Banco Santander (Brasil) S.A. Q1 FY2022 earnings call

Customer Centricity: Incorporate customer advocacy mindset, focus on client experience throughout the cycle, design integrated sales channels, improve self-serve and resolution capacity, develop personalized pricing models. ### Culture and People: Horizontal culture with empowerment, meritocracy, diversity; NPS at 57, aiming for 60+ by year-end; compensation models shifted to variable payouts based on consumer experience. ### Integrated Sales Channels: Build best sales platform in Brazil, integrate physical, digital, remote, and external channels; bank to go initiative; expand physical channel. ### Innovation and Capital: Continuous organic innovation, e.g., DividePIX, UseCasa, SX Integra; reduced mortgage delivery time to 19 business days; consistent 20+ ROE, dividend of R$1.7 billion approved.

No detailed product segment financial performance with revenue contribution % provided in the transcript. Key highlights include cards growing fees close to 30% Q-on-Q, Toro adding 90,000 new clients in Q1, sustainable business production of R$5.2 billion, and micro credit portfolio growing 47%.

GDP growth expected around 8-9%. ### NII from clients expected to continue strong due to client growth and loyalty. ### NII from markets affected by negative sensitivity to yield curve movements, with treasury activity expected to have lower performance going forward.

Macro conditions like inflation and interest rates posing risks to credit portfolios. ### Deterioration in asset quality aligned with expectations, with cost of risk growing to 3.5% in Q1.

Q: Good morning, everybody. A bit on NII. Could you help us understand a little more, what drove the treasury results? So close to zero and just to help us see how it will carry on to the next quarters and still on NII on the product portion. We wonder how far you think you are in terms of re pricing the credits, the cost of funding and cost of credit reality. That's upon us within you're already halfway or more in the final rounds of repricing the new lines.

A: Thank you. Well, I tried to explain on my previous answer, basically narrative sensitivity to movement in the GQ, which is I had impact on that part of the P&L positively impacted by our resource in person. That's basically, the summary of what I try to explain to you. And the summary of the number that show in terms of the market. And this is a trend, as I mentioned in the last two quarter, at least I don’t know more than that, but for sure, the last two quarter, this is a trend that will continue throughout 2022. Again, given our duration of on the asset side and given the GQ movement and the – GQ shape that we have today this should last one year, one year and half, depending how it moves from now on, remember that we hedge the commercial units in terms of cost of fund. Okay. So this is how it is reflected in our business model. The second part of the question was sorry?

Q: Could you give us an update on your views on auto lending and investment platform? Do you expect to maintain your market sharing out loans or is becoming more competent? And what are your aspirations in the investment areas? Will you compete with [indiscernible] or BTG?

A: Okay. Let me try to address both areas and probably Mario will also want to join us afterwards. On the auto, the auto sector is as you know is clearly going through difficult moments in terms of volumes. So the total number of cars is dropping by around 15%, 20%, 22%, which means that the activity as itself in the sector is low. What has been our position along with the measures I already said before started in last September et cetera, what we are doing is we are building – we have built impact. It's already bad. We have built capacity to address different publics and clients that we were not addressing before with the same capabilities and the same capacity of growth. And this is as I speak today. So this is happening in April and we will continue in that direction. We continue to build a full ecosystem. We are leaders in the country and we want to keep on business. We don't want to go in and out of that sector and we want to structurally maintain the activity in the lending and that means not only our financial unit that means del Monte's, that means the different acquisitions we have done Amherst, SHUSA, all that we have announced go in the direction of [indiscernible] and strong. On the investment side, this is one of our core strategies. I mean, we are going into that field for some time and we will continue to grow into that field for some time. We are building a new platform, et cetera, et cetera but we think that when we speak of lien clients, it also means lien clients through the liability part of the balance sheet and again that is something key and totally important for us. Mario Leão: Just adding specifically to the investments platform like Angel mentioned, this is one of our key strategies for not only this year but the next few years. We are closing a very important step now in terms of technology offering. We are delivering as we speak a much stronger investment platform for our clients and sales people within Santander that talk to clients about investments. And that's all the year we'll provide a big leap forward in terms of our technology offering and experience for our clients. In terms of sales efforts, we already have the advisors, we have a 250 plus advisors team already talking on a much more personalized base to our select and Vangaurd plus clients, which are welfare’s in terms of assets. We will expand that platform within sent them there, not through external offices. We will expand through sent them there four fivefold across the next two years. So that will be a big investment we're going to make, in terms of providing more personalized content and approach which has to be on a personalized basis as well, that together with the technology platform that I mentioned before, we provide a very big step forward towards our investment platform and we will be even stronger than we are today, expanding the product offering as well, but mostly focus on the distribution channel and technology platform. So yes, we are very focused on that and we'll keep expanding here. Thank you.