And this is why we have been able to double the client base of the bank from 2-point something million 3-4 years ago to more than 5 million this year with costs that have been growing single-digit. So, I think those three components are the ones that on everything we do with digital and analytics are pointing out to that, which, at the end, should lead to a positive operating leverage and an improvement in the numbers and sustainable ROE. Hope that helps.
Ernesto Gabilondo: So, this is super helpful, Felipe and Michela. Thank you very much.
Luis Felipe Castellanos: Okay, great Ernesto. Thank you.
Operator: Your next question comes from the line of Yuri Fernandes with JPMorgan. Please go ahead.
Yuri Fernandes: Thank you Luis Felipe, thank you Michela. I have a question regarding your cost of risk. It should increase, right, as per your guidance? So, if you can share like your expectations, maybe you should use a lower GDP and this is basically expected loss model being a little bit more punitive, or if you are seeing like more concerning, as you mentioned, like consumer segment having a slightly higher cost of risk. I just wanted to understand a little bit where this cost of risk will come from? And I totally understand your margin expansion, right? So, even with this cost of risk moving up, I guess your risk adjusted mean should still be fine this year. So, like not super concerned, but just would like to understand why cost of risk is running above the historical level?
And if I may, a second question somewhat related to the cost and revenue side. We are seeing a very strong margin expansion, right? Your guidance implying 50 to 100 bps margin expansion. So, your NII this year, assuming your guidance for loan growth should easily increase . And as you said, you are very cautious on your G&A. So why not, like €“ again, you are discussing the cost to income guidance, I totally understand this. But shouldn’t we not expect a much lower efficiency for you this year on the holding level, given your NII should be so strong? Thank you.
Luis Felipe Castellanos: Okay. Yuri, thank you very much for your question. I’m actually going to pass it on to Michela. Yes, overall, I think she’s going to go into details, but it’s basically a mix change that we’re seeing. Also, we are seeing low growth impacting all last year and will continue during the next year. It is expected to be around 2% or less for Peru this year. And inflation continues to be high. We are not seeing lots of investments coming from corporates or companies. So we do think it’s going to be a slow year and that will have a toll in the Peruvian consumer and in Peruvian companies overall. So it’s going to be a matter of both mix, consumer continue growing, but also deteriorating macro variables that will have an impact in the payment capacity of Peruvians.
You’re taking off a very, very low €“ lots of liquidity into the system in the last year because of what happened with the pension funds, the help from the government post-COVID and all that. That is also being taken out of the equation. So, that will have a toll in Peruvian consumers and obviously, in the cost of risk. If you add to that, the political turmoil that we’ve witnessed recently, the closures of certain regions, the impact in the south of Peru where we have close to 12% to 14% of our portfolio. Then we have what is happening in the tourism industry, in the restaurant industry, in the transportation industry. It’s a little bit tough to actually make right predictions, but everything obviously points to higher cost of risk, given everything that I’ve mentioned.
And so, maybe now I’m going to stop and pass it on to Michela to make a couple of precision of this if required and then to talk about the margin expansion and the impact of operator leverage that you asked. Michela?
