You’re also right when you say that payroll loans and mortgages have lower margins. That is a fact. The margin takes longer to come, but we are also offering products with a higher margin. We grew in February and more in March, and this will have a reflection in April, May, June, July and so on and so forth. As regards to wholesale, we talked about spread. Well, that doesn’t exist. That the spread in the wholesale bank is under pressure. It’s always been. Here we work with RAR, risk-adjusted return. So, our regional managers using their phone, the tablet or their managers, they see exactly the same thing. They see the RAR history of the client. They can simulate what they need to do to negotiate with the client online real time. So, we put pressure on them regarding RAR.
They just don’t have a deal to add to their portfolio. Today, the market doesn’t give you a lot of room to bring those to your portfolio. We also have what we call OPCD for the secondary market, OPCD portfolio. So, you see the margin is not coming only from spread. We don’t address this operation by operation. We address it by client. So, when we have an adequate RAR and relationship, the deal goes through or else they don’t have the ability to approve the deal. So, there’s a rationale here. We implemented this when I was in the whole Seo Bank together with Bruno and our colleagues there. So, this is not new. The margin comes from the whole. We also have private payrolls. We are one of the largest banks. Managing payrolls means relationship with large corps, midsize enterprises, small enterprises.
And we have other businesses that we do around the relationship with legal entities. So, revenue doesn’t come only from the margin. Now to make up the client NII will grow SMEs, because this is added to individuals for us to build up our margin over time. Is that line item challenging? It is. But rest assured, just wait, because we’ll get there. Look, we are looking at NII, net interest income. That is what is important. I have to have a balance between what I do and the potential loss with these clients. and this is our handbook for our day-to-day. But of course, the portfolio needs to come first and the NII will come later and we’ll keep looking at the mix over time and we’ll see a more balanced mix. But with delinquency under control, we have to have high-quality assets.
Okay, Pedro? So, we won’t make a mistake.
Unidentified Company Representative: If you want to add anything, just I just have two very brief comments. Pedro’s question was more directed to product mix and as Marcelo was saying, there is also the segment mix. Once we accelerate SME and individuals mass market, we bring on board more margin. The second comment is about guidance. When we look at the guidance, the guidance gives us an idea of, profit a year. That’s valid. This is what we work with. But in terms of a turnaround history, when we point the guidance towards the end of the year, the beginning of the year is different from the end of the year because you are churning the portfolio, so it’s a more classic case. It is more limited than it turns around and then it picks up again. So, it will be different, you know, if you compare one and another. I mean, it is valid but there are fluctuations in some possible lines within a turnaround perspective.
Operator: Now Carlos Gomez Lopez. Next question from HSBC.
Paulo Gomes: I have two questions. First is on funding. There was a drop of almost 13% on checking account year-on-year. When do you intend to change that in terms of cheap funding? The second question is about NEXT. We don’t have a lot of information about the future of NEXT or the digital platform.
Unidentified Company Representative : Thank you. Thank you, Carlos. So, you start first and then I’ll talk about next. Carlos, thanks. It’s a pleasure to see you. Marcelo just said now that one of the important indicators is our cash growth. We are doing some important work with companies and also working with some SMEs that are now coming into our offices. I think that the fair share path is important and this will strike a balance when it comes to mix or with that demand deposit. We must also remember that we have lots of CDBs, which are some instruments related to demand deposits and that’s not specifically in that same line. I mean, you have a remunerated line, but not to that client. You only see that when you look at the time deposit line.
I mean, remuneration is a bit lower. I mean, it’s a bit lower in this business. That’s why you see this change. But it’s not loss, but gain because the line is not broken down for you to see it more clearly. Yes, I think you’re right. In terms of the clients, that is it. And again, the more the client helps itself, it looks for different alternatives and we keep, we will keep seeing these changes. I mean, the first quarter is more seasonal, but we understand that this is quite normal. And within the context of the year, this will be within the lines of what we often do. Now about NEXT. Now to answer your question about NEXT. With NEXT, you know that part of the investments are within Bradesco. Digital is totally outside Bradesco. We had decided that NEXT would be another segment for us here with a brand that is known in the market.
But when we reviewed our strategy and the plan, we decided not to make that move before we would make all the decisions related to that mass segment because we have learnings with NEXT and learnings that come from digital. So, we are now in this decision-making process. We have some possible paths and you will see that in due time. Also, with this new colleague that is arriving, they will certainly help us in this process of execution and decision-making. But if you look at our playbook, you will also see some interesting figures about digital. Take a look at that. because we have some information about digital in our playbook. And thank you for your questions.
Operator: The next question comes from Guilherme – from JPMorgan.
Unidentified Analyst: Our question is on cost. We already talked a lot about G&A, et cetera. I would just like to look at orders. This was a controlled, I would say, controlled quarter. And discussing the guidance with you early this year, I think there was a caution in terms of the total cost of the guidance, because of that line guidance was above inflation and part of the explanation was because you were very cautious about that line throughout the year. But looking at the run rate for the quarter, if the pace was to be maintained of about 1.5% throughout the year, we would see a drop when compared to 2023. The question is, how could we see this line going forward, if the pressure you were anticipating at the beginning of the year, is this still a base case for the rest of the year? And also, exactly what led you to see this more beneficial performance or behavior up the line?
