Pedro Leduc: That’s very helpful. And a quick follow-up just on the potential number if you guys have budgeted loan book target for 2023 already. But on the banking side as well, understood very interesting. Thank you.
Lia Matos: Hi Pedro, yes, no specific guidance on that. I think that the message that we gave on credit is the way that we see how 2023 will play out right now. Of course, we’ll give more color as we evolve. So I think that’s the message there.
Pedro Leduc: Super. Thank you, guys so much.
Lia Matos: Thank you, Pedro.
Operator: And our next question will come from Domingos Falavina with JPMorgan. Please go ahead.
Domingos Falavina: Yes. Hi, Piau, Lia, Rafael, everyone, thanks for taking the question as well. First, congrats, very nice to see the €“ I guess, the pricing dynamics. It’s been a while we see growing 3% Q-on-Q and revenues growing 16%, I mean a massive increase, especially adding the cost of funding. We see basically a 20 bps improvement in Plugg.To rate all inclusive Q-on-Q. My question on that front is, I know things are pretty spread, but if you had to simplify when did you pass the price adjustments, especially on the prepayments, like in which month of the quarter so that we kind of can guesstimate how much has been baked in, in the overall quarterly volumes. Second one is on taxes. Like you guys reached a 20% tax. You mentioned basically the mark-to-market does an impact.
We remove into the valuation from the EBT and we get to like 36% tax, which seems pretty high. And when we look at the tax reconciliation, we actually see a lining effect of tax rates on mark-to-market of equity, about R$37.9 million and R$38 million. So I’m just a little curious like what exactly is the moving parts around this tax bracket that looks high if you remove a guess.
Thiago Piau: Hi, Domingos. Thiago here. I think that the price initiatives we did were spread around the quarter. We see space for some slight increase for fourth quarter, but we are not focusing on that. I think that the spreads will continue to evolve on fourth quarter because as we said, we think that cost of funding should grow less than revenue, so that can produce better spreads for fourth quarter. That’s why we’re giving stronger guidance for 4Q. And we still have to see the dynamics in the industry between debit and credit as a very seasonal quarter. But I think that the trend of improving spreads will continue from fourth quarter and to 2023. And regarding tax, I think that you are right in your analysis. So we’re seeing exactly the same way.
We think that we still have space to improve our efficiency, both on our entities and our treasury. So we’ll be focused on that. And we have a specific plan in terms of tax in our zero-based budget. So we are paying attention to that line very much. But we are seeing exactly the way you see it.
Domingos Falavina: Perfect. And just to confirm, so you’re basically saying you’re starting in August €“ July, August and September. So it equally spread, it was not concentrated towards the end of the quarter. Price adjustments?
Thiago Piau: Yes, you’re right.
Domingos Falavina: All right. Thank you, guys. Congrats on the results.
Thiago Piau: Thank you very much, Domingos.
Operator: And our last question today will come from Nicolas Riva with Bank of America. Please go ahead.
Nicolas Riva: Thanks for the chance to ask questions. So my first question is on the decline in your cash position by R$1.4 billion. So you mentioned you paid down some debt in the quarter. If you can discuss what type of debt it was, if it was bank debt, data insurers. And if it was basically because you couldn’t refinance this debt at a good rate. And if you’re paying down debt, then my question would be, why not buy back some of the 2028 bonds, given they’re trading well below par. If you can talk about the way you think about buying back debt. And finally, on your adjusted cash position, so you make a lot of adjustments to the cash and their position. But I notice a new adjustment this quarter, which is included in the cash position the deposits from the banking customers, which has an offset liability for roughly €“ for basically, the same amount.
So there’s no impact on the net debt position. But my question is why this adjust €“ why this new adjustment? Why the change in disclosure now? Thanks.
Rafael Martins: Nicolas, Rafael here. Let me try to answer all parts of your question. So first, when you think about the decrease in the cash position, as I said, this was our decision to be more efficient in capital structure, right? So if you think about one of the debts that we have prepaid was $400 million of our debenture on the beginning of July, right? And also some other CCBs that we haven’t prepaid. It has nothing to do with our ability to refinance. By the opposite, I think that as the company has generated more liquidity, we have more and more funding lines from different counterparties. So, I think that was €“ it was really a decision to be more efficient there. And if €“ as you said, the adjusted net cash position that we have has increased.
That adjustment that you mentioned about the banking is actually, our decision to be even more conservative in the way we look internally and managerially about net cash, because we have banking deposits with us. We do consider this as our adjusted debt, right? And we have banking assets as well that we consider as an asset. There is a technicality that part of the banking deposits that are in transit. We do have the ability, for example, to take that cash for ourselves. We don’t need regulatory wise to put that in treasury. But when we look at the adjusted net cash position, we do consider this as a debt. So I think that we decided to do that way, not to like have the illusion that cash that belongs to the client in transit is our cash. So I think that we can go in details with you, but this reflects our approach internally of how we manage the liquidity.
Nicolas Riva: Thanks very much .
