Ricardo Dutra: So Mario, the decline in our base €“ the majority of this declining is in nano merchants. Nano merchants are responsible for a very, very small part of our TPV, less than 3% for TPV. So if you look at the number of merchants, although we are decreasing our TPV is growing, growing on a yearly basis, growing on TPV promotion. If you look at the year figure, we are growing faster than the industry. And of course, the profitability are reaching record levels, as you could see in the presentation. So, although the net adds or the active merchant base is a metric that everyone follows, the fact that we are losing nano merchants, it doesn’t correlate with financial metrics. So, we are looking for clients in these key segments, which are micro merchants with some levels of TPV and SMBs where we have profitability in payments, and we have opportunities to cross-sell and to penetrate PagBank.
So, that’s why the €“ if you ask me the active merchant base looking forward, there could be a down trend, but we are not concerned with that because we’re losing clients that they have very low TPV, low probability of PagBank penetration. And that’s why even losing this client, we are growing TPV 40% year-over-year and reaching record levels of profitability. Regarding credit, we took the right decision in Q1 2022 to shift our credit from unsecured products to secure products. Today, we have 40% of our credit portfolio that is secured. We expect that to reach 60% in the short-term in the following quarters. And so that’s why even with this credit crisis we are seeing in Brazil, even in the corporate. We are not seeing our NPLs having problems because we have the full collateral for this part of our credit portfolio.
So, that’s the overall picture that I have in terms of credit. What could have happened in Brazil in Q4 is that some banks decrease the limits for the credit card holders they have, and that’s why, to some extent, could constrain consumption, people that had some limits in credit and now they have a lower limit because some banks are decreasing. And if you look at the results from banks, the quarterly call from some banks, we’re seeing some NPLs going up there. So, that could be the impact for us. But in the acquiring business, I’m saying, I mean, people with lower credit to spend money. But overall, we don’t see this crisis in corporate generating any problem in our credit portfolio or any other operation related to PagSeguro PagBank.
Mario Pierry: Okay, perfect. Thank you very much.
Operator: Our next question comes from Bryan Keane, Deutsche Bank.
Bryan Keane: Wanted to ask about the PagBank revenues and the delta to volume. I just want to make sure I understand the delta. And do you expect €“ or when do you expect maybe the delta between the gap between volume to revenue growth to close in PagBank?
Ricardo Dutra: Thank you for the question. I guess we are talking about the volumes of PagBank TPV and correlate that with the revenues.
Bryan Keane: Right, right.
Ricardo Dutra: Yes. A large part of this TPV in PagBank, they are not monetized because it’s based on people sending money from PagBank and sending money to PagBank and or from PagBank to someone else. So, that’s the nature of this money flow coming in, coming out, cash-in and cash-out. And we do not monetize that. It’s more like important for engagement and this kind of stuff, but the revenues are based on transactional when people pay some bills here or spending money with our cards, interchange or related to credit. Those are the three main drivers for revenue. So, what we had in Q4 is that as we are having this shift from unsecured products to secured products, the duration of these loans are higher than what we had in unsecured products.
