XP (XP) Q1 2026 Earnings Call Transcript

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DATE

Monday, May 18, 2026 at 5 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Thiago Maffra
• Chief Financial Officer — Victor Andreu Mansur Farinassi

TAKEAWAYS

• Total Client Assets -- BRL 2.1 trillion, a 21% increase year over year, reflecting expansion in both asset management and fund administration businesses.
• Gross Revenue -- $4.9 billion, up 8% year over year and down 7% sequentially from Q4 2025, with annual growth driven by retail verticals and wholesale banking.
• Net Income -- $1.3 billion, up 7% year over year, stable sequentially; net margin reached 27.8%, down 30 basis points year over year and up 122 basis points from Q4 2025.
• ROE (Return on Equity) -- 21.7% for the quarter, with a BIS capital ratio at 20.7%, above stated guidance of 16%-19%.
• Diluted Adjusted EPS -- Increased 9% year over year, outpacing net income growth, supported by share repurchase activity.
• Retail Net New Money -- $19 billion of organic retail inflows, offset by a BRL 4 billion decline in corporate and institutional, resulting in a total of approximately BRL 14 billion net inflows for the quarter.
• Retail Revenue -- BRL 800 million, a 10% increase year over year and a 2% decline sequentially, attributed to softness in corporate credit.
• Equities Revenue -- Almost BRL 1.2 billion, rising 13% sequentially and 22% year over year due to higher average daily trading volumes in equities and futures.
• Wholesale and Institutional Revenue -- Combined business lines in wholesale grew 26% year over year, with growth attributed to derivatives, FX, and institutional trading volumes.
• SG&A Expenses -- BRL 1.6 billion, up 14% year over year and down 6% sequentially; last 12 months efficiency ratio at 34.6%, a 100 basis point increase year over year.
• Adjusted EBT -- $1.4 billion, up 8% year over year and down 14% from Q4 2025; EBT margin stable year over year at 30%.
• Capital Returns -- New buyback program of BRL 1 billion announced, nearly half of current BRL 1 billion program executed; BRL 500 million in dividends to be paid June 18, totaling approximately BRL 2.5 billion capital returned or committed in 2026.
• Adjusted RWA (Risk-Weighted Assets) -- BRL 122 billion, up 3% sequentially, with market RWA up 2% and credit RWA stable.
• Management Transition -- Gustavo Vallejo appointed new CFO, replacing Victor Andreu Mansur Farinassi; described as a "well planned transition" aimed at supporting expansion in banking products.
• NPS (Net Promoter Score) -- Reported as impacted by one-off effects at Banco Master, Q1 NPS noted as 61 on a moving average basis; most recent weekly indicator near 70, with expectations to reach “historical levels by year end.”
• Product and Fee Model Evolution -- 25% of individual assets under custody (AUC) now under flat fees or fee-based models, with management targeting approximately 50% in the next three to five years.

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RISKS

• Thiago Maffra stated, "In March, there was a widening on the credit spreads. Even for AAA names, AA names, So we lost some money on mark to market," noting that most of the loss was not realized, and further said, "We do not expect the market to recover on Q2," although impacts are not expected to be as significant as in Q1.
• SG&A efficiency ratio increased by 100 basis points year over year due to revenue softness from higher market volatility and wider credit spreads, though management expects normalization by year end.
• On fixed income funds, Maffra stated, net flow of the credit funds, There are still redemptions, so they are still negative. indicating ongoing outflows in this product despite some stabilization in May.

SUMMARY

XP (NASDAQ:XP) reported year-over-year growth across all primary financial metrics, supported by expansion in client assets, increased retail and wholesale activity, and higher trading revenues. Management communicated a leadership change in the CFO role and described ongoing shifts toward diversified fee models and enhanced risk controls. The company attributed recent margin pressure and increased SG&A efficiency ratios to temporary volatility in credit markets and noted continued negative flows in fixed income funds. Recent stabilization in markets and ongoing capital returns provide management with confidence for double-digit growth in 2026.

• XP introduced a new managerial P&L structure, integrating the institutional business into wholesale and removing the previous ‘other revenue’ line, aligning its disclosure with industry practices.
• The company stated, "we are confident we can return to double digit growth supported by stronger execution across key verticals and a more diversified revenue base."
• CEO Maffra said, We do not have any change on our strategy, so it is the same directly addressing investor concerns about the impact of the CFO transition on company direction.
• Short-term volatility in March and April led to wider credit spreads and affected mark-to-market revenues, though leadership expects these effects to diminish over subsequent quarters absent further market disruption.
• XP is increasing the proportion of fee-based and flat-fee advisory models, aiming for approximately half of AUC under such arrangements within five years.

INDUSTRY GLOSSARY

• AUA (Assets Under Administration): Assets held by XP on behalf of clients for safekeeping and administrative purposes, excluding assets actively managed by the firm.
• DCM (Debt Capital Markets): Business line focused on the issuance, structuring, and trading of fixed income securities such as bonds.
• FGC: Fundo Garantidor de Créditos, Brazil’s private deposit insurance and investor protection fund for financial institutions.
• NPS (Net Promoter Score): Customer loyalty metric based on the likelihood of clients to recommend XP’s platform, tracked on a moving-average basis.
• RWA (Risk-Weighted Assets): Metric representing the total of assets held by XP, weighted according to associated credit, market, and operational risks for regulatory capital purposes.

Full Conference Call Transcript

Thiago Maffra: Good evening, everyone. Thank you, Andre. Good evening, everyone, and thank you for joining us for the first quarter 26 earnings call. Let's begin by reviewing the key highlights of the quarter. Client assets, combining AUM and AUA reached BRL 2.1 trillion, which represents a 21% year over year growth. We ended the period with 18.3 thousand advisers, up 1% year over year. While our active client base totaled 4.8 million, a 2% year over year increase. This quarter, gross revenues came in at $4.9 billion up 8% year over year. EBT also grew 8% to $1.4 billion and net income reached $1.3 billion rising 7% year over year. On profitability, our ROE achieved 21.7% for the quarter.

Our capital ratio remained at a comfortable 20.7% More importantly, these results reflect our ability to grow our business while maintaining disciplined capital and risk management. I would also like to highlight that today we are announcing a new buyback program of BRL 1 billion as of now, we have executed almost half of the currently $1 billion open program. Additionally, we are also declaring BRL 500 million in dividends to be paid in June. Victor, will provide more details in his presentation. Now moving to our diluted EPS, it grew 9% year-over-year, outpacing net income growth. We enter 2026 with solid momentum, largely driven by the global macro environment as a weaker U.S.

Dollar and a rotation toward non U. S. Assets boosted emerging markets inflows, which helped improve Brazil market dynamics and enabled us to sustain the growth momentum built in the second half of last year. However, as you know, the environment changed in March. Increased global volatility pressured local market sentiment, while domestic spread spreads widen at the same time, driven by technical factors. These developments were external to our underlying performance. Excluding these external factors, we would have delivered even stronger results achieving double digit growth. We saw the spread trend continued into April. However, we now see a better balance between buyers and sellers in the market, leading spreads into a more stable phase.

Despite just widening, in April, we do not expect an impact on the same magnitude as we saw in the first quarter. That said, we still see our business growing double digits this year. Additionally, we are now seeing the early stages of an interest rate easing cycle. While the pace of easing is expected to be more gradual than previously anticipated rates are still at high levels. And despite global uncertainties, there is still room for further cuts. This ongoing easing cycle, even if it is lower, supports our business momentum. as this positively impacts investor risk appetite and turnover velocity.

The short term volatility we mentioned earlier may have briefly slowed our growth momentum towards the end of this quarter. Even so, we are confident we can return to double digit growth supported by stronger execution across key verticals and a more diversified revenue base. Our unique scale and differentiated retail investments platform provides a competitive edge unmatched by any other player in the market. In addition, we now operate within a much broader ecosystem, and our corporate segment has definitely reached new standards that extend beyond pure investment banking. Together, these strengths helped partially offset the impact of higher volatility referenced earlier reinforcing retail investments and corporate as important drivers of growth and diversification.

Finally, the powerful combination of service excellence strong client relationships, and financial performance together with a sales force that has aligned incentives and robust capabilities corroborates our conviction that disciplined execution backed by governance and technology will drive our performance. Ultimately, our ability to execute this strategy is what will enable us to achieve our long term objectives in all our divisions, regardless of the current macroeconomic environment. Now moving to the next slide. In 2026, our total client assets combined with assets under management from our asset management business and AUA from our fund administration business, totaled over $2.1 trillion representing a 21% growth year over year.

We are strategically positioned for our next growth phase and remain focused on our ambition to become Brazil's leader in investments by 2033. To achieve that goal, despite external uncertainties, we are executing a strategy built to consistently deliver double digit growth. We are also constantly investing in your ecosystem and advisors in strengthening what is already Brazil's largest and most complete investment platform. We are the only player that can lead the democratization of access to first-class financial services, supporting clients with a holistic approach built on financial and wealth planning. Delivered at scale and with strong governance. The market has recognized these capabilities. As we were recently named for the 8th consecutive year, the best financial advisory platform.

With that, let's move to the next slide. On the left hand side of this slide, you can see how net new money related to client assets performed at the start of 2026. In Q1, we posted $19 billion of organic retail net new money, while corporate and institutional came in at negative BRL 4 billion bringing the total for the quarter to approximately BRL 14 billion. So we once again reached our guidance of around $20 billion in retail net new money per quarter. During the first quarter of the year, clients' receivables following these FGC-related inflows reflect the consistent execution of our advisers and the strength of our brand.

Related to that, and as we mentioned last quarter, our NPS was impacted by 1-off effects related to credit events and Banco Master. They temporarily affected a specific group of clients and consequently our overall NPS. First quarter's NPS is still impacted by them, due to a calculation methodology using a moving average. However, we are already on a consistent recovery path, and more recent indicators were positive with NPS coming around 70. We expect to return to historical levels by year end. Demonstrating the strength of our brand and the trust clients place in our platform.

Lastly, I would like to take a closer look at our retail strategy and share a bit more detail about this area of the business. Investments or core franchise remain solid supported by healthy underlying trends and continue to serve as a key driver of our results. We are further strengthening what we view as the markets best and most comprehensive product platform while also improving adviser productivity. This progress is underpinned by excellence in relationship management and a more intelligent, disciplined allocation process. Following our refined client segmentation, we developed tailored service models for each segment ensuring our approach is aligned with distinct needs for each client group.

In retail clients, we have developed a new value proposition grounded in goal based investing and managed portfolios. With that, we are already seeing improvements in this segment, supported by margin accretive dynamics. Our strategy is to extend this approach to other client layers, using technology, process, governance as key enablers to scale in a profitable way. In high income, our core segment, we deliver a distinctive value proposition, having been true pioneers in democratizing access to financial and wealth planning in Brazil. In addition to our differentiated advisory model, we were the first player to offer a truly agnostic service model enabling us to address the latest client demand.

We also continue to expand our sales channels invest in new products and services and enhance the client journey by providing the best tools available in the market. In private banking, we continue to gain market share by enhancing our offering and leveraging our broader ecosystem to address clients' needs more comprehensively. We have evolved into a full service wealth manager, serving clients both individual and corporate needs. Supported by a robust product platform and a highly skilled team. As our private banking franchise matures, we are becoming increasingly well positioned to compete with larger players in this segment.

In addition, our private segment has become a fundamental part of our ecosystem, serving as an important source of cross selling opportunities and referrals for other businesses. Among the 3 growth drivers, that directly impact our business, take rates are the only variable that we do not control 100%, as product mix and asset turnover are driven by investor sentiment and market momentum. On the other hand, our other growth drivers are fully within our control. And support our long term journey. We have also partially offset the take rate effect through revenue diversification, growth in advisory fee based models and expansion into new verticals.

Before I hand over to Victor, I want to quickly comment on the 6-Ks we just released. Today, we are announcing that Gustavo Vallejo has been appointed as XP's new CFO. This is part of a thoughtful and well planned transition. Marking a new chapter for XP as the bank continues to grow within our ecosystem. Vallejo is a seasoned executive with a remarkable track record and his expertise will be instrumental to our expansion strategy. We are truly pleased to welcome him to our team. I also want to take this moment to express my gratitude to Victor. Over more than a decade, he has been a central figure in XP's journey.

His dedication and contributions have been fundamental to the growth and development of this company. Victor will remain part of the XP ecosystem, supporting us in new ventures ahead. I sincerely thank him for everything he has built here. And I wish him every success in what comes next over to you, Victor.

Victor Andreu Mansur Farinassi: I would like to thank Maffra, Benchimol, all our partners and shareholders for the trust they deposited in me throughout all those years. I have been in the company for almost 15 years, and time passed quickly when we are building something that matters. that is what we have done at XP. Changed the way Brazilian invested and related to money. After almost 15 years, I decided to step down, but to continue as a partner, member of the board of several of the investments in your portfolio and contributing to the XP ecosystem in new ways. This transition was carefully planned with XP's long-term vision always guiding our decisions.

I would also like to thank the people who made this journey possible, especially all the incredible team I got to work very closely during my tenure as CFO. To each of you, thank you. it is been a genuine honor. I am sure that the best is still ahead. Thanks. And now let's review our financial performance. I would like to begin by noting that in this quarter, we are introducing our new managerial P&L, a revenue breakdown more accurately reflect how we operate the company, Under this framework, we are organizing our business lines into 2 main segments, retail and wholesale.

Along with this change, the institutional business has been incorporated into the wholesale division. aligning the reporting structure with the profile of clients we serve within this segment. Additionally, accompanying the final phase of restructuring, the other revenue line has become less relevant over the years and ceased to exist, being incorporated in the net interest margin across our business lines. With this, we provide a clearer and more consistent view of our operational structure and revenue generation. As a part of the same process, our proprietary funds were transferred into the bank structure. Consequently, we will no longer present the 'holdco' tax adjustments.

Instead, we now report our managerial results with other tax-equivalent reclassifications, consistent with the approach already adopted by other market players. This change improves the understanding of our results and aligns the market views more closely with the way we manage the company. All figures show throughout this presentation have been retrospectively adjusted to preserve comparability across periods. Finally, it is important to note that these new adjustments are IFRS compliant. If no changes to our gross revenue, net income or metrics. Given that context, let's now move to the quarter results. Total gross revenue in the first quarter reached $4.9 billion up 8% year over year and down 7% quarter over quarter.

The year-over-year growth was driven by our actions in retail, verticals, and other retail, with new ventures and floating expanding at a rapid pace. The wholesale bank division also delivered growth year over year. Now let's move to retail revenue. Retail revenue totaled BRL 800 million in the quarter, representing a 10% growth year over year and a 2% decline quarter over quarter, reflecting the impact on corporate credit in Brazil already explained before. Building on the market momentum that began in 2025, we saw increasing equity volumes driven by higher ADTV in equities and futures. Consequently, Equities revenues increased 13% quarter over quarter and 22% when compared to the same period of last year. Reaching almost BRL 1.2 billion.

As a result, equity revenue increased its shares of total gross revenue breakdown both year over year and versus the prior quarter, reaching 1% in the first quarter in 2026. Also, retail benefited from strong contributions from float and new verticals, which are reported in the other retail line and gaining representativeness during the quarter. Now let's move on to the next slide. Where we will talk through how our wholesale banking is evolving. As we mentioned earlier, now include our institutional business in the wholesale segment, Taken together, these 3 business lines grew 26% year over year. This same market figure showed a reduced volume in debt capital markets and fixed income offers in 2026.

With that, issue services revenues were down following the same rationale of retail fixed income. On corporate segment, we posted another solid result reaching almost BRL 500 million in revenues due to high volatility, we were able to serve our clients with more trading solutions. with derivatives and FX boosting revenues. This reinforced the consolidation of our franchise, which developed meaningfully through the years, become an important factor for consistency and an important driver in terms of growth and diversification. Finally, our institutional business grew both year over year and quarter over quarter. This segment, the same as retail actions, benefited from higher trading volumes during the quarter. Now let's shift our focus to SG&A efficiency ratios.

As mentioned earlier, we are introducing a new disclosure methodology which is better aligned to market peers and increase our results comparability. We can find a reconciliation and additional details about the new methodology in the appendix With that, our SG&A totaled BRL 1.6 billion in this quarter. Increased 14% year over year and declining 6% quarter over quarter. On the right hand side of the slide, our last 12 months efficiency ratio was 34.6%, representing a year-over-year increase of 100 basis points. The short term increase was caused by market events that temporarily impact our revenues in the first quarter as previously explained. As commented before, we expect to see a normalization of the ratios throughout the year.

Ending 2026 with a flattish number when compared to 2025. Moving on to EBT now. Our adjusted EBT totaled $1.4 billion in the first quarter, up 8% year over year and down 14% quarter over quarter. The adjusted EBT margin was 30%, stable versus the prior year and was lower quarter over quarter. As mentioned in the previous slide, market events impacted revenues and therefore, our EBT and EBT margin in 2026. On the next slide, we will see our adjusted net income. Adjusted net income in the first quarter totaled BRL 1.3 billion, representing a 7% increase year over year and the remaining roughly stable sequentially.

Net margins were 27.8% in 1Q26, down 30 bps year over year and a 122 bps higher sequentially. Let's move on to the next slide to talk about capital management. I will start by discussing capital returns. During the first quarter of the year, we continued execution on our share buyback program. And as of now, we have executed almost half of it. As Maffra mentioned earlier, today, we announced a new buyback program of BRL 1 billion and also the payment of BRL 500 million in dividends to be paid on June 18, Combining the dividends and the 2 buyback programs, we get to almost BRL 2.5 billion in capital distribution already announced in 2026.

Now let's move on the second part of our capital management strategy on the next slide. Our adjusted diluted EPS increased approximately 9% year over year. Reflect the execution of our share buyback program. This allowed our EPS to expand at a faster pace than net income. On the right hand side of this slide, you can see our adjusted annualized ROTE and ROE. Given our higher BIS ratio than last quarter, both metrics are lower this quarter than the last quarter. If we were operating the business with 17.5% BIS ratio, which is the midpoint of our guidance, our LTM ROE would have been around 30%, 24% respectively.

Let's move on to the next slide to give some additional details on our capital management, I would like to turn to our capital ratio under our risk weighted assets. Before going through the numbers, I want to highlight that even in a quarter market by elevated volatility, across both local international markets, Our disciplined risk management approach translated into a well controlled risk profile, lower VaR, and flat HRWA. Our VAR declined sequentially, closing the quarter at 14 basis points, 3 basis points lower than prior quarter. Our RWA ended the first quarter at BRL 122 billion, up 3% quarter over quarter. Credit RWA remained essentially stable.

Market RWA grew just 2% in the quarter, both expand at a lower pace than our revenues. And the main trigger of expansion of risk was the operational risk weighted assets. Despite the market dynamics we mentioned, our risk is under control, our balance sheet is sound, and we expect that to remain the case throughout the year. Consistent with what we have communicated to the market. Finally, we closed the quarter with a BIS ratio of 20.7%. Which is above our guidance of BIS ratio of 16% to 19% by the end of the year.

As communicated last quarter, we entered 2026 with a comfortable capital position that gives us flexibility to navigate different scenarios and remain well positioned in any potential volatility coming from internal or external markets throughout the year, even though we know this is a higher capitalization level than the company requires to operate, and we are committed to reach our guidance by the end of the year. And with that, we will now move to the Q&A session.

Operator: The first question is from Tito Labarta. Goldman Sachs. Tito, please.

Analyst (Tito Labarta): Hi, good evening. Thanks for the call and taking my question. And, Victor, good luck on your future endeavors. Thanks for all the help over the last few years. So maybe a couple questions. Maybe just 1, I guess, can you give a little bit more color on the decision to step down and the new CFO just understanding a little bit more? Some of the rationale behind that. And then second question, you talked a little bit about the widening of the credit spreads. But just to understand, do you expect that to recover maybe completely in February? Would that take a little bit longer?

Just to think about how that could impact your revenues for not just for 2Q, but also for the rest of the year? Thank you.

Thiago Maffra: Good evening, everyone, and thank you for the question, Tito. The first question about why, what is the reason behind the move of Victor is a transition that we have been discussing for, I would say, a few months, or, like, half a year. To do this transition, to find someone, with, more background in banking, and the banking products that we have been developing for both individuals and capital markets on the wholesale bank.

So it was a well planned transition, and you guys know the changes that happened at Santander, and it there was an opportunity to bring Gustavo Vallejo, who has more than 30 years of background in corporate, in credit, on credit, and as a CFO, and as a CFO. So it was an opportunity to bring someone with the background that we were looking for. So Victor is an important partner of the company. He has been with us for 15 years. He will continue to be a partner of the company and will help us on new ventures in the company in the future.

About the second question, if we did not have any credit loss because it is mainly tradable, fixed income that we have market to market on the positions. You guys know very well what happened on the credit market, since the beginning of the year. In March, there was a widening on the credit spreads. Even for AAA names, AA names, So we lost some money on mark to market. As you mentioned, we did not realize most of this loss. We do not expect the market to recover on Q2 because if you take a look on what happened in April, there was also a widening on the spreads, much smaller than in March, than in the first quarter.

We do not expect any impact on Q2 because our ecosystem and the other business lines will compensate for even more than what we lost in April. In May, we saw the credit spreads stabilizing. But we do not expect them to start, closing, this quarter. But let's see what happened. But for the year, we do not expect any further impacts on top line growth. that is why we are confident that we can deliver a double-digit growth for the year.

And if you take a look on what happened, just a 1-off widening of spreads on Q1, If we take that off, we would probably be at low teens, very close to what we have planned because all the business lines besides the credit spread, the widening on credit spreads and the primary market on DCM, besides these 2 business lines all the businesses were, like, in line with what we have planned for the year. So we are confident that we can resume higher growth in Q2.

Analyst (Tito Labarta): Great. No. that is helpful, Maffra. Thank you for that. If I can, just 1 quick follow-up on the management transition, I guess. And I know you have been talking more about capital ratios and then you have excess capital. given you have the banking license. But I think investors still view you a little bit more as an investment platform. Should we begin to think of you more as a bank? I mean, does this indicate any major change in strategy that we should kinda take into account, or is it is it just you kind of need somebody given in the capital requirements and things like that?

Just to understand a little bit how that plays into the strategy to some extent.

Thiago Maffra: We do not have any change on our strategy, so it is the same thing we have been talking for the past 3 years. So no major change, no big change. it is more of the same, looking forward, so no change in the strategy. Okay, great. Thank you.

Operator: Okay. Next question is from Thiago Bovolenta Batista, UBS. Thiago, please, you can make your question.

Analyst (Thiago Batista): Hi, guys. Can you hear me? Can you hear me? So, first of all Yes, we can. Mansur, thanks for all the help in the last years. I have 2 questions, to be honest. The first 1, when I look for the capital distribution, historically, you have paid half in dividends and half as buyback. So how do you think, on the future capital distribution? How do you think between these, 2 types of distribution, buyback and dividends? And the second 1, on the DCM side, I know that there is a lot of moving parts here. So The yield curve increased a lot. Spreads are higher than average. We also are seeing, inflows in the fixed income funds.

So how do you think about the DCM business? I know that it is a very tough view, but very tough to have a view on the performance of this business. But how you guys are seeing the DCM business until the end of the year?

Victor Andreu Mansur Farinassi: Hi, Batista. I am going to take the first 1 here, and the second will go to Maffra. First, in capital distribution, I think we are in the middle of the year. We all can do the math on how much cash we need to devote to shareholders should be inside our guidance. I think for now, more than half than what is announced, actually BRL 2 billion is buybacks. And BRL 500 million are dividends. I think for our mix of shareholders, and the price of the stock now, that is the best mix. And we are going to keep this pace, over the year to get the remainder of the guidance.

And exactly what would be the combination between 1 and the other depend on the stock level and the market environment, and then and then we go. But for now, more than 75% is buybacks.

Thiago Maffra: Yeah. On the second part of your question, as you mentioned, there are a lot of moving parts, here. But as I already mentioned, we saw the widening credit spreads continuing in April. in a smaller size than in March. In May, we are starting to see a more stable market So we start to see some buyers in the market. But if you look at the net flow of the credit funds, There are still redemptions, so they are still negative. But on the other side, they are all time high, in cash. Okay?

So we believe, if the market the global market stabilize, we believe we will see the beginning, maybe the beginning of the spread compression on the next, months. So that is the view we have right now looking at the numbers and the flows. Okay. We are starting to see, retail clients, buy corporate bonds. that is, something that did not happen since I would say, January or February. So we have early signs of a more stable market, but too early to say if we will see compression.

Analyst (Thiago Batista): I do not expect compression in Q2. Okay? So it is more for Q3 or Q4. Very clear.

Operator: Okay. Next question is from Eduardo Rosman, BTG. Eduardo, you may proceed.

Analyst (Eduardo Rosman): Hi, everyone. 2 questions here. The first is on a follow-up on the top line. Right? I think Maffra mentioned that you guys are still confident about growing double digits. But in case things are a little bit slower, can you do anything else on the cost side to compensate? So that would be question number 1. And question number 2, can you give us an update on the movement to the fixed base fee? How is that evolving? How IFAs are reacting and embracing the change? Thanks.

Victor Andreu Mansur Farinassi: Hi, Rosman. Thank you for your question. If you The first 1 here, the compression in efficiency ratio in the first quarter was due to the softness in revenues that Maffra commented on in the fixed income and issuance services. I said that it would be flattish year over year. And I think over the year, if the scenario starts deteriorating, we are committed to not lose efficiency because of costs. So there is margin, of course, the initial plan is to keep our investments. But if needed, we are committed to delivering a flattish efficiency ratio over the year and keep the pace of the revenue.

Thiago Maffra: Yes. On your second question, for sure, you have seen that we are doing advertisement, marketing campaigns about the multiple models that we have today. So we are basically the only house to offer to our customers all different models to serve our clients and the way they pay for that. Okay? So today, I would say about 25%, of our total individual AUC is under flat fees or fee based model. So it is growing. We believe in 3, 4 years, it is probably be half of the AUC. When you look at the consulting model or fee based model.

So these models, they are growing and we expect them, like, to reach 50%, I would say, in the next 3, 4, 5 years.

Analyst (Eduardo Rosman): Great. Thanks a lot.

Operator: Okay. Next question is from Jorge Curie from Morgan Stanley. Jorge, you may proceed. Okay. We go to the next 1. So the next 1 is Eric Ito from Bradesco BBI. Eric, you may proceed.

Analyst: Hi. Hi, it is Eric from Bradesco. Thank you for the opportunity, and Victor as well, thank you for the partnership, and wish you all the best for the future. I have 2 on my side as well. First is a follow-up on the impact from the yield curve. If you could just quantify in the quarter how much was the impact here. And if you could also give us some color on any potential 1-off impacts from the FGC payments or allocation on this product? And if you could also, help us understand which products are clients putting money into with the reimbursement from FGC?

Just to help us understand what we can expect for the fixed income take rate going forward. And then my second 1 is on the warehousing strategy here. If you could give us some color and recall what is the average duration that the credit stays in your in your warehouse, how should we think about distribution versus retention going forward? Any update and or change in the strategy here? Thank you.

Victor Andreu Mansur Farinassi: Eric. Thank you. Thanks for your question. First of all, about the interest rates level. I think despite the business impacts, in terms of macro tailwind and product allocation, When you look at the effects on the company, it is actually better for several business lines are floating, return on capital and then you go as we commented, floating inside the retail other revenues 1 of the drivers of growth inside retail. And about the allocation of premiums, you are going to see that in the prepayments inside of our balance sheet. And it is just important to remember that there is no P and L effect in that. And oh, okay.

And the last part about where the clients are allocating money. I think at the beginning of the year, we will talk a lot about the positive tailwind we had in Brazil and overall markets. And I think if the war and the and the easing side coin coming from 300 to 70 basis points, Clients move back to fixed income and short term fixed income. I think we are basically in the same case we were in the second semester of 2025. Almost all of the cash goes to short term fixed income.

Thiago Maffra: Okay. Thank you. Duration of the warehouse portfolio, I think that was the last question. it is-- it is the same. it is hopefully between 3 to 6 months. Of course, this widening in the credit spread may change a little bit the dynamics, but that is our base case, and we should keep this way over the year.

Analyst: Okay. Perfect. Thank you.

Operator: Okay. Next question is from Arnon Shirazi from Citi. Arnon, you may proceed.

Analyst (Arnon Shirazi): Hi, all. Good evening. Thanks for opportunity. Last quarter, a quick question regarding the NPS. We saw that it was low in the 4Q, now decreasing in this first quarter. We know that is tracking the last 6 months, but it is still low at 61. I want to get a view on this on the recent trend and if you expect it to be better in the next months or quarters. Thank you.

Thiago Maffra: Yeah. that is a good question. As we use a moving average here, the low number was in December and early January. So Q1 was the worst moving average. On Q2, you see the number, improving. And if we look at the number where we are right now, it is already at 70. Okay? So 70. So we are almost back on the current level. But, again, as we report a moving average, you will see Q2 higher than Q1 but not at 70 yet. So probably on Q3, you will see 70-plus and be back to normal levels.

Analyst (Arnon Shirazi): Great. Thank you.

Operator: This has come to an end. It will be more than a pleasure to answer any further questions. Just look for our contact at the IR team, and see you next quarter. Thank you so much for your participation. Bye.

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