We felt it was important to carry out this sale. The sale was completed satisfactorily with the regulator’s approval and its financial settlement last Friday. From the earning standpoint, in the material fact, where we announced the sale, we said that we post non-recurring result of approximately BRL1.2 billion. And this is the result that is actually materializing in this quarter’s earnings. So this settlement have this impact on equity that has been accumulating over the years, which is the CTA that we disclosed on the balance sheet. And the balance sheet as of September 30 does not include any more of the effects of Argentina, because from July onwards, we have the effect of only one month in the quarter, which is July. We started treating this asset as available for sale and no longer as a bank consolidated on our balance sheet.
The result excluded was a credit portfolio of BRL4 billion and operating revenues of BRL1.9 billion a non-interest expenses of approximately BRL650 million and earnings of BRL578 million is reported in P&L, which is the figure I’ve showed you just now. Thus, we no longer include Argentina in our earnings. As a result, we simply took the guidance that had been released to you last quarter, and we made the adjustment by excluding the impact of Argentina. How did we make this adjustment, we went back to the guidance and looked at what we had projected line by line for Argentina over 12 months, and we simply excluded them from the projection. And now we are restating the guidance without any changes. Basically, what we’re doing is excluding the effect of Argentina from the last five months, two months of which are from the last quarter and three months from the coming fourth quarter 2023.
Thus, here you can see the figures adjusted across the board. The basic message is that our guidance is being reaffirmed, we continue to believe in the projections and we are delivering earnings within these lines. Needless to say geography can always change from one side to the other side. But all ranges described here absorb our best expectation of how we should and 2023 This concludes the presentation. And I will now join Renato, so that we can answer your questions during the Q&A. I’d like to thank you once again for your trust. And say that we remain very confident in our agenda. We’ve been working tirelessly on this cultural transformation that I’ve talked about so much. This obsession with the client with expanding all NPSs, ensuring that our business keeps evolving and growing.
We still have a lot of opportunity for growth. And we’re going to continue evolving at the bank, but always with that focus and that long term view, creating shareholder value is a mantra for us. And it’s something we have very strong in our DNA. Then we’re not going to fight for growth that leads to one or two quarters with better earnings that is not sustainable in the long term. We are going to keep this long term view as we’ve always done here at Itaú Unibanco. Thanks everyone once again for your time. I’ll join Renato and we’ll continue our talk. Thank you very much. See you in two minutes all the best to everyone.
A – Renato Lulia : Milton is back with us. Thank you very much for being here and for your presentation. And now we will start the second part of our meeting, which is the Q&A session. Remember that this is a two-language session. We are going to answer the question in either English or Portuguese. If you need support, with the translation, you can choose the audio that you need. You can submit your questions via WhatsApp the number is 11-97-825-5707. The list of participants is long. We have the first question without further ado, let’s start. We have my friend, Renato from Autonomous here with us in video. Thank you for taking part of our call.
Renato Meloni : Good morning, everyone. Thank you for the opportunity. Would you please comment on the improvement on the ROA with the business on retail, regardless of the revenue didn’t grow so much. I want you to understand the drivers behind that improvement. And maybe under certain scenarios for the next quarters if there is a trend. And if you can comment on your expectation regarding the meeting with the Central Bank that is scheduled on the credit cards. Thank you.
Renato Lulia : Thank you, Renato, for the questions. Welcome, everyone. I would like to start with profitability. In fact, when we look on the quarter-on-quarter, the result on the retail is stable, but with competition that is different. With a turn of the quarter, we have had a revision of the capital allocation with a regulatory changes, and the demand of capital in the retail operation was reduced. Therefore, the capital that was economically allocated on the operation is dropping, but the operation is stable. Why? Because all the remuneration of capital is one side of the business, you’ll have less capital allocated with the business, you’ll have less remuneration of the capital allocated in the business. That’s why you remove the effect of the margin of the operation, but the core the operation was improving, it is improving a lot.
When you remove that working capital, you’ll have the constant and then you demand less capital. And then you have two levers, the operation of the company that is expanding, and growing with greater profitability with more efficient capital allocation. And the inflection point that I said, where the business of individuals already happened. And we are improving quarter-on-quarter the profitability. So yes, there is a return, but there is an evolution with every return even though it’s flat quarter-on-quarter, year-on-year, though it’s an important growth. And we can see a recovery and the individuals with all the drivers more client engagement, less cost of credit, more efficient, less cost, less costly operation. And we can work with all the levers.
And the companies have been growing with great profitability. And the competition of both. Lastly insurance has allowed us to improve the profitability of retail and we can believe on an improvement, looking up ahead. This is one point. Second question, which is the credit card discussion, our expectation as well, this is an agenda with a lot of associations. There will be a debate as your job, the regulator has a capacity under conditions to understand the different opinions, it’s important that they hear all of the market all of the players and the most important here, thing here is that we want to resolve. What are the starting points for the debate of the credit card and the starting point the intersection is so that their rate, the installments are lower than what we were nowadays.
