Good morning, ladies and gentlemen, and thank you for waiting. Welcome to Banco do Brasil's First Quarter 2021 Earnings Conference Call. This event is being conducted in Portuguese with simultaneous translation into English and is being recorded and broadcast live via webcast through Banco do Brasil's website at www.bb.com.br/ir, where the presentation is also available. All participants will be in listen only mode, and right after the presentation, we will initiate the Q&A session when further instructions will be provided. Questions in English will be received in writing only via the chat icon in the bottom of the platform, and for questions in Portuguese, just dial star one. Should any participant need assistance during this call, please dial star zero to reach the operator. With us today are Mr. Fausto Ribeiro, CEO, Mr. Ricardo Forni, CFO, Financial VP, and IRO, and Mr. Carlos Renato Bonetti, [Vice President of Internal Controls and Risk Management] of Banco do Brasil, and Daniel Maria, Head of Investor Relations. Mr. Fausto Ribeiro, please, you may proceed. Ladies and gentlemen, good morning. Good morning to those who are in the South Hemisphere. Those in Europe, good afternoon. I am Fausto Ribeiro. I am the CEO for Banco do Brasil, and it's a great pleasure for me to be with you this morning. In fact, this is our first meeting, and I hope this is the first of many. Right from the start, I would like to acknowledge the work that you do. It's very important that we take precise information to all of our stakeholders. I would also like to take this opportunity to thank our employees for the brilliant work they did this first quarter, which allowed us to reach record numbers, historical numbers, considering all of the past history of the bank. I have a set of slides before I give the floor to Ricardo Forni, our CFO. These are interest slides, even because they can give you some information about the main pillars of this management. Let me start very briefly speaking about our earnings highlights. In slide one. Sorry, slide two. Here, we have adjusted net income of BRL 4.9 billion, which accounts for a growth of 44.7% when you compare the first quarter of 2020. This result was mainly boosted by lower ALL and growth in the financial margins. I said that in our previous meeting, the year started with a rebound of the economy. The landscape for the next coming quarters still brings some uncertainties, and that's why we are optimistic, but at the same time, a bit more cautious in terms of the guidance, the existing guidance. We are keeping the current guidance. We also see the possibility of, by the end of the year, to be on the higher side. Our loan portfolio was BRL 758.3 billion, and this is growth of 4.5% when we compare to the same period of 2020 in March. Our ALL expended view is BRL 2.5 billion, which is a reduction of 54.2% when we compare to the first quarter of 2020. In terms of the dynamics of revenues expenses, NII grew 4%, and our admin expenses were down by 0.4%. Now I would like to show you some more slides where I'll talk about the main pillars of this management. Moving to slide three, I think. For those of you who are following us, we start with the pillars of our corporate strategy. What is my takeaway message? There is a very sound governance process that is very well consolidated at Banco do Brasil. This is a process that has been forged through many years, and the main pillar lies in the design and the approval of a corporate strategy for Banco do Brasil. We conduct annual reviews, but it covers a period that goes from 2021 to 2025, and that takes into account all of the outlook, clients, the financial side, processes, and people. What is the message I would like to convey to you today? Well, the bank has a corporate strategy that has been designed based on its corporate scope. It's important to say that our role as executives, those of us who came on board more recently, our task is to execute this strategy. Any changes in our corporate strategy has to go through all of the strategic and governance committees of the bank. In fact, we are just continuing to pursue or to follow this existing process that will allow us to reach some very interesting results in the near future. Well, upon my arrival, I talked to the employees of Banco do Brasil. Not only I had to introduce myself, I introduced my family, I talked a little bit about my background, and I also listed 10 structuring initiatives. All of these initiatives are based on the preexisting corporate strategy. I believe that these initiatives can help us expedite some changes within the bank, which will allow us to reach a series of strategic objectives that have been set forth. I am not going to mention each one of them because you have them listed on the slide. In the next three slides, I will show you in three different groups, what would be the main messages we want to convey to you today. The first group, or the first one is profitability. Here, the main message I want you to get is that, well, I renew our commitment with our search for efficiency and also the fact that we want to present sustainable results. We already have an expense reduction plan in progress that anticipates a recurring savings of BRL 3 billion a year, which by 2025 could reach BRL 10 billion of accumulated savings. This is a commitment that has been renewed, and we will pursue it. In terms of looking for a profitability similar to our peers and at times even higher than our peers, we have to strengthen our most profitable business lines, expanding and monetizing the customer base. The expansion of the customer base is crucial. There is no other way. We have to make progress in this regard. We will also reinforce our protagonists in some lines and segments where today we are, and we have been market leaders. I am referring to agribusiness. We have to make advances in agribusiness. We have to also include some digital initiatives to agribusiness, SMEs, individuals, and foreign trade. These are some segments where we think we have to expand. We also need, and we think it's important to constantly analyze the possibilities of building strategic alliances and partnerships, because this can help us maximize our results. So we have to keep an eye on that all the time and see ways of engaging in other partnerships, and this will help us to leverage better results. Finally, we have to focus on our core business to maximize capital efficiency. Maybe behind that, we have the continuity of our divestment policy, obviously focusing in the non-core businesses or things that do not have great synergies with our business. Now moving to next slide five. Another group of actions which are equally important when compared to the previous one is that, if I want to leave a legacy to this company, what I would really like to do is to expedite digital transformation so that we can, in fact, be really digital. This is a message that I've been constantly talking about in the company because it is important that we expedite this transformation. This is something that the market is calling for, and it's important that we are totally digital. We have been trailing this path for quite some time, but if we can accelerate the necessary transformation, this can certainly help us. As part of this process of expediting the digital transformation, we listed a series of actions that will encourage our clients to look for alternatives to access the bank in a more convenient way. We are trying to promote a digital inclusion. This is one of our commitments. We have to engage our own staff and our own employees. That's also very important. We have to promote a change in the internal culture, bringing about the necessary skills that will allow us to evolve quicker through this new culture. It's important also to emphasize that we have to train and qualify our people so that they can acquire the skills that maybe they do not have yet, because certainly this can help us expedite the process. Well, data intelligence, it's important that we anticipate the needs of our clients, trying to focus on information and data so data can be transformed into good information. We have an information repository which is very vast, and we have to connect that with the internet and other consumer means. We have to be able to use this data and turn them into valuable information to generate more business. In terms of business connection, Open Banking brings an amazing window of opportunity that also reflects in innovation, because with innovation, we can look for other alternative sources of income to our business. In addition to that, we will be able to analyze some strategic partnerships with startups to expand our presence in other platforms where we are not yet present. Certainly, the way to reach this goal is to develop all of our APIs, because with that, we'll be able to make good connections. Platform expansion, we want to automate processes. There is always room for further improvements and better efficiencies, and this is one of the paths that we will pursue. We also want to modernize our IT structure to be more competitive and ready to do what is important. These are my main messages and the main points that I want you to focus. We want to expedite our digital transformation to be indeed totally digital. Moving to slide number six. As important as the other previous slides, I call this part proximity. We have to be very close to our stakeholders, and I am saying that it's important that we'll be close to our clients so that they can make their own decisions in terms of what channel they want to use to communicate with us. One bank for each client. If they want, they will have the bank in the palm of their hands. They will have all of the necessary channels to establish a connection, to talk to their account manager. In fact, it's important that we promote an integrated management of the distribution network, a more omnichannel based view to be able to offer a very integrated view to our client. It's important to have the appropriate returns to our shareholders. We have to look for growing efficiencies and to be compatible with our peers. We want to compete on equal footing with all of our peers. Oftentimes, we want to be ahead of the curve. We also want to maintain an adequate level of corporate governance. As I mentioned before, this is something that has been part of the bank's strategy for quite some time. We are a reference market, even in Brasília, with so many public agencies, you know, other organizations that do their benchmark with us. Therefore, I would like to say that we want to continue to keep a very high level of corporate governance, and we value people as well. Here I'm talking about talent attraction and retention. I said previously that we have to have all the necessary skills to be able to anticipate trends. We will invest a lot in training. We will also make some investments to train and qualify our leading young. We also want to keep our commitment with sustainable. These actions important for us to fulfill our social role and at the same time, to be accountable to society in general. An example of that is that May is the month that we call the Sustainability Month, and we pick the theme, which is renewable energy. During this month, we are offering our clients some unique credit lines with better rates for the acquisition of solar panels, et cetera, allowing them to invest in clean energy. With that, we will be paying our contribution to society and the planet. My last slide, and then I'll give the floor to Ricardo. This is the bank we want. This is our view for the future. If I could tell you what is the legacy I want to leave, what bank I want to have in the future, I want to be the client's main bank, ensuring the best experience possible that he can choose, or she can choose the best way to communicate with the bank. We want to provide a unique experience, high quality, high availability, and that the client can promote the bank to other clients. In terms of our presence, whether it's a physical presence or digital, we want to be anytime, anywhere. This is very important to us. Also, we want to be a solutions hub. We have a platform that provides products, services, and benefits. Somehow we want to help our clients to have access to all of our products and services so as to maximize return. And in general, also sustainability is very important. It has to conciliate economic results, environment preservation, and development of society. Today, we are considered to be the bank with the most sustainable portfolio in Brazil. We received several awards. Our portfolio has more than BRL 200 million in sustainable credits. More recently, we received an award, and this is firsthand news. We just received an award from Global Finance as one of the most sustainable companies. One of the best companies in terms of processes. This is something that we will announce to everyone in the market. With that, I will turn the floor over to our CFO, Ricardo Forni, who will talk about the financial results. And after the end, I will be available to answer all of your questions. Thank you very much. Thank you, Fausto. First of all, good morning, everyone. My name is Ricardo Forni, I am VP for Financial Relations and Investor R elations. I would like to thank you very much for joining us today and the opportunity to present to you this very robust result. This is an all-time record for the bank. I'll start with slide nine, where we talk about our adjusted net income that posted growth of 44.7% over the first quarter of 2020, and 33% over Q4 of 2020, reaching BRL 4.9 billion in the quarter. This net income was mostly impacted by lower ALL in the period, the growth of our loan portfolio, and a very rigorous control of expenses. Our ROE went from 12.4% in the first quarter of last year to 15.1%, which is 158 basis points increase for ROE. Moving to slide 10. I will talk about NII. NII was up 4% vis-a-vis the first quarter of 2020, and 2.8% in the quarter. This annual growth is mainly explained by the reduction in financial expenses, 26.7% reduction in commercial funding, and minus 17.6% in institutional funding. When compared to the first quarter of 2020, the margin growth was influenced by higher loan financial expenses, benefited by a more profitable mix of assets and lower funding costs. Banco do Brasil continues to pursue higher revenues from loan operations for NII by increasing the loan portfolio and looking for a more profitable asset mix. NIM remains stable, ending the period at 3.7% due to higher volume of net assets. Moving to slide 11, our loan portfolio. The expanded loan portfolio grew 4.5% year-on-year and 2.2% when compared to December 2020, totaling BRL 758.3 billion, with emphasis on the performance of the retail loans and agribusiness. The individuals portfolio was up 7.1% year-on-year and 2% when compared to December of last year, with emphasis on payroll loans. Another line that presented significant growth was personal loans, resulting from the strategy to change the mix to more profitable lines. The agribusiness portfolio grew 6.4% year-on-year and 3.6% in the quarter, reaching BRL 198.5 billion, and getting closer to the all-time record for agribusiness. SME segment was up 26.1% year-on-year, influenced by disbursements in the PRONAMPE, working capital for the preservation of companies, and PESE lines. This occurred especially in the previous quarters, the evolution from December to March is lower of 1.4%. Companies and government, it was down by 1.2% year-on-year. Moving to the next slide. On ESG. Here, we talk about our sustainable business portfolio that posted BRL 261.3 billion in the quarter. Considering the 10 sustainability commitments that we announced in February and aiming at helping our clients to transition to more sustainable practices, we launched the BB Renewable Energy Loan for individuals, 100% digital. Also, through BB DTVM, we offered two ESG funds with total net worth of BRL 4.1 billion. Furthermore, starting this year, we are mitigating all of our GHG emissions to ensure that all energy consumed in our facility comes from a clean and renewable source with the acquisition of I-RECs. Also, we have received several awards, as you can see in the slide. On this slide, this is the agribusiness portfolio. As we said before, growing 6.4% in the comparison year-on-year. In March 2021, we reached a disbursement of BRL 76.1 billion in the 2021 harvest plan, with an increase of 14.7% vis-a-vis the previous year. I would like to draw your attention to our gross of platform. This is an end-to-end marketplace that brings maximum economic efficiency to producers with the increase in the number of accesses and new users, besides intensifying sales and financial growth too, realized over BRL 347 million since its inception. On this platform, we have 549 products, machinery implements, financial products, materializing our vision about the future of the bank as a hub for banking and non-banking solutions for our clients with convenience, practicality, and safety and security. On slide 14. We can see the forbearance portfolio flow. We can see that the flow of exit has already started in the forbearance portfolio with a good evolution. December 2020, 50% of operations were in grace. In March 2021, the percentage is 23%, amounting to BRL 26.3 billion, of which BRL 14 billion are government operations that have, most of them, a treasury guarantee, and that's therefore very low risk. NPL at 90, in the forbearance portfolio is under control, closing March at 0.86% due to the quality of origination of this portfolio. Here showing that net of the government portfolio, the portfolio would amount to BRL 90 billion, net of the government part of the portfolio. As it has a guarantee of the Union, the risk profile is very low. We have this exercise here that you can see on slide 15, and the total of BRL 90 billion, BRL 12.1 billion is still in grace and about BRL 7.1 billion maturing at the second quarter of 2021. With a reduction of the total balance in active operations in the forbearance portfolio, we would have 1.09% for the calculation of delinquency. It's very important to show you this breakdown, removing the part of the government, which is very low risk. Expanded ALL on slide 16 show you the expenses with provisions closing the period with BRL 2.4 billion, a 54.2% reduction year-on-year, 50.8% quarter-on-quarter reduction. Behavior explained mainly by the reduction of the credit with ALL, because during the last year, the bank made early provisions prudentially in order to buffer the future effects of the pandemic on the loan portfolio. And also, we have here the credit recovery performance, the highest in the series in the first quarter. The cost of credit closed at 3%. Delinquency, as you can see, delinquency is rigorously under control. We have the indicators of the quality of the portfolio over 90 days past due, with a slight increase quarter-on-quarter, reaching 2.8% in March 2021, and between 15 and 90 days, went from 1.5% in December to 1.9% in March. The coverage ratio closed the quarter at a very high level, 328.2%. Information about the new NPL formation, 0.66%. Coverage of the new NPL reached 73.6%. Fee income and administrative expenses on the slide. Fee income amounted to BRL 6.9 billion in the quarter. A 2.7% reduction year-on-year, impacted mainly by the reduction in the checking account line. It is important to remember that Banco do Brasil has been seeking to diversify its revenues, intensifying the use of analytics to have a better knowledge of the client and their preferences, and serving them in a more convenient fashion. Administrative expenses are under rigorous control, with a reduction of 0.4% year-on-year, amounting to BRL 7.7 billion. Cost control already reflects the efficiency measures announced, such as the layoff of employees by means of the voluntary severance plan and the savings generated by the compensation plan and the performance program, among other aspects. Cost to income ratio accumulated in 12 months closed at 36.9%. In relation to integration of service, we have on slide 19 the profile of our service network, which was adjusted in the period, aligned to the strategy of optimizing our channel platforms, seeking more efficiency and lighter structure. We see a reduction in the number of traditional branches, a slight increase in digital, specialized branches, the creation of 16 [Non-English content], and showing important adjustment in the core structure of the bank, migrating towards more efficient structure and without reducing the coverage of services to the community. We also increased the specialization with the opening of [Non-English content] and specialized agro branches that allowed us to increase 1.4 million clients, totaling 7 million with specialized service. 800 investment professionals are dedicated to investors. It is important to see that clients with specialized services tend to show higher satisfaction levels and a higher return to the institution. I would like to talk about the number of employees, because we already see the impact of the reduction of 91,073, and in March, 87,876. Most of those that enroll in the plan have already left the company. There are still quite a number to go, when they will be leaving the company. Digital in practice. We have relevant figures about the acceleration of digital transformation of Banco do Brasil. We understand that the migration trend toward digital is here to stay. We have been offering end-to-end solutions and innovative solutions to almost 21 million active clients in our digital channels. I would like to mention the coupons available in our app, where the client has vouchers for discounts and promotions for reaching 14 million accesses in the first quarter of 2021, when we sold over 315,000 gift cards. We also have programs for the utilization of points with the relationship of the bank that can be used for product and services of the bank, and also possibility to pay accounts in a cashback program for clients according to what they choose. In the first quarter of 2021, 360,000 clients paid accounts or bills with the use of this functionality in a total of BRL 18 million, all this by means of the app of Banco do Brasil or internet banking. Deals with clients by means of the app have been increasing significantly. Digital platforms, internet and mobile, accounted for 45% of disbursements in personal loans, 12% in payroll-deducted loans, 42% in auto loans, and 20% in mortgage. Over 90% of these transactions to digital platform in March, the Banco do Brasil app is the one with the best evaluation among all the banks in the Apple Store and the Google Play Store as well. All these figures show that we are on the right track for our vision of the future, positioning the bank closer and closer to clients with innovative solutions, bringing convenience with security. In relation to capital, we see a robust evolution of capital. As you can see, 19.56% common equity indicator, 12.89%, this places us as one of the banks with the highest capitalization in the Brazilian market and with very big capacity to grow. In relation to projections, we bring you our guidance here. We are maintaining our guidance. Adjusted net income, BRL 16 billion-BRL 19 billion. The result of the first quarter was BRL 4.9 billion. Net interest income, 2.6% - 6.5%. We reached 4%. Loan portfolio from 8% - 12%. We were slightly below in the first quarter with 5.8%. Retail businesses from 9%- 13%. We've reached 11.6%. Wholesale, a reduction of 7.3%. Afterwards we can go into that in detail. Agro, 7% - 11%, 11.2%. Fee income, -1.5% o + 1.5%. We had a reduction of 2.7%. Administrative expenses, -1.5% to +1.5%, a reduction of 0.4% under rigorous control. Expanded ALL, we had a provision of BRL 2.5 billion. Overall, in terms of our net income, we see a skew of being at the higher area of the guidance. We can go into details during the Q&A. With that, I conclude my presentation. Now we can go to the Q&A session. Thank you very much. Now we are going to start our Q&A session. I would like to remind you that questions in English will be received by the chat, and for questions in Portuguese, you should press star one. Our first question come from Mario Pierry from Bank of America. You may proceed. Good morning, everybody. It's a great pleasure to be with you for the first time, and congratulations for the results obtained in the quarter. Also, I loved to hear you talk about the commitment on the part of the bank in terms of keeping the strategy that was announced in mid-February, mainly in terms of improvement in your efficiency and cost to income ratio, and the market loved that. You mentioned that you expected to bring the profitability of the bank to the level of the peers. When you talk about profitability, are you referring to the ROE? Your peers have from 18%-20% ROE. Is this your goal, and how long will it take for you to get there? The second question, when you talked about the focus on core business and investments and the investment policy, I would like for you to expand on that. Asset management and acquiring are in your core business, and what is your strategy for these two segments? Thank you very much. Thank you, Mario. It's a great pleasure to talk to you. Okay. I will start with the last one about the core business, and then we will come to the ROE. As far as I understand, you're asking about our DTVM, our brokerage house. This is our core business, as it is for any other company or any other bank. We know that this area is going through many changes, and we have already made some notices to the market, and mainly because of some news published in newspapers. We have been studying this. What are the alternatives so that we may drive the business and maximize return to our shareholders? One of the initiatives is to find strategic partners that might work with us, and that might help us maximize our returns. Nevertheless, what I can tell you is the following. We still have no definition or mature definition about that, and that we could announce to you right now. We continue to study this and evaluating this. Evaluate the best way to drive our business and to extend our operations in the assets area. With relation to Cielo, you talked about acquiring. Cielo is also considered as a core business for us in terms of acquiring. Referring to this asset, we have a strong partner. We are doing by means of corporate governance with Cielo, so that our company may transform digitally, so that we may change our business model in order to bring more results, more positive results, for both companies. It is also core. Cielo is core, as far as we are concerned. Regarding the return expectations, the mission that I received from the Ministry of the Economy and the President was to lead this bank, seeking profitability at levels compared to our peers with a lot of efficiency, that we could give a top quality service to our population. A timeline for that, I cannot tell you anything about that. The ideal thing would be to get there as fast as possible. Of course, we still have some homework to do. As I said before during my presentation, we have many actions that have to be put in place in terms of our PPOP. The more we can accelerate the process and speed up the process so that we may reach the level of our peers, that would be great. This could help us a lot. I hope I have been able to answer your questions. Thank you very much, and a very good luck to you in your new position. Our next question is from [Mr. Jorge Kuri from Morgan Stanley]. Okay, thanks. Thank you very much for taking my question. Can you hear me well? Yes, very well. Thank you. Fausto, thank you for your message, and I really endorse the words of my colleague. On the analysis side, we see how Banco do Brasil is negotiating in view of all of these very strong operating results without a lot of interference. SO if possible, I would like you to reconcile some parts of your speech with what we see through the headlines. You said, as an executive, the main message is to give continuity to what was done before. We see that with very good eyes. At the same time, there have been several changes since you took over. Four VPs were changed, and maybe there are more changes to come. In regards to governance, when the chairman of the board, the previous chairman of the board, he criticized the governance of the bank. Now, there has been an important change in the composition of the board with Ieda there. If you could convey a message to the market or maybe reinforcing the message of how you see all of these changes, whether the strategic gear will change, because with so many changes at the board level and also on the executive level, I would like you just to put in context your legacy or what else could happen in terms of changes in the bank. Some things are changing, even though the backbone remains the same. So let's go with that, and then I'll come with my second question. Thank you. Jorge, if I understand your name correctly. Okay, there were many comments. Let me try to answer each one of them. First of all, changes in the VP position. Well, my point of view is that as part of a natural succession process in a company, it's very common and very usual to have some changes. I think that all of the changes that we are promoting are absolutely normal. We are straightly looking for people in-house from career professionals inside Banco do Brasil with a lot of experience. All of the names have more than 25 years of experience in the bank, and they are highly competent. And if I should give you a message, if I could probably give you some light of what is happening here, is that we are looking for very committed professionals and with enormous capability to be in the positions where they are. I think that it's very normal for somebody new to make changes. In terms of what you said about the fact that some board members complained when they left, what I've been saying is that my approval process as the CEO of the bank goes through two spheres, one inside Banco do Brasil and one outside the bank. In terms of the outside sphere, I'm referring to appointments from the Ministry of the Economy, which is ratified by the president of the country through a decree. First of all, we have to send the names to our internal committee that has to evaluate a series of prerequisites, and they have to look at things related to legislation first. I mean, the Law 13303 and all of the other issues that are part of our internal bylaws. That is then ratified by other instances. The process follow its normal path. That's how I was appointed. The same thing happened to all of the previous CEOs of the bank. All of them had to go through this process. In terms of particular opinion of one or another board member, I would rather not comment because, you know, it's an opinion. They were talking about a process that exists in the bank for a very long time. Anything that can help the bank improve its business is something that should be analyzed. In terms of Ieda, I think you mentioned her name. She is an excellent professional. We are constantly looking for diverse opinions in the board member. She comes from the Ministry of Treasury. She has extensive experience. She's been through different boards. She has an interesting experience. Therefore, I believe that she will pay a very good contribution to Banco do Brasil when it comes to analyzing further deals. I think I answered most part of your questions. Did I leave anything out, Jorge? No. Once again, I think that we support the bank, and I think it's important that you have a very firm message when you conciliate all the changes with this line of continuity. You explained it quite well. Thank you very much for your presentation, and I wish you the best. Now, I have another question, but it's more operational. I think you're doing an excellent job in terms of controlling expenses, which is the core part. And you said that yourself, and you said that the middle of the guidance is low. I also realized that non-core expenses, that part of non-core expenses is slightly above what we expected. For the second consecutive quarter, you had more than BRL 1.5 billion of expenses with legal fees. Also in this quarter, we noticed BRL 1 billion related to payroll. We want to understand how that works. I also want to get your view on the legal risks and whether the guidance is still maintained. All right. I will turn the floor to our VP of Risk Management, and he will help me with that answer. Okay. I will start by talking about the legal risk, and then I'll turn the floor to Forni to add more things to that answer. In terms of legal risk, the bank has some strategies that aims at improving this trajectory of these legal expenses, and some factors impacted the volumes you saw for the first quarter. The first one has to do with the pandemic. Last year, we saw mainly in the second and third quarter, some of the actions were stagnated because the courts were shut down, and that's why all of the lawsuits were postponed to the fourth quarter of the year, and this had an impact on the first quarter of 2021. Because of that, either the volume of payments or provisions had to be expedited a bit. Another important aspect is a strategy that we have adopted related to agreements. This is a changing paradigm for us because the bank used to approach a strategy of appealing to the last courts, and now we're adopting a mixed strategy whereby we are favoring agreements right on the initial stages. This has a positive effect in the long run because it reduces long-term expenses and things are more predictable. There is another effect, which is the acceleration of expenses in the short run, meaning that the amount of payment is larger in a shorter period of time. This is what happened in this first quarter, and this is a strategy that is now in place for the year. It does not apply only to the first quarter. These two effects can explain the amounts posted in the first quarter, and this should also be noticed, you know, at different levels throughout the year. We are trying to project that expense, and you said BRL 4 billion. We are looking at a number closer to BRL 6.5 billion rather than BRL 4 billion when it comes to, you know, accelerating agreements and unleashing processes or lawsuits in the courts. I would just like to add, Jorge, this is Ricardo Forni, the CFO. I would like to add something in relation to expenses or other operating expenses. Here, we had an impairment related to the business funds. We try to identify a non-financial asset that shows signs of depreciation because of their value in use. They could probably indicate some reductions in the recoverable value of the asset. With the recent economic impact, there was an indication that there should be an impact about some payroll agreements considering the good accounting practices. That's why we did the impairment and we did the accounting write-off. Now we recognize BRL 459 million of losses because of that. We believe, just to clarify, when it comes to the evaluation about the recurrency or non-recurrency of this evaluation, what we think is that in terms of the impairment, this recurring evaluation, this was a business event. We posted that, and with that, our future projection in regards to these contracts really reflect what remains in our accounting books. Perfect. I just wanted to understand whether we could still see something more along the road. There is something more to come. We do not expect anything else down the road. We are running that evaluation. This is a current evaluation. We will do that in the next quarter, but with no future expectation about that. Our next question is from [audio distortion]. Good morning, thank you for the question. We have already talked about the NPL 90. We had a higher volume than private banks. Do you have any other data that you could share with us? In this quarter, the provisions were lower in the NPL formation. The interpreter apologizes, but the sound is very, very bad. Bonetti is going to answer, but I would like to make a short remark about, over 75% of the operations extended are paying back normally. This is excellent as a sign regarding the forbearance portfolio. And 90 days past due is under control, and the level is better than we expected, around 1%. Bonetti, please. Octavio talking about the forbearance portfolio. You remember that we closed the fourth quarter with BRL 130 billion. I would like to remind you that this portfolio has some different characteristics vis-a-vis our peers. We have a relevant participation with the government in this portfolio. A 20% of this is credit with the government and with a government guarantee. We have a major part, 25% of that is payroll deducted loan. Normally, government sub, that is to say public. Because of that, the quality is very good. About 93% of the customers didn't have any history of delays in the 12 previous months, the months preceding the pandemic. It's a very good performance, and the time of relationship is quite long, 17 years on average with these customers. We have a percentage of guarantees that is very big, 65% on average. In the period of the fourth quarter, we said that it would get into amortization as of the first quarter. That is to say, the portfolio, we had a reduction of 12.5% in the balance of this from BRL 130 billion to BRL 113.8 billion. This already shows part of what we were already seeing in terms of quality and expectation of repayment. That is to say, people are paying us back again. This is being done with a very low delinquency ratio. If you take the short-term delinquency, we are talking about 2.5%. If you talk about 90 days past due, it is lower than 1%. We have a percentage that is BRL 126 million will be returning in the second quarter. Of these BRL 26 million, half of that is credit with government accounts. The portfolio has a quality looking ahead, a quality that is very good and which leads us to believe that if everything remains the same in terms of the pace of the economy, the performance will be quite good in this portfolio. That has a coverage of provisions that is quite high as well. Talking about the level of provisions, what you saw in terms of flow and provision is reflecting the behavior of our portfolio, very low delinquency, 1.95%. It is a fact that we expect an increase of delinquency up to the end of the year or by the end of the year. This is something that we are projecting. Nevertheless, our projection of the base case scenario is better than we estimated at the end of last year. Because of that, we believe that this provision or the need for new provisions should follow a normal behavior and in line with the volume of disbursements that we will be making by the end of the year. We believe that disbursements will accelerate. This year, and provisions will reflect the acceleration of these outlays. Talking about the inventory of our portfolios, this is very much under control, and the additional provisions that we built last year support the growth estimate for delinquency for this year. This is Daniel Maria. I would like to remind you the dynamics of the balance sheet as we have been talking to you. In 2020, basically, as Bonetti said, the construction of provisions, that is to say, creating this buffer that has a 48% coverage. For 2021, consuming part of this coverage and reducing provisions and gradually increasing delinquency. The fact that you have the coverage of the NPL at percentages lower than 100%, this is the dynamics of this movement, and this is in line, as Bonetti said, with what we expected in this regard. Very clear. Thank you. Pedro Leduc from Itaú BBA. Good morning, everybody. Thank you very much for the presentation. Thank you for the question. You made two opening remarks about the guidance. It seems that we are going toward the upper part of the guidance, I would like to talk about the performance. Very low ALL, it seems to be the biggest contribution. In the other items, NII, it started well, 4%, but when you look at it seems that it has part of funding and the revenue with credit from clients, it didn't go so much. Fee income, it seems to be at the upper part, and it's not really seasonality, I believe. Lastly, about the legal risks, do you contemplate this when you talk about going to the upper part of the range? Once again, congratulations for the presentation. Ricardo Forni will start to talk about the components of the guidance, and then I will come back. Thank you, Pedro Leduc, for your question. In relation to the guidance and the adjusted net income, this is the aggregator of all the other effects that are going on in the different variables we started very well in the first quarter, and if we continue with these lines, as we expect, while we are bullish about the economic scenario, however, there are uncertainties involved. When we talk about the income, we believe that we are going to the upper part of the guidance. Looking ahead, I believe that later on, we might review the guidance when we are more sure about some important variables. Regarding the MSD, we are in the middle of the guidance. We had an important evolution. I would say a change in the mix of the portfolio that has been happening and has been reflecting already. We were already capturing that over time. The strategy for the year is very much centered on seeking and being more competitive in lines with attractive returns, changing our mix over time. We have been doing this and we have been very successful in this strategy. From the viewpoint of the loan portfolio, we are slightly lower than the guidance, and there are some components there. In retail businesses, for instance, we are within the range. We have been working in lines of payroll deducted very successfully, also with good operations and even exceeded the line of credit cards coming from non-account holders. It took some time to scale, but we are already seeing results, and we have been seeking this growth that together with the strategy of lines with a higher return, this becomes a very interesting component in the mix for the growth of the portfolio. In the wholesale for companies, these are specific cases. Well, let me see how Daniel, can you help me here, please? This has a base effect. I would like to remind you that in the first quarter of last year, there was a higher demand, and this increased the base for the first quarter, and then it started going down. As we are comparing year-over-year, we have this effect and also the migration toward the capital markets. I would like to remind you that some companies went to the market with debt and equity. When we look at this range of companies with over BRL 200 million in revenue, when I look at the large ones, over BRL 800 million, they are dropping because of this dynamic in the capital market. This is being offset by the large middle, the companies that have revenues up to BRL 300 million. It's a little bit capital markets and a little bit of the comparison base as well. Just continue here. In relation to agribusiness, we have been reaching the guidance and the PS. We saw a performance that was lower in individual tariffs, but we are optimistic because we are using analytics and many other tools, and we are seeking to be more assertive in our sales by means of using data. We still believe that we will be reaching the guidance, and we are working very strongly in this direction, and we believe that we will be able to get into the range. In administrative expenses, we have been reaching the guidance by means of a rigorous efficiency program that is already bearing fruit. We know that there are some risks involved because of inflation. Inflation has been coming higher than estimated. Also payroll expenses and other contracts as well, they suffer for this kind of impact. Our efficiency program with reduction of expenses is what will give us the right condition to reach the guidance. In credit risk, based on everything that has already been said about delinquency, our net provision is much lower than estimated in the guidance. As Bonetti said, we have to see the evolution of the portfolio in the second and the third quarters because many of our uncertainties will be solved. What you have in terms of forbearance will be maturing to a certain extent in the second and the third quarters. We are very bullish about the origination of the portfolio that was built for the future. It is one indicator that has a lower bias. And as uncertainly disappear. We might have some change in the guidance should this be necessary. Just to complete, Bonetti, the legal risk is already inbuilt in this new estimate, in this projection that we talked about our alternate income. Okay. Thank you very much. A follow-up about the NII, 4% a year is quite satisfactory, as the mix has been improving, as you mentioned yourselves. If we break down what helped you were lower funding expenses. Could you help us about the funding expenses over the years? Should they go up because there was a help from abroad, the PDM, that really brought this down. What about the next remainder of the year? May I make a remark? The funding cost, I would like to remind you that we paid the perpetual at the end of the fourth quarter. The redemption was almost BRL 1 billion, and also in the first quarter, there was another subordinated loan, about BRL 800 million, that was paid. You reduce your expenses in foreign currency. Together with that, what we foresee as a dynamic from now on, less contribution from the cost of funding, some contribution that could come from some renegotiations, but less contribution compared to what we saw in 2020, and much more based on the increase in the number, the portfolio, and the mix in the portfolio mix. Thank you very much. Our next question is from Mr. Domingos Falavina from JP Morgan. You may proceed, sir. Thank you. Good morning. Fausto, first of all, I would like to thank you. Thank you for your remarks in the first quarter because I know that you haven't been there for a very long time. Well, sometimes we are at the mercy of the news, and it's hard for us to understand the promotion of some of the executives. Probably better than trying to guess what the newspapers are trying to say, you know, it's better also to talk to the people involved. In Itaú, there was a new CEO. He worked with Candido Bracher in the investment bank. He was then the CFO of the bank. There's Lobuto, who also worked for other banks. Your name for us. I think we also look at some people that could potentially be promoted, and we didn't see your name in that list. So when they ask us about names, how can you explain why you are in this position? My second question, I would say it's very good to see that the bank is focusing on profitability and ROE. We see three leverages here, three pillars, growth, volume, price cost, and leverage. Do you think that this ROE will grow in the bank? Let's talk about Fausto. Fausto Ribeiro presided over a company from the conglomerate of Banco do Brasil, BB Consórcios. It's a company that, in terms of results to the bank, generates BRL 700 and some billion in net income. Also they pay an important contribution to our results. In 33 years in Banco do Brasil. I also worked in several areas of the bank. I can mention the area of internal controls. I spent 10 years in that position. I was kidding, I said that sometimes this is my PhD in internal controls because I led the bank to comply with Sarbanes-Oxley legislation. I was also chosen to represent the bank in the transaction committee of Banco Patagonia and in Argentina. You know that the Argentinian Central Bank takes some time to approve the acquisition or any acquisition, and that's why we had to have a separate team from the management of the bank. We were three people in charge. Then I was called to be the Director of the bank in that geography, and then I was in charge of doing larger operations with large corporate. When I returned to Brazil, I was in charge of the postal bank that served low-income clients. I also worked in the channels area of the bank. Just to be clear, 33 years in the bank, vast experience with the bank, and the bank has innumerous qualified professionals. As you mentioned yourself, many people leave Banco do Brasil, and they occupy high positions in private companies like Santander and in other companies in the market. In terms of my arrival in this position, it started with the Ministry of the Economy, and then the President of the country, and then I had to be approved by other internal instances. In terms of what was mentioned at the time, people said, the press said that I didn't go through the evaluation methodology. I did go through the Korn Ferry methodology, and I was on the ninth quadrant, if you understand about that methodology. That indicates the individual that is ready to take that position. In terms of Fausto, this is what I have to tell you. I feel that I am highly qualified. I have a long experience with the bank, and I believe that those that are promoted from inside, they're much better prepared because they are very familiar with the way the bank works, and they can also work to promote the acceleration of the bank and all of the pillars that I mentioned during my presentation, and that will help us to reach our results much quicker. In this regard, I do respect any other dissenting opinion, but this is what I have to say. In terms of our next question, I will give the floor to our CFO. Well, I'm not saying that there were dissenting opinions. This is just the version that I received. There is no dissenting opinion at all. Yeah. I did understand. I'm referring to journalists, those journalists that talked about this topic. Hi, Domingos. Here is Ricardo Forni, the CFO of the bank. Now, speaking about future growth or profitability and what are our leverages. Certainly, Banco do Brasil has always been and will always been, you know, leveraging loans. We are growing our loan portfolio. A loan portfolio with good origination and good quality. At the same time, we are also looking at the portfolio mix. This is a strategy that has been put forth for a long time. We are executing it well. As Fausto was saying, it's not just one management that will execute that strategy. This has been a strategy that has been in place for quite some time. This search for a better portfolio mix is something that is already bearing results. So, we will continue to pursue that strategy. This year, we see an important contribution towards reducing the cost of credit. All the work that is being done in terms of risk management. Also, I believe that our prudential strategy of last year, and especially in terms of the fact that we are being cautious in terms of origination, is already bearing results. I think we can get good results in terms of our credit portfolio. Expenses, I mean. The bank has always had a very rigorous control of expenses. The banking industry is faced with an additional challenge because when the paradigm changes, the way you serve your customer changes as well. This brings about challenges for those that are controlling expenses. But I would say that our transformation pace and our efficiency is in line, or I would even say, when compared to our peers, we obtain a level of excellence in terms of our control of expenses, and we intend to keep it that way. In terms of seeking for additional revenues through data and innovation, this is here to stay. That's a strategy, an open strategy of the bank. It's part of our strategic planning, and we are just expediting and accelerating that. It's organic growth and sustainability, not only in regards to the generation of more results, but this emphasis of ESG and all of its different aspects. On the E aspects, I mean, science and sustainability, we have a large program to expand the use of renewable energy with savings, and this is quite important. In the physical world, a lot of work is being done in that regard. I think this is the emphasis we're giving, and Fausto talked about that also. He talked about that when he addressed the employees of the company, and the results of the first quarter are already giving signs of these indicators. Good luck to the new team. Our next question from Carlos [Gomez-Lopez] from HSBC. You may proceed, sir. Mr. Carlos [Gomez-Lopez] from HSBC, you may proceed. Yes. Good morning. I have two questions. First, we noticed an increase in net worth in the quarter from the pension funds and healthcare. Do you see the possibility of reducing the risk or the volatility of Previ in the bank in the long run? The second question, because I know that you were involved with Sarbanes-Oxley, would you consider an ADR program or, you know, going to the New York Exchange in the future? This is Daniel Maria. Let me just answer the first part of your question about actuarial. We do have an actuarial effect, which is mark to market, but this involves several effects. In the case of the Previ benefit plan, you have to look at the curve because you have to discount the liabilities, and you have also to look at the behavior of assets. The behavior of assets, here you have a concentration in some of the things that the funds said that they intend to reduce. By reducing it, then you minimize the impact. Now the effect of the curve, this is a fact. The way to manage that is by creating capital buffers as we have done it, and this is how we monitor that. Daniel, would you like just to answer the second part of the question? Sure. In terms of ADRs, we have ADR level 1 and the decision to go to ADR level 2. We are monitoring the market, but we don't have anything already defined in that regard. The important thing is to follow the best practices. If you look at the best practices adopted in the New York Exchange or Sarbox and all the others, this is what we do. Perfect. I would just like to add to what Daniel said. When the bank made a decision back then to do some internal work to adjust to all of the required practices in a regulating environment as the one in the U.S., we hired a consulting company. They worked with us for two and a half years back then in an attempt to improve the governance standards of the bank, and I was the leader of that project, representing Banco do Brasil. We had to do a lot of work to comply with the very high standards of governance. There were several meetings from strategic committees. There were many tasks in our internal controls. This is now carried out by the person in charge. We want to ensure the integrity of the figures that appear in our income statement. The important thing is that the bank has been adopting these practices since then. The decision to go to level 3 in the U.S. market is still a decision that depends on further analysis on the market momentum. To date, we don't have anything to tell you at this moment about this subject. Carlos, I hope we were able to answer your question. Yes. You did answer it. In terms of ADR, it depends on the market. Maybe in the long run, don't you think it would be better for the bank to be in the same area where all the other Brazilian banks are? This is the point. We have a very diversified base of investors. We have over 870,000 investors. In fact, the fact that we are not listed in the New York Stock Exchange, this is not an impediment because we also have a very large base of foreign investors. But it's important that we look at the best practices. This is a process that we look at. We wanted to bring those best practices into the bank, and even though we're not listed, we comply with them and we follow them. Okay. Thank you. Tito Labarta, Goldman Sachs. He asks, provisions are lower than the annual guidance. Does this mean that provisions should go up over the year, or are you going to decrease the guidance for provisions? What will it mean to the bank? Should it start here? This is Ricardo Forni talking about the guidance for expenses of provisions. I think we have already talked about that. Provisions for this quarter were quite lower than the guidance. In looking ahead and considering all the uncertainties that have already been mentioned in this call, we believe that in the second and the third quarter, mainly our retail customers, and most of the forbearance portfolio will be paid in the second and the third quarter. We will see how much is risk and how much is increase in delinquency, because the prudential provisions that we built were to...b e proactive regarding this moment. We are optimistic, but we are conservative at the same time in terms of the future evaluation regarding our provisions. So, the expectation of the guidance is in the lower part of the range regarding provisions and regarding RPO. This is our expectation for the year if we are to evolve in some of the ROE. If we have good news about that, we might, in the future, have this situation of provision will be affected by the fact that the risk will become more clear to us. We will have higher results and lower provisions. The guidance is maintained because it's too early for us to review it because of the risk and uncertainty that we still have. We are still in a scenario of pandemic. The high risk has not disappeared yet. But we see the second half of the year with a higher activity than the first half of this year. So, I think this is the basis for us to keep our guidance with a degree of optimism vis-a-vis higher ROE and lower provisions. Our Q&A session has come to an end. Mr. Fausto Ribeiro will come back and make the closing remarks. Thank you very much for participating in our call. I hope we have been able to answer objectively all your questions and without trying to avoid any questions. And I hope we have been able to clarify all the things regarding the variations in our balance sheet and our investor relations team is available to you at all times, should you still need some further clarification. Thank you very much and have a good afternoon. Banco do Brasil conference call has come to an end. We thank you for participating, and the material used in this call is available at the investor relations portal on the internet. Thank you very much for participating. We wish you all a very good day. Thank you.