伊塔烏聯合銀行 (ITUB) 2009 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. This is Itau Unibanco Holding conference call. At this time, all lines are in a listen only mode. Later, there will be a question and answer session, and instructions to participate will be given at that time. (Operator instructions)

As a reminder, this conference is being recorded. At this time, I would like to turn the conference over to Ms. Daniela Ueda, of Financial Investor Relations Brazil. Please go ahead.

Good morning, and welcome to Itau Unibanco Holding conference call about 2009 earnings. This conference call is being broadcast live on www.itau-unibanco.com/ir. A slide presentation is also available on this site.

Before proceeding, let me mention that forward-looking statements are being made under the safe harbor of the Securities Litigation Reform Act of 1996. Actual performance could differ materially from those anticipated in any forward-looking comments as a result of macroeconomic conditions, market risks, and other factors.

With us today in this conference call in Sao Paolo are Roberto Egydio Setubal, CEO, Silvio de Carvalho, Chief Financial Officer, Jean-Marc Etlin, Itau BBA's Executive Vice President, and Marco Antunes, Accounting Director.

First, Mr. Roberto Setubal will comment on the 2009 earnings. Afterwards, management will be available for a question and answer session.

It is now my pleasure to turn the call over to Mr. Roberto Setubal.

Good morning, and good afternoon for all of you. I'd like to start this presentation talking about some of the highlights we had this quarter, starting with the earnings. We had strong earnings, BRL2.8 billion of recurring net income, which shows an ROE of 22.6%. This, our final net income, was BRL3.2 billion. And I will talk more about that, explaining the differences.

But most of the extraordinary items were related to the payment of the federal tax law, which gave incentives to payments. And we took advantage of that.

I would like to mention, and we use (inaudible) also this along the presentation, that we had not used any of the anti-cycle provisions that we have on our balance sheet, so this was a very strong recurring earnings, because we are not really using any of the provisions we have done previously. And we'll talk more about that.

One of the important things on the quarter was the NPL ratio, which has improved, both 60 and 90 days. And this is a trend, as we announced in the third quarter, that will remain for the year, and also, talk to more about that.

I'd like to go to page 3. And I won't read the numbers -- you can see most of the numbers. I'll basically talk some of the cycles we have there.

First, I'd like to show -- to call your attention on the ROE of the quarter, 22.6% -- very strong and very stable along the year, which shows our capacity to deliver an ROE along these levels, in different scenarios. We have also done improvement in our efficiency ratio. If you look, our number in 2008 was 45%, and now it's down to 42.4%, so a good improvement. And also, taking advantage already of synergies of our merger between Itau and Unibanco.

And also, we introduced this risk adjusted efficiency ratio, which also takes into account, in addition to the costs, takes into account the losses on risks. And it was, at the end of the day, we increased the losses, but we could manage this with revenues and cost cutting, so that the final ratio was basically the same, year to year.

Moving to the next screen, we see how the extraordinary effects [met] the quarter. As I mentioned, we had this new law that allowed us to avoid taxes that's on litigation, had incentives to pay that. Those taxes was on litigation with some incentives, but since we had provisions, we had a positive impact in our balance sheet for that.

On page 5, we can see the P&L of the quarter, for the year, compared to previous quarter, and previous year. As I mentioned, in the quarter, we had not used any of the provisions, additional provisions for loan losses, and this was the first quarter that we had not done that in the year. So if you look on the column of the year, you can see that we had used BRL1.6 billion of provisions that we had on our balance sheet in December last year, and this was not the case of this last quarter, showing how strong was the results of the quarter.

I also would like to mention the growth on our service fees, 9.8% in the quarter, which reversed the trend of the year. The quarter was strong, and we have overcome some of the restrictions that was imposed by Central Bank, and the Justice on fees that we were charging clients, and we are not able anymore to do it. But now, this was in the beginning of the year, and now we are more -- in a more current, recurrent level of income, given the doubt for the quarter that had seasonal volume. But we don't have any restrictions now to face ahead, so we see a more normal playing field ahead.

Provisions was the highlight of the quarter -- strong reduction on provisions. We are talking about BRL600 million reduction in provisions, which were very much welcome, and well anticipated for us, when we had the last call.

Recovery of credit is also improving, as you can see. This is natural, again, because of the cycle that we are now going through. It's a positive cycle, so we will have a strong recovery in the coming quarters, given the provisions and losses that we have had in the previous quarter. And now we are in the good part of the cycle, given that the economy will grow like 5.5% for 2010. This is our expectations.

I think this, on the expenses side, we have -- I'll talk more about that in the coming slides, but I just show you that for the year, we have a 4.1% growth on expenses below inflation, so that we are already seeing some of the benefits of the merger of the cost cutting synergies that we had expected, as I mentioned when I commented with you the efficiency ratio. I will talk more about that down the presentation.

The loan evolution was positive, and the last quarter of the year was the stronger quarter, also given the cycle of the economy and also the seasonality of the year. We had a strong growth in credit cards, given Christmas and end year parties, and also in small companies. So this pushed our total growth for -- to 3.6%, and for the year, 2.4%. But when we talk about retail loans, which had a much more stronger impact in revenues, we are talking about 5.7% growth in the quarter, and a 14% growth for the year, in a year that was not especially strong, given the recession part of the year.

Going ahead, I think that we can see that the non-performing loans are improving. We are reducing the NPL ratios, and as I mentioned, we had not used any of the additional provisions that we have in the balance sheet on this quarter. Coverage ratio stayed almost stable.

And the next slide, we can see in a different way that expenses for provisions are increasing when compared to the credit portfolio, and also in the next page, we are seeing the funding and assets under management that the bank manages. The total number has improved for the year 13%, with some highlights in the last quarter. And [actually] savings deposits and demand deposits, which are lower cost deposits.

And also, you can see that for the year, we have reduced institutional investors, we have reduced market deposits from banks, and [acute] issuance, which are more expensive costs of -- funds are more costly for us. So we are, given our very liquid position today, we are emphasizing more the low cost products for the next (inaudible).

As you can see on page 10, our liquidity ratios are very comfortable, so we are in this (inaudible) of not really having to go -- we are not going to the market to fund the bank. We are doing it basically on the client base, and we are very, very comfortable with this current situation.

When we see the fee revenue, on slide 11, we can see a good progress in this last quarter. We have some seasonality, but also we have, as I mentioned, the economy and push have helped the numbers for the year. We had some problems at the beginning of the year, given some restrictions, as I mentioned, on the Central Bank and Justice. But now that this is over, we are back to growth on the revenues, fee revenues.

On expenses, on page 12, we have important figures here that I'd like to put in view -- that I'd like to share with you.

First, although we had a 7% growth in the last quarter, we had only a 4% for the year. The 7% growth has a lot to do with two things, which are very seasonal in our case. One is the personnel expenses, which grew 9%, most given the 7% increase salary that we had for all banking system personnel, and also given the fact that at year-end, we have extra hour payments, given the more intense use of banking and the economic activity that was more intense in the last quarter. We have more extra hours payments. So this explains the personnel, increase in personnel expense.

On the side of Other Expenses, we had marketing expenses, usually at year-end are more intense, so this explains most of the numbers there.

But I'd love to show you, when you look on the quarter left of this screen, you can compare. Although it grew 7% compared to last quarter, it decreased when we compare it to last quarter of 2008. So it was a 3.8% decrease when we compare year to year quarter, so it's -- which gives a pictures of mostly about the seasonality and things like that. So this was a good improvement, I believe.

And when you look, those orange bars on your right side, you can see that quarter to quarter, the last two quarters are better than 2008 quarters, although the beginning of the year was higher, and they were higher basically because during the 2008 year, both Itau and Unibanco was -- they were in the growth mode, so we end up in a running rate expense, 2008, much above the beginning of the year of 2008. So this change in level of expenses explains why we had a -- this first quarter 2009 and 2008 growth, which was not the case when we compare year end quarters.

This can be better observed on page 13 with the improvement on the efficiency ratio. When we talk about the risk adjusted efficiency ratio, you can see that we are floating around one same level, which shows our capacity to manage the higher level losses during this crisis period.

Our capital ratio, on slide 14, has kept strong. We are very (inaudible) with the numbers that we are growing at this moment now, and you can see that we have a lot of room for Tier 2 capital which we are not using at this moment.

When we talk about segments, on slide 16, we can see that we have the three major segments of our business, very good and decent RAROC ratios, and this was given the very complicated year, a very good year at the end of the day, given all the numbers in all of the segments, we had -- we could manage all the three segments with good results.

On screen 17, I'd like to share with you the numbers that -- and how the Porto [Seguros] deal impacted our results. As you can see, there is very small impact in our net income, almost negligible change, although line to line, the numbers are -- there's some impact there, you can see on this screen. But importantly, that was a very small impact on bottom line.

On page 18, we gave you our view and guidance for year 2010. We are expecting 5.5% GDP growth. This would imply a good growth in credit. We are talking about between 15% and 19% growth on credit. But I'd like to call your attention -- this is the number for individuals. But I'd like to call your attention for numbers 19% and 23% that are in the same line, in parentheses, which talks about the revenue -- the performing loans.

Performing loans would grow 19% to 23%, so higher than the number that we use here on balance sheet, and this is due to the fact that we are expecting a lot of write-offs during the year, write-offs of loans that has already been provisioned, so this will not have a meaningful impact in the results, but still have impact from the (inaudible) growth comparing the balances of credit between one year and another.

So we have a big difference in this number. This difference is even higher, when you look for the number of the small company credit growth, our [2.1] number here in the page. We have much higher growth when we talk about performing loans, then we have, comparing the numbers of the balance sheet, this is due again, the write-offs.

NPLs, we believe that will decrease from current levels. The delinquency will improve along the year, even though we are expecting some increase in interest rates. We still believe that NPLs will decrease during the year.

Banking fees, we expect to go between 10% and 15%. When you talk about expenses, excluding Redecard and Porto Seguros, we are talking about 3% to 5% growth. But if we do not include expansion costs, which means costs directly related to new point of sales, which means new branches, new platforms for small companies, new point of sales in partnerships that we already have like Americanas or (inaudible), we are opening new point of sales. This would have (inaudible). If we do not include the cost of the new point of sales, we are talking about extensive growing, between 0% and 3%, which clearly shows some -- it's a result of our synergies in the (inaudible).

I'd like to finish this presentation at this point, and open up for your questions.

Excuse me. Ladies and gentlemen, we will now begin the question and answer session. (Operator instructions) Our first question comes from Mr. Jason Mollin from Goldman Sachs.

Hello, everyone. Thank you for hosting this call. I have two questions about the guidance that you've presented for 2010. First, could you talk to us about Itau Unibanco's outlook for the growth for the Brazilian banking sector overall? Do you anticipate that Itau Unibanco will be able to maintain its market share post-merger?

And secondly, on fee income growth, you talk about a level of 10% to 15%, now that you've seen a normalization in the regulatory environment, and the adjustment that we've seen on individual pricing for fees. Can you talk about what kind of fees should be driving this growth? Thank you.

Thank you, Jason. Well, we are expecting, as I mentioned, a 5.5% growth in the economy. And we -- the numbers we are showing here as a guidance, the numbers that basically have, in some lines, some growth -- gain in the market share, like small companies, for instance, and some others, a stabilization of market share. And we are following these numbers closely. We are not expecting any loss of market share in 2010.

Regarding the fees growth, we are basically expecting growth coming from volumes. We are not really implementing here in these numbers any major change in the pricing of our services.

Just as a follow-up on the fees, is the fee income from the investment banking operations driving a significant portion of that? They were quite strong already. We saw some reasonable revenue already there.

Oh, that's (inaudible) -- Jean-Marc is here, so he can talk something about investment bank's perspective for 2010.

Yes, just looking specifically at the investment banking side of the equation, we expect overall a fairly supportive market in 2010 versus 2009. As you know, half of 2009 was basically a write-off, and we had a very strong third and fourth quarter in terms of investment banking business.

So I mean -- in terms of perspective, I think we're -- sort of have a positive bias, I would say, and as such, I think the contribution, if you will, of investment banking fees to the overall fees of the Group should continue to remain strong.

And Jason, also, I'd like to call your attention that this number, 10% to 15%, is also highly impacted by credit card fees, which credit card we are expecting to keep the same level of growth that we have had last years, about 18%, 20%. These are the numbers that the markets are expecting for credit card growth. Okay?

That's very helpful. Thank you very much.

Excuse me, our next question comes from Mr. Daniel Abut from Citi.

Good morning, Roberto. I think you mentioned in your presentation that you expect, as most people, interest rates will start rising in the year. Could you elaborate a bit, and give us some color, how will you see that impacting your margins and top line income? In 2009, we ended up having it pretty solid, top line income, in large part because your treasury operations contributed very nicely. How do you see things playing in 2010, now that you widely -- most people think interest rates will start to rise?

Hello, Daniel. Thank you for being with us this morning. Well, we are expecting the interest rates to increase as the market [appoints]. But we do not expect any meaningful at all impact of this directly because of the increase in interest rates. We expect margins to come down a little bit, but -- and I said, a little bit, because this will be in the different way when you -- rates will be increasing, so margins will not come down as much as they could if rates were not increasing. But they would still come down somehow.

And also, what else, you mentioned a third item on your question?

Treasury contributed very nicely in 2009, but it was in a different interest rate environment.

Yes, you are right. Treasury was a great contribution in 2009. We do not expect and we do not count on this for 2010. And '11, I think the levels of gains on markets were very high. We are not expecting to -- we are expecting some decrease in that line.

Okay. Thank you, Roberto.

Excuse me, our next question comes from Mr. Jorge Kuri from Morgan Stanley.

Hi, good morning, everyone. I have two questions. The first one is on expenses for the fourth quarter. If we add up your personnel expenses and administrative expenses, they grew roughly 12% quarter over quarter. Can you give us some color on if there were some one-timers there? Obviously, the seasonality in the fourth quarter implies stronger growth, but it seems that the growth was a bit higher than what seasonality is. Were there any one-offs that we shouldn't expect to see going forward?

And the second question is, you are talking about volume growth of around 15% to 20% year-over-year, so I'm assuming that on average, growth is going to be closer to 15% for the year. With some pressure on margins as you mentioned, and a much lower trading environment, are we talking about financial income growth closer to 10% maybe for the year? What's your expectation for that? Thank you.

Jorge, good to hear you here with us this morning. I'm not sure -- your numbers on expenses, because the numbers that I am showing on the page 12 shows 7% increase on costs, so you mentioned something like 12%. If you have the slides, we are adding all expenses altogether, including personnel, administrative, other operating expenses, tax expenses, and this adds up to BRL6.7 billion on the fourth quarter. So I'm not really sure -- what numbers are you mentioning?

Well, I'm looking at personnel expenses, plus other admin expenses. Personnel expenses grew 9.4%, and other administrative expenses grew 14% quarter over quarter, and those two jumps are the ones I'm trying to understand.

Well, personnel expenses, we can explain very easily. We had a 7% increase in salaries for the whole banking sector on Brazil in September. So the last quarter has clearly the impact of those expenses there.

In addition to that, we have extra hours payments in the last quarter, given the -- which increases always in the last quarter, given the more intensity activity -- active of the economy in this last quarter. So this probably explains most of the variation on personnel expenses.

On administrative expenses, we have marketing expenses which usually has a seasonal expending -- higher expending, higher in the last quarter. So this explains part of it.

In addition, we have, like I mentioned, more intensity, so [areas] like energy, watt and everything is higher. And also, some services that we have -- services that we close the year, and we have to finalize some contracts. I'm not sure if Silvio wants to mention anything.

No, I think you covered everything. Just remember, Jorge, we have more the number of transactions during the fourth quarter. It means that the cost higher is related with that.

All right, and regarding my second question?

Well, what was your second question?

The second question is, I'm just trying to understand, when you put together your guidance for loan growth loss, a margin contraction plus much lower treasury operations, what's your expectation for financial income growth, obviously before provisions? You know, when -- if you just do a quick math, you probably end up with somewhere around 10% to 12% growth in financial income. Does that make sense?

We are not giving any guidance on growth on total revenues, as you are mentioning. But we do have some growth, okay? We are not guiding, and this number, I don't have a clear number here to give you. But we do have growth.

All right, thank you.

Excuse me, our next question comes from Mr. Saul Martinez from JPMorgan.

Hi, everybody. I want to understand the dynamics of -- on your net interest margin, of changes in rates, a little bit more fully. Maybe Silvio can help us here. But if you -- as I look at your annualized margin this year, excluding treasuries, it actually increased over the course of the year. It's 10.3% in fourth quarter of '08, 6% fourth quarter of '09, even as rates have come down.

And if I look at the components, that is because the annualized rate on spread-sensitive transactions increased meaningfully, even -- and more than offset the impact of lower rates on rate-sensitive transactions, all of which would seem to imply that as rates go up, that net-net is more of a negative for you, in terms of your net interest margin, which is a little bit contrary to what was said earlier, that higher rates will actually stem the decline in your net interest margins.

So can you just help us understand how you think about the impact of higher rates on your margins? Because it looks like lower rates actually benefited you net-net in 2009.

Saul, what we thought, that they are financial margin, net interest margin, was increasing 90%. The reason basically is because we have some increasing spreads during the year, even considered that the interest rates reduced, but we increased the spreads because of the increase in delinquency, which was basically the reason, because we had this impact. And then we have a very good result related with the treasury, you saw that.

When you see the movement in the future interest rates, we mentioned that we are not expecting that the net interest margin we use [offer], to any movement to 2010. Just because we have the [lever] of the portfolio, that the duration is about 20 months. This will not impact the material 2010.

Okay, so Silvio, just -- the duration on your loans is roughly, what, 20 months? Is that what I heard from you?

Yes.

Okay, so basically, it's just the higher lending spreads gradually impacted the -- over the course of the year, the spreads on your spread-sensitive transactions.

Right.

(multiple speakers).

Yes. It does not happen immediately, and they will have some -- it takes some time to appear in the P&L.

Okay, fair enough. And the second question is just also a follow-up on the treasury results. I think in the past conference call, I asked kind of how to think about a more reasonable run rate for treasuries, and I think the floor -- I think it was mentioned that the floor on treasury income on a quarterly basis may be in the neighborhood of BRL400 million to BRL500 million per quarter. Can you just help us understand what's in that treasury result, and kind of how to think about what's more of a core recurring revenue stream, and what's more -- a little bit more volatile on a quarterly basis?

Well, we put on that line all the transactions that we do with market counterparts, market -- and, well, it's very hard to talk about a number there. I can tell you that this year, the number was much stronger than the usual number that we would expect for that kind of line.

The numbers can vary a lot, and we believe that this was a very strong number for the year of 2009. If you compare 2009 with 2008, you can see that 2008 was BRL2.1 billion, and 2009, 5.6 billion. So it was a major increase. I think these numbers of 2009 are above the expected number that we can put -- that we can expect for 2010. Much above.

Okay. Okay, fair enough. Thank you very much.

Excuse me, our next question comes from Mr. Marcelo Telles from Credit Suisse.

Hello, everyone. I have two questions, the first one regarding the growth in your individuals portfolio. Can you elaborate a little bit more on which segments are going to drive the growth, more specifically if you could, mention also the vehicle financing segment?

And the second question is about the EPPICard. Do we -- what are your plans for EPPICard now going forward? I mean, do you see them operating independently, in a full integrated model, or you think at some point it would make sense eventually to have EPPICard integrated, at least the acquired business, into the Redecard platform? Thank you.

Okay, on the side of growth on loans, we have to divide into consumers and companies. Companies, we have already mentioned that small companies will outgrow big companies. We are expecting growth for big companies, but much higher growth for small companies, as we put on the screen 18.

On the side of consumers, we believe that credit cards will be one driver, an important driver, and credit to [consignado] will be another driver. Those would be the two ones that would be pushing the number for consumers.

We have also mortgages, which will be an important number. We'll grow a lot, although the number comes from a very low base, and will have a small impact in 2010.

And the other question -- ?

About EPPICard.

EPPICard? EPPICard, we like the business. We believe that EPPICard has a lot of potential. We are discussing how to issue more EPPICards for Itau clients, we have a lot of discussion on that. But we do not have any position on the acquiring side.

Okay. Thank you.

Excuse me, our next question comes from Mr. Craig Maurer from CLSA.

Yes, good morning. I had a quick question, a follow-up on the prior question, regarding Redecard. I was curious what your opinion is on how that business evolves, and how the market evolves once the exclusivity agreements roll off and competition begins with Santander and possibly others.

Well, I have to tell you, I would ask you to ask this question to Redecard. I mean, I'm here on the capacity of Itau. We're not to comment on Redecard, how I can -- I mean, we are very happy with the investment that we have there. We believe it's a big company, it's a lot of potential in Brazil to grow. But I will not talk specifically about our Redecard operations in this call.

Okay, thank you.

I am sorry.

Excuse me, our next question comes from Mr. Jonathan Prigoff from Equinox Partners.

Hi. I had a question about insurance income in the quarter. I noticed that the net result of insurance operations was higher. I know some of that is probably due to the loss ratio in Q4 being lower. But I was wondering if you could talk a little bit more about it, and also how the Porto Seguro transaction will affect that line item going forward. Thanks.

Well, Porto Seguro transaction, as you know, will affect our numbers, because we will be consolidating 30% of Porto Seguros in our balance sheet. We will not consolidate 100%. We will consolidate, under Brazil laws, 30%, which is our participation in that investment.

As we have on page 17, the numbers, and how they impacted our quarter line by line, so you can -- these are the numbers for the quarter. As you know, we started consolidating Porto Seguro in this last quarter, so there's not -- there's no previous influence on the numbers. But you can see line by line, how it impacted our P&L.

I mean, we think that Porto Seguro is a great company, and we are very positive on the [deal]. That integration is going well. We have already selected the people that has moved to Porto Seguros, so things are moving. We are very positive on that.

Okay, but so -- going forward, I guess, in the summary income statement, the net result of operation -- insurance pension plan capitalization, that line item, that's going to -- you didn't provide guidance on that. So is that going to grow roughly in line with other fee income, or is it going to be moving a little bit differently?

I don't have a number here to give you, but I would say that there's no major change if you compare to previous numbers. We are not expecting any movement, any major movement in those lines.

Okay, thank you.

And maybe Silvio can give you a more -- a better guidance on that, more material information on that.

Jonathan, I will call you later. I will give you more details about the operation.

We don't have any (multiple speakers) --

Thank you. Thank you very much.

Okay.

Excuse me, our next question comes from Mr. Victor Galliano from HSBC.

Hi, good morning. Just two questions from me, one on asset quality and looking at the implication on the improvement in asset quality, which we see from your guidance, is that corporate credit is going to improve more rapidly than that of the individual credit.

Is this a market thing? Or is this because you have been -- you know, Itau Unibanco has been, shall we say, more cautious or more conservative in terms of marking down corporate credit during the weaker part of the cycle? So is this something of non-performing loans going back into performing?

And secondly, on personnel expenses and operating expenses generally, and looking at the expansion plan, do you -- I just want to confirm, I don't think you do. Do you capitalize any of those expansion costs of new branches, or will you put those all through the P&L? In other words, are all those costs in the 3% to 5% guidance that you're giving? Thank you.

We are -- in the first question, we are expecting, as you could see on our guidance for 2010, the same kind of growth on the balance sheet for consumers and companies, although when you look on the side of companies, you have higher growth on small companies. And when you look on consumers, you have higher growth on credit cards and consignado.

So -- but basically, at the end of the day, it's much more a market and opportunity that we see than any other thing. I do not -- I don't have an opinion of -- if you have been more conservative than others or not. I think this is very difficult to mention anything on that area.

And your other question was related to -- ?

Capitalizing [expenses]?

No, we do not capitalize any kind of expenses. In the year 2010, we are expecting to expense, or to have expenses, given the merger, the branch unification program, we expect to have additional expenses of BRL550 million. This is the net effect of taxes, of the program of unifying the branches. And this is already included in the numbers that we give you on expenses as guidance for 2010.

Okay. Sorry, coming back to the first question, I didn't explain myself very clearly. You're sort of implying by the guidance you give on the accrual, on the accrual basis for loans, that asset quality is going to improve even more quickly in corporates and in SMEs. Is that because you've been more conservative in your book in terms of writing down corporates?

No --

Or it's just a product of the cycle, the returning cycle and improving growth?

Victor, just to remember, the big companies here, you are talking about big, big companies in Brazil. They are (inaudible) more of the capital market to get funding. They are (multiple speakers) big operations, and that's one of the reasons, because if you look at the service fees, you will see that our commissions increased during the quarter. They do have two effects in this line, in big corporate loans.

First is related to -- with the appreciation of the real, that is one of the reasons because of the portfolio decrease. The second, because the demand is more related with the capital markets.

Okay, great. Thank you.

Excuse me, our next question comes from Mr. Henrique Navarro from Santander Bank.

Hi, gentlemen. Well, a great part of my questions were already answered, but I would like to know if Itau already starts selling Porto Seguro products on its branch network? And if not, when it will start? And what is your expectation of commission revenues per year with that? Thank you.

Well, it's -- we have not started, as a whole. We are testing some alternatives of how to offer clients insurance that Porto Seguros is managing. We are creating the channels, interaction. We are testing it. And during this year, we will be fully serving clients with Porto Seguros products, which is not the case so far.

But this will happen along the year. I'm not sure exactly the date, but we are -- and also, because we are testing.

In the case of revenues, we will have commissions of more or less -- under 30% of premiums of the insurance that we sell on the branch side.

Okay, thank you.

Ladies and gentlemen, this concludes today's question and answer session. Mr. Setubal, at this time, you may proceed with your closing statements, sir.

Okay, thank you very much for this first conference call, first year conference call, Itau Unibanco. I think we had a very good year, given everything that happened during the year. I have to tell you that we are very positive on the integration, it's going very well. We have done a lot of things this year, and we will have results of things we've done this year in the coming years.

So we are very positive on the position of the bank, in terms of integration, in terms of competitiveness. And thank you all for being here with us this morning, and afternoon, for some of you that are in Europe.

Thank you. See you. Bye.

Thank you. That does conclude our Itau Unibanco Holding earnings conference call for today. Thank you very much for your participation and have a good day. Thank you.