Youssef Lahrech: So, I mean, the way I would think about, the impact of financing is just one additional way to enhance the product. It adds ARPAC per customer. It brings, you know, more interest-bearing balances, at the customer level. And so it just makes the unit economics of credit card, more attractive, which in turns allow us to do a couple things. One is increasing credit limit selectively and also acquire more customers profitably that we might not have acquired, before. So you kind of get the second order impact of being able to grow more at more attractive returns, albeit, for part of those, the higher growth at higher levels of NPLs.
Jorg Friedemann: And, we will try to come once again to the line of Pedro Leduc at Itau.
Pedro Leduc: Alright. Thank you so much, Jorg. Hope you can hear me now. Coming back quickly to the, before mentioned accounting change that you had and impact to the credit card balance. The reason I’m asking is because in our BRL estimates, it looks like the installment credit card product decelerated a lot, and it’s probably where this accounting change had most impact. So, it probably grew. If you can understand, help us understand how by how much and the innovation products [indiscernible], how relevant they are becoming on how much they grew this quarter? But really trying to get all accounting constant growth figure for the installment credit card with interest figure for the quarter?
Guilherme Lago: Thank you for your question, Pedro. So let me recap, so the accounting change that we implemented with respect to credit card receivables and credit card payables in the third quarter was one whereby we are now representing those receivables and payables according to their respective present value. And what does that change? So if you take a look at our financial statements and the credit card receivables in the line that we call receivables installments, that is where you will see those numbers being affected. And in the liability side, in where you call payable to the networks is where are you going to see a corresponding impact almost offsetting each other? With respect, Pedro, to your question about the growth of our interest-bearing balance, I will draw your attention to slide 15.
In which you can see that for another consecutive quarter, our share of revolving balance has remained largely unchanged that about 7%. Whereas the share of the finance portion went from 19% to 21%. Most of this growth can still be attributed to the continuous growth of Peaks and Boleto Finance.
Pedro Leduc: And this slide, Lago, the 2 key was also restated for that accounting change, so it’s comparable?
Guilherme Lago: No. No. No. It has not. Only we started to make this new accounting treatment only in the third quarter of 2023. There has —
Pedro Leduc: And the impact you said earlier was like $150 million to $100 million, so we can probably, do the adjustments here to the comparable.
Guilherme Lago: That’s correct.
Jorg Friedemann: And our next question comes from the line of Eduardo Rosman at BTG.
Eduardo Rosman: I have a question, I think, to David. I think in a recent, podcast interview, I think you talked about going beyond financial services and that you would be dedicating an important part of your time chasing that goal. So, can you share with us, the potential opportunities there? Is this something that we should be seeing a couple of years down the road? Or, can we expect something in the short-term? So it would be interesting to what you’re thinking about it?
David Velez: Sure. Absolutely. So listen, I think when we when we take a step back and we think about what we’re building and what we have built in this 10 years. We realized that with a 90 million and growing fully detailed consumer base, which is one of the largest in Latin America already. One of the most valuable brands and highest NPS, a really data rich ecosystem, very high engagement and an opportunity to do a lot of cross sells. This platform that we’re building opens up a bunch of new optionalities ahead of us. These are optionalities that are going to take a long time to figure out. Not necessarily something that happens very fast. We’re actively thinking about how do we, as we think a bit of our evolution around effectively the first 10 years, we had to catch up to the big gaps.
We started with our simple credit card, unbundling the entire financial services products. And then we were in a complete race to try to fill all the gaps that we had in financial services to be a party. And we are getting close to party. Obviously, there are a couple of things that we need to improve in certain areas. More insurance products, more investment products, very valid proposition for high income. But in generally, we’re at least getting very close to the core products that somebody needs to have to choose us as their primary bank account. And then we are thinking about the next 10 years around how do we really change the game in the market? How do we skate competition? And this is, reinventing a number of several products and this is using all of those assets that I mentioned.
It’s basically this base to provide more products and services to our users. So we are, here thinking about year 4, 5, 6, 7 from now, these are going to be generally low investments over the next few years. We’re operating in a way where we have a number of different, start-ups within the start-up. Some of the products that we’ve launched already that would grow in our, for example, marketplace, where we already have several million users already buying non financial products and services in our app. We are seeing very significant traction in NuPay, which is a new way to pay online. Today with a number of different merchants, we are bringing increasingly the concept of the AI private bank where we see AI being able to play a significant role.
And under those roof, there’s a number of our initiatives that we are spinning out always in a way where they are provide a lot of optionality. We like to invest little money upfront, let the teams run. And as we start seeing product market feeding, we get excited about the pension in the long run, we invest more, more resources and energy into this. So big answer to effectively tell you we’re actively thinking about the next 5 years, but we’re also actively thinking about the next 10 years. And we think the opportunity ahead of us is just much bigger than simply building, one of the most profitable and efficient banks in the world, which we’re getting close to be. And we want to make sure that we take advantage of the opportunity of some of these different assets that we are being able to accommodate and aggregate under one roof for the past few years.
Jorg Friedemann: And our next question comes from the line of Neha Agarwala at HSBC.
Neha Agarwala: I have a few questions. First one on credit card.
David Velez: Sorry, Neha. I apologize that we can’t hear you very well. Would you mind speaking up a little bit?
Neha Agarwala: Sure. Is this better?
David Velez: Yes. It’s slightly better. Thank you.
Neha Agarwala: Okay. I’ll try to speak loudly.
David Velez: That looks perfect. Thank you.
