Good afternoon, ladies and gentlemen, welcome to Banrisul's video conference to discuss the results for the first quarter of 2026. This video conference is being recorded and the replay can be accessed in our Investors Relations website a few hours after the event.

Furthermore, I'd like to remind you that we have simultaneous translation into English. If this is your preference, please click on the button you can find on the bottom of your screen.

Today's event will be divided into three parts. The first, our president and CEO, Mr.

Fernando Lemos, will talk about the main highlights of this quarter. Next, our CFO and director, Mr.

Gonzaga, will present in greater detail the main figures and performance for the quarter. Last, but not least, we finish with our traditional Q&A session with our market analysts.

The presentation will give today will be available for download in the chat of this platform, and it is also available on our IR website. Now, I'd like to give the floor over to our president so we can start our event.

The floor is yours, Mr. President.

Thank you.

Thank you, Nathan. Thank you, everyone.

Thank you for your presence. Before we start talking about the results, I'd like to present some analysis.

We are reaching 2 years and so of our management. I'd like to talk about everything that has been done and how we see Banrisul is today.

2.5 years ago, 2 years and so ago, when I got here, we had some concerns at first. First, the mismatch of over R$20 billion in our funding and credit portfolios.

Then, we managed to equate this financially, and we are about R$4 billion in this. Alone gives us peace of mind because the bank can continue without further concerns regarding the interest rates.

Another concern had to do with labor issues that were of major concern, like wage losses about the 17th and 18th hour. We had two main issues at the time.

First, as the labor suits had discharacterized commission roles, it was overtime, and then we had labor suits liabilities, which is registered in our records. Then, we had working with the trade unions, we managed to reduce it to 6 hours, and then we solved the main the root cause of this issue.

Regarding this labor issue, which was very tough for the bank and hurt the balance equity and balance sheet, was solved. We managed to equate this for the future.

This year, we have already disclosed that we reached a very important agreement with around 40% of the employees involved in this labor suits. We have reached an agreement which will be ratified by the Rio Grande do Sul labor justice in the next few days, which places us at a much better position for the past for the next few months.

We will not have major concerns regarding labor lawsuits with the bank. This gives us security and safety and shows us that we are on the right path.

Now we have to accelerate our credit granting. At the time, our the leverage of our bank, it was too much leveraging the rural portfolio.

We have managed that, and we do not have major problems regarding that anymore. Although Rio Grande do Sul has gone through three droughts and one flood event, now our rural portfolios are well-managed.

No bigger concerns. Now, one of our major concerns at the time we which we could advance, but it was a little bit worse, was the the debt of the population, the households of Rio Grande do Sul.

It's a little bit above the the national average, and we have a protective justice regarding consumers consumers, and around 40% of debt suits are in Rio Grande do Sul, which has hurt our the scenario and the screenshot for this first quarter, the the figures for this first quarter. What gives us peace of mind for the the institution was these changes we have implemented that caused some issues.

We also made the fundings that were necessary to maintain the capitals the the bank capitals. We liquidated external bonds, and we performed some internal operations.

Our fundings, as continues very strong as as strong as traditional Rio Grande do Sul. Our funding is very strong in the state.

We have a lot of money in the treasury department, as we'll see later. What we can advance and we we get rid of of problems regarding Selic interest rate and default rate above the expectation, new players coming to the market.

There is some confusion regarding the scenario now, the banking scenario now, but I think will be clear in the near future. The results was a little bit behind what we imagined for this quarter, but we have peace of mind regarding the near future, the future for the next few years of Rio Grande do Sul.

We are pretty satisfied with the with the actions we have taken. The screenshot could have been a little better now, but we are not afraid because the foundations and the bases are very strong.

We have invested in our IT, which were lagging. We managed to do that.

We have been implementing some important IT changes, which will give us more speed and will help us contain administrative costs and gain productivity. This was the first idea is like a a screenshot of what we have done in the past 2 years to clear the pathway for the decision.

Now we need to grow in credit, in assets, in corporate, and individuals, too. In the individuals, we want them this portfolio to be less dependent on the payroll loans to increase our profitability.

We have increased or improved our rates already because we have been applying our resources in the lines which have better spreads. Another issue that we dealt with was the payroll with had a very long period.

In our state, payroll loan portfolio is very heavy. Then regarding the ones that had margins and very long periods, our maturity dates led to an an increased debt by public servants.

Now we are managing this portfolio. The state has reduced this this rate this number of months for 80 84 months and 35% of the limit of the net income that can be used for the loan.

We have done we have increased our spread for this portfolio. The payroll deductible deductible loans for the INSS continues.

We have the new CLT payroll deductible loans. We have initiated this with caution because the the rules are were not so clear before, but now we will start working more with this portfolios.

Our way our the the way we do things is to do things safely, trying to increase the portfolios to but with safety. In real estate, we do not have funding because savings are lower and lower lower, with the new rules defined by the federal government and the federal bank are not so well understood.

Selic interest rate at 15% makes things harder. We are sorry about that because we like civil construction, because it can generate income, it can generate jobs.

This day, we had this year, we had a good crop, which were a little bit depressed by prices due to the wars and the war in the Middle East, but the we the crops were good for the the the producers, which helps the state economy because they depend a lot on this this crops and how successful they are for commerce and services. We still see some important challenges ahead, but we absolutely believe our instruments and our micro policies within the the institution gives us peace of mind to continue growing in our institution.

Thank you, Nathan. Thank you very much for your participation.

We remain available.

Thank you, Mr. President.

Now moving on to our second session, let me ask Mr. Gonzaga.

He will talk about the figures for this quarter.

Good afternoon, everyone. Now moving on with our presentation, let me introduce to you the results for this first quarter.

We had R$221.6 million in net income, a slight decrease regarding the first quarter of '25 of 8.2% decrease, an ROAE of 7.9%, a slight decrease of 1.4 percentage points regarding the first quarter of '25. In our loan portfolio, we had a slightly growth of 1.3% with R$64.3 billion.

There were some migrations, internal migrations, a slight reduction in rural and real estate credits, and increase in the commercial portfolios for companies and also foreign exchange. Funding had R$111.3 billion reais, a growth of 13%.

In this period, in this first quarter, we have had a reduction in the funding portfolio of $300 million due to a liquidation of a external business we had. Our net interest income was R$1.7 billion, 12.5% growth based on the higher profitability of corporate portfolio, too.

We had cost of risk to 1.9%, an increase of 0.4% regarding the first quarter of '25. In administrative expenses, we had R$1.0 billion, increase of 6.4% year-on-year.

Later, I will talk about human resources and other expenses that are in line with inflation and led to this figure. Next, we will talk about profitability in our results, 241.5 in the first quarter '25 versus 221.6 in the first quarter of '26.

We had a small decrease of 8.2%. In the past quarter of '25 was outside the curve, we are not considering this because we know that there were some adjustments, end-of-the-year adjustments.

ROAE, I show you 7.9% in this first quarter. In December of '25, was outside of the curve.

It doesn't make part of the average. It was well above the deliverables Banrisul makes every quarter.

Our net interest income has been good in the year, year-on-year and quarter-on-quarter. 12.5% growth year-on-year.

If we compare the fourth quarter of '25 with the first quarter of '26, we had a performance of 7.3% increase in our net interest income based on the more profitable portfolios based on credit and loans. Now loan portfolios, in the year, we've had a slight increase of 1.3%.

In the quarter, if we compare to the first quarter of '25, we had a decrease of 1.1%. Individuals portfolio, we had a decrease of 2.5% and 1.4% in the quarter, notably in the payroll deductible loan.

For this loan, we had a state payroll loan portfolio. It hasn't shown any growth, this amount doesn't reach the changes made by the state.

This is good for the bank, it's good for the market, and it has reduced the margin. Our portfolio is taking time to grow, but the quality of this portfolio increases every day.

This reflects on the portfolio margin. In the INSS loans, we have an operation that is open sea all over Brazil.

It's a very good payroll loan for INSS, but with the changes in INSS and operating changes, I would say that we have a low margin for the people who sign this loans. We are partially replacing these loans.

In corporate portfolio, we had a growth in working capital of almost 15 percentage points, which can leverage the profitability of the portfolio. For companies, year-on-year it was 14.9%, and quarter-on-quarter -0.7%.

There is some delinquency, but it doesn't hurt the portfolio. Even in overdraft checks, it doesn't change.

The volatility of the interest rate doesn't change this because the market has a very good margin with the small depreciation in terms of delinquency. It's part of the game.

We need to know how to operate on this market. I love this type of market.

Some people don't like to deal with this loans, but I do. In terms of asset quality, you see on the left the first graph, you can see that we want to be really clear.

It would be in line if we still had the 2682. We would go from a delinquency rate of 2.2 in March '26, and then we would reached 3.2%.

This was the growth in delinquency rate for over 90 days. This difference, we can see there's 0.7% moving on to 1.6% from March '25 to March '26.

This accumulated amount in the portfolio that can be written off, we reached this 1.6, which gives a total of 4.8% in delinquency rate due to 18 months that it's in the portfolio and then written off before the 24th month. On your right, you can see 1.9, our cost of risk with written-offs credits.

We've had in net provision expenses and cost of risk, we have 4 R$542.5 million in cost of risk. Then, finally, on your left below, you see we have a larger amortization of written-off credits based on the 4966 regulation.

The coverage ratio, if you have 1.6% in the portfolio, we accumulate this, written-off credits, and then you have a reduction in the coverage ratio for this credit. It reached 145.4% in March '26.

Then we have tiers 1, 2, and 3, stages 1, 2, and 3. 98% is in stage 1.

Nine over 90%, 91.8%. Very good, very robust, and healthy figures.

Stage 2, 1.4, it's a smaller portfolio, but it does have a coverage of 1.4 and 6.8 in stage 3 of the portfolio. What it means is that we are elongating this 18 months to 24 months, and then we accumulate this in stage number 3.

We accumulate this credit in stage 3, and this percentage gets an increase as time goes by. Maybe next year, in 2027, this curve will have some reduction because what entered in January '26 will be written off in June '27, and then successively.

The trend of this curve is to have a very low move or movements that are very low in over 90 days with problematic assets which were carried out or given the 4962 regulations. It's written off every month, most of this credits, most of this assets.

Then we have coverage by stage: stage 1 is 1.4 in the beginning as we hire the portfolio, you have to take the regulations into account; stage 2, 29.9; and stage 3, 68.7%. By the time we reach the 18th month, we put together the provisioning necessity for this portfolio, and then it will be 100% percent provision.

This is why we reached 68.7%. This shows there is a protection for our portfolios in stages 1, 2, and 3.

We are very careful with this portfolios in order to protect our credit and our loans. In terms of administrative expenses, we had some wage agreements, retirements, and then we had the wage agreement.

There is this administrative expenses a little below inflation, 6.4% globally. These are the open administrative expenses per line, as you can see on the screen.

We need to be really careful about them, and we are. Now coming to our service fees, December is a special month.

We have the acquiring revenue. There is more revenue coming from this.

You can see the revenue was above the average in December '25, and then in the first quarter of '26, it comes back to the average with a slight increase of 0.7%. We had cards, accounts, insurance, consortium, and other revenues or sources of revenues.

Consortium was an accumulation of revenues, which was accounted for in December 2025. There was this decrease, but we're talking about R$4 million.

This revenue was provisioned for. It doesn't hurt the global figure.

In terms of funding, we have a good performance. We're talking about a growth of a 13% increase quarter-on-quarter.

If you compare Q1 '25 to Q1 '26, by December 25 versus March '26, there was a recovery of 1 million 700 R$1 billion 700 that we had for capital level 2. We had a level 2 funding last year of R$1 billion 850 million, and then I will be explaining this in the Basel ratio.

Our CEO mentioned in our ALMs of our asset portfolio and indexed and prefixed portfolios based on CDI, interbank deposit certificates. We have been working on this.

We have been growing in this prefixed portfolios to adjust the balance of the bank, the liabilities and the assets, and maintain the financial margin of our operations, the net interest income without being surprised by any increase in interest rate. It's good when interest rates go down, but we have to be prepared for when they go up.

In assets under management, we have a good performance, especially pension funds in Rio Grande do Sul, and also products related to fixed income and corporate clients who like this products, good remuneration. Our funding has shown good performance, and we have a good control.

In terms of short-term and long-term funding, it's around 24 months, it's pretty sustainable with a very good and friendly pricing. In terms of capital, December is outside the curve, but there was this recovery to be made in January of this $300 million bond, but then we have a Basel ratio of 17.5% in the level 1 with 14.1, very comfortable, too.

We are a fixed income bank, in terms of funding, as we can see, we have Basel ratio that is safe. We have room to increase in credits and loans.

We have cash flow, liquidity, too, and room to grow in credits and loans. We had LFSN of R$1.85 billion and bond redemption around $300 million which was recovered in Tier 2.

That's what I had to share with you. Thank you very much.

Thank you, Mr. Gonzaga.

Thank you, Mr. Lemos.

Let's start our Q&A session. Just let me give you some guidelines.

If you wish to ask a question via audio, please press the reaction button and then click on raise your hand. If your question is answered, you can leave the queue by clicking on lower hand.

Let's start opening to Ricardo Buchpiguel from BTG Pactual. Hi, Ricardo.

How are you doing? Can you hear us?

Please go ahead.

Thank you very much for accepting my question. On one hand, in the call, you said that long-term strategy involves growing in more profitable lines, usually lines that carry more risk.

Given the initial comments on cost of risk, which are a little worse, especially individuals portfolio, are you reducing your appetite for credits, postponing this the the revenues that can come from this long-term strategy? What about the scenario, which was which is more challenging?

Can you help us Can you give us more color about this strategy and the potential for default rate peak in or in terms of margin, because the the delinquency rate was around 700 millions in this this period. Can you give us more a better idea on that?

Good afternoon, everyone. Thank you, Ricardo, for your question.

Regarding growth in our portfolio, we have a room to grow in small and medium-sized businesses. We still have a margin that has good potential to grow.

The idea is to do that by adding Vero and receivables. Today, we have Banrisul Pagamentos.

Not many banks have this type of companies. We have been exploring that in the market to make our portfolios grow.

That we have a partnerships with receivables to bring receivables into the bank, which will assure us to have a better and more qualified portfolios. We can also think about expanding our bases.

We have our bases that have a potential to leverage our loans, our credits. We had a decrease in payroll loans, as mentioned before, in the year of around 10% based on the regulations that were changed in the state or by the state and that change the product itself.

It will take 1.5 years or 2 years for us to see, and then we'll have the opportunity to grow again because there was a reduction in maturity time and also around 10%. In terms of non-payroll loans, there was a growth of 10% with personal credits, overdraft products, and the bank still have room to grow in credit cards for individuals portfolios.

That's what we've been doing in remodeling these portfolios. Regarding the delinquency rate, we expect this rate to have reached its peak.

Maybe we still have some advancements in the future, but we do not believe there will be another peak or significant growth because the crops in general, Rio Grande do Sul, they were good. There is a depreciation in terms of price, which is below the expectation, but the supply chain is doing very well.

We can see, based on the figures of April, that will be some help from that. There will be better figures coming from that.

We have also restructured our collection area, and we'll have two companies of call centers in our digital platforms to help us with collections. We are still working on the bidding process for that.

We have the biggest client representing 30% of this 20 largest one we have already dealt with in April. This is a very diversified portfolio with small amounts, which demands a lot of hands, a lot of people to regularize.

Desenrola Brasil, which is a federal program, will help us do that. We have many clients looking for this Desenrola new program.

We will be joining this federal program, and we are working with Banco do Brasil and [UFG?] to work on that.

Regarding Pronampe program, there was a change with an expansion in the amount per company up to R$500,000, and then we'll take advantage of these lines to grow in the corporate portfolio with good clients and raising our loyalty basis in terms of credit cards, receivables through our acquiring company. Ricardo, do you have any other doubts, and I remain available.

It's super clear. Thank you.

I just wanted to add something with two points here. Foreign exchange portfolio has an opportunity to grow.

We grew 27% last year, and we can grow even more because it's away from the average share of Banrisul in other products. Now in more profitability lines, we have to analyze them not based on delinquency, but based on the income that will generate.

As Mr. Gonzaga said, we can make this portfolio grow based on our NIIs.

Thank you very much.

Thank you, Ricardo. Now moving on, I'd like to bring Antonio Ruette from Bank of America.

Antonio, can you hear us?

Yes, can you hear me?

Yes, good afternoon. Please go ahead.

Thank you for your time. I have two questions here.

First, is on NII. You mentioned briefly during your presentation that it's sensitive to interest rates, I'd like to know how sensible this portfolio is regarding changes in interest rate, and what's your perspective?

In the beginning of the year, we had the Selic around 12%. Now Selic interest rate is 13.5%.

How sensitive you are in terms of this for the NII in liabilities and assets? Now talking about portfolio quality, I'd like to focus on the rural portfolio.

We had a result of Banco do Brasil yesterday, and then we could understand several dimensions of this product in terms of NII and renegotiation of delinquency rates and potential crop breaks. I'd like to touch on this points with you.

How do you see the quality of your rural portfolio, and how do you assess potential risks regarding El Niño and fertilizers and the case of war? How will this reflect this in terms of growth and provisioning?

The first time is the matching of liabilities and assets. We continue with our operation, and this is our strategy.

We have R$4 billion today to provisioning in funding, which would be mismatched if we look at the global figure in the assets portfolio in credit operations, prefixed assets products that we have, and also the indexed products based on CDI. If you look at the portfolio that's zero.

We will continue with prefixed CDB and LCA and financial letter and all these bonds and products that have reasonable margin will be accepted in the prefixed area. Regardless of the interest rate we deal with, we will not change this operation.

We will be well-positioned in this matching. The bad point or the bad about the interest rate is that households get more debt.

There will be more inflation. Enterprises or small and medium-sized companies can be hurt.

Major companies, they will have a high level of liquidity, the good companies, but they are not investing. This is bad for the economy because this reduces the overall offer of new products.

On the other hand, the government is always helping the consumption, household consumption. If you have household consumption without the offer of new products, of new services, will make inflation grow by that the Federal Bank.

This is the regular economy, and this is a year of election. Now the government have this new program, the Desenrola, to help people in debt, but they will pay their debts in the morning, and then whenever they get rid of this debt, they will contract new debts.

We have this Desenrola program. This will change the economy.

Will get R$10 billion, R$15 billion, which will be this money from this deposits, from small amounts, small residual amounts in this banking system that will be sending to the Federal Bank to the National Treasury, by the way, the FGO. This is a lot of money, extra money that will be injected into the economy.

We now have financing of new cars for Uber drivers and other services, and this will make it harder for the interest rate to get lower by the Federal Bank. I believe that will be more debt, more household debt, more debts by the companies.

The big companies that have good cash flow will remain with a good cash flow. This will not affect our balance sheet.

What can affect us is delinquency rate, yes, because we were not expecting such a high delinquency rate.

In terms of rural portfolio, my colleague has already mentioned, but I could keep talking about the rural portfolio if you want. Regarding rural portfolio, it's different for us if we compare Banrisul to Banco do Brasil because we deal with small farmers.

We had around 135,000 small producers, small farmers. Our delinquency rate is around 2.5%.

We have concentrated and focused our work, especially in 2025, and we will continue to do so in 2026, to adjust the cash flow of this small producers, small rural producers. We do not expect to grow.

We do not want to leverage more investments, but we want to adjust the cash flow of this rural producers, this rural farmers, and guarantee the costs of the new crops for these producers and ranchers who can roll their debts because they pay their investments, they pay the crops for '25 and '26, and then the bank will finance '26 and '27 again to guarantee their production. That's how we do it.

We have made several adjustments with some governmental programs, we've had the help of the state government to equalize interest rates. This was done in 2025.

In 2026, we already have some changes. Some producers have made good crops, and they are paying some of their loans.

Price is helping. Here in Rio Grande do Sul, we have an important production in terms of rice crop.

They do really well, but the price of rice is bad. There is an excessive stock in the industry, in the rice companies, but the grain is available.

The worst scenario would be having no grain. Price will oscillate.

There's seasonal changes about prices, but the important thing is that producers and farmers guarantee their crops. The '25-'26 crops were really good, especially rice.

Just some regions, very particular regions had problems, but in overall, the crops were really good, we do not expect the delinquency rate to grow. The idea is that this delinquency rate will decrease a little bit if compared to the rates that we have today.

Just another thing about rural portfolio: well, inputs, we have producers with bad prices for rice and bad prices for soy, too. We have exports quotas, especially with the beef with China, the markets are inhibited to grow more in prices.

If you offset this with prices of soy that are coming to the US, the US want to change their exports with China, and we have to follow this. The dilemma is the short-term, the war of United States and Iran.

When the war ceases and there is peace in the region again, in the geographic area of the Strait of Hormuz, we'll have some lagging time, maybe 60 days, we get back to normal in terms of prices, oil prices. I hope it doesn't get worse than that.

I hope the war ends soon, but this will lead to accommodation of prices. In Rio Grande do Sul, we only have one crop per year, one crop for soy, rice, and maize.

It's not like in other regions of Brazil. We have a small crop in the winter in wheat and canola, too, but very small crops.

For the big ones, we just have one crop per year. I hope prices will be normalized because inputs are too high nowadays, because producers already deal with lower margins in their productions, in their business due to price containments.

If urea is almost R$6 R$6,000 per ton, the diesel prices are too high as well because of the oil prices, all over the world, and chemical fertilizers. Limestone is local production.

It's produced locally in Rio Grande do Sul, prices are not so high for limestone. For other fertilizers, they are high.

We hope El Niño will bring a lot of rain. We are not sure how this will affect our crops, we do not have very good scenario, but let's hope.

Farmers always hope that God will help them, that the weather will be good, we have to wait and see. It's very important.

It's 40% of our GDP, the state GDP. We have a lot of farmers of rural producers in Rio Grande do Sul, and they are used to dealing with risk.

Thank you very much.

Thank you, Antonio. Thank you for your questions.

Now moving on, we have Yuri Fernandes from JPMorgan. Hello, Yuri.

Hi, Nathan. Thank you.

I'll get back to the point on portfolio quality. There are some impacts that when you look at your formation for your delta and the decrease of NPL and stages, it has been running higher than your cost of risk, 2% or around that.

Or maybe 4%, 5% of the portfolio formation. My point is, is this sustainable?

The quarter was one-off in terms of formation, and cost of risk of 2% will be maintained as a guidance? Let me check on this point, because seem to be this formation of new problematic assets, our NPL were a little higher.

Now my second question is around payroll deductible loans. We have lost some market share in this product.

The INSS has some challenges. Sometimes it stops, sometimes it doesn't.

I'd like to understand your appetite regarding payroll loans. Is there any products regarding that you are more excited about?

I'd like to understand this a little better.

Thank you, Yuri.

Yes, NPL formation, new formation of delinquency rate, and our provision, if you understand this is a threshold moving forward.

Thank you for your question. Regarding delinquency rate and asset quality, and the NPL above 90 days or marked by any situation or issue brought by 4966 and written off with loss.

There is new operations in stage or tier 3. We have 15 months now or 18 months from the first day of maturity rate, 24 months to be written off.

We are following the whole period to reach 100%. This year, we'll have a longer curve if you compare it to 2025, because we will complete 1 year, 1.5 years of the coming into force of 4999 regulation.

This indicators are expected to remain. There will be some renegotiations, I'm sure, more recent debts recently entered into this tier.

For the older ones, we are using other collection measures, like judicial collection and based on assurances, which will take even longer. Regarding payroll loans, we expect to maintain the portfolio as is.

We hope to grow in the CLT, CLT payroll loans or salary-based loans. We have some changes in rates, some of this prefixed rates.

Our appetite is contained in this because we do not have very good experience with elongated payroll loans. The idea is to keep on with the portfolio.

As our CEO mentioned, this year, we are more excited about this payroll loans for CLT, and we are betting on this for looking at the employers, looking at the turnover of employees in this companies and working with employees of companies who have a relationship with the bank. We are not open sea offering payroll loans to all employees of private employees, which are called the CLT.

No, we are working with starting with companies who have had a connection with the bank or who have a payroll managed by the bank. This will give us some peace of mind in terms of growing this CLT of private company payroll loan.

Just let me get back to delinquency/provision. This will decrease because we have a more elongated written-off.

Yes. Yes, as we write off these loans, this dynamics will experience a drop.

In April, we have seen this, and the trend is that as we close the next quarter, we will see a slight decrease regarding this, because we will get less in tier 3. This indicator follows a trend to experience a slight reduction.

Thank you very much.

I think Yuri brought several ideas. If our CEO and our CFO mentioned several collection strategies to recover credit, when you look at cost of risk today, it is the cost of risk considering net provisions for credit recovery.

We have some initiatives on these lines, and we haven't promoted any guidance revision regarding this on this quarter, we can see how this strategies will do. Maybe in the next results call, we tend to evaluate the performance of this portfolios, and based on that, we will establish strategies for the rest of the year, revisiting this indicators, especially the cost of risk indicator, okay?

Thank you very much, Nathan.

Thank you, and just a follow-up question regarding your capital. It's very good to see that there is a help of 13 14 regulation, but the bank capital is very strong, very sturdy.

What about the ratio, NPL ratio, and any changes in 4966? We talk about tax credits.

Your DTA hasn't grown unlike other banks. What is your message for this capital, this 14% of main capital?

Will it be maintained? Will the payout increase?

What about your Basel ratio? Thank you.

What about the guidance? Our guidance right now, we have been observing this quarter, but probably we will be reviewing some of the lines in the second semester, the second half of the year.

There will be some adjustments, some revision if needed. Regarding capital, we have 14.1 of Basel in Tier 1 alone.

That's pretty comfortable. Our board determined 14.

14.5 as the minimum level for the global rate of the bank. The payout account, we do not expect any changes.

Historically, the bank distributed 40% of dividends. This will continue like this.

We do not expect any changes regarding that. Our shareholders would like it to be higher, but we always privilege the quality of our Basel ratio and the bank's volume of capital, this values will be maintained.

Just let me add that in Tier 1, based on discussion of payroll renewal agreement, it can be some changes in 2026 according to the agreement that will be reached because it's an ongoing agreement. We cannot say that we will maintain 14% because it depends on this agreement that will be closed.

Thank you very much, very clear.

Thank you. Now, ladies and gentlemen, I'd like to thank you all for your presence, for your participation.

Oh, we do have another question. I'm sorry.

Yes, we have Eduardo Nishio from Genial. I'm sorry, Nishio.

Can you hear us? Hello, can you hear us?

I almost cut you out. I'm sorry.

No problem.

My question has to do with the asset quality and also has to do with Yuri's question. Thank you very much.

Good afternoon, everyone. Regarding the asset quality, I'd like to understand a little bit better the dynamics you see in terms of decrease or worsening of indicators.

Your cost of risk is still high, R$542 million in the quarter. You are consuming for a while some coverage, 200%, and now is 145%.

I'd like to understand the dynamic moving forward. Your cost of risk guidance of 2.2 implies a net view of R$1.1 billion and a half, and this quarter, you reached 1/3 of this.

I'd like to understand why you needed to make so much provision, which were the portfolios that got worse, and how you looking about that. It was the 4966 regulation that led to this need of provisioning?

I'd like you to give us more color about that. Also, you are recovering in terms of the asset quality.

What do you see in the long term in terms of return on equity and return on investment? Maybe we shouldn't reach something near your cost of capital.

When do you expect to reach this level?

Eduardo, well, regarding the first part of your question regarding the percentage of portfolio coverage, well, as we close the necessary time to write off some of these amounts, the trend, and we have already seen that in April, and this is expected to happen in the next few months as well, we hope to have an increase in this coverage percentage. We hope this will happen.

We do not believe in a accelerated growth of delinquency rate in the next few months due to some reasons. Because we are better organized internally.

We have already understood how this dynamic works based on the 4966 regulation. We have restructured the department.

Up until then, we waited to collect, but as I mentioned, we have a very diversified portfolio, and our clients in default, they account for only 6% of the total. This portfolio is pretty well-diversified with thousands and thousands of clients, thousands of thousands of contracts and agreements.

The idea of scale is to count on the help of third parties. We are finishing this bidding procedure.

We cannot decide overnight to hire one company. We are a public company, we need to go through this tendering, this bidding procedure.

We are about to wrap this up, and then we will be able to start collecting small retailers, small companies, and renegotiate some debts. We already have a digital platform, which is called Finanças em Dia, or Finances in Check.

This is a digital collection platform. We didn't have that before 4966, only for losses.

We had some outsourced programs, but now with the changes in the procedure, we have started working on this digital platforms so that the network of branches, our colleagues in our branches can have or can devote more time to increase this relationship with our clients.

There was another part of your question. Can you remind me of that, or was it at all?

You can go ahead, Nishio. I'm sorry.

Regarding the portfolios that were worse and the need for provisioning the cost of risk that increased. Yes, the portfolios that suffered more, that provisioned more,

okay? Right.

Eduardo, well, there's no unique portfolio that carried more provisioning. As I told you, we have very well-diversified portfolio.

We have a pretty conservative and defensive stand on this. That gives us some balance.

We have one issue our president mentioned. We have some labor lawsuits of overdrafts due to the obligations posed by 4966 on tier 3.

Then we work to defend the bank from this credits arising from that. We managed to create internal strategy to accelerate this with our debtors.

We have 15, 20 negotiations per day, and they have been successful, and we are putting this loans back on track. We have some clients who have labor lawsuits with the municipalities or with a private company or the state, and we are negotiating this within the payroll deductible loans, which gives us a guarantee of liquidity for the future.

Just let me add something, Mr. Fernando, for cost of credit.

Let me tell you that, first, in April, there was the operation of an specific case which was negotiated. This operation was a tier 3 operation, moving forward, this will soften this indication.

The second element is that when you look at cost of risk and cost of credit, the same indicator of the guidance, for the fourth quarter, we had a provisioning of R$257 million. It was an asset which was not within the assets portfolio.

It was a financial area, we do not consider this R$257 within the variable. It's important to mention this figure, which was significant.

We mentioned this in the fourth quarter call. When we compare this for the guidance indicator, it's important to mention this amount, okay?

Thank you. That's perfect.

Thank you very much.

Thank you, Nishio. Yes, now I'd like to close our results call for the first quarter of 2026.

Thank you very much. If you have any remaining questions, our RI team will address your concerns.

Thank you very much, and see you next quarter. Take care.