Banco Santander (Brasil) S.A. (NYSE:BSBR) Q4 2023 Earnings Call Transcript January 31, 2024

Banco Santander (Brasil) S.A. misses on earnings expectations. Reported EPS is $0.06 EPS, expectations were $0.15. Banco Santander (Brasil) S.A. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Camila Toledo: Good morning, everyone, and thank you for joining us this morning to join us during the 2023 Closing Results Conference Call. This event is being broadcast live from our headquarters in São Paulo and, as always, will be divided into three parts. First our CEO, Mario Leão, will talk about the main highlights of the period and the strategies by which we will continue to direct our growth in the coming quarters. Next, our CFO, Gustavo Alejo, will provide a detailed analysis of our performance. And finally, we will have our Q&A session, during which you will be able to interact directly with our leadership. Before we begin, I would like to give you some instructions. We have three audio options on the screen, all the content in Portuguese, all the content in English or the original audio.

The first two options will have simultaneous translation. To choose your option, just click on the button at the bottom center of your screen. To ask questions during the Q&A session, simply click on the hand icon at the bottom of your screen. Questions will be answered in the language in which they are asked. Today's presentation is now available to download from our IR website. Now I hand over to Mario Leão, who will begin the presentation.

Mario Leão: Hello, good morning, everyone. We are here live with you. It's 10.03. It's a pleasure to be with you again, closing my second year in the leadership of Santander. As we started with this new format the last quarter, I will try to present to you the first slides in a very direct and dynamic way. And then Gustavo will join me to talk about the numbers. We will try to conclude the presentation in about half hour because we want to allow 45 to 50 minutes for Q&A, depending on your interest. So we are here to answer your questions promptly. And then our IR Department will certainly be available to answer further questions. Here on slide four, I would like to highlight a few key messages, revenue and our net income is also here.

But we also want to focus on the consolidation of our messages for 2023 that just ended. Well, slide four carries some key messages. First of all, this has been another quarter of margin growth as a whole. We will show you, a more impressive growth in market NII. We also have growth in the client NII, but client NNI, NII is the summation of margins on the liability and also asset side. I mean, liability margin has the challenge that we will try to make up with more volume. And on the asset side, we will try to show you several lines that are growing as well. The first takeaway message is that certainly we have a revenue recovery, apart from NII. And looking at the portfolio diversification, as I've been stressed constantly, this quarter has been stronger, but even with seasonality, the quarter has been very positive in terms of fees.

And I'll give you more details on how we go about that. Our balance sheet construction has been more solid. We already showed you some of our balance sheet lines, and now we will elaborate on that in the fourth quarter, which consolidates our strategy, both in terms of portfolio diversification. Portfolio diversification has to do with assets commissions and be less reliant on market credit. But it also has to do with diversification in the credit line, focusing on the customer base where we were growing less in the growth cycle, but we are growing more in products and client base. And so the quality of our portfolio makes us very optimistic and excited. We are talking about that turnaround in the curve, which happened in the first quarter of this year.

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