So these variables we are assessing. Obviously we are Brazilian bank. We have a responsibility with all of these municipalities. But today people have changed their habits. The way clients relate with the banks has changed. There are some digital banks that don’t even have branches, but these are banks that are well-positioned in the market. So it is necessary, it is absolutely necessary, Tito, that we make adjustments, adjustments we’ve been making and will continue to make in 2024 like them. And we are working hard on this because it is important, the physical cost serve is quite high in our bank and we have to make adjustments. In January, Bradesco Digital will be fully implemented together with Next, so that we can serve these clients that open checking accounts with Bradesco, that come to Bradesco, and we want to serve them 100% digitally as long as they want this without the need for the clients to go to the physical branch of the bank.
Unless they need some kind of advice, consultancy or such things. So these branches will be complete of sale. They’ll be a lot smaller without all the associated costs of armored cars, of guards, et cetera. All of the costs linked to a brick and mortar agency or branch. So that’s number one. Now of course, we still have an appetite to continue to grow in all audiences and also in low-income because that’s a characteristic of Bradesco Bank, it’s a characteristic of our bank. We always operated. We are a retail bank and will continue to operate in this segment with the adequate risk appetite for each one of these audiences and with the right pricing. Prices defined according to geography, like I said, prices defined according to type of guarantee, prices defined according to profitability, relationship with the client, principality that the clients have with our bank, but always with the adequate price.
So that’s regarding low-income segment. For higher income, like I said, everyone wants to operate in higher income. But with Bradesco, we believe we have a competitive and competitive advantage. Firstly, because we can serve the higher-income audience in all places of the country. We have 1,300,000 clients that are in higher income. Bradesco Prime, not to mention private banking, which is going on growing. Now we have more than 250,000 high-income clients which are spread all over Brazil. And they do not have yet a manager serving them. And you all know that when we have a checking account with an exclusive bank manager for this client where this client becomes a lot more profitable. We can bring the client’s principality to our management.
And of course this client will be a lot more profitable. So you were right, this is an extremely competitive market, but we have a blue ocean to work with these higher income clients. Also the bank, the corporation itself enjoys a competitive advantage of being able to provide all products and services. We have an insurance company, a consortium with company and asset actually too now with Tivio. So two asset management companies. We have another financial company. So we have all products to serve the needs of these higher-income clients. In addition to cards, like I mentioned, we have a card geared to higher income, the Amazon card. So a lot of products in our shelf to offer to these clients. Always respecting a customer-centric approach, the right product at the right time in the moment, in the life moment of those clients.
All of that will allow us to compete better in these competitive landscape. Like I said, the insurance company is coming strong, delivering a very adequate ROE, contributing sizably for the earnings of the bank. And of course the ROE of the bank will consequently be a lot greater. Of course, we’re not happy with the ROE that we are recording. It is inadequate. This is explained by delinquency in market NII in the past. But we are recovering the ROE. The insurance company as well as all of the other companies of our organization are important in forming the result. So looking forward, our expectation is that with all the work we are doing, with verticals, with the higher-income segment, adjusting the structures and important adjustment, Tito, to our structures or with the related companies, Bradesco Insurance, Bradesco Asset, cards, all of the different levers that we can work with, with all this will bring better results to the organization, will improve our ROE, not only because of the increase in the loan book, but because of all of the products and services that we can offer to these clients.
Thank you for the question, Tito.
Tito Labarta: Thanks, Octavio. That’s very helpful. Just one quick follow up. On the insurance ROE, is it fair to assume that there could be some pressure from a lower rate environment? Or how do you think about ROE versus interest rates for insurance in particular?
Octavio de Lazari: Tito, Bradesco Insurance posted and is posting a significant results this year. This is not new. You know the insurance company really well. The insurance group has been posting recurring results for Bradesco. And this year in particular this happened. Of course there were benefits of the interest rate, of the portfolio being managed by the insurance group, with interest rates and the GPM, IPCA indicators. And that benefited even more the financial result of the insurance company. Although we do see declining interest rates by the Brazilian Central Bank, the insurance company will certainly end the year with more than BRL100 billion in revenue. So it’s all about working the claims ratio. We have to continue to work with the assets we have in the insurance group, the pension plans, and in the private — healthcare insurance for the insurance group.
