We are growing our credit book within our own, where in Brazil called or the closed ocean. We are — we give credit to customers that uses our primary bank accounts that are getting their salaries in our account, they are using our app to do payments they’re getting an insurance. So that generates a lot of loyalty on one end, that generates a lot of information that we can use for underwriting. We are not providing credit in the open ocean as a lot of banks have actually done over the past 12 months. There’s been a lot of growth in that open ocean. So it’s been a different strategy. And as a result, we get to continue to pick within a base that we understand and that we know. The third consideration is we’ve actually always looked to provide products that are very good for consumers, and we’ve been very careful about taking into account ratios on household debt.
So just to give you one data point. The — on the credit card product, we don’t think evolving as a product is a good product for consumers to finance. It’s a very high interest rate, consumers enter into that product, and they ultimately end up getting very high losses. So as a result, we look for customers that pay on time. We’ve always look for customers that pay their bill on time. If we could choose, we could only get we get 100% customers that pay on time. And as a result, what you see is in the market, about 70% of customers — of the common banks getting to the revolver for us, it’s only 7%. So we end up with a consumer base that is healthier, that is less leveraged, that is — provides more data to give us information around underwriting and that we ultimately get to cherry pick to provide credit and continue to grow even if the environment as a big headline is adverse and generates some risk.
Regardless of that, we did though decided to take it a little bit slower as you saw in 2022, especially in consumer lending, which has a newer product. But as you will see — as you see here on the delinquency numbers in Q4, which ended up being better than we expected, even though there is some seasonality, we already started growth again and feel comfortable that we can start tweaking up the growth on the lending side, but we will be monitoring this very closely. And if the environment shifts, we are very, very agile and can shift very quickly as well.
Tito Labarta: Great. That’s very clear. Very helpful. One follow-up, if I may. Thanks for the Slide 10, showing that profitability in Brazil. You’re showing annualized of 40%, but you still have a very under-levered balance sheet. And efficiency is improving pretty quickly. But do you think there’s still upside to that 40% ROE in Brazil as you expand the product base, the whole up-sell and cross-sell to your clients? And do you think there’s some upside to that number from here?
Guilherme Lago: Tito, we think that the profitability levels that we are showing now are a good testament of the long-term potential of the profitability that we can have as a digital bank. It provides clear evidence in our view about the cost modes and the revenue advantages that we have. So in the long term, we do believe that there is more upside optionality there. In the short term, we don’t provide guidance. So for 2023, we do expect to see some puts and takes in this equation. Would you expect, on one hand, to see the cap on the interchange of prepaid cards coming into fruition on April 1. We do expect that as we accelerate growth, this will now put additional weight on our margins. Conversely, as tailwinds, we expect that we will continue to grow and extract even more operating efficiency out of our system.
