Good morning, ladies and gentlemen, and thank you for waiting. We would like to welcome everyone to Bradesco's Second Quarter 2021 Earnings Conference Call. This call is being broadcasted simultaneously through the internet on the investor relations website, bradescori.com.br/en. In that address, you can also find the presentation available for download. We inform that all participants will only be able to listen to the conference call during the company's presentation. After the presentation, there will be a question-and-answer session when further instructions will be given. Should any participant need assistance during this call, please press star zero, star one to reach the operator. Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of Banco Bradesco's management and on information currently available to the company. They involve risks, uncertainties, and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of Banco Bradesco and could cause results to differ materially from those expressed in such forward-looking statements. I'll turn the conference over to Mr. Carlos Firetti, Business Controller and Market Relations Director. Hi, everyone. Welcome to our conference call for discussions on our Q2 2021 results. We have today with us here in our headquarters, our CEO, Octavio de Lazari Jr., our Executive Vice President, André Cano, our Executive Director and CRO, Leandro Miranda, our CFO, Oswaldo Fernandes, the Bradesco Seguros CEO, Ivan Gontijo, and Banco Next Chief Executive Officer, Renato Ejnisman. I turn the floor to Leandro. Thank you, Firretti. Good morning, everyone. Thank you for your interest and for joining us on our second quarter earnings conference call. This quarter, we saw a new surge in the pandemic, which unfortunately affected a significant number of Brazilians. However, there was also a great acceleration in vaccinations, which is the only real solution for the COVID-19. The current pace is good, and we shall accelerate even further. Over the coming months, this should help Brazil achieve the benefits seen in the countries at more advanced vaccination phases. We see continued recovery on the economic fields, even with the spike in COVID cases in the beginning of the year, and especially now with vaccinations ramping up. We foresee a growth of 5.2% in the Brazilian economy in 2021. Formal employment is rapidly rising, supporting loan growth, and keeping delinquency ratios at historically low levels. Fiscal risks have eased with GDP growth, leading to a positive surprise in debt GDP ratio, and thereby enabling an appreciation of the real. On page three, we begin a discussion on our numbers. Our income in the quarter was BRL 6.3 billion, with the accumulated return reaching 18.2% over six months. The loan portfolio expanded 3% in comparison to the previous quarter and about 10% year-on-year. The Tier 1 ratio reached 14.1%, an increase of 0.5 basis points quarter-on-quarter, and 1.6 basis points year-on-year, which indicates a very comfortable capital level. So far this year, we have already distributed BRL 6 billion in the form of interest on shareholders' equity. This brought our payout to 52%. We feel that our second quarter results had a good level, driven by a robust performance in banking activity. The insurance income was adversely impacted by the increase in health and life insurance claims due to the impact from new spikes in the pandemic and a lower financial income due to variations in market indexes. The fact that we were able to deliver a strong consolidated income despite the hit taken from insurance activities demonstrates the strength of our balance sheets and our organization ability to diversify our revenue streams. Moving now to slide four, we present our income statement. As we mentioned before, the lower quarterly income primarily reflects the impact on the insurance business, which was heavily affected by the claims related to COVID-19, despite the evolution of 20% in revenue year-on-year. Looking just at income from the banking structure, the growth in the quarter was 16% compared to the first quarter. In year comparison, the income rose 125% as the second Q was the most affected by the pandemic. It's worth noting that the banking structure's income in the second Q was 23% higher than in the second Q 2019. The total NII was up 1% in the quarter and down in the annual comparison because the market NII was rather high in the second Q of 2020, thanks to the robust market recovery in that period. ALL expenses came at a very good level, posting a reduction of 10.7% quarter-on-quarter. This comes from the positive performance and defaults in our loan models. We would like to point out the sharp improvement in costs and the solid recovery in fees. Finally, when we compare our operation this half year with the first six months we had in 2019, it's possible to notice that we have had significant evolution and that we are expanding. Total revenues are up 6% and reflect the growth in the portfolio and customer base, more than absorbing the drops in spreads. Expenses fell 7.3%, even with the high inflation accumulated this period. As a consequence, the efficiency ratio reaches 45.7%, an improvement of 3.7 percentage points. We will now take a look at slide five. Our funding activities, as you may see, continue to perform well. Funds from clients grew 4.5% in the annual comparison, particularly in demand deposits and savings, the latter being an important source of funding for our mortgage loan operations. On slide six, we'll talk about the expanded portfolio, which grew 9.9% in 12 months and posted a sharp 21% hike in individuals and to 28.7% in SMEs. For large companies, the annual comparison was somewhat hampered by the solid growth of working capital lines at the start of the pandemic and greater access to the capital market at this time. Some lines report impressive levels of growth over 12 months. Real estate funding, it's grew by 40%. This performance reflects improvements in our contracting process and the strength of our origination channels. We would like to highlight our digital journey that originated around 1,700 transactions in the first semester of 2021, 4x higher than last year. Therefore, a channel that is increasingly gaining share in our mortgage origination. Payroll-deductible loans grew 19.8%, with origination concentrated on our own channels. Agricultural loans rose 18.2%, an increase of BRL 3.1 billion for companies and BRL 1.2 billion for individuals, reflecting the close relations we have with farmers through our regional agriculture platforms, which we have reinforced with agricultural engineers, along with the distribution of our branch network, which is present in the major agricultural municipalities. In SMEs, the growth of 28.7% year-on-year reflects the repositioning we made in our business retail structure, in which we tripled the number of coordinators and also added 600 relationship managers. We also reviewed the small entrepreneurs origination journey. We will have more news in the second half. Finally, I would like to highlight that the origination of loans to individuals, which had been already enjoying steady growth, progressed even further and now is 40% higher compared to the same quarter of the previous year. In this quarter, with the recovery of the economy, the origination of companies grew by around 25%. Turning now to slide seven. Our expanded ALL expenses totaled BRL 3.5 billion in the quarter, representing 1.9% of the portfolio. The level was consistent with our guidance. The reduction in cost of risk is a consequence of the positive performance in the delinquency ratios and the growth in lower-risk transactions over the last few quarters, such as real estate financing, payroll-deductible loans, as mentioned before. The 90-day coverage ratio remains at rather high levels and is expected to continue above pre-pandemic levels up to the end of this year. The coverage ratio, including the renegotiated portfolio, remained virtually stable. Turning now to slide eight, we see that delinquencies remain under control, in line with our expectations. The 90-day ratio remains stable with a 10 basis points improvement in the individual segments. The 15 to 90-day ratio showed signs of improvement in all segments. We believe that the delinquency ratios are expected to converge to near pre-pandemic levels by early 2022. This positive performance can be explained by an active portfolio management, the progress of our loan models, and journeys for credit application, as well as renegotiation that are centered on the clients. I would like to highlight that the NPL creation this quarter is at the same level of 2019. Moving to slide nine, the extended portfolio continued to improve, falling 26% year-on-year. From a balance of BRL 41.3 billion, only BRL 3.5 billion are now arrears for over 30 days. The possibility of an extension remained available to clients in the second quarter, but the demand was low. Coming to slide 10, you can see that our renegotiated portfolio declined by BRL 900 million in the second quarter this year, after holding a stable position in the first quarter. This shows a trend towards more normal loan conditions. We maintained a high level of provisions, maybe the highest compared to our peers, equivalent to 62% of the portfolio. Delinquency ratios in the renegotiated portfolio continued to be stable over the quarter, but are expected to climb by the end of the year, returning to pre-pandemic levels. Turning now to slide 11, the total NII grew 1% over the quarter. Year-on-year, there was a drop of 5.7%, thanks to the strong market NII in the second quarter of the previous year. The quarterly growth in the client NII is mainly driven by the expansion of the individuals' portfolio, mainly in personal loans, credit cards, and payroll-deductible loans, which more than offset the slowdown spreads motivated by market dynamics. We expect spreads to stabilize. Indeed, we might even improve during the second half due to the economy improvements. We now turn to slide 12. We posted a strong performance in fees. We are seeing an intense growth in the volumes transacted in both debt and credit cards, reflecting recovering economy. For checking accounts, we were able to recover the level of revenues from our network of banking correspondents due to a resumption in commercial activity. Revenues were also positively impacted by the annual growth of more than 1.7 million clients, offsetting reductions in fees and DOC revenues. In asset management, the growth over the quarter came out of the strategy to diversify into new products that have a higher added value. In addition, we experienced growth in our net funding, both in our own products as well as on third parties. This comes as a result of the work performed by our team of investment specialists, contributing to a net funding of BRL 17 billion in the first half of 2021, and also by higher revenues originated from third-party funds. We also highlight the strong performance in the income from consortium and investment bank, benefit from the favorable market window. Operating expenses, now on slide 13. As you can see, our total costs fell by 4.4% over six months. The comparison between the quarter and the previous year is impaired by the poor base of comparison, as a number of expenses were not carried out due to the pandemic. Personal expenses were primarily impacted by higher provisions for profit sharing. It's good expense, compared to the previous year, given the 60% higher net income this year. The decline in the administrative expenses for the half year reflects our stringent cost control measures and actions to optimize our cost of serving, which more than absorbed the high inflation accumulated over the 12 months, IPCA 8.3% and IGPM 35.8%. Turning now to slide 14, our insurance operations posted a robust growth of 20% in revenues and resilience in terms of income, which was BRL 2.3 billion despite the elevated level of claims due to the events related to the pandemic. On this slide, we highlight the COVID-19 impact in our insurance operations, with costs reaching BRL 1.8 billion in Q2 2021 and BRL 3 billion in the first half, totaling around BRL 4.8 billion since the beginning of the pandemic. The financial income in Q2 also was affected by the behavior of the ratios, which had an impact on the performance of financial investments as a whole. This scenario is temporary. It already shows improvements as a consequence of the vaccination, but we decided to revise our insurance guidance as well, as we are going to detail further on. Slide 15 gives an overview of weekly events related to the pandemic in our healthcare business. Here we show the curves with the volumes of PCR tests that have been administered, as well as hospitalizations for policyholders during the same periods. Since the onset of the pandemic, Bradesco Saúde's insured clients took more than 1.3 million PCR exams and approximately 78,000 ended up hospitalizations. As you can see, this graph is a good indicator for hospitalization levels, and this chart allows to expect reduction in the short future due to the recent weeks' trend, although still in high level. We now move on to slide 16. As you can see, our capital and liquidity ratios. Our Tier 1 capital ratio finished the quarter at 14.1%, and the common equity stood at 13.1%. It was an increase of 50 basis points compared to the previous quarter, and 160 basis points compared to June 2020. The ratio is well above the regulatory minimums, and it's a fairly comfortable level. Moving now to slide 17, we provide data that demonstrate the growth in the use of our digital channels. This year, 98% of transactions are already done by clients using our various channels through fluid and intuitive journeys, and an ongoing evolution towards transitioning to digital without dependence on the branch. The most significant transactional volumes are now seen in the mobile channel. The number of financial transactions in the first six months of this year reached 600 million, which is 9% higher than the previous year. We also saw a record number of accounts opened for both individuals and companies, already at volumes that are 2x as high as last year. The volume of loans coming from digital channels over the periods amounted to BRL 31 billion, 21% higher than last year. Growth in individual segments came to 54%. The number of credit card requests through digital channels grew 270%, and this year we issued 3.9 million new cards. For the insurance company, we managed to sell 1 million products through digital channels in the first half of 2021, which represents revenues of BRL 700 million and an increase of 80% compared to the same period last year. We now move on to slide 18, where you can see the evolution of our payments. The push we have been giving to Pix through client intuitive journey is driving financial inclusion and contributing to improved volume of transactions. Pix is responsible for over 50% of the increase in transactions. We witnessed a digitization of minor transactions given the fact that around 40% of the volume in Pix transactions are below BRL 50. As seen in the graphs, only processed checks and ATM withdrawals have decreased in quantity, which contributes to a reduction in our expenses. Turning now to slide 19. In addition to continually improving our channels, we have also made investments in BIA, our artificial intelligence that simplifies our clients' lives by providing an increasingly pleasant experience. I would like to point out that we are pioneers in the use of artificial intelligence in Brazil. In this first half of the year, digital interaction grew 43%, totaling 275 million interactions with clients, in which 83 million of these interactions were through WhatsApp. I'm pleased to share with you that Bradesco received, for the second consecutive year, the award as the most innovative bank in Latin America, an award organized by The Banker magazine, reflecting all the investment and focus we have placed on innovation. Turning now to slide 20, we can see Ágora, Next and Bitz. Our digital business, as you could see throughout the presentation, posted a strong performance. Agora saw nearly 50% growth over 12 months in both the number of clients and in terms of volume under custody. Agora is getting more and more important in funding for us as well, as you can see that there is an increase of 81% in that funding. Next is expected to continue its robust growth in the second half, thanks to the Member Get Member program and partnerships. The sign-up process has been improved, and 70% of our accounts are opened within 24 hours. Next has also incorporated ShopFácil, that now includes a new source of revenue from non-financial business. Finally, Bitz, the digital wallet that we introduced last September, has already surpassed 1 million accounts. Turning now to slide 21, we would like to point out that we are the first financial institution in Brazil to announce our goal to achieve a balance to the greenhouse gas emissions by our clients and invested companies, reaching what is known as net zero. This is an extension of our climate strategy. 15 years ago, Bradesco was one of the first to measure the amount of carbon generated through its own operations. As of 2019, we have neutralized 100% of these emissions. In 2020, we were also the first financial institution in Brazil to join PCAF, the Partnership for Carbon Accounting Financials. We have arrived at a new level of climate management, and we'd like to play a leading role in this transition in the country, engaging and supporting our clients to adapt their business while promoting a more efficient, clean, and climate-resilient economy. Moving now to page 22. Concerning our guidance, we consider we established a well-balanced guidance when the year began. We maintained expectations for all lines, with the exception of insurance, due to the change with the pandemic of COVID-19. We believe that we will see growth above the center of the range for the loan portfolio as well as for fees. In the center for client NII. At the bottom, fortunately, costs primarily due to the expected impacts from the collective bargaining agreement for base employees as inflation accelerated sharply in the first half. In the center of the guidance for ALL expenses. The insurance guidance was reviewed downwards. We now anticipate a drop from 15%-20% as a consequence of the drops discussed earlier today. Finally, we would like to thank you so much for making the time to be with us, and now we are going to proceed to the questions- and- answer sections. We will now initiate the question-and-answer section. If you'd like to ask a question, please dial star one. If at any point your question has been answered, you may remove your question from the queue by pressing star two key. Our first question is coming from Mario Pierry of Bank of America. Mario, your line is open. You may proceed. Hi, everybody. Good afternoon. I have two questions. First, related to your insurance operations and especially your guidance that you've given for the year. Doing the quick math here, you're basically guiding for results from insurance of about BRL 10 billion in 2021, which means an average rate of only BRL 2.6 billion in the third and fourth quarter. When we look back over the last four quarters, your results from insurance were averaging almost BRL 3.1 billion, even because you already had some big expenses related to COVID in the first quarter. I was wondering, why do you expect your run rate to remain below the last four quarters, especially considering that a higher rate should eventually be positive for your financial results. That's my first question. Second question is related to your operating expenses. You are very close to the top of your guidance here, expenses of 4%. However, we see some significant headwinds during the second half of the year, especially related to salary negotiations. Can you talk a little bit about where banks are in regards to annual salary renegotiations, and how can you offset some of this headwind in the second half of the year? Especially, when you already closed about 1,000 branches over the last one year, which is almost 25% of your branch network. Is there more room for you to reduce branches or are there efficiency gains that you can turn somewhere else? Thank you. I'm going to ask my colleagues here to help me with the two questions if I'm not able to answer all of it to you, Mario, because the sound was not that clear. As far as I understood, the first question is related to the guidance for insurance, right? Basically, the way we see the peak has passed, and therefore we shall have better quarters from now on, especially on the fourth quarter. As we continue to grow in terms of premiums, that are our revenues, and especially in life, the number of death has also passed its worst parts. Of course, it's going to come gradually, and it also depends on if we see a new mutation here, how it's going to evolve in terms of vaccination. Regarding to operating expenses, these already contemplate all the employees or personnel adjustment that we shall have in the 2nd semester. We believe that we are going to continue to reduce expenses overall despite of this increase in salaries, because basically, as Octavio was pointing out earlier, we continue to close branches and we continue to transform those branches into points of services or business units. We continue to reduce our administrative expenses as well. We understand that we are going to be able to keep the lower part of the guidance. Sorry about the quality of the sound. It's a little bit hard for us to hear as well. Just to go back on insurance, if I look at your first quarter results in insurance, you had like BRL 3.1 billion, and you already had very elevated costs related to COVID. If we think about it, your financial results should improve. Even if your COVID expenses remain elevated in line with the first quarter numbers, I was just wondering why you shouldn't be able to average BRL 3 billion per quarter in the second half of the year. Mario, basically, we are assuming in the guidance that we continue in the path to normalization in the second half. For sure, we have to do the disclaimer that, as you know, there's a lot of uncertainty on how it's going to progress. Our view is, in this path to normalization, the third quarter is going to be better than the third quarter that probably got a lot of the cost of claims that came from the peak. It's still not a normal quarter because there are a few costs that should be impacting it. We expect a gradual convergence of the inflation index that impacted the results, reducing the negative impact in our financial results. That's also something that we are cautious on forecast. I think you should take our guidance as one that takes a view of that we are going to a normalization, but not a total normalization from the beginning of the third quarter. It's something that will happen with some graduality. Okay. No, thank you. Just to follow up on insurance also, your ability to increase pricing going forward for premiums and for your plans, how do you think about that going into next year? Well, I think we are going to have a couple of benefits there. The first one is that with the improvement of the economy, pretty much companies have Bradesco Seguros as a premium plan for their employees. We have seen that we have a very high correlation in sales of our plans as the economy is getting better. That's the first one. The second one is that we are the plan that really protects the customers. The claims that we have seen here hardly ever would be accepted in other insurance companies. That's the reason why more and more people are buying the plan from us. It's a matter of the center than the clients, and therefore, we shall be keeping on the increasing revenues. Of course, the market is going to determine the prices. There is no way that we can circle them there, but the quality is being well appreciated by the markets. In addition, we are presenting a very important growth through digital channels. In the first half alone, we have a little bit more than 1 million insurance items that were acquired digitally. We see that trend continue. Also, as Leandro pointed, we see the perception of value of insurance for customers increasing, given the uncertainty we have seen and the risks perceived during the COVID crisis. We see a solid demand for life insurance, as Leandro said, health insurance, we have a premium plan. I think even if the economy has not really fully recovered, the kind of premium growth we are experiencing already show an encouraging trend. Yeah, it's very interesting to see how the digital channels are improving the sales. Pedro has a very good point there. We are using digital channels, not only the bank, but all of our platforms. Ágora is going to start to sell, also to offer insurance products to our clients. More and more, we are tapping the different pools of clients that we have. We know that we have a base of more than 7 million clients through digital channels, but from different platforms, so we can seize the best from them. Okay. Thank you very much. Thank you, Mario. Thank you very much, everyone, for making the time to be with us. Have a great day. That does conclude Bradesco's conference call for today. Thank you very much for your participation. Have a great day.