channels so that they will account for approximately 50% of the bank's revenue. Also to support that, we created the Life program. The idea is to change and transform how we offer products in a new operation model with new analytics solutions, smart tag-in ad tag technologies. And this is just a quick summary of the initiatives that we are developing with our [ I version ] 2030 project. And this is certainly going to lead this to a fundamentally different retail banking structure than we have today. And we're client-centered. And not only saying that as a fad, but it really reflects our business model that it is developed based on client needs with the expectation to generate value in the long run, seeking to create new bonds and to make them ever more faithful and ever more loyal clients. This is the [I version ] 2030 initiative. And I think it would be interesting to talk about another very important business. That may be in a more advanced page of evolution with very important achievements, but still with a lot of opportunities to be seized, which is our SME operations. Our operation has doubled in size in the past 4 years. With that, we went from an uncomfortable third place ranking position to leaders in SMEs. And we've created that with great credit portfolio, being resilient in moments of crisis and with a lot of selective products in the process. And that was not a simple process. It didn't happen by chance. And it's really focused on establishing a business model that would be or should be sustainable in the long-term and driven by client needs. That arose from thorough reorganization of our organizations. Some of the elements related to that are the spotless journey on everyday activities. With channels that interact well with each other. Then credit from a client perspective, not products with regional teams being retrained and the commercial front being the first item in line. Customization on scale, but with more autonomy for our SAF. And lastly, consulting services for our customers whenever they need to make the most important changes in subjects that are not so every day sometimes. This value requires a great change in our culture. We're going from a mass approach, so delivering products in a mass perspective. But now with structured data, we understand the needs of our clients, and we propose the best solutions for each case. This new model has risen the satisfaction levels in comparison to competition. And we now have a competitive edge in the market as well. You can't grow sustainably without customer satisfaction. This journey has not come to an end. We're improving and enhancing this model for the whole SME clients, especially smaller companies. And last but not least, we're creating an ecosystem for partnerships to also offer non-financial solutions and increasing the number of interactions and points of contact with our clients creating more engagement and more contribution from the bank and partners to the client's journey. We still have a lot of opportunities to work with in different markets. And this will allow us to experience high rates of growth throughout the next years. And our perception is not -- what we want to broaden the leadership in the market, and we want to be the first choice for our customers. And talking about growth, we have my colleagues that will talk about payments that will have a very relevant vector of growth for the customers of the bank. And now we are incorporating a series of capabilities that are differentiated for the bank.

[Interpreted] Thank you, Andre. Good morning. I'm also Andre Sapoznik. I am responsible for payments, operations and marketing. Now from this moment on of 2021, we started to work with the payments area here in Itaú Unibanco, and this structure has our businesses of debit and credit cards. Our Rede network, our cash management and ET, our digital portfolio. Now this is a fundamental group of discussions so we can best service our customers since 90% of all the interactions of the customer with the bank involve some sort of payment. Therefore, solutions for payment are essential to establish with our customers a very close relationship. That is based on frequency, recurrence and relevance. This relationship allows us to have very important information on the activity of the operations of the customers. And from this operation, we position ourselves to offer adequate services for the financial lives of people and companies, whether if it's credit investments, insurance and so on and so forth. Now this payment area has 44 million customers. We're talking about natural persons and companies. And in the end of 2020, we've processed BRL 10 trillion of several transactions. This is the equivalent of BRL 320,000 per second in every second of the year. Currently, out of every BRL 4 that go through Brazil, BRL 1 goes through Itaú. And our mission is we want to see the origin and the differential destination for payments here in Brazil. And now we have a few principles. The first principle is talking about the development of an impeccable experience, simple, quick, intuitive. And this is an experience where the customer is not exposed to problems. But if they should happen, they have to be resolved very quickly. Secondly, we have to talk about the utilization of information to understand the behavior of customers, and therefore, we can position ourselves to offer credit, differentiated credit solutions and for investments as well. And we have to understand technology as a competitive advantage. Therefore, the platform that is in constant update, and that can address us continuously to see the pace of our customers in a more productive way. And the fourth principle is always trying to find the leadership. And this is how we will be always -- we will always offer competitive advantage and offerings. Our agenda is for growth. For the growth of the customer base for the intensity with which the customers have a relationship with us and the growth of opportunities that the customers provide us and in proposing the financial solutions. In the credit card world, we are the leaders where the market share, and we are trying to find in 2021. We are trying to grow significantly the basis of customers. Whether if it's leveraging the growth of the bank, where we offer the debit and credit cards, or because of our own brands, Itaú card, credit card, [indiscernible] card or even we are using several partnerships with several operations, wholesale and industry, for example, [indiscernible] Carrefour, [indiscernible] CBC, Body Shop, LatAM [indiscernible] VIVO, Fiat, Volkswagen, Ford, Samsung, Mitsubishi, we have a lot of partnerships. And besides that -- besides the growth, we are promoting a very important renovation of our technology platform of cards that will bring more velocity and efficiency. Now in the operation of the Rede, the objective is to help the companies that are our customers to sell more. We are developing an operation with a culture of services and technology for wholesale. And this is an operation that is agile, innovative, light, open, integrated and very good to work with. Digitalization of the customers and their connection with our several solutions will be one of the competitive strengths of Itaú. The acquisition and several other financial services inside of the bank, we -- this will lead to the customer more options, so they can really focus on their business, and they can focus on their cash flow. We are going to help retail and wholesale to sell more and better. ET has started as a digital portfolio. And now we're coming at an offering for a digital bank. It's a proposal that is for the public that wants to solve everything via cellphone. And this really coincides with youth, and it was launched in November of 2019 with the proposal -- value proposition in the simplification of payments and movement of money through a simple account. Now ET, besides being a full account offers, credit cards, personal credit and other financial services so that the customers can use ET as a bank that is ever more complete in their day-to-day operations. And we continue to work intensely so that the new evolutions of the proposal of ET is available all throughout the next weeks and months. And well, how has the customers received this? We are very satisfied with the evolution of ITE. And we've managed to achieve over 7 million customers, and we are working to work to gain the trust of 1 million new customers every month. These customers have brought their main banking operations. And they have registered even their key, their PIX keys with us, and this makes ET their main interaction channel. And ET also has a valuable contribution for Itaú Unibanco from the standpoint of technology. This is because ET has been developed in a technology for matrix that is absolutely renewable, completely built in micro services that work with cloud computing and modern philosophy for compossible banking. This allows for different modules of businesses and financial services can be added in an orchestrated way, so we can service our customers. And this generates more speed, more speed of growth for our operations, and it allows us to be in synchronicity, not only with what the customer needs to do, but also with what they're going to need tomorrow. This modularity and flexibility is very important for us so that ET is a solution of long-term relationship and some of our customers. Sometimes they do one transaction with us, and they don't keep contact. Now this first transaction can generate a long-lasting relationship and that is complete, for example. The customer that will work with us credit or buying a vehicle, ET can become an excellent relationship platform for these customers. isn't it? [indiscernible], now you can talk.

[Interpreted] You're right, Andre. Thank you very much. Well, good morning, everyone. It is a great pleasure to be here with you. I am [indiscernible]. I have been for 1.5 years in Itaú and I'm responsible for the financing and credit for wholesale and retail for the lever of digital acquisition of customers. And since the beginning of the year, I just took over the responsibility for credit for the natural persons and the recovery of asset's business. I would like to talk about how has the journey for the evolution of the finance business and for the guarantee of wholesale and retail credit, a business where Itaú was the market leader, but where we had the growth much lower than the average of growth between 2015 and 2019, and we were over -- well, our main competition from the private banking has surpassed us. And since this -- these are businesses with low-cost of freight, they bring stability to the portfolio and the release a potential for growth in other businesses that have more spread and volatility, which didn't happen, and these are businesses that are still very little. It's -- they're not really exposed to digital competition, and they have a broad space for growth. When we compare it to other markets. We have businesses with high relevance in the lives of the customers. They generate a connection, a long-term connection. And these are businesses that are open for the possibility of new customers. Once we take part into the journey of the customer as a whole. And a great view of the origination starts in nonbanking channels. Therefore, sea of opportunities, and the big news is that the changing of the game started in 2020. We are managing to achieve a growth that is very good in these businesses, whether we're talking production 80% of growth between 2018 and 2019 -- 2021, sorry. And also in the portfolio of results in growth with 40%. And this is a result not only of the evolution of these markets in and of itself, but also the strong gain in competitiveness for Itaú. I'll give you 2 examples. More in the change of performance in vehicles, the market share of production lept from 11% to 15% throughout the next 12 months. And in real estate, our market share for production will have lept from 19% to 30%. We are trustworthy that this trajectory will intensify in the next quarters. And remembering that this share is observed in the origination. But it takes some time for it to really become a portfolio market share and mainly in the generation of results. Therefore, whether we're talking about the inertial result of the portfolio. But the trend of the evolution of the market movements are very positive, and they have the potential for more than doubling the generation of value for these businesses all throughout the next 4 years. And this is the objective that we are pursuing, and we are very confident that we will reach. But what makes us so confident in this continuous growth. Well, first of all, the credit market has behaved in a very surprisingly good way all throughout the pandemic. We managed to deal with the liquidity challenges that really affected many of our portfolios with solutions that are creative, effective and pro-customer. But the most -- the more -- the most important reason for trust is because of the business strategy that we adopted that has become -- has shown itself very correct and will generate -- will bear a lot of fruit. To understand our strategy, we have to understand in a very simple and didactic way the metrics that together result in the evaluation of the competitiveness in our markets. We have 3 metrics. The first metric is visibility, which represents how much of the credit demand in the market we have, and we've managed to visualize and at least have an opportunity to take part. Here in vehicles, we've had an evolution of visibility of -- from 40% to 59%. And in the business of real estate, we had real estate credit from 44% to 57%, which are very relevant gains. Second metric is the approval, which represents how much of that mend we actually managed to see. We also made it viable with the offering of credit that is good for the customer, but profitable for the banks. And here, we have jumped between 10% and 50%, depending on the channel and the product. And all of that with the maintenance of bad debt at very good healthy levels and also conversion, which really represents the -- our capacity to be the final choice of the customer. And these are the metrics that the team is starting to evolve. And more than actually metrics for conversion and marginal conversions, these are very structuring pillars that we've really invested to achieve these transformations. The first pillar is the digital transformation and cultural transformation. The credit for retail or the business -- is one of the businesses that really was one of the first ones to migrate to the integrated communities. This is a radical way in which the businesses are -- new way in which the businesses are operating. New areas, product, technology, design, operations, credit, marketing, they are all integrated into the business. The silos are broken down and the multidisciplinary teams are organized by squads with the objectives that are very clear all throughout the entire value chain of the customer. We are starting to operate in a more -- more in a way of a tech company. The investments in our platforms, they start to be faced as something priority and strategic. And the results are very exciting. Now with only 25% of the modernization journey of the platforms that has been completed, a new model has brought gains such as the increase in the capacity for deploy of new functionalities, 194%; a reduction in the lead time, 77%; and earnings increase in productivity of 87%. But these numbers that can really bring your attention, they are only metrics for the path. And now they're only a means to an end and not the end. The changes are cultural because more than producing more and in a more efficient way, the focus -- the total focus of each of the teams start to be generating value for customers. Productivity is what, in fact, changes the behavior and solves the pains, concrete pains and specific pains of our customers. This has been very nice to observe the evolution of the motivations of the team with products with clear purposes and an overview of customer -- of products that are very aspirational working with a big dream. And with the logic of achievement where the result speaks louder, louder than plans, than projects and even than -- even louder than deliveries. And more so, this is a team that has a passion to face our problems up ahead and the relevant pains of our customers. The -- there is a trend to decrease the weight of the cultural aspect of the business. But I can tell you without a shed of a doubt that this has been one of the main factors, critical factors for success for our journey of transformation. The second pillar, the evolution of the platforms, data platforms and decisioning of the bank. I am certain that we are building one of the decisioning platforms that are one of the most modern in the market. Everything is working in the cloud. And with the treatment of streaming of data in real time with integrated data of pricing, CRM and all of that with the strong possibility for digital permutation, giving a high possibility for personalization. And the rollout of this platform has been initiated, but we are still going to have a sea of opportunities up ahead. And here, once again, the importance of the cultural change, which is very relevant, which yes, here, we have analytics and technical teams, but they have to work not only under control and optimization, but also with a focus in the viabilization of what we still cannot provide, which is still not viable. The third pillar is the evolution of the business models. Now we have more and more clear than the -- in the journey of financing, we have to take part in a very integrated way in the journey, broader journey for the acquisition of the customers. Now eventually, we need to be more transparent. We need to start being a pain in the process of acquisition to become, in fact, a solution here. One of the differentials that we have explored in a very aggressive way is the anticipation of the agenda of open banking with a lever of digital acquisition that is externalizing our APIs with a strong expansion in the nonbanking channel and with a model of partnership and the -- working with partnerships, whether if it's on site or in environments that are completely remote and digital. We practically do not talk about making business not only with customers of Itau. Itau has to -- wants to embrace Brazil. And our products and channels start to be worked and being developed to solve the needs of every single Brazilian and we want more. We are working so that the solutions of a specific pain can be only the entry-level door for the participation in the financial solutions for all of our customers. And if this is an inexorable fact, the trend for a bundle of financial solutions, we're working to make viable the possibility of a rebundle through an offering of products that is very specific, yes, but with a log in that is unique and universal and working in an integrated way with a relationship of -- with a platform relationship with the customers. It has a potential for complementary options. And as I told you, we have good reasons and my enthusiasm with the evolution of the credit portfolio of the bank. And we are managing to, in a very structured way, very fundamental way and at the same time, very quick and very agile to be able to lever what the bank has, which is best in data, brand and customers with an agenda to build competitiveness in digital solutions completely directed to solve the pains of our customers. And the results have pointed that we are down the right path. Now last but not least, I focus my presentation into the credit business with guarantees because this is where we really evolved in a very clear way with the integrated communities, with technology, credit, and in the review of business models that we have. Now we have to highlight that we started the same agenda for evolution in the management of clean credit of the bank as a whole. Now here, we are going to be more cautious. Given that the point of market share from the inception is higher and the complexity for change is higher and the agenda for the management of credit during the pandemic has demanded more focus in the management of the portfolio that has already been implemented that was already existing. Now what we adopted for the -- we have a new plan during the pandemic. We want to restart the agenda for the expansion of the credit through a portfolio that is very healthy. And this added to the learnings of the transformational agenda. The digital transformation of agenda and the pipeline of the agenda already taken in place with the credit platform. This opens a great avenue for growth right from the second quarter of 2021. Well, and this is what I wanted to share with you. And now I give the floor to Carlos Constantini, which will talk a little bit about the evolution in WMS.

My name is Carlos Constantini, in charge of Wealth Management Services. WMS, Wealth Management and Services. Here, we look after the whole journey of our clients. And to do that as best as we can, we're structured in a few pillars. So we have resource management. It could be direct management through Itau asset or with third parties with Itau fund of funds. The second has to do with distribution. It has different models and services, different segments from private banking to retail. And the third has to do with offers and consulting and the experience of investing also the digital investing experience. And the fourth block is the infrastructure for all of that is the department for products and services for investors where we also have institutions in result. And the first message I'd like to convey here has to do with growth. We are market leaders in basically all of the friends of these 4 pillars I've mentioned. And our market share has been stable. But our objective is undoubtedly to continue to grow and gain market share for which reason we are investing and repositioning WMS constantly and all the time. We have to evolve and develop to meet clients' needs and our value proposition was put together with them based on trust, simplicity and sophistication. Trust will be seen in the unbiased recommendation. So our specialists are in line with what customers want, and we have opened architectural, we've been doing for over 20 years in WMS. And simplicity is what we seek to have all the time. We're here to make their lives easier. We understand that investments are not an end in themselves, but a means to an end. That's why we are working on ion, ion in Portuguese, and we're looking for inspirations everywhere in the financial market in Brazil and abroad. ion is being soft launched. It has launched. Now it's going to be growing quite fast, also because we're hiring specialists all over Brazil. And soon enough, all segments even those who are not retail clients will have a chance to use that tool. And sophistication, the third part in our value proposition has to do with good return rates, alternative forms of investments, the use of algorithms to have a well-balanced portfolio, the use of data to customize offers that are made to each client and it has to do with democratization as well. So we believe that information must be given to every one of our clients. That's why products like Carteira Itau will allow clients to invest as little as BRL 1 in a number of assets. And that was put together based on clients' pain points who don't understand or who don't like to keep up with all of the asset classes or clients who don't have minimum ticket to make these allocations. But here, they actually can do that through the -- through us using BRL 1 only, for example. This is a very successful product, it's the greatest asset allocation product in Brazil even though it was launched only in 2020. It already has over BRL 31 billion under management. And we have that through beta funds, through passive funds and ETFs amount to over BRL 18 billion under management. The last one we launched and that offers exposure to 10 international big techs. In just a few days, it already had millions -- or rather than thousands of investors. We work very hard with Itau asset. And in 2 years, we have managers that put together 15 different strategies for Brazil and the international market with a lot of diversification for our clients. We had a BRL 40 billion increase, BRL 61 billion, all of that based on performance fees. We became leaders in this market in only 2 years. And innovation wasn't only about the model itself, but also in choices. We have Quantamental, for example. And Quantamental has a team that is based -- is composed of 8 robots and humans and they work together to work out the best strategies. We have beta with ETFs. We have alpha with Multimesas and we can see our commitment to growth. And from the first to the second quarter, we have consolidated our presence in the largest platforms in the market so the Itau assets, products can be bought on any of these platforms. Speaking of open platforms, what we've been doing for over 20 years in WMS is fund of funds. We have over BRL 270 billion under management. It's had a 46% CAGR in the past 5 years. We have dozens of managers managing over 1,300 funds, and there are multi-management funds as well. Through that, investors can have access to a selected group of fund of funds. So multifunds, the greatest product in the industry has over 100,000 investors already, and they can invest as little as BRL 100. We are very large, and we know that the commitment we have to the market and the influence we can have in responsible investment. The products we offer to our clients also have ESG filters. All of them have it. So every company, every investment that Itau asset makes takes ESG into account. We have been PRI signatories since 2008. We had the last price awarded to us in 2020. And that's a commitment of Itau Unibanco. The asset management is but a part of WMS, distribution, offers and consulting are also part of this journey. And we're also making changes on those fronts so that we can -- continue to be market leaders on private banking and regional banking. We're the largest private bank in Brazil with BRL 650 billion under management and over 450 specialists. And WMS has more technical front to support clients, and we work with private banking, with exclusive funds, as I mentioned. We work with Itau BBA as well so that we can more and more see our clients, individuals and corporations now listed way. And we have Itau Unibanco also servicing private banking, private banking products that are exclusive. And we work closely with the client, and the client can choose what they want to do with -- or when they want to have humans helping them or robots helping them, so physical or digital services. We are market leaders, and ion is going to get to -- or ion is yet to get to private banking as well. So ion or ion, what is that? It's a new investment experience that we're going to be offering our clients whatever segment they're in. And soon enough whether or not they have a current account with Itau, that's something that is new, not only for Itau and for Itau clients but for the whole market. It was created as an app and it soon evolved into a full journey with 4 points communication, transactions, monitoring and consulting and support. And all of that was sort of based on a human and automated process. We revolutionized the architecture and we use technology using the cloud and using APIs and modernizing our brokerage as well. In many cases, we had a double jump in these evolutions. MVP is already working. We already have had -- we already have a few thousand clients who have been giving us feedback and allowing us to improve our products. You have daily return rates, daily yields, and you can navigate your products as if you were browsing through Netflix for a series. News items will be seen by clients as Instagram stories that everyone is familiar with. And all of the transactions are based on e-commerce platforms. So you don't have that feeling that you're going to go from 1 app to another to be able to trade. And there's a lot more to come. And I'd like to invite you to keep your eyes peeled for the new items coming. We're going to have the investment aggregator soon, which will show you investment possibilities inside and outside the bank. We'll have a window, so to speak, as well for us to see orders and the investment consultancy, which I believe is a great opportunity as well. And the app comes along with a great number of specialists being hired all over Brazil. We have 22 office that were opened already this year. We expect to open 90 by the end of this year and 113 in 2022. And that will give opportunities to the bank and ion to have the best experience with human and digital services. And there's another message I want to convey here, which is alongside clients, we're creating a new model to grow, which we believe is the investment model of the future. We carefully analyze the pain points our clients shown and we've created ion. And using data, we are creating offers for clients whatever their level, whatever their possibilities of investments. And together, we're going to have consulting -- going for clients, leading them to better results, thanks to this joint effort. Experience. This experience is going to be ideal for larger and smaller investment -- investors, and this will have support from specialists all over the country and their compensation is very transparent as well as it's line with clients' interest. And this is our objective and growth is going to be a consequence of that. The market will continue to be wholeheartedly transformed, and I'm very excited about those changes. I'll now turn the floor over to Flavio Souza who will now tell us what's going on in Itau BBA. Thank you.

Thank you, Constantino (sic) [ Constantini ]. I am Flavio Souza. I am the CEO of Itau BBA. I'd like to start off to giving -- setting the stage about our activities. Itau BBA is the business area of Itau Unibanco and responsible for the relationship with the 20,000 largest companies in Brazil. We base on about value proposition, which rests on the following pillars. We focus on long-term relationships with our clients. We offer a thorough product and service portfolio that will meet all of the needs of our clients from more basic to more sophisticated needs. And we do that through a very specialized type of service provided, which is carried out by a team that is recognized and acknowledged by their technical and ethical experience and supported by the solidity of Itau Unibanco. Itau BBA through the relationship with medium-sized and large-sized companies accounted for about 15% of total revenues of Unibanco, Itau Unibanco. And that is composed of a mix that really represents who we are. Approximately 55% comes from credit products. In the past 2 years, our credit portfolio grew by 48% and it surpassed the BRL 310 billion mark. 30% to 45% of our revenue comes from a diverse spectrum of services we offer our clients. So investment banking, cash management, FX and investments. We have teams in Brazil and abroad that are dedicated and specialized and servicing larger companies, those whose revenue surpasses 50 -- or rather BRL 500 million, and they have specialized services for 16,000 medium-sized companies that have over BRL 30 million income a year. We have specialized segments for agribusiness and real estate and technical -- technology rather as well so that we can monitor them and support them in hard times as well. Another highlight is our investment bank and our distribution department. Consistently, in the past decade, we have ranked in the top positions in M&A, Capital Markets and also for the distribution of fixed income, be it in the amount of transaction and as well as the financial volume involved. This performance is really a reason for us to be proud. Our clients recognize our capacity and expertise to be on their side and they're more -- the most important moments of their story. We have a research team that covers over 230 companies in Latin America and which is a reference for the main institutional investors in Brazil and abroad. And we have strategic intelligence per sector for our clients as well. And Itau BBA also works with payment methods. This is a market that has been radically transformed recently. Well, now, I've let you know a little bit about Itau BBA and our activities. And now I'd like to talk about the future. Even though we have a relevant or important role in many activities, we're still positive there is a lot of room for growth. And I'd like to start off speaking about our mission and whatever we're doing to achieve it. And our mission is quite straightforward. We want to consolidate and expand our position as a leader in the wholesale banking segment. We don't want to only be ranking first in many categories, but we want this position to also reflect our ability to offer the best value proposition to each and every one of our clients. And for that to be truer by the day, we have a strategic agenda that is composed of some leverages. The first one, of course, is client satisfaction. Itau BBA is an operation whose DNA always focus on the clients, we're always client-centric. We want to have good solutions for everyday needs and for strategic decisions. Our NPS is already close to 75, that's a very good level. But we are adamant that it can improve even further. And our agenda is really one that aims to charm our plans, want them to feel charmed, feel enchanted by whatever we have to offer them. And we have been focusing on reviewing and enhancing our journeys from a client perspective. The second leverage -- the second lever, pardon me, is the leadership in investment. We have consistently been a leader in all of the rankings around this activity. We still believe there is room for growth and for doing things even better. We're working with the resource management department so that we can improve our distribution and management abilities with private and retail banking. We're going to invest in specialized teams that know how to distribute and research for these audiences. We're also going to revisit our brokerage position. And we are going to invest, aiming to expand our product offers and expanding our business lines offers. We have had the first investments in the reformulation and reorganization of our broker firm. Agribusiness and leadership in Agribusiness. Agribusiness represents 20% of our GDP, and it's a segment where Brazil stands out all over the world. Brazil stands out over the world. And we have a very ambitious process ongoing already. Last year, we created a segment that brings together all of the agribusiness stakeholders. We have inputs, companies, all of the agents and the whole production chain with cooperatives and growers and small, medium-sized and large-sized companies that will market products as well. We have really expanded our geographic coverage to really get close to our customers. We are in 28 locations that are important for agribusiness. Cities like Tangara da Serra in Mato Grosso, Dourados in Mato Grosso do Sul and Rio Verde in Goias. We have been expanding our team very fast, and we're going to hire another 100 people this year, and we'll then have a 300-people team focusing on agribusiness only. Not to mention all of the other support staff with trading desks and credit desks and so on and so forth. And this team will aim to understand the market and clients better and get closer and closer to them. And this team is composed by professionals with a very diverse background. We have hired a lot of people from the market, and they come not only from the bank, but also from trading companies, cooperatives and inputs companies. And 90% are agricultural engineers by education. So they really know our clients and they speak their language. We're producing content, and we are producing results already with the first CPR in dollar, and we've really became a reference for the agribusiness. And we have more variability in this area that we will announce briefly. And the results show that we are down a really nice path. The last 2 years, the credit portfolio has increased 50%, and we reached over BRL 46 billion. Now our fourth lever is also very ambitious. We want to be the biggest operation of middle market in Brazil. The results that we've obtained in these markets for the last couple of years shows that our value proposition and the model for management has been, well, very much successful. We've grown in a rhythm of over 20% a year over the last few years. And even more so, we see a lot of opportunities in that segment. The macro scenario of low interest rates has created the conditions for a democratization of the capital market for smaller companies that up until now did not have access to the debt and shares market and -- liabilities and shares market. And we are trying to service these customers, not only in the credit and finance basic operations, but also help them in the strategic transactions. For this, at the beginning of last year, we decided to extend the value proposition of Itau BBA for the 16,000 market customers of the middle market. For the incorporation of that extension, this means the commitment of delivering a value proposition that is much more complete and much more customized. And it has become a reality for many companies. Just so you know, over the last 2 years, we've done over 250 transactions in the liabilities and equity market for middle market here in Brazil. And we have a pipeline with over 350 companies that are evaluating the alternatives to reach this capital market. And still within the segment of servicing the middle market, there is the tech niche, and it has risen because of the identification of the specific needs of the companies of this sector. We realize that the technology companies, even though -- well, they are as any company, the inception is small, their life cycle and their needs are very specific. Since their inception, they start to discuss the routes for the capture of resources with investors, sometimes without even having invoicing, still in the development of their business plan phase, and they didn't find not even the correct interaction or the customized value proposition. Now today, we mapped over 10,000 technology companies, out of which we are having talks with 2,000 of them with a value proposition that includes our basic needs such as credit cards, corporate credit cards, the limit of credit for a company that doesn't have a cash flow that has been consolidated. And we evolve alongside with them for their life cycle until when their needs are, for example, the help to issue shares to open capital and so on and so forth in Brazil and abroad. And another growth of lever is related to the revolution for which the payment industry is undergoing. And we want to consolidate ourselves in this position of highlight leading this transformation. And here, we have several initiatives. Since an intense -- well, education of our customers in regards to the PIX rates, we have a team of specialists to support them in adopting PIX for their business. And we also have a very guided work to get to know the activities and needs of our customers in operating their financial cycle from their several stages. There are many such as selling, issuing and the physical invoices while doing the payments, managing cash flow, the management of suppliers, the workforce and taxes. And from the deep understanding of these activities, we started to have the building of a business logic with the objective of evolving from a service provider to providing a modular and complete platform to service the many needs of our customers. And this will be a great journey. Long journey, but briefly we will start to deliver the first solutions in this direction. Well, I hope that you've noticed that the issues that I mentioned the most here are true, customers and growth. And they walk hand in hand. To summarize. This has been the agenda of Itau BBA, to do an agenda of growth that has a fundamental commitment with the obsession in supporting in a very relevant way our customers in all of their needs. With that, we have a very complete offering and ever more digital of a team that is developed every day and with the strength of Itau Unibanco. Regardless of what is happening in the most favorable moments and more challenging moments of the market, we will be present alongside with our customers. And while talking about the market, now I give the word -- give the floor to Pedro Lorenzini, he is responsible for this area. Thank you.

Hello, everyone. Thank you, Flavio. Well, I am Pedro Lorenzini. I, my team is responsible for the management of treasury, products, customers, macroeconomics and for the operations of the bank in Latin America. Let's talk about the Latin American operations. Well, we have a bank that we have different moments. So I would divide this between the Southern Cone and the Itau CorpBanca. The Southern Cone. Uruguay, Paraguay and Argentina, these are very profitable. Operations are very healthy and they're advancing with a very strategic objectives that are very close to the operations in Brazil with a focus on growth and digital culture. Here, I highlight the launching of our broker in Paraguay and the digital accounts that we are launching in Uruguay and Argentina. The last one will be moved 100% via WhatsApp and it should capture 200,000 customers just in 2021. We also have a partnership with Personal, the biggest telecom company in Paraguay, and it will allow us to access 1 million customers. The Itau CorpBanca, which operates in Chile and Colombia, we are increasing the operational resilience. And we have that evolving in the governance, the appetite of risk and integrating the technological infrastructure and strengthening this with a sustainable opinion. And we have the digital businesses. And we have very important challenges to the operation. The main one is increasing the retail. And we have several initiatives, which is a partnership with Rappi, which will allow us to offer services to more customers with whether we are talking about natural people -- natural persons or companies in Chile. Now our super app is in the first place in the customer experience in the country, Chile. And we just launched our digital portfolio, our investment open platform for -- which was launched. And now talking about treasury. We have several roles, which include the differentiated products for our customers, very sophisticated ones and up until the management of which is a bank of our -- well, we have the liabilities here. And this aligned with the -- this mismatch will allow us to be a very important player in the risk factors that we negotiated in all the markets. Now our liabilities management is very robust and very well structured that can service the needs of our customers and can also bring sustainable return on investment for our businesses. We have a big diversifying of the financial positions, and we are broadening this. And in the second semester of 2021, we should gather -- bear the fruit in the investments that we have in trading and energy. Now we'd like to invest some time talking a little bit about how we service our customers in GMT. We have customized and quick service, which makes members -- so makes us have the leadership and derivatives for over a decade. We have innovative products for risks, and we have a sophisticated portfolio that can provide all the risk factors that can service all the needs, including commodities, the foreign exchange, the interest rates, local and international accretion and even derivatives that are more personalized for specific situations. Now our strength is also through the ForEx. For example, spot for awards, where we position ourselves as the biggest provider for the management of foreign exchange. And our mission is to grow ever more with the capacity to service the customers to provide more improvement in the experience, in efficiency, digitalization and automatization of the processes with the more commodities, products and the incrementation of structured products so we can make it more personalized, so we can make the bank more competitive, and it can be the #1 choice for all the customers for all the treasury businesses. For this, we have a very experienced team with a physical presence in the mainland American company markets where we invest continuously. This team can maximize the opportunities and can mitigate the risks that are not desirable for our books, generating an additional value for the bank. And here I include the macroeconomics team, where we have one of the best professionals in the country. And that can support the bank and the customers for the reading of the financial market. Now the -- having new technologies and the new transactional models, such as PIX and the exchange bill will bring new challenges to the bank. But at the same time, will also bring a lot of opportunities. The biggest opening for the capital market internal and external, our strategic positioning and the evolution and modernization, regulatory modernization are one of the main opportunities for the growth in our business volume. To be ready, we have to be part of the transformation that the bank is living. We have many opportunities in regards to digitalization, and we're working with this so we can make the way that we service our customers revolutionary, creating negotiation platforms, algorithms, journeys of risk management in the market and payment cross-border that want to create value for our customer, bringing agility and efficiency all throughout the process. We are migrating to a culture that is more digital. And we are evolving in the way that we are working for formats in the agile methodology. But here, I will let the specialist talk about this. Guerra, you can continue.

Thank you, Pedro. Hello, everyone. I hope that everyone is well. I am Ricardo Guerra. I am responsible for technology here at Itau Unibanco. As Pedro has said, we are migrating to a culture that is more digital, and we are evolving very strongly in the way that we're working. We're going to talk a little bit about that today. Now for us to be digital, in essence, is to be -- have a core centrality, what we have to focus on the customer so we can bring value and we can create -- we can solve their problems very quickly. For this, we need to implement that transformation, digital transformation that we all talk about. But for -- but let's do a deep dive and understand what this means. There is a series of initiatives that are necessary so we can build a bank that is focused on the customer. And for this, we can provide solutions that are more interesting from the standpoint of the consumer. And to create these solutions requires not only the delivery of a very important business foundation, technological foundation for the businesses, but it imposes into the IT professionals to live the reality of the business, living the pains of the customers and doing more for the customers. And this is the way that we will contribute. So that through technology, we can create this value. To give you a better detail on this transformation, I can talk about 3 pillars that I consider -- that are fundamentals so we can be a more digital company and more customer-centric. The first biggest pillar has to do with the working methodology. And when we look inside of the operation, the big -- the biggest translation so we can deliver this in the core here with the customer is speed. We need to identify and solve the pains of the customers in a very quick way. And to answer this in a very quick way is what will make us different. And this is done through a structured methodology where we have talks with the customers, we create hypothesis to address their pains. And we have the ability to test that very quickly, getting to the conclusion alongside the customer about what is a type of solution that is the most interesting. It is in the [indiscernible] creation of product opportunities and solutions where we can find more -- we can add more value to the customer. Now to do this, we need to have, first of all, autonomy with the teams. The teams need to work empowered so we can hear the customer. We can create hypotheses, and we can test them. For this to happen with speed, you need to bring everyone close to the customer. When I say everybody, I am talking about those I have the knowledge to do this cycle of experimentation. These are people from products, customer experience, technology, operations, well, everybody. Professionals that work with the journey of the customer and that all -- added up, they can deliver good solutions. This empowerment is granted once we join these people, and we can align them along common objective so we can observe the same problem and have an end-to-end vision of the customer. And not just the part that compete to them. Now to address this, I need to bring agile and scale. We created the communities which the -- the integrated communities. Now we have a lot of people working with this integrated model. And the expectation is to have 100% of everyone working in these integrated communities, 21,000 people. We see that in practice at Iti. When you open an account at Iti, and you use it on the day to day, you realize that the solution is much quicker, much on -- it's online, and it has to do more -- it's more aligned with the needs of the customers of Iti. Second pillar is technology in and of itself. Still talking about speed. To improve the experience of the customer, we need to have cutting-edge technology. If we have a monolithic structure, which is a lot of codes -- long codes, we create a line, so everybody is just at the same bottleneck. The architecture has to be compartmentalized. We have to have micro services so we can have scalability and working with things in parallel, creating the hypotheses and creating -- and testing very quickly. Always using the best technology available so we can provide the best experiences. To be able to reach this, we have a journey of migration and creation of digital platforms in a very large scale. And cloud is the infrastructure that is better adequate for this infrastructure. And that's why we are doing the migration to cloud and rebuilding our platform. We have a series of initiatives that were already built this way. PIX of Itau Unibanco was conceived completely in the cloud. It operates on the cloud and it brings speed. Credit card, we are also working with this technology and in the integrated communities as well. To accelerate this journey, we closed a contract with AWS announced last year, and we have the objective until 2022 to deliver 50% of the bank in cloud. Third biggest pillar is regarding data. Well, nothing -- none of this will work if we don't have the information. If we can now read the pains and the needs of the customers to create hypotheses and to really measure if the solutions created are working and are being used by the customer in improving their lives, then if we don't measure that, that's not -- it's of no use to do all this. We have 56 million customers. And if we don't have a lot of automation and using scalability on data, we cannot deliver the value that we want. Therefore, the data for us is fundamental because this is what will allow us to operate in this business model in a more competitive way and centered on the customer. And when we are talking about data, we are talking about 2 different pathways. One is the building of the foundation of data, which involves technology and infrastructure. The other one is the utilization of these data. Itau Unibanco has a unique volume of data. You can see 70 petabytes. And we have to use this -- and if we use this data correctly, this brings a lot of competitiveness to the operation. This summarizes our journey of transformation, and we have to talk about the evolution in technology all throughout this change. From 2018 onwards, our team was twice as productive and they delivered new functionalities, 43% quicker. And besides that, we decreased the critical incidents, and we increased the resilience of our operations. More than 99% of our customers did not have problems or they suffered. They didn't have problems doing the transactions through the digital channels. But I would like to finish saying that the determinant factor for this transformation is focused on people. At the end of the day, to learn in a more -- to working with more empowerment and more autonomy and decentralize decisions on what product you should build and what are the pains of the customers that you should solve. It demands more entrepreneurship and more knowledge of technology from each professional. And all of this change only happens with collaboration. You cannot have multidisciplinary teams of different professions if they are not aligned in the same objectives, therefore, working to solve the same problem. Now the database of this whole change and this whole building of new models, the base of this is people. And for this, the cultural change is fundamental. And we need to have a different culture so we can operate with a different model. And to promote this cultural change, we need to have a profound understanding of what we want, what we expect and what is the overview of the bank. And therefore, guaranteeing a structural process from A to Z that can help to transform the mentality of all of our collaborators. To talk about that, I'm going to call on the specialist of this -- on the subject, Sergio Fajerman, that is building this cultural change, and he will talk to you now.

Thank you, Guerra. Good morning, everyone. My name is Sergio Fajerman. I'm in charge of the people department, and I'll talk to you about cultural transformation. Our culture has brought us this far. We know it's not going to be the same that's going to guide us from now on. And based on that belief, we're promoting a true cultural transformation. Our client is the absolute priority. We're going to see what their problems are, and we're going to generate innovative solutions. We understand we need to make progress with the simplification agenda and we want to give more autonomy and simplify our teams. Digital transformation is pivotal in this cultural change. But in the year, we'll have about 15,000 people working in the agile methodology and we'll continue to be evolving. The challenge now is to develop a digital mindset. The structures are already at hand. Now we really need to work on the cultural change. The changes in the market have increased exponentially opportunities in the job market. We're learning a lot about remote work, and we'll soon be experimenting with flexible hybrid models, increasing satisfaction levels amongst our staff and increasing productivity while reducing costs. We're very optimistic about this new flexible model, and we're very attentive to what impacts that's going to have on our culture and on the staff's mental health. This change is crucial for our activity. We have been ranking first as a company to work in, also comparing to regions outside São Paulo and having people from other regions work with us. We're also making important headway with our diversity agenda. We currently have a majority of women working in our company, and 52% of managing positions are women's positions. We want to increase that in the high levels of administration now. And we are working on the race front as well. When you look at the trainee I group, 50% of them are Black this year. Now I'll turn the floor over to Leila so that you can tell us how we're going to be acting for a sustainable future. Leila, over to you.

Thank you, Sergio. Good morning, everyone. My name is Leila Melo, and I'm in charge of the legal department as well as sustainability and corporate matters in Itaú Unibanco. Diversity in the workplace has become more and more important in society and in companies. It's not only the right thing to do, and that would be enough, but fostering diversity is also a premise for sustainable performance. When you think about diversity, be it for client customers or providers, that's part of a broader agenda for the bank, which is the sustainability agenda, which has now become termed ESG by the market. We understand that a company has to go beyond delivering good services and products. Investors don't expect only to reap dividends. The ESG agenda had been brewing after the Economic Forum in 2019 and it became even more important during the pandemic. The current scenario made it clear how important it is that we have a positive agenda on the side of companies. From a business perspective, it's clear that there are a number of pressures in the corporate world. More and more people believe or take into account sustainability points in their choices. Talents choose to work for companies that adhere and comply with this agenda. Companies that are not in line with these guidelines will struggle more to have access to capital, and investors have also been weighing the risks and possibilities with companies that comply well with ESG norms. And there's a need to comply with these norms. Sustainability has been a priority subject for Itaú for decades. And it's high time -- I mean or offsetting debits is passed and now we have to generate credit. So we want to cause positive impact on society. In 2019, we structured our ESG strategy through commitments to generate positive impact with metrics that are in line with our different business lines as well as with the Sustainable Development Goals by the UN. There are 46 goals that are closely monitored by the executives of the bank. Our strategy is also monitored periodically by a governance team that is integrated to our businesses with reports to the Managing Board and to the Board of Directors and to the Executive Board. Over a month ago, we launched the ESG Report for 2020. That's the main tool to report on environmental, social and governance indicators. The objective is to give more accessibility and transparency around our businesses and around sustainability. At ESG, attitude will come through internal practices first and Itaú has been a reference in the 3 pillars: environment, social and governance. And we have the ASG acronym in Portugese comparing to the ESG acronym in English. We want to have positive impact not only through our institutional actions by the company, but also through our different businesses. Itaú upper management has launched a number of investment products focused on Brazilian and international markets. The objective is to make investment opportunities available for investments that will contribute to the capital market in a more transparent and efficient manner. In Itaú BBA, our wholesale bank, we have also had important progresses. We made good progress on directing resources to important sectors of the economy like renewable energy, health care, education as well as supporting our clients in transitioning their business models through specialized consulting services, what we call the ESG operations with seasonability-linked bonds and green bonds. Itaú was also the first Brazilian company to issue a sustainable bond in the foreign market. That goes for renewable energy, clean transport, SMEs that are spearheaded by women and others. Our Retail Banking has been working on supporting and on inclusion for Brazilian entrepreneurs, especially during this difficult moment with high unemployment rates. We're focusing on financial and nonfinancial solutions. For Itaú to incorporate ESG practices into our activities is already part of our culture. Innovation has been part of what we've done so far and we're going to go even beyond that. We're going to make progress in finding business opportunities related to the ESG agenda. Initiatives that have a positive impact for Brazil like Plano Amazônia or Todos pela Saúde. These are examples of how willing we are to generate value for society. We're also constantly enhancing and reflecting internal practices and creating mechanisms that will support clients and -- to getting to a more clean, inclusive and sustainable economy. With the ESG pillars integrated with our business strategy, we will continue to progress towards sustainable performance. But to reach this goal, we need to understand that the market is transformed constantly and that our risk assessment and analysis models need to change as well. Matias Granata, our CIO, is going to talk about this item now.

Thank you, Leila. Good morning, everyone. My name is Matias Granata, and I'm in charge of the risk department at Itaú Unibanco. Risk appetite and risk management have been crucial pillars for our performance, allowing us to be able to weather crisis successfully. During the pandemic, our risk appetite made sure that we could perform well with capital markets as far as liquidity is concerned and looking at our portfolios as well. We were able to look at a crisis with a midterm perspective, not only as short term or long term, and we were able to look at all of the opportunities and challenges. During the crisis, we have kept comfortable liquidity levels and we have been recomposing our capital, showing the resilience of Itaú Unibanco. We have also embraced accelerated digitalization with our clients and customers, and we have 50,000 staff working from home without letting go of all of the performance that we already have. For individual and corporate clients, we have increased limits for digital transactions, and we have brought in new biometric technologies to keep fraud to minimum levels. And looking ahead, risk management will play a crucial role in the bank. If we're client-centric, we need to constantly develop new products and platforms and grant credit and to make sure that clients have their privacy in their digital journey. Let's talk about a few examples of what we're doing. When you develop digital products, you need to have an environment that will allow customers to try things out so that they can learn and find out with agility. We are reviewing our product governance, and we're creating new rooms and spaces for tests with security and also taking product risk into account. Respecting the way that clients want to interact with the bank also calls for a need that we take client experience into account. We're reinforcing our investment in cybersecurity. And in that way, clients can have a fully digital experience that is absolutely secure and safe. One million clients a month will no longer need to go to a branch or to an ATM for authentification, for example, should they need to recover their credit card PIN or change their mobile number. We're replicating our controls on-premise onto the cloud. And being on the cloud, we can have a much better level of scalability. We have client data and technology that allows our engineers to create products with the agility and creativity necessary. And lastly, we need to have the best use of data that is available, of course, respecting privacy and proprietary information. We'll continue to develop our models and credit policies. The average time for our credit card clients is 7 years, the average time of relationships. So we already have the data around their consumption habits, their preferences and social class. So with that, we can have a better analysis of when and how to interact with them. And at the end of that, we will have reshaped all of our models for individuals and corporations, and we'll have a unified vision of the client for whatever they need to do with the bank. And in a nutshell, we'll have a risk management that is flexible enough to take into account this new need without letting go of the robust structure that we have always had. And that is a catalyzer for digital transformation in the bank and making sure that we keep up with new times. And now I'll turn the floor over to my colleague. Thank you.

Thank you very much, everyone. I'd like to say that what we've heard from all of our colleagues here makes it clear to me that the transformation is clear and that the quality of the executives is absolutely pivotal. We have open debates, we're pragmatic, we are client centered and we have the objective of growing, of course. Each one of these initiatives is very important for our future, and we're working towards becoming faster and more agile at every moment. We're becoming a more horizontal bank with less hierarchy. And we wouldn't be -- and we're not going to be a digital bank without branches, but we're going to have a digital mindset. We want to service clients the way they want to be serviced, also in person if they should choose to do so. I am very happy to be talking to all of you today. And I'm really here hoping that the message has been clear that this is a unique moment, and we are adamant that client satisfaction is going to be a key competitive edge that we'll have against the competition. Now we're going to start the Q&A. Thank you very much for joining us.

Thank you, Milton. We'll now start the Q&A session. [Operator Instructions] Before we start with the first question, I'd like to invite Lucy Sousa for a quick message. Lucy, please.

Thank you, Renato. Thank you, Milton. We have Apimec Brasil, the association for professional investors in the capital market in Brazil. Here, we have 26 years that we have been meeting with the analysts and professional investors and the bank. These meetings are an opportunity for us to exchange for you for the -- with the IR department and for us with the analysis (sic) [ analysts ] and management department. You have the emerald award now -- or the Emerald category now for this 26 years.

Thank you very much, Lucy. It is an honor for us. And I'd like to thank Apimec Brasil on behalf of Itaú for this long-standing partnership. So Lucy, the first question should be yours, I believe. Lucy?

Thank you. Thank you for giving me the first question. There is a question that I have been hearing from analysts and we heard about that today, too. So what do you believe to be a priority in competing against fintechs?

Milton, would you like to take that one?