Ricardo Dutra: Hi, Jorge, thank you for the question. Good to hear you. I will start with the second question and then Artur can answer the first one. Regarding prepayments, we didn’t see any pressure in terms of prepayment rates at this point. Of course, we have a small — very small part of our TPV where prepayments are related to the basic interest rate of the economy, it’s related to CDI. So once CDI goes down for these clients, rates goes down automatically, but there is very, very small part of our TPV. For the other part, we didn’t change our price. We don’t see movements from the competition decreasing in price at this point. And remember that we had this decrease from 13.75% to 13.25%. So although it’s — 50 bps is not something that we think is, let’s say, the structure for people to start changing the price at this point.
So we don’t see, if the rates keeps falling down, some competitors will start decreasing prices. As we said before, we don’t plan to be the first one to keep decreasing prices. We try to keep the prices alive that we have as long as we can. But, of course, we’re going to evaluate and look what the competitors are doing. But at this point, we didn’t see pressure. Looking to the end of the year, the basic interest rates expect to come to around 11.75% or 12% and for next year around 9%, 9.5%. So we’ll keep following the movements of competitors. But going back to your question at this point, we don’t see pressures for prepayment rates decrease yet. So let’s see. And Artur, would you like to take the first one?
Artur Schunck: Yes, Jorge, good to talk to you. Thank you for the question. And related to this take rates, there are many moving parts and we decided to include a slide, Slide 9, in the presentation that shows everyone what — that the most clear way to show to everyone that there are moving parts and those moving parts related to Financial Services division and also payments. In financial divisions, as you know, may prefer to start the interchange cap on prepaid cards and debit cards that affected our revenues impact in Financial Services division. On top of that, we decided to change the underwriting. And also the portfolio from unsecured products to secured products that present lower yields, but longer durations, better for engagement to the clients when we move our originations to payroll loans, that also reduce the level of revenue that we have in financial services, but with lower expected credit losses.
In terms of payments, we have a positive effect of our TPV growing 4% year-over-year that resulted in BRL141 million of revenues. However, we saw that in the second quarter, we have shorter duration on TPV credit card installments reducing the number of installments that affected our take rates, because as we have less installments, we have less take rates. And also we continue to changing the client mix in payments to SMB clients that has lower take rates, but good contribution in terms of gross profit and EBITDA. On top of that, we have this BRL22 million in other financial income that also contributed a little bit because of interest — interest rate in accounting that was — was higher than — than before.
Jorge Kuri: Thank you. That was very clear. Thank you, all. And just the last part of my question was, how is that take rates trending so far in the third quarter relative to the second quarter?
Ricardo Dutra: We are expecting our take rate reducing a little bit, not too much, but reducing because of this client shift mix.
Jorge Kuri: Got it. Perfect. Thank you, Artur and thank you, Ricardo.
Ricardo Dutra: Thank you.
Artur Schunck: Thank you.
Operator: Our next question comes from John Coffey with Barclays. Please go ahead.
John Coffey: Great, thank you — thank you very much for taking my call. I just had two short questions, which were somewhat overlap with the last caller. My first question was on Page 9, which I thought was a great slide and I find it to be very clear. As far as that 74%, which is a result of the prepaid interchange caps, I understand that and I see that that will — I would presume continue at some level for the next three quarters before it lapse. But regarding the [171] which you’re getting from the shorter duration on TPV for credit card installments. Could you give me some thoughts about when that lapse? Is that something that we should also expect for three quarters or have we seen this already in the past couple quarters and we should see that impact diminish?
And my second question is if we do see 50 basis — 350 basis points to clients in the SELIC over the course of 2023, how should we think about the different puts and takes on your P&L? Because you already seem able to mitigate the effects of SELIC increases just due to your strong balance sheet, how can you take advantage of this if you start to see these interest rate declines? Thank you.
Ricardo Dutra: Hi, John. Thank you for the question. I’ll start backwards here if — just to give a sensitivity analysis here. For every 100 bps decrease in SELIC, if we did not change the price and the — keep the same capital structure and client mix, I mean, all variables equal, we’re going to have something like close to BRL1,200 million EBT benefit for every 100 bps for one year, if everything else keeps the same. So, of course, we cannot predict how is going to be the other variables because we cannot control. And let’s say if the client mix changed a little bit or if competitors start decreasing price and you may respond a little bit, we don’t know how it’s going to be the size of our response and things like that. But everything else equal, it’s going to be BRL200 million, around BRL200 million EBT for every 100 bps.
So that’s the sensitivity to give a sense how is the P&L related to the SELIC. Regarding the order 171, that’s something that may happen in some quarter, maybe the next quarter is going to be better. What we saw here is that the duration went down a little bit, but let’s say in Q4, when you have some people using more debit, but we also have some people buy like holiday gift and things like that, the duration could go up. So it’s hard for you — for us to predict to say to you that 171 will keep going down in Q3 and in Q4. We are just putting here what happened in this quarter. It doesn’t mean it’s going to happen in following quarters. And also important to say that for the whole analysis for the P&L, so to say, we should look at the financial expenses and also the financial income because what the end of the day what matters is the net of these two lines, financial income minus financial expenses and here we are just talking about the financial income in this Slide 9, just we’re explaining only the revenue part of the P&L.
