Hello. Good morning, everyone. My name is Gustavo, and it is a pleasure to have you joining us for our Third Quarter of 2025 Earnings Video Conference. As always, Milton will walk you through our performance. Before handing over to Milton, I would like to share a few instructions to help you make the most of today's event. For those accessing this video conference via our website, there are three audio options available on your screen. The entire content in Portuguese, the entire content in English or the original audio. The first two options offer simultaneous translation to select your preferred option, simply click on the flag icon in the upper left corner of your screen. Questions can also be submitted via WhatsApp to the number displayed on your screen. Today's presentation is available for download on the hot site and as always, on our Investor Relations website. With that, I'll now hand over to Milton, and I'll see you again shortly for the Q&A session. Milton, over to you.

Good morning, everyone. Welcome. It is a pleasure to be here with you once again to present our third quarter 2025 results. Thank you, Gustavo. In a moment, I will join Gustavo and Gabriel for our Q&A session. The objective of this presentation, as always, is to share with you an executive and objective overview so that we have quality time for discussion afterwards. I believe it is important to have a Q&A session with adequate time and depth. Let's move on to the numbers. I will begin with the main highlights. I will cover results, ROE, capital, services and insurance, the loan portfolio and long-term delinquency. The first highlight is that we closed the quarter with very strong net income BRL 11.9 billion, representing growth of 3.2% compared to the second quarter of 2025 and 11.3% compared to the third quarter of 2024. Therefore, we continue to expand our bottom line. Just as important as the bottom line is profitability. On a consolidated basis, our ROE reached 23.3%, and in Brazil, ROE was 24.2%. So we posted a profitability expansion compared to the previous quarter. But what I always like to emphasize, and we include this in the footnotes for you is the capital adjustment. As you saw on the first slide, in terms of capital, we closed the quarter at 13.5% of CET1. Adjusting the capital for our Board's approved risk appetite or to the CET1 level we have seen in the market, we are running at 25.4% ROE on a consolidated basis and in Brazil at 26.7% for the period. This is a very strong profitability level, reaching almost 27% of ROE in Brazil. How did we achieve this result? First, capital showed significant expansion in the quarter with growth of 40 basis points. Compared to September 2024, we saw a slight decrease, but it is important to remember that we had a relevant additional dividend distribution this year. Moving on to services and insurance. This was a very solid and strong quarter for this line, which grew by 4.0% in the quarter and 7.1% year-over-year. Regarding the loan portfolio, we closed the quarter at BRL 1.4 trillion, a growth of 0.9% compared to June and a 6.4% growth year-over-year. Excluding the FX impact, the portfolio grew by 1.7% in the quarter and 7.5% year-over-year. Another highlight is delinquency. We have been able to grow the loan portfolio with high-quality credit and with very well-controlled delinquency levels. Here, I am highlighting long-term delinquency, but you will see that the portfolio remains very well behaved in any credit indicators such as cost of credit, stages, coverage, short- and long-term delinquency. I would like to highlight the growth in our loan book. Let me start by focusing on the individual segment. We grew by 1.0% quarter-over-quarter and 6.5% year-over-year. And in this table, we present a breakdown of the segment. I would like to highlight mortgage loans, which grew by 2.0% in the quarter and 15.2% year-over-year. In the first nine months of this year, we originated BRL 24 billion in mortgage loans, a 24% year-over-year increase. Our market share among private banks is 47% in this product, which is highly relevant for client relationships and for our long-term vision. Structurally, we have a higher savings balance among private banks, which also allows us to deliver long-term value to our clients. Regarding the quality of the individuals portfolio growth, focusing first on credit cards, we grew by 4.3% in the quarter. The consolidated growth was 0.8%, but when we look at the mid- and high-income segments, we posted a significant growth of nearly 24% year-over-year. In personal loans, we posted a 1.4% growth, but it is important to break down this line. It is composed of consumer credit, which grew by 3.1% in the quarter and 9.6% year-over-year, revolving credit, which grew by 5% in the quarter and 15% year-over-year and refinancing credit, which is a portfolio we aim to reduce, which declined by 3.4% in the quarter and 12.4% year-over-year. This shows that beyond simply looking at aggregate performance, it is important to analyze the breakdown within each line we disclose. In payroll loans, the highlight is the strong growth in the private sector, up by 9.5% in the quarter and also up by 9.5% year-over-year. The public sector portfolio posted a slight decrease, and for INSS beneficiaries, which are the retirees, the main effect comes from the interest rate cap implemented some time ago. We are currently facing our highest funding costs, which has led us to reduce origination in some channels, especially through banking correspondents. Today, most of our production is already being done through our own channels, and we have stopped operating in some segments due to low spreads and low returns. Moving to the SMEs loan portfolio. It was up by 1.1% in the quarter and 7.5% year-over-year. In Brazil, the portfolio grew by 1.2% in the quarter and 7.8% year-over-year, and the total portfolio grew by 6.4% year-over-year. Here, we present the breakdown, excluding the FX impact. For SMEs, growth would have been 8% year-over-year. For large companies, nearly 10%; and in Latin America, 4.5%. The total portfolio grew by 6.4% year-over-year and would have grown by 7.5% excluding the FX impact. The highlight in SMEs is the government programs, which posted a growth of 10.9% in the quarter, a very solid result. When we look at the year-over-year performance, growth was over 110%. I would like to emphasize that this is a portfolio that is growing significantly, but with high quality. We have been originating through these lines with shorter grace periods of under 12 months. While we have seen the market originating with longer grace periods closer to 24 months. Therefore, there is a difference in approach. But again, each organization or each bank has its own strategy. I'm only highlighting how we have been doing business. Moving on to margins. I will focus first on NII with clients. I would like to draw your attention to the fact that considering the effect of working capital, the NII grew by 0.5% in the quarter or BRL 200 million. Average volume, product mix and spreads had very minor effects. Additionally, there was a calendar effect. We know that this quarter had more calendar and working days with five additional working days and one extra calendar day, which impacts liabilities and assets differently in the way we disclose the managerial results. In the Latin America and others line, we consider wholesale bank structured operations and this is where we always expect some volatility. I would like to highlight that the previous quarter was very strong in terms of margin. We had already mentioned that it was an exceptional quarter, so it is natural that we see a smaller effect of these structured operations when comparing quarter-over-quarter. It is important to emphasize that in the year-over-year comparison, which is perhaps the best indicator to analyze our ability to generate NII with clients, we posted robust growth of 13.4%. Moving on to NIM. First, on a consolidated basis, we see a slight decrease. Nothing to be concerned about. NIM is very much in line with what we posted in the first quarter of 2025. As I mentioned, the previous quarter was exceptional. The risk-adjusted NIM also performed this way. The risk-adjusted NIM was still higher than in the first quarter, but slightly lower than in the second quarter with a minor variation. For the annualized average margin in Brazil, this effect is even clearer. We posted significant NIM growth in Brazil 9.5%, 9.3%, 9.8% and 10% in 2Q '25, which was when I emphasized that it had been an exceptional quarter. Now we have returned to a very high level of 9.8%, exactly the same NIM as in the first quarter of 2025. The risk-adjusted NIM reached 6.7%, which is even better than the NIM posted in the first quarter of 2025, but showing a slight decrease quarter-over-quarter. This demonstrates the strength and quality of our NII with clients. Now regarding NII with the market, although the numbers may appear very stable, we know this is the hardest line to estimate in our budget exercise given the inherent volatility behind these figures. What did we highlight at the beginning of the year? First, we provided guidance indicating that NII with the market would be between BRL 1 billion and BRL 3 billion for the year. The main effect, as I mentioned previously, is that the capital index hedge costs would increase throughout the quarters. This was the only number we could be more certain about when we disclose the 2025 guidance. And it is evident when we look at the accumulated results. We delivered BRL 3.5 billion in market NII for the first nine months of 2024, and the capital index hedge cost was of BRL 900 million in the first nine months of 2025. Market NII was BRL 2.7 billion, down from BRL 3.5 billion, but the main effect was the cost for hedging the capital index, which doubled in the period. So in fact, we have performed very well. Our NII with the market is very strong, very stable with a high alpha generation and a very accurate transfer price that avoids transfers between NII with clients and with the market. Our disclosures have been very transparent. And in respect with that, I will mention an update in our 2025 guidance. The only line that we will adjust is NII with the market for obvious reasons, it is a mechanical adjustment, a small one, I will address this at the end of this presentation. Moving on to commissions, fees and results from insurance. I would like to make a few highlights. The first one is in the payments and collections revenues, which grew by 3.7% in the quarter and 8.0% compared to the third quarter of 2024. For the 9-month period, growth was 6.1%. What is the main highlight? We no longer refer to Rede as a separate acquiring business or company as Rede is fully integrated into our operations. Nevertheless, we believe it is important to highlight the total transaction volume, which reached BRL 258 billion, an important increase of 6.6% in the quarter. This demonstrates our ability to integrate businesses and focus on client profitability. The total transaction volume grew by 12.8% year-over-year. Another highlight is the revenue from advisory services and brokerage, which posted a significant growth of 33.7% in the quarter, but a decline when comparing the accumulated results for the 9-month period. I remind you that last year was by far our best year in DCM, so there is a market volume effect. Our market share demonstrates that we continue to present a very solid performance. We are leaders in fixed income origination and distribution with a 25% market share. In other words, 1/4 of the market passes through the bank, and we have originated BRL 91 billion over the 9-month period. Another very relevant highlight is what we have been able to achieve year after year in our insurance business, we posted sound growth of 5.7% quarter-over-quarter and 17.8% year-over-year. Results for the first 9 months were up by 17.1%. This growth is well distributed between earned premiums, which were up by 14% and the recurring result up by 17.3%. This performance has been very important for the bank's value creation for expanding profitability and for generating value across all our business channels. I am deeply pleased and satisfied with the evolution of our insurance business. Now regarding asset quality, I will be objective in my remarks because as you will see in the credit indicators, the level of stability in our portfolio is truly impressive. Short-term delinquency is very well controlled. I will focus on these figures when discussing large corporate performance in the next slide. Actually, to make it easier for you, let me zoom in on this information. In Brazil, for short-term delinquency, you can see that the 15 to 90 days NPL for individuals remained absolutely stable as did it for the SMEs portfolio. There was an increase in this indicator for large corporates, but this is a specific case of a client that has been in stage 3 for many quarters with more than adequate provisions. And we felt that it was time to let it move into delinquency and follow the regular flow. That is why I always say, I do not like to track this indicator for large corporates. It has no correlation to either the cost of credit or the balance sheet effects. You will see that it has no impact on stage coverage, on migration between stages nor on the cost of credit. So it is only a representation of a client that was already properly provisioned in Stage 3 and moved into delinquency, there is no cause for concern here. Again, this is a specific client. For long-term delinquency, which does not have this impact, you will note that there is great stability in the NPL indicators for Brazil, for Latin America and considering all regions. When we break down the Brazilian operation by individuals, SMEs and large corporate, we also see great stability. We have been able to grow with high quality within our strategy, maintaining a portfolio with a truly impressive level of provision and high quality. We have followed the asset quality indicators released for each industry. And when we compare our performance for each product against the industry figures, we note that we have performed much better than the market in terms of delinquency. In fact, in several products, we have seen significant increases in long-term delinquency, while NPL in our portfolio remains very stable. We do not usually disclose our delinquency rate breakdown by product, but I can assure you that in addition to being at a much lower level than has been reported by industry, we continue to operate with great stability, while we have seen delinquency accelerate in the industry especially the long-term delinquency. Once again, I emphasize our long-term vision, our capital allocation at the right price and our daily and active risk management, and I believe the results speak for themselves. Moving on to the stages. I will go straight to the portfolio and coverage in Stage 2, where you will note the remarkable stability. Any volatility, given the size of our portfolio does not generate or produce any material impact. Therefore, everything is within expectations with no points of concern and the same applies to Stage 3. If you look at both the portfolio in Stage 3 and the coverage in stage 3, you will also see only very marginal variations. It is clear that this flow is dynamic because we do not migrate exposures to stages based solely on delinquency. Delinquency is one variable. As I showed you when we disclosed the implementation of Resolution 4966, if you add up the nonperforming portfolios overdue by more than 90 days and compare it to the portfolios in the stages, the numbers are quite different because we look at prospective risk. In this way, migrations due to asset quality deterioration are adjusted well before the client actually becomes delinquent. This is the case for large corporates, for example, as I mentioned earlier, regarding this specific client that has been in Stage 3 for many quarters with a performing loan. So I believe that this proactive and forward-looking dynamic is very important when managing our balance sheet. Our performance reflects this. Now I will briefly address 2 topics, the renegotiated portfolio and the cost of credit. I will first comment on the renegotiated portfolio. If you look at the credit-only portfolio, it continues to decline in what we call the renegotiated portfolio. We break down what refers to the restructured portfolio and what refers to the renegotiated portfolio. But the most important thing is that the ratio of the renegotiated portfolio over the loan book continues to fall. In other words, the nominal value is declining even though the loan book is growing. I believe that at some point, we will reach an inflection, and we may even see the nominal values rise. That's why it's important to analyze the ratio to compare nominal values over the portfolio that has been growing over all these quarters. On the right-hand side, we present the figures considering Resolution 4966, which considers credit and securities. The story is the same. The amounts are higher because in this view, we include securities, but we also see nominal declines over the period. And the ratio also shows a very healthy performance, even better than in the credit only view. This shows the high quality and strength of our portfolio. The cost of credit has been flat. We have been delivering a very consistent cost of credit. And in relative terms, we also have a very solid result. When we look at the figures for the nine months despite the increase from BRL 25.9 billion to BRL 27.2 billion, the ratio fell from 2.7% to 2.6%. Even though we see industry indicators deteriorating, our portfolios have been performing very well. I believe that risk management is our competitive advantage, and it's something we strongly believe in. Changing gears to OpEx. We posted an increase in non-interest expenses in Brazil of 4.5% in the quarter. Remember that this is a quarter that historically is pressured by the union agreement and wage raises. We also have a volume effect with the operation performing very well. So this is what we call good cholesterol, especially when we talk about volumes. The first nine months year-over-year growth in Brazil was 8.5% and 8.9% on a consolidated basis, including Latin America. All of this is absolutely in line with our expectations, which is the most important thing. It was what we expected with the significant investments being made in the operation with a strong focus on top line generation. And all of this is ultimately reflected in the efficiency ratio. It is not just about cost for the sake of cost. At the beginning of next year, I will share with you a very transparent view on costs for the future. But the most important thing is to look at the trend. We closed the efficiency ratio for this 9-month period at 36.9% in Brazil and a 38.8% on a consolidated basis. I remind you, this is the lowest ratio in the industry when compared to Universal Bank's peers. In the calculation of this ratio, we include all the bank's expenses and do not leave any negative effects out of the indicators so that the number is very consistent and transparent for the market. So I believe this is a very relevant performance. If we look at the figures from 2019 to 2025, the path has been very healthy for the bank's operational leverage and efficiency. Next, let's talk about capital. First, just to clarify, we started the quarter at CET1 of 13.1%. As we can see, profit generation in the quarter was very strong with a positive contribution to capital of 80 basis points. As I mentioned, we are running with a profitability level of nearly 27% in Brazil. Interest on capital provision and IOC maximization results in a payout slightly above 30% and leads to a capital consumption of about 40 basis points. This is already included in the ratio. Next, we see risk-weighted assets consume 20 basis points. And finally, we have other prudential and equity adjustments that are practically flat. All in all, CET1 moved from 13.1% to 13.5% in the quarter. We had AT1 to the CET1, and we reached a Tier 1 capital ratio of 14.8% in September 2025. It's interesting to note that we no longer have any perpetual instruments issued in foreign currency. In other words, 100% of our AT1 instruments are issued in Brazilian reals at a much more competitive cost. So this liability management we carried out was very important for the bank's capital management. Finally, as I have already mentioned, the only line to be updated in the 2025 guidance is market NII. It is a minor adjustment. We originally expected between BRL 1 billion and BRL 3 billion for this line, and that was our best expectation. It is great that we performed better than we expected. And given that we only have a couple of months to account for, we are updating our market NII expectation and narrowing the range. Thus, our best expectation for market NII is between BRL 3 billion and BRL 3.5 billion. So this table consolidates 2025 guidance, except for the market NII, every other line has been reaffirmed, which demonstrates our ability to consistently predict results for the year and share them with you at the beginning of the year. Of course, volatility is expected throughout the year. In the loan book, we have the FX impact. So this is always something difficult to project. But the fact is that we have very solid discipline and transparency and a high degree of predictability, I believe the most important thing is to have predictive capacity to be able to forecast and manage with a long-term vision. With that, I will conclude my presentation. I would like to thank you once again for your participation. Now I will join Gustavo and Gabriel for the Q&A session. This was another solid and consistent quarter with very high profitability and strong results. Most importantly, behind these numbers, is all the transformation the bank has been undergoing for many years. We are at a very advanced stage, both in digital and cultural transformation and above all, as a universal organization. I believe the strength of Itau Unibanco is being this universal bank, striving to be a leader in every segment in which we operate, and we have managed to be leaders in several of them, as I always say, we have a very balanced portfolio with solid and consistent results in both wholesale and retail businesses, which have been decisive for value creation. And most importantly, we are a 100% client-centric organization. All of our NPS and quality indicators have advanced materially. At the end of the day, the result is a consequence of a solid, strong franchise with our client-centric and long-term vision. We do not make decisions to maximize in the short term nor do we grow the portfolio at the wrong price. We must maintain strong discipline in capital allocation and returns. And naturally, the results come in the long run. That is what I wanted to share with you. I will now join the others for the Q&A session. See you shortly.

Thank you for the presentation, Milton. Now we have also Gabriel with us to start the Q&A. Well, let's remind you, this is a two-language session. We're going to answer the questions in the language that they are asked. Should you need any support with the translation, please, choose your preferred audio, English or Portuguese. Where you can submit the questions via WhatsApp. With that, let's go to the first question. Bernardo Guttmann from XP.

Congratulations on the results. As we approach the end of the year, the bank should begin discussions regarding the outlook for 2026, noting that the macro scenario is mixed. The activity remains strong, but high interest rates and a more selective credit market are present. I would like to understand how this context influences your strategic decisions for the bank next year, particularly concerning portfolio growth, efficiency, and capital allocation. Itau is at a turning point in the cycle, focusing on discipline and profitability, but the challenge now is to grow in an efficient and calibrated manner in an environment that still requires caution. How do you plan to achieve this balance?

Thank you, Bernardo. I appreciate your participation in our call. I want to emphasize that we're being careful not to project guidance for 2026, as we're still in the early phases of our planning. However, we've identified growth opportunities, and it's important to note that the challenges we face stem more from uncertainty rather than its impact. It's hard to have complete confidence in an unpredictable environment. First, I can assure you that opportunities do exist, and we will continue to enhance our franchises in all areas where we aim to grow, with a long-term focus and quality portfolio management. Our ability to react now is significantly better than it has been in the past. As we approach 2026, I can guarantee that we do so with a very solid and well-resourced balance sheet, which provides us with substantial strength and capacity. This robust foundation supports our capacity to respond to any scenario, whether challenging or favorable. This is vital because historically, with our older systems, credit decisions took time to implement. Now, thanks to modernization, we make daily decisions, and the implementation is immediate. We no longer have to wait 24 hours for a decision or reaction. The guidance I provide will be based on the best information available at the time. It's important to understand that guidance is not fixed; we aim to provide predictability and show consistency with disciplined execution. While it reflects our best forecasts at publication, we will keep you updated if circumstances change. As discussed during Itau Day, we are reevaluating our future business strategies. We have well-established businesses that provide us with significant strength, allowing us to grow with quality and capital discipline while delivering good returns to our shareholders.

Now we go to the second question that comes from Renato Meloni from Autonomous.

Congratulations on the results. And I would like to talk about the segment of these small companies, specifically in the line government. So I wanted to understand, how do you see the trajectory? Can you grow at the same level, or are you going to see some limitations whether if it's government risk? And how do you see the trajectory of the NPLs as these are expiring?

Thank you, Renato, for the opportunity and for your presence. We all dedicated significant hours to reviewing our reports last night, which reinforces our confidence in both wholesale and retail sectors. We are experiencing notable growth due to governmental programs, supported by effective capital allocation and management focused on selecting the right clients and fostering growth within a unified value proposition. This enables us to take on a significant leadership role since these programs began, and we've learned to manage them wisely, although it varies by program. We've discussed the sustainability of these programs, particularly for smaller clients, and the ongoing budget considerations regarding their future. We experienced market changes and took advantage of initial losses due to our capacity to leverage effectively, returning approximately BRL 100 billion to the market. This process is crucial and largely depends on government resource allocation, with an emphasis on efficient utilization that fosters leverage. The first loss multiplier remains high in this program, and therefore, our growth capacity must align with maintaining product consistency for our clients, as this is a government initiative. We will continue to provide services to both clients and government entities and focus on cross-selling to ensure consistent profitability moving forward. We believe there's still significant room for growth, adhering to disciplined capital allocation and value creation, while seizing the right timing and pricing strategies. Retail holds promising opportunities, especially with our fully powered Gen AI platform, which stands central to our strategic evolution. As we advance this platform, we are enhancing our capabilities, aiming for flawless customer experiences, and achieving notable maturity. It will play a crucial role in our retail strategy, allowing us to serve clients digitally and efficiently with evolved models. This is expected to become increasingly significant in retail, and we will continue to share our progress in the upcoming quarters.

Now we go to the third question. We have Gustavo Schroden from Citi.

Congratulations on the impressive results and consistency. I would like to discuss the client margin. Considering the recent dynamics, we experienced some negative impacts from spreads. Additionally, there are concerns regarding Latin America. I want to know if this margin is a reasonable baseline for future client interactions, or do you believe there are specific issues in the third quarter that could disrupt our growth trajectory and hinder stability? I'm curious why the margin expanded so significantly. We covered several points last year, but I want to know if there is anything else we should consider for further expansion, or if we have reached a more stable level with our clients.

It's great to see you, Gustavo. I'll provide two answers. First, regarding this quarter's performance, I want to highlight some key issues. Last quarter, we noted strong net interest margin (NIM) growth. The NIM's balance is vital when we compare the second quarter to the third, especially since we saw a significant jump. This jump can be explained by a notable increase in credit card financing last quarter, which creates a seasonal effect related to the calendar rather than anything else. This had a positive impact on NIM and net interest income (NII) last quarter. Additionally, given our current profitability and expanded margin, we've become aware of more apparent operations and perceived volatility. Last quarter, we anticipated some wholesale structured operations that were supposed to occur in the third and fourth quarters, and they ended up broadening into this period. The previous NIM accelerated more than it would have if it had occurred this quarter due to certain caps issues, particularly in the INSS and check portfolios. Higher interest rates and liabilities also impact our caps operations, thereby pressuring the margin. Another effect to consider is related to our Flex product, where we anticipate results that involve revenue through services without funding costs. We previously separated these results, but the significance of these operations at the year’s start prompts us to review how we present our managerial results. We will transparently show changes and make comparisons to 2025 to maintain a consistent base. With the rising cost of funding and product penetration, Flex negatively impacted this quarter's margin. We must consider an annual perspective to evaluate NII and NIM evolution. We've revised our margin expectations upward at the year's start and have adjusted our guidance, aiming to reach closer to the guidance’s center by year-end. This indicates expected expansion in the fourth quarter, aiming for around 12.5% growth, potentially slightly less, depending on fourth-quarter performance. Though it's early to finalize predictions, we anticipate growth with expanding portfolios and margins exceeding 12% year-on-year. This growth reflects our strong margin growth, and we expect some stability moving forward. We've seen significant NIM growth, particularly in risk-adjusted terms. While generating NIM isn't challenging, how we manage growth quality impacts risk-adjusted returns. This quarter reflected a positive expansion largely due to 10 basis points adjustments made recently in Brazil, moving back to natural trends with margin levels adjusted for risk in the future. We aim to grow NII as we expand our portfolios and businesses sustainably. Although analysts may underestimate our sensitivity to interest rate changes, a structural interest rate drop positions us to balance and grow across other lines. Moving into next year, we anticipate expanding NII throughout the year while maintaining a more stable NIM with some expected volatility within reasonable thresholds.

Now the question of Marcelo Mizrahi from Bradesco BBI.

Congratulations on the results, very solid. I guess the question goes along the way of capital. An organic generation of capital very positive in the quarter with an equity 13.5%. So the question of last year, the threshold that the bank was after the profit sharing was 12.3%. When we look at the perspective of growth from now on, and we have the other challenges, I wanted you to discuss, and you always discussed that threshold of 11.5% and 12%, which would be the level that you're feeling comfortable, keeping that threshold. How it would be this threshold now that will the NIM of the bank that we will keep after the dividend distribution payout.

Thank you, Marcelo, for the opportunity and your introductory words. I want to emphasize a few key points. First, our profit-sharing policy remains unchanged, and we are committed to maintaining it. There is an element of subjectivity involved, as we conduct extensive analyses before deciding on the dividend distribution. We adhere to a risk appetite set by the Board, ensuring we do not operate below a CET1 ratio of 11.5%. The Board has set a buffer of half a percent, which means we aim for a CET1 of 12%. We prefer not to operate too close to the minimum because that could jeopardize growth opportunities and critical investments that may require more capital. In this quarter, we recorded a CET1 of 0.8 before accounting for share repurchases and profit-sharing. Looking ahead, our aim isn't solely to hold excess capital, but rather to focus on capital allocation with a disciplined approach that fosters long-term value creation and organizational growth. We continuously assess our future budgets, growth capacity, credit risk, market risk, and operational risk. It’s worth noting that this year marks the phase-in of Basel III's operational risk and credit risk adjustments in certain wholesale operations. In this first quarter, we incurred a capital cost of 45 bps due to regulatory changes, with a three-year phase-in period extending to 2028. This will be considered in our planning. We evaluate our growth potential and profitable capital allocation in light of these regulatory adjustments. Any excess capital will be proposed to the Board of Directors for deliberation on dividend distribution. However, I want to clarify that this dividend is not extraordinary; it is simply an additional distribution as per our established policy over the years, which we see no reason to alter. The market will be informed through our communication protocols, and we will comply with all relevant publication norms regarding dividends.

Next question, Eduardo Rosman.

In the Investor Day, you mentioned your goal to enhance the bank's efficiency. Specifically, in retail, it seems you are willing to forgo some revenue for greater growth. I would like to hear Milton's thoughts on whether this strategy is more of a defensive or offensive move.

Hi, Rosman. Great to see you. Thank you for the wonderful words. I read your report. Thank you for the quality and depth of the report that you just published yesterday. Let me tell you. At the beginning of the year, I discussed this at the presentation, and I wouldn't bring you a clear vision of how our efficiency level is composed because we tend to oversimplify the vision of cost of DNDJ of the bank of the expenses that do not stem from interest rates. So we simplify when we try to do comparisons with other players that are more specific in specific segments. So first, the bank is a portfolio of businesses that is very relevant. So everyone with the level of maturity at a different industry level, some with strong investments, others with an efficiency agenda that is deeper and so on. So it's important to understand the whole. So because of a number, we do not make precipitous conclusions. But our responsibility is to demonstrate this to you. In the way that we publish, we break down the retail wholesale bank. You can see in the MD&A that vision for the best breakdown is there, but we need to be more precise showing you the strategic way up ahead. Gabriel has been the leader of an important work of efficiency in the bank. And efficiency is something that we need to do every day. It's not a responsibility neither of the area of Gabriel in an isolated way or the commitment of a specific area. No, everybody in their own circumstances, everybody in the bank has to look every day and seek the efficiency level, the evolution that we've had throughout the time shows our discipline with the generation of top line and the control of costs so that this will be evolving, and we have a better leverage. In in the massified, it seems that is more attack than defense because it's not high income, but in the high income, you have an efficiency level that is higher than what we observed in the bank as a whole. But in an operation that has a cost of service that is different because the cost of serving the mid- to high-range clients is different than the platform that is 100% digital. The model of service can evolve, we understand that. So it's the remote, the on-site, and Andre was discussing at Itau Day, a bit about evolution. And we want to get most of the clients remotely, maybe over the next few years, and we're going to continue to do this with a lot of emphasis. So Itau Day was the idea of telling you what are the refreshers, how we are reviewing strategically the businesses looking ahead in the natural persons and the companies. So I can tell you that we are in the execution model. We started the execution of these projects that are very important for the future of the bank. And I am certain that this will generate a lot of value.

I would like to follow up on the topic of massified capital and dividends. Considering the capital generated in the fourth quarter and the adjustments related to operational risk effective January 1st, we should be nearing the 13.5 threshold for Tier 1. As we approach the end of the year, there are several companies discussing the taxation of dividends and shareholder expectations regarding payouts. There could be some strategic timing involved, and having excess capital could be managed more effectively. Given our strong profitability and the resulting capital generation, this topic is likely to generate discussion. How do you view this situation? Would it be prudent to anticipate the Brazilian IRS's decisions and take advantage of this opportunity?

Thank you, Daniel, and I appreciate your comments. It's great to see you. You mentioned the ongoing discussion regarding legislative changes in taxation and payout issues, which we are monitoring closely. We recognize our responsibility in light of these regulatory changes and will assess any new information as it arises. Once we have relevant updates, we will conduct our analysis, make informed decisions, and promptly communicate any outcomes from the Board of Directors to the market. We remain committed to our dividend policy and will fulfill our fiduciary duties. Should there be any shifts in our usual practices due to new developments, we will present it to the Board for discussion, and once a decision is reached, we will inform the market. We will continue to track the evolution of these regulatory changes closely.

Now the next question Yuri Fernandes, JPMorgan.

Congratulations on the results. I would like to ask about the growth of retail. During the Investor Day, it was mentioned that you expect the retail portfolio to double over the next five years. However, we have noticed a modest growth of 1% quarter-on-quarter, which comes with many nuances. For instance, in the personal credit card sector, we see positive growth, and some areas of consumer finance are performing well, while others, like INSS, seem weaker. Milton, when can we anticipate an acceleration in the retail portfolio? I understand this is not immediate, and while the goal is to double, we might not reach the expected levels soon. Your insights on retail growth would be appreciated.

It's great to see everyone again. Thank you for your question. We remain committed to our goals in retail, both for individuals and companies. I want to clarify that our aspirations for growth are not formal guidance but rather our ambitions moving forward. We see many opportunities for growth, especially among more resilient sectors where we can see quality improvements. Our numbers from Uniclass and Personnalite Digital clearly show strong growth in the high-income segment. We have effectively reduced risk in our less resilient portfolios, and now we are focused on the natural dynamics of decision-making—deciding where to expand and where to scale back. This is a fundamental aspect of credit: making informed choices about growth potential and identifying segments that may pose more risks, which we can then conserve. Overall, there are still growth opportunities in retail for both individuals and businesses. We will share these insights as we establish guidance, ensuring everyone is informed. We are excited about our recent acquisition, though we acknowledge that next year may come with uncertainties. We prioritize good risk management and capital allocation before pursuing our aspirations. We have a solid history of navigating through challenges, and our portfolio has never been more resilient in facing obstacles. As opportunities become evident, we are prepared to grow with quality in these segments. The One Itau migration enhances our client relationships that were previously more superficial, highlighting the potential we have ahead. I am optimistic as I closely monitor the progress of individuals and companies in retail, and I believe we will achieve meaningful results over time. However, I prefer to underpromise and deliver rather than set unrealistic expectations. While there are risks in execution and external factors to consider—such as interest rates, inflation, and unemployment—all of these affect financial decisions and risk management. It's important to note that if conditions remain steady, we would likely be working with a lower credit cost by year’s end compared to what we had initially anticipated. Throughout the year, our models, including indicators for PB and LGB of our clients, also incorporate macroeconomic expectations. We have been recalibrating these models, which has led to increased provisions compared to earlier assumptions. We have never been in a stronger position in terms of provisioning, and we are likely to meet our best expectations regarding credit costs. We will provide high-quality credit indicators as we adjust our forward-looking models for macroeconomic conditions, ensuring we are ready to fill necessary gaps by the end of the year. There is much to look forward to. Remember, this is a marathon, not a sprint, so don't base your expectations on a specific figure for 2030 just yet, but the overall trend is very positive.

Now the next question, Eduardo Nishio, Genial.

Congratulations on the results. I have a follow-up for Rosman regarding efficiency in the mass market. After the rise of neobanks, this segment has become quite challenging. I want to understand what prompted Itau to pursue this segment more aggressively now in a tech-focused manner. Was it the younger target audience? What do you perceive as different now compared to a few years ago when it was more evident to avoid this segment? Additionally, regarding efficiency, you mentioned that you have the smallest level among the banks. Can you improve that level? As you're undergoing a cost-cutting journey, can you reach a level of 30%, and how long would that take? How do you plan to navigate the challenging mass market journey?

Thank you for your opening remarks. It's good to see you again. Let me rephrase your question for clarity. We have never turned our back on the low-income segment. We have always found ways to serve these clients in various formats. Historically, we have partnered with retailers to service these products. Our growth is attributed to a valuable proposition that maintains a reasonable cost of service and manageable risk that can be sustained over time. We have a significant volume of clients in the mass market. When we assess the incomes in our portfolio, we’re servicing millions of clients, and there’s potential for improving their experience, especially through our digital channels and super app. We maintain relationships with these clients, and when we categorize them by income, we find stable clients that are resilient throughout economic cycles. We focus on various profiles, including retirees from INSS, who may have lower incomes but represent a stable long-term demographic for us. Our INSS portfolio is one of the largest in the market, demonstrating years of successful digitalization. New technology allows us to serve these clients differently than we could in the past. Scalability now relies more on advanced technology with low service costs rather than just volume and processing capacity. As we increase efficiency and improve service levels, we enhance our ability to absorb credit losses, allowing us to serve a broader range of clients. Even clients who are not initially targeted can become viable opportunities as we enhance service costs. This approach allows us to build a larger relationship with mass-market clients, specifically those with lower incomes. To achieve this, investing in digital transformation is crucial, which we have begun through our bank's platformization and the creation of technological modules and our super app. This positions us to efficiently serve clients with an operational leverage that changes our competitive capacity concerning pricing. When clients engage with us digitally through fully digitalized products, we are poised to meet their needs effectively. We aim to offer comprehensive banking solutions rather than just singular products, all through a digital framework with significantly lower service costs and greater scalability over time. This is our vision for this segment. There’s work to do, and we plan to enhance our retail efficiency. However, the bank's overall efficiency will depend on our top-line growth. We see substantial opportunities for evolution. It is essential to focus on specific segments, where we already excel, such as payroll loans, where our efficiency is top-tier. We acknowledge it’s not sufficient, and we intend to push for advancements across other segments as we improve overall performance. The specifics will likely yield greater relative gains than the whole due to contributions from all segments.

For the next question, we are going to switch to English as we have Carlos Gomez-Lopez from HSBC.

Thank you, as always, for the consistency in the results. You make our work very easy. I have a question about taxes. So we have a situation in which because of the high IOC, many of the banks are reporting very low effective tax rates. Actually, Itau is the honorable exception. On top of that, we're going to have the accelerated amortization of the deferred tax assets starting next year. Are you concerned that at some point, there could be a public policy reaction and try to increase even more the taxation that the banks have in order to increase the cash revenues that they can get from the banking sector?

Thank you, Carlos. It's great to see you. I appreciate your compliments, and we take them seriously. To address your second question about potential changes or increases in taxation for banks, we do not expect that. There is ongoing discussion regarding fiscal discrepancies between banks and companies performing similar functions. If there are changes for payment institutions, we are prepared. For nonbanking financial companies, we have our mechanisms in place. Any regulatory changes might have a minor impact, but not significantly, given our current tax levels. We don't anticipate major changes, only smaller adjustments, and overall, we don’t foresee a significant effect on our corporate tax rate. This is due to the fact that the banking sector in Brazil has the highest corporate tax rates. Compared to other economies globally, Brazil stands out with a 45% corporate tax rate, which is substantial. The government is aware of this, and I have heard the Minister of Finance affirm that the taxation level in the industry is high. Therefore, I do not expect major changes. Now, regarding the effective tax rate, Gabriel, could you please share some insights on our figures? It would be beneficial to discuss.

Carlos, thank you for your question. As Milton mentioned, the effective tax rate that we had at the beginning of the year, and we mentioned that was around 31.5%, and we mentioned that it would converge to the guidance that we have for the year. That's the expectation that you have. As you mentioned, the major effect towards the marginal rate that we have in Brazil of 45% to the effective tax rate that we see, it's the interest on capital and also some geographies of how the result is among all the different companies that we have. Those are the two major effects. But at the end of the day, we are going through the guidance that we had before, and we are converging to that.

Next question, we have Antonio Ruette from Bank of America.

Congratulations on the predictability. I wanted to explore a theme we’ve discussed with the acquiring business. It was very important due to the pressure of the net interest margin. So what I want to ask is about the double-digit growth in volumes. This growth certainly exceeds that of any competitor, indicating an increase in market share over time. I would like to understand the main drivers behind this growth, the segments where you are expanding, and, more importantly, how you plan to capture this market share in acquiring. Do you have any influence from ITAUX, or is it too early to determine?

It's great to see you, Antonio. You brought up a crucial point about consistency. Predictability is valuable for us as we look to the future, project our results, and manage our operations. Regarding our acquisition strategy, we successfully integrated the Rede business after closing its capital in 2012. Thirteen years later, we're seeing the positive outcomes of that integration within the bank. As for specific segments, we don't pinpoint just one; we have seen growth in both wholesale and retail and increased market share in those areas. Our strategy focuses on providing comprehensive services to clients rather than a singular product offering. We aim to deliver a seamless flow of payments and receivables, where Rede is part of our overall value proposition. We no longer view Rede as a standalone business or product that we price independently. Despite this, we maintain discipline in understanding our clients’ needs while avoiding the temptation to simply chase market share through aggressive pricing. My experience as CEO of Rede from 2013 to 2015 taught me that invoicing often comes from larger clients. It can be tempting to lower prices to gain market share, but that's not a sustainable strategy; once contracts are renewed, prices need to be reassessed, and market share may dwindle. We are very careful with price risk allocation, and while chargeback risks can vary by segment, we focus on sustainable business models. Our sales strategies are crucial for our management, and we maintain a strong value proposition complemented by high service quality and efficiency. We provide clients with quick credit card machines and high approval rates, enabling us to understand their receivables process swiftly, allowing us to add value beyond the machine itself. Our account managers are well-trained to address any issues, breaking down the barriers that previously limited discussions about Rede to specialists, which enhances our scalability and strengthens client relationships. We've observed significant improvements in client satisfaction metrics, as competitiveness isn’t solely about pricing. Clients need swift, quality sales processes. Even a brief delay in receiving a credit card machine can lead to substantial lost revenue, so they are willing to pay a fair price if they receive quality service. The legal team has collaborated closely with Rede to enhance these offerings. Lastly, although the integrated tap-and-phone solution for smaller clients doesn’t significantly impact invoicing right now, it remains essential for engagement and will play a key role in our company's platform repositioning efforts moving forward.

And now the last question, Henrique Navarro, Santander.

Congratulations on the results. The 23% return on equity is impressive. My question is about the soft guidance for 2030. We've talked about this, and considering the strong numbers, Itau should begin preparations next year. So, I'm curious about your outlook for 2026. You mentioned that Itau expects to achieve 7% to 8% growth in the portfolio. Do you believe it's possible for that portfolio growth to be double given a more favorable credit cycle? What are your thoughts for 2026?

Thank you, Henrique, for your introductory comments. We are very pleased with our profitability level, especially considering our capital base, which has a significant impact. We’re excited about achieving a return on investment in Brazil that compares favorably with the overall industry. However, we acknowledge the challenges that lie ahead. We believe in humility and staying grounded, as past results do not guarantee future performance, and we must not allow previous successes to lead to complacency. Regarding 2026, I want to emphasize some important points, and I take full responsibility for communicating them clearly. Our discussions during Itau Day are more aspirational than soft guidance. It’s essential to clarify that everyone is looking towards doubling the portfolio by 2030. When conducting a strategic review, it's vital to set high ambitions and envision what can be achieved under ideal conditions. While the necessary levers are available, success depends on a multitude of factors, including execution capacity and changes in our value proposition. I want to stress that we are not going to predict portfolio growth for 2026. Given the uncertainties tied to that year, I can assure you that we will not present a growth figure of 15%, which is double the expected growth. It’s crucial to understand that these expectations will vary, especially in a year filled with uncertainty and potential volatility, such as an election year. The Central Bank may begin adjusting monetary policy, but many variables—such as fiscal policies, Brazil's risk perception, and the cost of capital—will influence this situation. The uncertainty for 2026 is greater than it was for 2025, which is typical for countries undergoing election processes. Thus, do not anticipate guidance of 15% growth and do not calculate a compound annual growth rate of 15.8%. However, I assure you that our strategy is robust, and we are confident in our ability to generate value. Our retail plan is on track, without any deviations. Next year will be a pivotal moment for us, and we will carefully harness opportunities that arise. We are committed to proceeding with caution and taking measured steps. This is a long-term plan, and if we do not double the portfolio due to external circumstances, we will not be disheartened. While we would certainly love to achieve that, we will navigate based on the information we have, and we maintain strong management momentum. We won’t compromise on critical aspects such as risk management and capital allocation, as these remain crucial in steering the bank. The outcomes are beginning to be recognized, and I am confident we will have positive news to share with you. However, please temper your expectations regarding a 15% portfolio growth to avoid disappointment. We will never overpromise or present figures beyond our reach. To reiterate my initial point, if next year presents a favorable environment, we will respond swiftly. Our capacity to adapt—financially and operationally—is immediate; we can make decisions and implement them within 24 hours. This will increasingly distinguish us moving forward.

Thank you, Navarro, and thank you to all of you that took part of our earnings. Well, we finish the Q&A and our conference call of the third quarter of 2025. Thank you very much. Thank you, Milton. Thank you, Gabriel. And I'll give the floor to Milton to close the session.

Thank you for joining us today. I appreciate the presence of my friend Gabriel, the CFO of the bank, and Gustavo, the IR Director. It is a privilege to have you all in this market discussion. We are very pleased with our progress, and I want to emphasize that the results we achieve stem from our dedicated, energetic efforts, deep understanding of our business operations, and a strong desire to continue growing, all rooted in humility. We are confident in our solid results and strong returns, but we recognize the challenges ahead. I want to assure you that we are not becoming complacent. Our goal is to excel daily, focusing on our clients and embracing the era of hyper-personalization, which helps us make important decisions that yield positive outcomes. Our ability to compete across various niches, markets, and segments has never been stronger, and we are excited about future opportunities. We are grounded in capital allocation, value creation, efficiency, a consistent execution model, and a long-term perspective. We will not sacrifice the future for short-term gains just to meet quarterly expectations. We believe that any necessary adjustments should be structural. Our aim is for our shares to improve with consistency and quality. Thank you to the investors and analysts for your invaluable feedback and challenging questions, which help us grow. We recognize that we don't have all the answers, and that is part of our culture. Thank you again, and I look forward to our next quarter together.