Guilherme Lago: Yes. Frade, thanks so much for your question. So, just for the purpose of everyone here, so we are all on the same page. I believe you are referring to the Resolution 200 that the Brazilian Central Bank enacted back in the first quarter of 2022, which harmonized the regulatory capital regulations for both payment institutions and financial institutions. We — that regulation became effect July 1, 2023. And we have now, as you correctly pointed out, Frade, been operating as a regulatory — a financial conglomerate in Brazil, encapsulating our payment institution and our financial institution. We are — if we look at our financial institution, only our Basel ratio is above 20%. If you were to look at our whole conglomerate, our capital ratio would be closer to 12% in Brazil compared with the minimum regulatory requirement of 6.75%, which is the metric that is being used by this new regulation.
So, we have almost twice as much capital than we need to operate in Brazil.
Jorg Friedemann: And our next question comes from the line of Daniel Vaz, Credit Suisse.
Daniel Vaz: Congrats on the strong results. It’s — my question is practically a follow-up on Frade’s question. There’s also a potential significant increase in your CET1 or Basel ratio from July onwards considering the Central Bank 229 resolution and consequently reduced RWA factors considering the transactional portion of your credit card portfolio. So on the net impact from the 30% already from the Type 3 prudential adjustments and this 229, would it be correct to assume that you’re net positive for capital ratios, or have you calculated the impact already? Thank you.
Guilherme Lago: I think we are super well capitalized. Our capital in Brazil far exceeds the regulatory capital requirements that the new regulation imposes on us, without mentioning the $2.4 billion in excess capital that we have in our holding company. So, we are fairly comfortably capitalized. To give you just a general sense, today, our capital position in Brazil amounts to approximately $2 billion. The minimum regulatory that we have is about $1.2 billion. So, that is the buffer that we have to operate as of today. And our Brazilian operations, as you have pointed out, continues to be quite profitable, generating relevant amounts of earnings. So, we do expect to continue to have a very comfortable capital position.
Daniel Vaz: So Lago, maybe a follow-up here. So, we see a good level of Basel ratio with also strong profitability of 17% ROE at the holding level. So with this good level of organic buildup, is management considering to distribute dividends or somehow we should expect a stronger capital buffer to support increased origination levels for credit, for example?
Guilherme Lago: So, at the holding company level, we have no plans to distribute dividends at this point in time. We do believe that the amount of earnings that we’re going to be able to generate in Brazil and later on in Mexico and Colombia will basically be reinvested in organic growth opportunities that we have ahead of us in those three geos, right? So what we may do at some point in time is do distributions from Brazil to the holding company and to optimize our capital structure, but we believe that most of the early surplus will be generated and reinvested in the business in the foreseeable future.
Jorg Friedemann: And our next question comes from the line of Neha Agarwala at HSBC.
Neha Agarwala: My first question is on yields. When I look at the yields for both your credit card and your personal, only the interest-bearing part. I see that the yields in the last 2, 3 quarters have been going up. Are you consciously repricing up, which is leading to high yields? Or is there any other factor playing in there? And I contrast that with I think what you mentioned, if I heard it correctly, about the payroll loans that you would like to use your cost advantage in the payroll product and be competitive in terms of pricing for the payroll product. Is that correct? And should we expect a similar trajectory for the personal loans and credit card products as you gain profitability? My second question is a quick one on the cost-to-income ratio.
