Eduardo Rosman: Good morning. I have a question about the results in the different segments of the bank because the earnings of the bank improved. The insurance company remains. Well, it lost a little bit of relevance as a whole in this quarter. And you don’t really disclose the results for high income, low income, retail, and wholesale. So, it would be interesting to hear from you where do you see easier improvements in the results. If in low income, if the reduced provision is already improving the result and whether there is any segment that is sufficient, if you could elaborate about the different segments of the bank? Thank you.
Unidentified Company Representative : Thank you, Rosman for the question. Well, we are doing more in the wholesale bank. In RAR, that is high for the different segments. And in this also for high-income segment, not to mention private. So that’s doing quite well. Our challenge as you know spoke about the insurance group but our challenge is you know comes from our mass market clients given the cost to serve and delinquency and we’ve been paying that bill. But indeed, things are starting to improve a lot. In SMEs in particular, though we see the delinquency curve dropping, but there’s some improvement. Month by month, we see improvement. So, our expectation is that we will drive the RAR of the mass market quarter after quarter.
And I have to tell you, we don’t really disclose this breakdown, but I can’t tell you is that all business units have a lot of traction right now. An area demand has a small traction or a smaller attraction could be small and midsize enterprises, but it’s improving. And again, that OpenSea of a lower income client, because they have a higher risk. But they are all with a lot of traction. It’s not by chance that we are doing this. That we are growing. Credit general segments in important lines. So, we have the ability to deliver and to deliver more than we are delivering right now. And what I see and what I am living, because I’ve been going all over Brazil, I’ve been having breakfast with colleagues in the headquarters, in many locations in Rio de Janeiro, in Sao Paulo, in Salvador.
And I see everyone motivated and excited and moving in the same direction. So, we are improving. They are the risk adjusted return for all of these segments. We are going to be delivering in the future quarters. That’s my expectation for all business units. And in the mass market, perhaps the biggest challenge is to accelerate credit maintaining NPL declining and adjusting the footprint. And the numbers we showed here, point exactly at that. The new vintage of mass market increasing accelerating with exceptional quality and footprint adjustment happening.
Operator: Next question from Eduardo Nishio with Genial.
Eduardo Nishio : My question relates to your strategic plan. Part of the recovery that you anticipate comes from improvement in the cycle that impacted the mass market, but most of it comes from more structural changes that you are promoting. I would like you to elaborate further on your structural changes and everything else that is happening with your strategic planning, if you could list probably the main strategic structural changes that you have in mind for the next quarters or maybe years? And also, if you could give me more details about changes in management and cultural changes as well that you were trying to introduce in the bank, especially that cultural aspect, because this has been something so important in the DNA of the bank. How do you anticipate in terms of these changes? And what do you see going forward in 2028 after everything has been done?
Unidentified Company Representative: These are very open questions and I think we could spend days here just answering everything in more details. I’ll ask Cassiano to help me with the answers.
Cassiano Scarpelli: Well, number one, that delivery of that credit business unit, we unified processes that were separated in our organization. So, everything is now combined, integrated. I mean the separation of the teams that used to serve the mass market and the wholesale bank. We made also important process changes, first line of defense, second line of defense with the use of machine learning running in the background of our modeling. And we also introduced some credit policies because you put a certain appetite. Okay. You say, I want to give 50% of the company’s revenue. So that was one change. The second change was segmentation. That segment of SME is one of the things that we told you that we would launch early this year is already in place.
We don’t have all the clients already in there because we’re still in the process of segmenting clients, but we will also deliver the affluent segment, the wealth segment in the second half. But we will also, we are also working on restructuring our prime segment for wealthier clients and that’s another important segmentation. In terms of the wholesale banking, I told you that we made some process changes on the loan book side. So, I’m saying that this is something that is already happening and this is generating results and in turn, this will improve our numbers with time. And obviously, I think the biggest challenge is in the cost to serve or more mass retail clients. Well, we have, we are reviewing the footprint because we are delivering above plan, but we will deliver numbers above the plan with costs under control and all of these deliveries will allow us to get that additional revenue that we talk about last year.
But even today, I said that since the market is growing with the CAGR of 8% a year in terms of the credit volumes for the next five years it will bring an additional BRL3.3 billion to the Brazilian market in five years. And certainly, we want to capture part of that, so that when we go forward our revenue level will be much high and our return will be higher because the bottom line matters which has the profitability that we will have. And, Cassiano, I think you can add to what I’m saying because out of the 10 topics that we listed, we had over 2,600 initiatives, but I am just highlighting some of the main initiatives. And also, there was that movement of time to market that we are doing with the technology area and the very intensive use of Gen AI.
I would also mention these two. Yes, I’ll talk about that management side as well. But there are two important points. Bradesco Expresso, it’s a very important link with this new concept of the new footprint and our cost to serve together with digital. Marcelo also mentioned that during the presentation, it’s a very strong digital bank. Bradesco Expresso is a very positive tool because we can be present in many municipalities. Technology, Marcelo mentioned that not only in terms of reskilling, but also, we are hiring new people. We are hiring people at all levels of technology and all-important processes are becoming more agile. It’s becoming more productive. It’s a new concept and this is across the board and culture management. I think you should also talk a little bit about that and what we are doing in terms of our culture.
