Octavio de Lazari: Hi, Yuri. Good morning. It’s a pleasure to have you here with us. Thank you for your question. In fact, I mean, if you look at the market as a whole, Yuri, the funding cost of the incumbent banks, I mean, our funding cost increased due to the competition coming from new platforms, smaller banks and other things. There are a series of factors that at the end benefited some. And in other instances, it increased the funding cost even because today it’s very easy for our clients to choose where they want to invest their money. And this increases our funding cost. But anyhow, the reduction in savings account or even demand deposits, it’s quite natural. Given the current situation of people, I mean, savings deposits are dropping, not only at Bradesco but in any other incumbent bank, this drop in savings deposits is across the board, maybe also because people are now choosing to invest in other instruments rather than savings account.
And also because families need to use that money because of high interest rates, inflation issues. This is a cyclical phenomenon and it’s very hard to avoid it. And demand deposits is pretty much along the same lines. Demand deposits were kind of inflated due to many government programs and benefits that the government offered. That’s why I talked a lot about principality, the share of wallet of our clients. We talked a lot about that during the presentation. Because in fact this is a challenge that we face every single day when we go to work. We have to work the centrality of the client, the share of wallet because that allows us to improve the liability margin. We made important investments to make that possible. I talked to you about wealth management, more than 4,000 Prime clients and a lot of investment experts.
I mean there we also grant loans to these people. Of course they take credit as well. But it’s important that we bring the principality of the clients to our organization. We did some relevant work extensively recognized at Bradesco Asset. So this growth has been quite significant. We had more than BRL770 billion of assets under management. And even private banking, we increased the liabilities on the private banking side. I believe that we are moving in the right direction to bring more investments from our clients, even with Agora, our brokerage firm. There are several levers that can be worked on to bring principality. And in turn, we will increase the liability NII through funds management or CDB or any other kind of investments in our trading transactions with clients using our own brokerage firm.
This is the first step, and it has proven to be right. We are evolving in terms of the liabilities, and we are also making important strides towards improving client NII. When we had interest rates of 2% a year like we had in the past, maybe that liability NII wouldn’t make a lot of difference, but this is important if you want to grow your loan book. But with an interest rate that reached 14% and 12-point-something today, that liability NII makes a lot of difference. So I think that’s it in terms of the liabilities. Now speaking about SME portfolio, and we have been talking about that extensively. In fact, you should know Bradesco has a very big geographic footprint. I’m not talking about 30 million upwards, but I’m talking about companies whose revenue was way below that.
When you work with secured accounts, with receivables discount, et cetera. These are very profitable transactions. Now when we look at the fee comparison at the Central Bank, you see the size of the spread of these portfolios vis-a-vis a portfolio from a midsize company. There is a huge difference, which is natural because of the risk that these companies represent. So the margin of this mix of types of clients with whom we’ve been working with in terms of small and micro-sized companies is what made that difference. I don’t know exactly what the percentage is, but Firetti and — they can give you more details on the numbers.
Carlos Firetti: When we look at our SME portfolio, approximately two-thirds of that portfolio are clients below BRL50 million. And this particular portfolio is a bit compensated by the midsized company portfolio.
Yuri Fernandes: That is very clear. I just have one last follow-up. Funding, Octavio. How much is it today? I don’t know whether you can break it down. I mean, average funding or CDI.
Carlos Firetti: I think all of the incumbent banks struggle with it. There was a worsening of the numbers. Well, we do not release specific numbers. Our comments are more generic. But clearly there was an increase in funding cost. Part of it due — if you look at the movements in our portfolio, part of that has to do with a more focused work using some investment experts at first. They looked at funding that were there in demand deposits. These are investment funds. So that had some minor adjustments. This is probably something that is behind some of the moves.
