Mario Pierry: Okay. But as part of your strategy, it is right, like you’re trying to eventually increase your presence among the higher income population in Brazil. Does that mean that you’re trying to be a little bit more aggressive and that’s why the that NPL could be a little bit higher?
Guilherme Lago: No. I don’t think the monetization or the getting deeper in wallet, in high income would cause that the trend we’ve observed in on NPLs to deviate substantially. I think it’s just it’s the way it’s been historically.
Mario Pierry: Okay. And Lago, let me go back then to the first part of the question, right. Because if we convert the origination to dollars, right, like we again, I quickly look at the FX here. You originated about $1.8 billion this quarter versus $1.5 billion in the second quarter. So when you originated $1.5 billion in the last quarter, we saw your loan book grow by almost $2 billion. And, this quarter, your loan book only grew $600 million. So is there any change in the maturity of the loans you’re originating or you originated previously?
Guilherme Lago: No, but I think, there has not been any material change in the average duration or in the profile I have the loan. I think the origination that you’re show that you’re referring to is related to personal loans only, which accounts for about 20% of our book more or less. So if you take a look on slides 14, and if you do an FX adjusted gap, you will see the gap in growth is justified for us having an average duration of the personal book somewhere between 5 and 6 months.
Jorg Friedemann: [Operator Instructions] And our next question comes from the line of Geoff Elliott at Autonomous.
Geoff Elliott: Question on the deposit side. There was quite a big increase in interest expense and particularly interest expense on deposits in the quarter, I think up from something like 400 million to 460 million. I mean, I guess the growth in the previous quarter was a factor, but can you just help us understand that it looks like quite a big step up in deposit costs this quarter?
Guilherme Lago: If I understand right, you’re asking why our interest expense have gone up. And it’s just not only the growth in deposits, but also the growth in our finances. So our operations in Mexico and Colombia are primarily funded through bilateral finances and syndicated loans. And they have also contributed to the expansion of our interest expenses.
Geoff Elliott: I was more focus, I think you breakout the deposit pass in the financial statements and that part specifically, 401 million in 2Q, 464 million in 3Q? So pretty big, increase just on the deposit side?
Guilherme Lago: Yes. I think the deposit size, the 3 months of deposits, I’m looking at the financial statements. It went from, for the 3-month went from about $430 million to $463 million in interest and financial expenses, the interest expense and deposits, which is largely a result of the growth in the sheer size of deposits that reached at $19.1 billion in the quarter. The other relatively jumps that you see in interest expenses going from $29 million to $74 million. That is the direct result of the growth in the finances of Mexico and Colombia.
Operator: And our next question comes from the line of Pedro Leduc of Itau. Pedro, your line is open. Pedro, I think we can’t hear you. So let’s try to take the next question, and we can come back to Pedro later. So our next question will come from the line of Thiago Batista at UBS.
Thiago Batista: My question is about the high-income segment. You already comment in the past that this should be a focus of new, in the future. And, my question is the first one, is possible to really, achieve to this client without a kind of banking manager or branch manager or adviser, do you see this Nubank serving those clients fully digital? And, also, if it’s possible to maintain the same level of ROE in your Brazilian operation, let’s say, 30% to 40%, in this high-income segment?
David Velez: As we think about the high-income segment, which you are correct, is an important focus for the company. We think about it in 2 steps. The first step for context is customer acquisition. And the second step is how do we monetize, that customer base? Our customer acquisition has made a lot of progress over the recent quarters. We now have about 60% of the high-income customer segment as customers of Nubank. And within the high-income customer segment, we have the leading NPS in the market. On the monetization side, it’s a marathon. It’s not a sprint and we’re still in the very early days of that process. We do believe that both the customer acquisition as we’ve already demonstrated, but also the monetization can be achieved with a high degree of customer satisfaction and customer happiness in a digital way.
We do intend to invest, additional focus efforts to make sure that we’re doing everything we can to delight the high-income customers, but we think that can be done following the template of how Nubank has operated over many years. So essentially in a digital first manner. The initial signs on monetization have been very positive as we build on our customer acquisition efforts. There are, we believe, 3 core components to having a compelling solution for high income customers. There is having a payments and banking and account infrastructure that they find compelling. And on that front, we are the leader in terms of, for example, picks usage at well over 20% share, as a transactional account. On the credit side, we’ve made a lot of progress this year.
We have for our ultraviolet product, for example, been able to double the average credit limit. We’ve been able to roughly double the number of ultraviolet the customers. And we’ve also been able to double the purchase volume, on the ultraviolet credit card. And as we go forward, we are working on wrapping a bundled solution around that flagship credit card product that will trigger ultraviolet. And on the investment side overall, we’ve seen AUC grow 50% year-on-year. So we believe we’re making a lot of progress with high income customers, getting them to try and start developing the habit of using our products. We have a long journey ahead of us, but we are confident in the direction we’re going. We believe we can do that with strong unit economics and overall returns.
And we believe we can do that with following the new bank template that we’ve had historically across the market with a digital first approach.
Guilherme Lago: And just to compliment, no, we do not expect that our share of wallet gain in high income will dilute our margins and returns as Jag mentioned.
Thiago Batista : No. Very clear. If I can do a small follow-up. Youssef, you comment a couple of minutes ago that, it’s possible to see a higher delinquency ratio together with higher margins, or margins at the provisions at least. This is how do you guys see the fixed finance? Do you believe that fixed finance should bring higher delinquency ratio with higher after previous margins?
