Good morning, and welcome to the fourth quarter 2022 Gentera conference call. I'd like to turn the call over to Mr. Enrique Barrera, Investor Relations Officer of the company. Sir, you may begin. Thank you. Good morning. Thank you all for joining us and for your continued interest in Gentera. I'm Enrique Barrera, the company's Investor Relations Officer. I'm very pleased to introduce our management team. With us today are Mr. Enrique Majós, Gentera's Chief Executive Officer, Mr. Patricio Diez de Bonilla, Banco Compartamos Chief Executive Officer, and Mr. Mario Langarica, Gentera's Chief Financial Officer. Enrique Majós and Mario Langarica will present Gentera results for the fourth quarter period and full year 2022, as per the report that was issued yesterday. Patricio Diez de Bonilla, along with Enrique and Mario, will actively participate in the Q&A session of this conference call. Please note that during this presentation, Gentera may make forward-looking statements. These do not account for future economic circumstances, industry conditions, company performance, or financial results. Additional information on forward-looking statements can be found in the disclaimer located in our earnings release. If you did not receive a copy of the release or if you have any questions, please do not hesitate to contact our investor relations department in Mexico City. If you are a member of the media, we ask you to contact us directly. I would now like to turn the call over to Mr. Enrique Majós for his presentation. Enrique, please go ahead. Thank you. Good morning, everyone, or maybe good afternoon for some of you. Thank you for your presence today. We are very happy to announce another great year for Gentera. 2022 was a year of historic results. We have a very good results practically in every business unit and financial indicator. Let me start by highlighting and explaining deeply some numbers that for sure you have already learned from our press release. In 2022, Gentera accomplished double-digit growth in portfolio and net income. Portfolio grew 16% and has reached a historic figure of MXN 53.6 billion. Net income reached MXN 4.6 billion. This means it grew 77% compared to 2021. We know that 2021 was a year with a low number since it was still a recovery year from the pandemic. It is remarkable that 2022 results was also 40% above the net income reached in 2019, which as you recall, was a record pre-pandemic year for Gentera. Expenses and efficiencies has been consistently under control and improving. Overall portfolio quality ended in line with expectations, with a consolidated NPLs of 3.46%. Also very important, we got back to ROE of 20%. We reached this result one year before expectations since we expected to get to this number until the end of the present year. As you can see, we have delivered higher results above the guidance provided at the beginning of last year. We are confident that the results are also a clear indicator of a solid business operation and strong position in the market. Thank you all for your trust as, after the COVID pandemic and other challenges that we have faced in the recent past years. We believe we didn't disappoint you, and our commitment is strong as ever. I want to point out that opportunities looking forward are also clear and very optimistic. There is a clear need of credit in the market, and Gentera's business units are strong, not only financially speaking, but also in terms of our operation, service, and loyalty from our customers. Actually, we are one of the first options for the market when people of the segment we serve are looking for funding options. We are also the first option for them when talking about payments, paying their loans. We are in a privileged position to start the year, and we feel excited about the promising future that Gentera has this year. After the past difficult years, we are back on track, and we have great expectations and perspective for 2023. In summary, we have the financial strength, customer loyalty, and product offer to continue adding value for each one of our stakeholders. Mario will provide more specific information about the guidance for 2023. In the meantime, let me just announce that we are guiding a portfolio growth between 12% and 14%, and EPS will be in the range of 3.14 to 3.24. We also recognize some challenges that we are already facing along the present years. Let me specifically point out two of them. We know that we will continue dealing with a complicated political, social, and economic context in Peru. Up to now, we have been not only handling the situation successfully, we have been even growing our portfolio with good quality. In fact, this is not the first time we have faced similar market conditions, and I'm talking about inflation, lockdowns, and a slowed down economy. We have always been successful dealing with this kind of challenges. Recent lockdowns in Peru have been for short periods of time, and the economic activities of our clients are flowing. NPLs in Peru may show a slight increase along the year. This is already incorporated in our 2023 guidance. The second challenge that we are facing this year is the recent increase of ConCrédito's NPL. We have been working on understanding the root causes, and we are taking action. We are happy to see that the first signs of recovery are already showing up, and we feel comfortable that we are in a typical control phase after a period of growth in our portfolio. As we have mentioned in the past, growing and controlling our portfolio is a natural cycle for our businesses, and ConCrédito's management team knows how to deal with it. Finally, let me tell you that our board of directors will submit to our annual shareholders meeting to be held in April 2023, a dividend distribution up to 40% of the net income generated by the controlling company in 2022. Getting back to 40% is a good news for our investors, and we really want to thank you again for your trust and support in the recent years when it was important to keep the company financially strong. Wrapping up, let me close with the following highlights. 2022 was a great year with historic business results for Gentera. We grew double digits in each one of our businesses. For 2023, Banco Compartamos started the year solid from previous year and with positive growth trends. Peru is moving stable and with positive trends even under an unstable environment. ConCrédito is solving the portfolio quality situation. The increase on NPL that we had in the past months is under control, and we have seen the first signs of recovery. Yastás and Aterna continue providing support to the other subsidiaries of Gentera with effectiveness and high-quality service. In fact, Aterna reported 21% increase in insurance policies placed in 2022, reaching more than 43 million insurance policies placed during the year, which is an amazing number considering the low culture of protection we used to have in our segment. Yastás continues performing exceptionally well. Through our extended network of over 6,900 affiliates, we executed over 26 million transactions during the year, which is a figure 10% larger than in 2021. Thank you for your presence again and interest in our quarterly report. Let me now turn back the call to Mario so he can give us some summary financial results. Thank you, Enrique, and good day to everyone. As always, we appreciate your interest in Gentera. As Enrique mentioned in his remarks, we're very excited with the results we're presenting, what we have achieved in the past couple of years, and we are very enthusiastic with the opportunities that lie ahead. I will focus my remarks on the following concepts: our net income generation and profitability, our portfolio growth and the performance of our margins, our asset quality, including cost of risk, allowances, NPLs, and coverage ratios, our operational expenses, ConCrédito's goodwill impact, our liquidity and capitalization levels, and our expectations for year 2023. Net income and profitability. 2022 net income amounted to MXN 4.65 billion, reaching the highest historical figure ever. Gentera's controlling participation amounted to MXN 4.55 billion, representing an EPS of 2.88, which was in the middle of our last guided range. Important to remember that given the excellent operational results observed during the year, we had a couple of upward revisions to the original year guidance. In 2022, EPS grew 94.4% compared to 2021. Gentera's full year net income amounted to MXN 829 million, representing a reduction compared to the previous quarter, mainly driven by, one, an increase in financial expenses, two, our decision to take a precautory incremental reserve in Peru at the consolidated level, three, an impairment impact on ConCrédito's goodwill, and four, a higher expenses. We are very enthusiastic about Gentera's full year controlling ROE reaching 20.2%, one year before originally expected. Total ROE amounted to 18.4%. Important to note that Banco Compartamos, our largest subsidiary, reached very strong levels of profitability in 2022, with an ROE of 31% and an ROA of 9.8%. Portfolio growth and margins. As Enrique mentioned, Gentera closed 2022 with a new historic loan portfolio of MXN 53.68 billion, growing 16% compared to year 2021. We have double-digit growth in our three credit subsidiaries. Banco Compartamos grew 15.8%, ConCrédito 24.9%, and Compartamos Financiera 15%. Following this portfolio growth, accumulated net interest income amounted to MXN 24.6 billion, growing 20% above 2021. These results were driven by a strong growth in accumulated interest income of MXN 5.6 billion that more than compensated the increase in financial expenses of MXN 771 million and the reclassification of originating expenses due to IFRS rules of MXN 730 million. The net effect resulted in a NIM of 40.2%, better than 35.5% in 2021. For your convenience, we're presenting the separate effects of financing expenses and origination and leasing agreement lines, so you can identify these movements more easily. Accumulated provisions for loan losses amounted to MXN 5.3 billion, 37% higher than in 2021. This higher level of provisions is explained by, one, the strong portfolio growth in all the subsidiaries. Two, changes in Compartamos provision methodology and its new entrepreneurial profile, which have a little larger risk profile, and a prudential reserve that we took in Peru of MXN 241 million booked at the consolidated level for Compartamos Financiera. Growing provisions were compensated by NII growth, resulted in an accumulated net interest income after provisions of MXN 19.22 billion, 16% growth compared to 2021. In 2022, NIM after provisions stood at 31.5% compared to 28.8% in 2021. For the year, we expect NIM before provisions to move around 39% and NIM after provisions around 30%. Asset quality. Cost of risk amounted to 10.6%. Excluding the additional precautionary reserves for Peru that we have already described, our cost of risk would have been at 10.1%. Allowances amounted to MXN 4.5 billion on a consolidated level. NPLs stood at 3.46%, which was above the level shown in the previous quarter, but still within the normal range, and we have explained in previous conferences this is a normalization of the business going forward. NPLs reached in 4Q 2022 was 3.46%, and our expectation for this year is to be in the range between 3.5%-4% at Gentera level. Finally, our coverage ratio in 4Q amounted to 244%, which is a solid and adequate level. Four, operational expenses. Operational expenses for the quarter, for 4Q stood at MXN 3.86 billion, which was below the level reached in 4Q 2021. For the full year, expenses stood at MXN 14.9 billion, representing 1.9% annual growth compared to 2021. Once again, it's important to note that expenses linked to credit origination and leasing agreements are now reflected in the interest expense line instead in operating expenses. At the bank level, if fees and expenses that were reflected in this line are now considered in other operating expense line. If all of these expenses would have been reflected together, the growth in FX for Gentera would have been 7.4% compared to 2021. It is also important to signal that during 2023, we will continue investing in most of our transformational initiatives that started in 2022. Considering these initiatives and inflationary impacts, our expectation for 2023 is to grow operational expenses around 11.5% compared to 2022. For the following years, we should return to single-digit growth levels for operating expenses. Compartamos goodwill impact. At the end of the year, we reviewed the annual goodwill impairment valuation of Gentera. The result of this analysis resulted in an impairment of MXN 300 million in Compartamos goodwill that was recorded in 4Q. This impairment resulted from some delays in the projected flows and an impact from the reference rate carried out for the valuation that had an increase due to the increase in rates globally of around 310 basis points. During 2023, we will be closely monitoring the projected flows as well as the assumptions used for the calculation. If any adjustment would be required, we would let you know. We firmly believe that ConCrédito has a very strong potential to generate significant value for Gentera through its geographical expansion, cross-selling, product expansion, and synergy. While we recognize this impairment today, we're certain that we will capture this value back going forward through net income. Liquidity funding and capitalization. We continue maintaining healthy liquidity, access to funding, and capitalization levels. Our liquidity position amounts to MXN 12 billion, and by year-end, Gentera's capital-to-asset ratio amounted to 34%. Banco Compartamos ECAP amounted to 39.1%. Compartamos Financiera solvency level amounted to 18.7%, and ConCrédito's capital-to-assets ratio to 52.8%. As we have mentioned in different conference calls, we have strong access to different and incremental funding sources for the holding company and our financial subsidiaries. We have kept a healthy balance in the composition of our liabilities, with a mix of short-term and long-term tenors and fixed and floating rates. Liquidity levels and access to fundings are solid and sufficient to fund the growth and are strong to face the opportunities that year 2023 and the next years will bring to Gentera. 2023 guidance and expectation. As Enrique already mentioned, we expect a year of double-digit growth for Gentera and the 3 great subsidiaries. This is growing the consolidated loan portfolio in a range between 12%-14% and EPS between 3.4 and 3.24, thus representing a 9%-12.5% growth compared to the EPS reached in 2022. Regarding other financial indicators that we have talked about in the past, I can share you the following numbers. Cost of risk should move around 10.5%- 11%. Operating expenses should grow around 11.5%, as mentioned before. Very important, we will keep controlling ROE moving around 20%. Finally, and as Enrique mentioned before, our board of directors will submit to our annual shareholders meeting to be held in April, a dividend distribution of 40% of the net income generated by the controlling company in 2022. If approved, the dividend will be paid in two installments. The first one no later than May 2023, and the second will be paid no later than November 2023. Thank you very much. That is all for my remarks, and we can open now for Q&A. Certainly. Ladies and gentlemen, to ask a question, please press star one on your telephone keypad at this time. If you're using a speakerphone, please make sure that your mute function is turned off to allow the signal to reach our equipment. Your first question is coming from Ernesto Gabilondo from Bank of America. Your line is live. Hi, good morning, Carlos, Enrique, Patricio, and Mario. Thank you for the opportunity and for taking questions. My first question will be on NIMs. Just wondering, what is the level of interest rates that you're expecting for Mexico this year? On the other hand, we think Mexico interest rates is likely approaching the peak. How should we think about the NIMs this year and for the next years? My second question is on asset quality. We saw an important deterioration in the Mexico's group and individual lending methodologies and in ConCrédito. I agree that part of the NPL expansion is explained by the accelerated loan growth. Are you evaluating some strategies to keep the NPL under control? At what level of NPLs, in each of the Mexico group loans, individual loans or ConCrédito, do you think it could be starting to be a concern? My last question is on ConCrédito. We saw that ConCrédito's ROE is at 19% in 2022. Well, it continues to be below other subsidiaries. Just wondering when do you expect ConCrédito's ROE to be back on the 20% or above? Thank you. Okay, Ernesto, thank you very much. First, for your NIM questions, we are including in our plan a 11.5% reference rate for Mexico and an 8% for Peru. All of our plan and the guidance that we have provided include those assumptions. As you mentioned, we agree that we should be close to a peak, and we hope that rates start coming down as soon as possible. We will expect a normalization for 2024 and going forward. We expect, as I mentioned in the conference call, to have a NIM before provisions around 39 and a NIM after provisions of around 30. Going forward, we think those levels could improve a little, but remember also that we are going to have a different mix in the future with more individual loans than group loans. We will be obviously making sure that our financial margins keep healthy. Your second question, Ernesto, this is Patricio, on asset quality. As you remember, in microfinance, you normally grow the customer base, the portfolio and some deterioration of your asset quality is expected as you bring to the table new customers which are riskier than existing ones. This is a normal trend in our expansion process. As of today, the reality is that the growth that we've seen in 2021, 2022 come with some asset quality, I wouldn't say deterioration, but normalization, given the fact that 2022 was a historic, low, asset quality, given the fact that it came from the pandemic years. There's nothing that we should concern at this time, both in Mexico and Peru. Our biggest, focus of not concern, but action, it's on the ConCrédito front, which we are already taking actions. You should expect that the first part of this year, the first semester, asset quality come into control because the short-term vintages of the portfolio are doing well. We will be ready to expand the business and the portfolio for the second leg of 2023. Nothing to be concerned of, and we should continue observing this as we've done in the past. Ernesto, regarding ConCrédito ROE, in our plan for this year, we expect to have ConCrédito above 20% by year-end. Thank you. Your next question is coming from Jason Mollin from Scotiabank. Your line is live. Once again, your next question is coming from Jason Mollin from Scotiabank. Your line is live. I'm sorry about that. Well, first, congratulations on the strong year. Thank you for the opportunity to ask questions. I have two questions. The first one is related to client growth expectations. The second one related to Peru. In terms of client growth, you guided for a portfolio growth of 12%-14% for 2023. I was wondering what kind of client growth is built in your guidance. Do you expect most of this portfolio growth to come from current clients, or do you expect it to come from an increase in the number of clients as well? If you can give some color here, it would be great. The second question related to the outlook for Peru. We know it's a challenging operating environment. I was wondering what's your base case in terms of portfolio growth and profitability for the Peruvian operations? Okay. Thank you, Juan. In terms of client growth, different dynamics. In Mexico, as you know, we're expanding both in Crédito Grupal and individual credit. We are renewing existing customers, but we need to adopt new ones in order to meet this 12%-14% growth for the year. You should expect for Gentera's customer growth around 9% in customers. On the Peruvian side, we are growing faster the group lending methodologies, so this is a faster client growth subsidiary. Adding up both Mexico and Peru, you should expect client growth for the year of around 9%. In terms of the Peruvian subsidiary, of course, we are in the middle of social unrest now and political changes, the reality is that the economic activity in the country remain healthy. We've seen positive trends in January, in February, and we expect to grow, for example, customers around 30% in Peru. We are committed with our Peruvian operation. More so in these difficult times, people require financing for productive activities, and this is where Compartamos Financiera really plays a key role to serving the underserved in the Peruvian market. I hope I responded both of your questions. Yes, you did. Thank you for the comments. Thank you. Your next question is coming from Yuri Fernandes from JP Morgan. Your line is live. Thank you, everybody. Thank you and congrats for the year. I have a question regarding our margins. You mentioned like cost of risk should move up on this normalization, but you expect risk-adjusted means to stay around 30%. Basically, you know, some kind of margin expansion. My question is: Where this margin expansion will come from? Like excess liquidity, you still have some buckets there. Funding costs, they were slightly under pressure this quarter. Like, how to make this margin expansion? Do you think you can reprice loans? Like, is the repricing coming mostly from Mexico, Peru? That's, that's my first question. I have a follow-up regarding asset quality. You mentioned this on normalization, but when we look to cost of risk, 10%, 11% cost of risk is historically high, right? Gentera usually, like in the previous years, was 8%-9% cost of risk, like in good years in 2018, 2019. My question is 10%-11% cost of risk the normal level we should be working for the future years? You know, like this, you know, 10.5%-11% cost of risk is something for maybe for 2023, for 2024, we may eventually work with a lower cost of risk. Thank you. Okay. Regarding number one, we have different contributors to our objective for margins. Number one is the growth in interest income, that as you know, interest income is significantly larger than the financial expenses. The growth that we expect for the year of the growth of the portfolio, it has naturally an impact on financial margin. Again, we're gonna be controlling cost of risk. All of the three lines, we will make sure that they keep under control to maintain margins. Also important to note is that we still have large liquidity. We will probably be also reducing that liquidity. Those are the main drivers for the margin, Yuri. Yuri, when you compare Gentera now, you should take into consideration that ConCrédito has a larger cost of credit than the other subsidiaries. It's not necessarily apples to apples comparison when you look backwards, because we didn't have consolidated ConCrédito in pre-pandemic years. Now around 11% is something that we feel comfortable, given the fact that we are diversifying products and we have ConCrédito under Gentera. Per-perfect, guys. Thank you. Thank you, Yuri. Thank you. Your next question is coming from Andrés Soto from Santander. Your line is live. Uh, good morning to all. Thank you so much for the presentation. Um, my question is, uh, regarding the, the impairment, uh, for the ConCrédito investment. I would like to, to understand a little bit more about that and what is the possibility, uh, for us to see additional impairments. Can you give us a sense of, from, from the, the money that you paid for this, how much, uh, is, is goodwill, how much is tangible book? And, and based on that, uh, what will be the worst case scenario for, for this, uh, uh, investment? Thank you very much. Yes, as we mentioned, the main reason for the impairment was a delay in our original plans. As Enrique mentioned and as Patricio has mentioned, we are in a phase of growth and expansion, geographical and cross-selling and new selling methodologies for ConCrédito that we're testing. We're in this risk growth, risk road mode, risk control road mode that Enrique explained. This last year, we had a delay in the projection. You know that we have to do the annual review of the impairment of the goodwill. In December, when we did this, we had a correction in the projections going forward. That was not really the main effect. The main effect came from the discount rate. The discount rate, as you, as we all know, in all the assets, CAPM had impact in the valuation. We had a 300 or so basis points increasing the reference rate that is one of the components of the discount rate. Having said that, we have the commitment to continue reviewing the projections very closely during the year. We are very confident that ConCrédito will pick up. In fact, the January numbers show a very good growth with good control of risk. We're very confident that the projections will come back and will start behaving back. We as management at this point, don't think that we will have another impairment. In the stress test and in the worst case, we shouldn't expect nothing above the 22 number. Obviously that number is very, very manageable from us, and we will make sure that we reach the EPS guidance that we have already given, even if an additional impairment happens. Perfect, Mario. just to understand. You say the worst case scenario is another MXN 300 million impairment, right? Yeah. In the worst case, that would be. Again, we are very confident that we will meet the projections for the year. Okay. That's very clear. Thank you so much. Thank you. Your next question is coming from Carlos Gómez from HSBC. Your line is live. Thank you, Mario. If I can ask a little bit more on ConCrédito. The first thing is, can you remind us what discount rate you have used? If the discount rate falls, by the end of the year as it is expected, would that mean that you would reevaluate the goodwill and therefore might, you know, might recalculate it again? The second thing is there any consequence for the shareholding that you have in ConCrédito or for the minorities that you have on ConCrédito from this reevaluation in the business? The last one is if you can remind us, is if your shareholding is now stable or you have additional options to purchase a further stake in the future. Thank you. Okay. Yeah. Regarding the discount rate, we don't give the number we use. The reference rate that we use, which has the highest impact, is the 20-year treasury bonds. That was the one that had the major impact. The second one, s orry, was, Carlos? Shareholder. Shareholder. Well, the original contract already has the conditions for the pricing. That hasn't changed, and that will remain going forward. At this point, we don't think that we think that we'll keep the current shareholder base. We're very happy with our partners. One, as you know, is the founding partner of ConCrédito, and he will remain with us for years to come because his expertise, his know-how, his leadership is very strong for ConCrédito and very valuable for us. The second shareholder, who was one of the, if you want, the founding believers in ConCrédito, will be with us going forward. He's an entrepreneur and he's a board member. He's Juan Carlos Torre. Both will stay with us for years to come. I don't know, Enrique, you would like to add something else? No. First of all, it is nice to hear from you, Carlos. Hello, this is Enrique. Yes, as Mario mentioned, we are very happy with how we are working with our partners, and we feel that this is the mix that we want to keep looking forward. As you know, ConCrédito is a new business model for us. It is serving the same segments that we have or we have traditionally had in Compartamos, they have a different product. It's more like a consumer credit loan. On the other hand, the methodology is different. Having people that really know how to manage and how to grow this business, for us is very important. If we have people that we trust and that we have a very profound alignment in our vision for the future, well, that's the best scenario we can have. Yes, we are happy, and we will be stable with this mix. That's very clear. Thank you. If I can ask, as you said, this is a new part of the business. It's about 7% of your total portfolio today. Where would you aspire to bring it to in the next, let's say, three or five years? How big should ConCrédito be in the future? Thank you. Well, ConCrédito, as we have explained in previous calls, is, it's a different model, that strategically for Gentera is very important because we have now two different methodologies, serving maybe the same segments, but with different products. Additionally, we have CrediTienda. All this putting in the table all these elements, what we see, and that was the reason we bought this participation in the company, was that in the future, we see growth over 25%-30% in the following years. The thing here is that we have to understand that this, as a credit business, and we know about credit businesses, we have maybe some periods of time in which we have to grow, and then there are some periods of time that we have to control the growth and make sure that we are having the high quality of the portfolio that we are looking for. Yeah, I see that we, as Mario said, we have very, very positive perspectives looking forward. It's a high-growth company, and We're putting all our effort and strategy to make this happen in the following years. Thank you so much, Enrique. Thank you. Your next question is coming from Gilberto García from Barclays. Your line is live. Hi. Good morning. Thank you for the call. I had a follow-up on your funding strategy. You mentioned that you can reduce the cash that you are carrying. Can you tell us what the goal would be and at what point would you aim to reach that? Thank you. At, at the bank level, we would expect that probably we would reduce, around MXN 2,000, sorry, million. Is that. That's. for end of the year? Yeah. Yeah, during the year. Again, we think that we have a very good balance sheet and very strong balance sheet structure compared to many other participants in the market. We can reduce those 2,000, and we will be doing it as we feel comfortable. The most important thing is to make sure that we keep the balance sheet very strong. Okay. Thank you very much. Thank you. With no further questions in the queue, the question and answer session concludes. I will now hand the conference over to management of the company for final remarks. Thank you. Well, thank you for your comments, your questions, your interest. For us, it's always very enlightening, talking with you, not only in this call, but also in the individual calls that we have with you. Thank you for that, and we will be in touch. We have a promising year this 2023, and we are sure that we will deliver very good results this year too, as we did it last year. Thank you so much and have a nice day. Thank you all for participating in today's conference call. You may now disconnect.