And in human resources, we also want to change our paradigms to be more aligned with the market, having growing ambitions for our organizational development. I can also tell you another concern that we had since you talked about the team, and I think it’s very important. We are giving recognition without increasing the operating cost. As I said, we’re actually reducing this cost. And this is also an example for the organization. We were only able to set aside the team for change and the team for run because we reduced the layers and change the spend. Otherwise, how were we going to do that with departures and taking people or change the bank. It was difficult to run this business with the directors leading. So of all supporters, five of them are owed to replace me to be in the succession plan as well as the Vice President, and those who have been recognized new executive officers who will continue to run their departments not being replaced.
There’s also five of them with the age and background to replace any of the vice presidents who are here as well as myself, take on my seat in the dual time toward the association. Thank you, Renato. Next question Bernardo from [indiscernible].
Bernardo Guttmann: Marcelo, we show a lot of success in your new role. Building on the prior question on incentives, and I ask a question, but in a broad way regarding the transformation process of tides you’ve been in this role for a little time noon. You’ve had different positions at the bank. And in the presentation, it’s clear that we have a wide diagnosis of the necessary changes to be made. But I’d like to focus on one specifically. Bradesco has a very traditional culture that has been very well worked on over the years in terms of robustness and cost. But the new environment is quite competitive. And the moment that the bank is dealing with brings about a different sense of urgency. You need to have different agility to react into change of housing.
How has this initiative being received in the bank regarding the adjustments that need to be made? And what paradigm do you still have to break because that will give me an idea of the priorities of your agenda of transformation.
Marcelo Noronha: Thank you for the question. This is a big question. What I can tell you is, number one, I think that we have to learn from the past. We did have some conviction. And when we sit and we deeply debate each topic, it’s almost like you opened up your kimono and you see what you need to do. So without beating around the bush, I’ll go to the answer. The Board of Directors gave me autonomy and has been supporting me in 100% of the changes. We also wouldn’t have changed the [indiscernible]. I wouldn’t be telling you that I’m in the process of hiring a C level for HR and a C level of food digital. And in other levels of the org structure as well, we are in the process of hiring a lot of people. So I have the support of the Board of Directors, 100% support.
And this has been really nice, the kind of debate we are having. The Board of Directors is aware and we put everything on the table. We were very pragmatic. It’s no use of the laser. There’s a sense of urgency. We have to change. We have to do it. And that’s kind of my style on this file up some colleagues here of the executive management. We go straight to the point Bernardo. Little philosophy, a lot of pragmatism. I think we were able to break down the main paradigms. The other paradigm is the compensation that we are delivering now. There was no time been to 60 days since cover. And in order to do all the ad, we just didn’t work during Christmas night, Christmas Eve New Year’s. Other than that, everyone, including the consulting France, have been working long hours on Sundays, I’ve been working on Sundays with my colleagues to deliver this urgently with this level of depth because if you look at the whole thing we’re doing, it’s not [indiscernible], and you’re already executing because that’s crucial.
It’s no use having a notable book, promising things are not doing them, but we are doing it. Already. Our next question comes from Mario Pierry with Bank of America.
Mario Pierry: I have a question about cost and efficiency. You talked about improving the efficiency ratio, but when I look here, your provision is BRL570 million this quarter to restructure branches. So I’d like to understand what that means in the short term. And what are you thinking to get to this efficiency ratio target. How do you think about your headcount number of branches because you think when we look at the bank today, the bank has about 86,000 employees with about 2,700 branches, 32 employees per branch, it seems to be very high, high number. How are you thinking about this metric? That’s my question.
Marcelo Noronha: Thank you for the question. So let me answer it. I’ll ask you to recalculate the metrics because you can see 2,700 is. But in fracs, we have 7,000 weeks of sale, 7,000. Even with the reductions 7,000, we have two additional branches. We have points of service, which is like mini branches. So it’s — we have even smaller than mini branches. So we have set of branches with different characteristics. So you would have to divide the number of employees by 7,000 and up by 20. Having said that, we are reviewing our first and will deliver some basis. We had an expectation, in line with the new plant, we changed our expectation. We have been more ambitious, more strict. And events two things. The idea is not to reduce the sales force, but rather to gain efficiency.
The second thing I told you, we’re going to be hiring 3,000 to 4,000 people in technology. So we’re exchanging expense lines. Personnel lines will grow, but we would reduce operating expenses with the hiring of cars parties. So perhaps that’s the main point in terms of efficiency gain. But this is a cost-cutting initiative in the organization. We are discussing some areas. We are discussing the existence of the points of sale, the scale, we will automate the processes and execute this much faster. It’s all mapped out. The whole operating efficiency project is divided into several initiatives, not just one. The one I mentioned here is the largest. But periodically, we will be updating you showing our evolution and our performance quarter after quarter — quarter-by-quarter.
So more towards the end of the year, beginning of next year, we will be seeing some important changes in the organization. Well, in addition to everything you mentioned on sale, we should not get the restructuring of the affluent segment. A lot of the sales force will be allocated to improve our account loading and the way we will manage such important clients for the bank. In terms of branch efficiency, it’s a lot more corporation there has to do with operating synergies among the different departments at the playing. So under this big framework, there will be a reallocation of people and that is fundamental for us to have change initiatives and the run initiatives, working continuously and going in the same direction. Let me add to what Cassiano said.
[indiscernible] that I can have a branch with one manager serving mass retail, and this would not make sense as the manager could be managing SMEs. So we will be reallocating the salesforce, it’s all mapped out, and we are now refining it so that we can start executing. Next question, Tito Labarta, Goldman Sachs.
Tito Labarta: A couple of questions on the strategic plan from just looking at Slide 13, some of the comments you made, right, that the market represented $1.3 trillion in post risk revenues, 30% to 40% in retail and that the biggest challenge is the cost to serve and you mentioned for the entire market. I mean, just I could argue that, that’s really the biggest challenge for the incumbent banks, right, for the fintechs have a much lower cost to serve, right don’t have the brand to network, to have the employee base that you have — excuse me, employee base that you have. So what can you do to get your cost to serve down? Does it mean that you will need to invest quite a bit in the business first, we look at your expense guidance above inflation.
I mean, do you think that continues for some time before you’re able to bring down the cost to serve? And then somewhat related on that same slide, a couple of bullet points later. You mentioned that credit is the primary anchor and challenge for fintechs, which represent less than 3% of the market. But you can argue they’re also gaining share at least one or two are gaining share very rapidly. So just to understand your ambition to get to that 15% to 19%, given that you could argue that the market has gotten more competitive in the last few years, what can you do to really capture that market share given that other competitors are also growing very fast.
Marcelo Noronha: What we have here to compete in this market, as you asked. The revenue I mentioned, you mentioned it again. And then you said about their retail… 40% of total revenue, how can we compete with the cost of fintechs? It’s a fact that our main challenge is the cost to serve, of course, that the right credit model for that, but cost to serve is key. And as I said, we assessed or evaluated clusters, and we found out that in some clusters, we are able to compete, and we have a significant share of wallet, but we are going to have to reduce the cost to serve. And we identified exactly where we have to get to. And now we’re detailing this. But let me tell you other things that are worth mentioning. First, Bradesco has high penetration in this segment.
Not all incumbents have that. But this principality, as I said, is again around 60%. Not all incumbents have that. Bradesco has, in its DNA, the relationship with this type of customer. We need to change the cost to serve. We have Bradesco Espresso as a very important competitive lever, not only as a channel, but I also told you we can serve those customers with a variable costs instead of having fixed costs and some points of sale around throughout Brazil. So we have different competitive levers that can allow us to compete in this market. But look, Tito, know that we have a market of 30% to 40% of the total revenue of banking business in Brazil. And it’s a market that can be divided with three or four banks or fintechs and everybody can hold 20% of share and be big.
