Octavio de Lazari: Hello Daniel. Good morning. Thank you for your question. It’s a pleasure to have you hear with us. Indeed you’re right, but that’s what I said. At the end of this cycle, when you carry over more provision, that skipping of ladders when it goes from 10 to 30 to 50 to 70 to 100, the provision volume end up higher here, although the credit provision volume for new operations is not as high because they are operations that come at a better rating your score. So that balances our capacity to continue to grow, increasing our credit and accelerating as we expect and want to accelerate without having an increase on credit provision expenses. We’re running at 3.5 to 4 per month, but a majority of this are the operations of the older vintages that are closing their formation cycle in BR GAAP, now unexpected losses, that’s the concepts that we use, and that’s why in every presentation, we show this to you, and this will be enforced now in 2025 — in January ’25.
So we’re always looking at that and showing it to you through the expected loss concept because that’s how we’re able to better see it. So a better origination of a better portfolio with clients with better ratings and scores as you already mentioned, already gives us a good dimension of the work that we’re seeking to do to increase our credit portfolio. And on the other hand, it also benefits those operations to have bigger spreads. That means that can take a little bit more of delinquency, but on the other hand, bring credit – higher credit revenues. So, I think this balance that we’re trying to achieve and implement over the second half of the year and 2024 will allow us to get the portfolio to the credit portfolio to grow because there will be a demand for credit.
This seems pretty certain with the reduction of interest rates and increase on the GDP and employment going down will allow us to grow our loan portfolio without increasing or maybe even reducing the credit provision expenses that we see for the year 2023 because it is still carrying over expenses with delinquency provisions of ALL. It’s also worth mentioning that NPL formation has already given clear indications of stability in the last quarter. We believe it will begin to drop the formation also goes through this negotiation process and renegotiation with the client that also delays the natural flow from those older vintages that have already given some indication of deterioration. So I believe this cycle is slowing. We believe that soon, we’ll be able to get better news information as well.
Daniel Vaz: Thank you.
Operator: Next question from Rafael Frade with Citi Group. Frade, go ahead.
Rafael Frade: I have two questions. One, building on the comment made by Firetti regarding renegotiation. I don’t know, maybe I overlooked this in the previous quarter. But I believe that you negotiated very little in portfolios, there were less than 90 days past due. But in this quarter, you mentioned almost 50% of the renegotiation came in the portfolio of less than 90 days past due. So I’d like to know when did this change happen? And please elaborate on the rationale for this change. How do you see this renegotiation that is somewhat earlier? And the second question regarding the insurance operation, you posted a relevant improvement in the operation this quarter and in the guidance for the year. But I also noticed the reversal of provisions, specifically in the line item, other provisions in life and pensions.
So I’d like to know if this help explain the improvement. I’d like to understand this reduction in provisions. And if this helps explain the improvement in the yearly guidance. And perhaps how this will be in 2024, because you’re not going to have this kind of reversal.
