Earnings Call Transcript - XP Q2 2020

Carlos Lazar, Investor Relations

Good evening, everybody. Thanks for having us here in this second-quarter results event that we are holding here with Mr. Bruno Constantino, our CFO; and Andre Martins, together with me, Carlos Lazar, are part of the Investor Relations team of XP Inc. In today's event, we will be holding a presentation for all of you. This presentation has a disclaimer on Slide #2 that I would like to ask you all to read. Additionally, we're going to have an audio/video to present during the beginning of this presentation that I also would like to ask you to control the volume of your device for this event. And finally, by the end of Bruno's presentation, we will be having a Q&A session. So by the end of his presentation, I'm going to be, again, having this information available for you. And so we'll not take any longer here, I would like to ask Bruno to continue the presentation.

Bruno Constantino dos Santos, CFO

Okay. Thank you, Lazar. Good evening, everyone. Thank you for joining us for our third earnings call with the market, about the second quarter of 2020. Before we get started talking about these opening remarks, I would like to say that, first of all, we had a very tough, I mean, and by we, I mean, the whole world in this first semester. A lot of volatility, uncertainty. We were heading for a year of growth all over the world, and then we all were caught by surprise with a black swan, this pandemic. And I believe that as we move forward into this pandemic and its effect, XP, and by XP, I mean our close to 3,000 employees plus 7,000 IFAs, we were able to show our resilience to adapt, we all had to; to strengthen our culture, which I believe is our main competitive advantage when investors ask me, I always go for the culture and our people; and also to reinforce our values, the big dream to have an open mind and our entrepreneurial spirit. And all of that together made us able to deliver the results we are going to share with you. And as Lazar mentioned, we have this short video that we would like to share with all of you that will touch point on everything that happened during this first semester of 2020. So please, Andre, I hope it works. Let's see. Okay. It worked. So this short video is just to present some highlights, but let's go to the presentation, and I will try to be as short as I can, so as fast as I can, so we can go to the Q&A. So going directly to our KPIs and financials of the second quarter this year, we start with our assets under custody. As you can see on the left, we reached, at the end of June, BRL 436 billion of custody, a 59% increase year-over-year and compared to the BRL 366 billion of the first quarter this year, almost a 20% increase. Part of that was market appreciation during the second quarter. But most relevant, I think we saw the net new money inflow picking up, especially in June, because of our offer that we did in July, end of June, beginning of July. We presented a guidance. We had to be very conservative about this guidance, considering when we established the guidance, we were in the mid of June, first half of June, and with the lawyers and the banks in the syndicate, as we had an offer, we had to be sure we were not going to get numbers below the bottom of the range. In terms of net new money, we had a guidance between BRL 10 billion to BRL 12 billion for June. We hit more than BRL 14 billion, the highest level compared to even pre-COVID numbers. When we look at active clients, the situation is similar. We reached 2.4 million clients by the end of June, marking an 81% increase compared to last year. We issued a press release to highlight Expert, which is our main event for the year. We noted that Expert generates momentum in the month it occurs, typically resulting in a higher number of new account openings. We anticipated over 10% growth in new accounts for July due to Expert compared to the monthly average from the first half of 2020. Ultimately, we exceeded our expectations, achieving an increase of over 30% in account openings for July, totaling 187,000. So moving on, we can move to the next one. Yes. Keeping the KPIs, when we look at the retail equity daily trades, also skyrocketing. You can see that by the B3 numbers. It's what we call, and we explained that a lot during our offering in the roadshow, the equitization process in Brazil. It's happening, and you can see that in those numbers. So in the second quarter, we had an average of 2.7 million daily trades, a 187% increase year-over-year. And in July, this space kept a very high figure, reaching almost 3 million, our record ever for the month. And our NPS is stable at a very high level, around 70 to 71, which is the highest in the industry. Going for the financials. The total gross revenue, again, above the top range. We got our record quarter ever in all the numbers, more than BRL 2 billion of gross revenue, BRL 2.041 billion. And it was mainly driven by retail and institutional business. I'm going to explain a little bit later. But when we look at the breakdown, the main shift is that retail and institutional did really well in the second quarter at the expense of issuer services, as we had anticipated, because the market offers were harmed by the crisis. We had April and May with not very good market windows for offers, but we saw picking up in June, and we now are at full speed for the second semester, I believe. In digital content, despite having this low number in terms of relevance, it's always important to highlight that is our core, we started the company with education. So it's a very important part of our ecosystem. We can move forward. Take rates. So retail revenue, a growth of 69% year-over-year, almost BRL 1.5 billion in the quarter, mainly driven by equity and futures, fixed income, and also financial products. The take rates, looking at the last 12 months, stable at 1.4. And when we compare to the first quarter, you need to keep in mind that it's a function of numerator, the revenue of 1.5 in the second quarter, for example, and the denominator. And the denominator in the first quarter was the BRL 366 billion, the average of this number and the end number of the first quarter '19. Because of the market appreciation, of course, the take rate should even go down, but we had this high number of revenue, reaching almost BRL 1.5 billion. We can move forward to the next slide. Institutional revenue, same thing, the market picked up. So the overall equity trading volume in the market in the second quarter year-over-year was around 90%. If we take out of that equation retail investors, when we just look at institutional, it should be close to 80%. We had an 88% growth year-over-year, a very healthy pace of growth as well. In issuer services, as I already mentioned, a decline compared to the second quarter last year of 25%, but already picking up. Digital content, I already mentioned, a 42% increase, BRL 46 million. The relevance is more about the education concept that we have on our platform. And other revenue is basically a function of our gross cash that went up because of the IPO and the cash generation. And despite interest rates going down, the results compare year-over-year present a 78% growth figure. In the final line, regarding net income, adjusted net income, and margin, the highest figure we projected was BRL 520 million for the second quarter. We achieved adjusted net income of BRL 565 million. Reflecting on 1.5 years ago, at the end of 2018, our total adjusted net income for that year was BRL 491 million. Fast forward to now, we have exceeded that entire 2018 adjusted net income by 15% in just one quarter. This illustrates the exponential potential of our business. But I would like to highlight that despite all this growth in this short period, it's nothing compared to the opportunity we have ahead of us. If we look for the 5 banks we are disrupting in the financial industry and we look at their quarterly net income in a stable position, not with these high provisions because of the COVID crisis, we're talking about more than BRL 20 billion quarterly net income, close to BRL 25 billion if we add Caixa in that number. And here, we are talking about less than BRL 1 billion. So that's just to give you a sense of the size of the opportunity that we still have ahead of us. And the adjusted net margin, very high, 29.4%, above the top range as well, 28% that we had given the market during the offer. And that's a function of, number one, the high growth rates that we just showed; number two, the operating leverage that our model, by being an asset-light business model, has; and number three, a function of a lower effective tax rate, I know that's a thought also that investors have asked a lot. We can move into the Q&A, but I want to clarify some points first. Regarding the effective tax rate, we have a diverse group of 30 companies, each operating under different tax brackets that range from 0% to 45%. The bank has a tax rate of 45%, and the broker-dealer operates at 40%. Some companies fall at 34%, while others are at 22%. The cash from the IPO, which is held outside Brazil but invested in Brazil, is subject to a tax rate of 15%. However, when it comes to accounting, we already account for this 15% tax. For example, on a revenue of 100%, we actually recognize 85% for accounting purposes. In terms of financial accountability, this reflects a tax bracket of 0%. Therefore, our effective tax rate, on a consolidated basis, will range between 0% and 45%, with the midpoint being approximately 22.5%. It will fluctuate from quarter to quarter based on our revenue mix. If we generate more revenue at the XP Inc. level, the effective tax rate will be lower. Conversely, if more revenue comes from the bank level, the effective tax rate will be higher. This mixture will lead to volatility, which explains the impact of the low effective tax rate. Now discussing our recent developments showcased in the video, we have launched our credit card, which is currently in beta mode. It's here, and I've been using mine. We expect to roll it out to clients in the fourth quarter, along with digital bank accounts and other services for our investor clients. We also want to highlight that in the first half of the year, our issuer services area participated in 67 deals across DCM, ECM, and REITs, totaling more than BRL 6 billion in market offers. We are very confident that this segment will gain momentum now that we have this opening in the market. The fixed fee is something we continually consider as we look to enhance our ecosystem and explore new possibilities. We remain neutral in our approach, as the choice ultimately belongs to the client; our focus is entirely on them. We recognized that our IFA network needed an alternative payment option for our services. We currently have a commission-based model and have now introduced a fixed fee business model for the IFAs. Ultimately, the decision will rest with the client, as it should always be, and everything will be handled transparently for them. And the international funds platform with this low interest rate environment is going really well. We have more than BRL 6 billion already in our platform, new funds such as Bridgewater, Oaktree, Moneda, Ashmore, and many more; more than 45 funds in our platform, and we expect to keep growing that business in our ecosystem as well. And lastly, this slide, I mean, we already talked about in the video. I'm not going to take longer here. Only to highlight that Expert was something else this year. We, as I said, were caught by surprise regarding this crisis; what to do with Expert. Our tenth edition of our most important annual event, we were expecting to have 50,000 people in presence in São Paulo this year, and we had to adapt. And we did, and the result was, again, beyond expectation. We got more than 5 million people with high-quality financial content for free. The feedback that we got because of it, it’s something else, and it gives us a lot of motivation to create new experiences for our next Expert in 2021. And now I think we go for the last slide, the closing remarks. Again, you're going to see me talking a lot about it. It's the same. The same thing because we are on a long journey. So from quarter-to-quarter, we don't have much to add here. It's the retail investment business, despite all the growth, still 90% of the investments are made through 5 banks. There is a long way to disrupt this business. If you look at the first semester, for example, it's impressive, in a low-interest rate environment, the Poupanca in Brazil savings accounts hit new records in terms of total money, almost BRL 1 trillion, and in specific months of net inflow. The Tesouro Direto government bond, same thing. So people still have this huge gap in terms of financial knowledge. It's improving, it's changing, but it's a long journey. That leads to the equitization process. Brazil, the number of individuals in B3 is going up at a very high rate. We have now more than 2.8 million already. It's growing, but it's still a very underpenetrated market. So we believe, again, it's going to be a secular trend there, low penetration in a percentage of the population. The corporate banking, it's another market that we have an optimistic view about it. We want to do an equal, if not greater, disruption in this market that we have done in retail business. As you know, we have hired Jose Berenguer, the former CEO of JPMorgan Brazil. Berenguer is going to lead all these efforts across the company. And we believe that with our network, with the bank, with the products that we can offer, we have everything to disrupt this highly concentrated market as well. The pension industry is growing well for our insurance company, but that pales in comparison to the BRL 1 trillion total addressable market in Brazil's open pension sector. There is much to be done to transform the financial market in Brazil. Our strong purpose inspires us and the entire ecosystem we can influence to continue doing what is right, without shortcuts. We have a long journey ahead to reshape the financial market and enhance people's lives in Brazil while adhering to our core values. So with that, I end the second quarter presentation, and let's go for the Q&A. I'm sure you have probably a lot of questions to do.

Carlos Lazar, Investor Relations

Thank you, Bruno. So let's start the Q&A session. We already have some questions here, Bruno. I'm going to start with Otávio Tanganelli. Can you dig a little further into the restructuring you mentioned to lead to such a low effective tax rate? Is this sustainable going forward?

Bruno Constantino dos Santos, CFO

Okay. Yes, Otavio, this structure is as I explained. We have cash tied up in various companies within our group, totaling 30 firms, both offshore and onshore. Following the proceeds from the IPO in December last year, we retained most of this cash at the XP Inc. level. XP Inc. operates with a 15% tax rate, and in terms of accounting, it appears as 0 because the revenue recognition is already net of taxes. This effectively lowers the tax rate. Is this sustainable moving forward? Yes, it is sustainable. In the first half of this year, our group's effective tax rate was around 17%. If we consider the midpoint of the range I mentioned earlier, which is between 0% and 45%, we're looking at an effective tax rate of 22.5%. So I would estimate our tax rate to be between 20% and 25%. However, there is some volatility; it could be lower or higher depending on market conditions and the revenue mix among our companies.

Carlos Lazar, Investor Relations

The tax rate is currently running well below historical levels, resulting in a net margin that exceeds 29%. This is significantly higher than our mid- to long-term guidance of 18% to 22%. Are you considering revising your guidance?

Bruno Constantino dos Santos, CFO

Yes, Mario, you're right. We want to consider this after at least one year because the guidance we provided is not annual guidance. We chose not to give annual guidance; instead, it represents long-term guidance, specifically for the mid- to long-term, which we define as three to five years. Since we haven't completed one year after the IPO yet, we feel it is best to wait a year before deciding whether to adjust the guidance. You are correct that the adjusted net margin is significantly higher than our mid- to long-term guidance, largely due to the impact of the primary proceeds from the IPO at the XP Inc. level, which resulted in a lower effective tax rate that we did not factor into the initial guidance. So, we should consider a revision, but not until after one year. That's essentially what I'm trying to convey.

Carlos Lazar, Investor Relations

Okay. From Jorge Kuri, to what extent was the jump in the revenue positively impacted by the high trading during the quarter given the volatility? And what would be the revenue adjusting for this event? And also how it’s trending now, the third quarter, when we don't see any more volatility as we saw previously? And one more, what is the outlook for 2021? I guess it's also regarding revenue.

Bruno Constantino dos Santos, CFO

The revenue volatility primarily occurred in March, during the circuit break, and then began to stabilize. Despite a decrease in volatility over time, we continue to experience high-volume trading. Looking ahead, it is challenging to predict as we currently don't have much volatility. In July, we recorded an average of 2.9 million daily trades, our highest monthly record ever. I believe there is still significant potential in the equitization process in Brazil beyond just addressing volatility. While our revenue was affected by volatility, it was more significantly influenced by these equitization trends in Brazil. We don't anticipate a reduction in this pace moving forward, particularly with the 2% interest rate in Brazil and considering the stock market remains underpenetrated.

Carlos Lazar, Investor Relations

The trend, the trends for the future, for the near future, 2021 and so on.

Bruno Constantino dos Santos, CFO

In terms of take rates?

Carlos Lazar, Investor Relations

Yes, yes. And just putting together here Mario Pierry's question also, if we have any ability to maintain the revenue about 1.4% when market rates are around 2%.

Bruno Constantino dos Santos, CFO

The trend in revenue yields and take rates tends to have volatility depending on the product mix. When we have a higher presence of equities, futures, or financial products, this usually results in a better take rate. However, this is also influenced by the additional products we introduce. For instance, we are currently beta testing a credit card service. Revenue from this credit card will primarily come from retail clients, and this revenue is separate from assets under custody, which means it will add to our existing revenue base. This indicates that revenue yield should increase. There seems to be some confusion regarding the 1.4 figure; people tend to associate it with fees from retail clients, but that's not the case. Specifically, if we focus solely on brokerage, the revenue yield is actually less than 30 basis points. We've received inquiries from international investors about the possibility of brokerage fees in the U.S. dropping to zero, which could potentially reduce our revenue yield from 1.4 to around 1.1. However, this may also introduce new sources of revenue that aren't accounted for in my previous explanation. Ultimately, revenue yield is influenced by how our assets under custody grow. In the first quarter, we did see part of our AUC decrease, but it was linked to equities that did not contribute significantly to retail revenue, which should have elevated our revenue yield. Additionally, increases in the pension sector, while generating less revenue yield, are also worthwhile projects we are focusing on. If pensions become a bigger part of our mix, they might lower revenue yield. Overall, multiple factors play a role in influencing revenue yield. We believe that regardless of the product, as long as we provide suitable offerings that help clients meet their long-term goals, our revenue will continue to grow. I am confident about this because of our business model and the total addressable market, but predicting whether revenue yield will rise or fall compared to the current 1.4 is challenging.

Carlos Lazar, Investor Relations

From Christian Bolu from Autonomous Research, what drove the 300% year-over-year growth in the net income from financial instruments?

Bruno Constantino dos Santos, CFO

We have a range of financial instruments, particularly in the equity market, where retail clients seek to protect their positions or engage in trading derivatives. Additionally, we have introduced structured notes, known as COE in Brazil, which are new for us this year due to our banking capabilities. Previously, we depended on other banks and partners to issue these notes, but now we can produce them ourselves, while still offering structured notes from other banks on our platform as part of our investment ecosystem. This structure allows us to expand significantly and we anticipate continued growth in this area since it is a newly available product. For institutional clients, our bank also allows us to offer derivative products to independent asset managers and corporate clients who want to utilize our secondary markets. Thanks to our volume, we can provide competitive pricing for these clients, connecting them with our retail client base as well.

Carlos Lazar, Investor Relations

Some questions about competition here, Bruno, from Thiago Gomes and Teeja Boye. Can you share your thoughts on the competitive threats to your retail business from other platforms? What do you think is their strategy in aggressively targeting the IFA network and what should we expect in terms of AUC departure?

Bruno Constantino dos Santos, CFO

I appreciate the opportunity to address the current competitive landscape in the IFA business, especially as it has become a prominent topic. I’d like to take a moment to provide some context regarding the IFA sector in Brazil and discuss the implications of increasing competition. As we've mentioned, competition is indeed set to rise, which is expected given our leading position and the successes XP has achieved. This trend seems likely to continue in the future. First, I'd like to emphasize that XP began as an IFA and has dedicated significant effort to develop this profession in Brazil. The fact that other platforms are now attempting to replicate our long-established model signals to us that we are on the right track. When we consider the future potential of the IFA profession in Brazil, especially in light of the large number of bank managers and the ongoing reduction of bank branches combined with the current low interest rate environment, it is clear to us that the growth of the IFA profession is just beginning. Additionally, looking at the influx of new IFAs entering the market, the numbers indicate that these individuals regard XP as the premier brand and platform for achieving success in this field. For instance, over the past year, more than 80% of new IFAs opted for the XP platform, translating to around 150 to nearly 200 new IFAs joining each month. This profession remains underrepresented in Brazil, and I strongly believe it will experience significant growth. The question remains, why do over 80%—specifically 84% in the last year—of these new IFAs choose XP over other platforms? And again, at the end of the day, considering that, we developed this profession. We were down the road by ourselves for many years. We have the ecosystem of the IFA; we have a company inside our company just to deliver the best service for those IFAs and to help them to succeed in their profession. And considering the number of new IFAs choosing XP as their final destination for the long term as they decide to become an entrepreneur, it's a natural thing that other platforms that are not able to attract those new IFAs that they want to come to our platform and try to convince some of our IFAs to migrate to their platform. So yes, some IFAs might leave our platform, as they have in the past, and it will happen in the future as well. But again, it's nothing, nothing relevant to change our exponential growth; it has not been because those other platforms, they've been attacking our IFA network, it's not a new thing. They've been there for more than 2 years attacking. And remember again how underpenetrated the independent platform business in Brazil is, with 90% of the investments inside 5 big commercial banks. That's where the gold pot is. Even for those independent financial advisors who choose to leave our platform, their success is not guaranteed, as this decision is quite challenging. There are four main reasons why it’s not an easy choice for an advisor connected to our platform. First, they understand that they will not be able to take all their clients’ assets when leaving. We have provided historical data about this in a press release. Second, negotiations often occur at an office level rather than between individual advisors. In these situations, an office might try to retain their advisors, and some may choose not to leave with the controlling office, opting instead to join existing offices we have or to create a new office while remaining connected to the XP platform. Third, the migration process can be complicated and time-consuming due to the different systems involved. Depending on the clients' assets, transferring them may pose challenges, including negative tax implications that clients may want to avoid. Clients are already accustomed to our app and experience, which means advisors risk losing momentum if they decide to switch. Fourth, advisors recognize that their growth potential is significantly greater at XP, which is precisely why they partnered with us in the first place. This partnership between XP and the advisors highlights the value that competitors are trying to replicate in an effort to persuade them to leave. So in summary, when an IFA decides to leave our platform, it's much more an individual decision of the IFA then a decision to migrate to a platform that is going to be better for the clients or that will help the IFA to accelerate their growth. That's not the case. Now in terms of impact from this higher competition going forward, we see basically 2 main developments in a practical way to think about our numbers going forward. Number one, the margin compression, that we should expect margin compression. We are not going to stand still. So we can expect a higher investment from our part in the IFA network, that will follow, okay? And we are doing already. We are still in this preliminary assumption, but what we can tell you in terms of our preliminary assumption is that we expect some margin compression of 200 basis points in gross margin and 100 basis points in adjusted net margin. Again, that's in the short term that will lead to higher margins in the long term. And number two is that by making these investments that we are doing, especially in a moment like the one we are living with the low interest rate environment, we are going to have, at the end of the day, an IFA network much more capitalized. It's like we are decentralizing the cash all over Brazil, spread all over Brazil and remember, with 90% of the investments in those 5 banks. So when I give you this margin compression number, I'm not taking into consideration the potential acceleration of the pace of net new money and growth of those IFAs because of this capitalization that is going on right now.

Carlos Lazar, Investor Relations

Okay. From Teeja, another question here. Can you please help me think about the revenue potential and timing for the new product pipeline, lending, cards, digital banking, insurance distribution, and so on?

Bruno Constantino dos Santos, CFO

Yes. We don't have a number yet to give to the market in that sense. As I said, those are brand new businesses. You're going to see most of those businesses impacting the retail revenue line, but we also have institutional, for example, institutional clients, as I mentioned, with the bank and financial products. It's another revenue line that is impacting institutional revenue line. But we see a lot of potential because, for example, I mentioned some, okay? If you look at our Limite and Resgate Express line, our structured notes as leverage for margin loan business that we don't have in Brazil at scale. It's a brand-new business in scale. We are small. As the end of this second quarter, we had something close to BRL 400 million in our balance sheet, basically nothing. There is a lot of potential for growth there as well. And the credit card is just starting. We are going to open for the public in the fourth quarter, and it's going to skyrocket. So no question it's going to contribute to our revenue, but we don't have a figure to share with you right now in terms of how much it will impact the revenue going forward.

Carlos Lazar, Investor Relations

A question from Mariana Taddeo and Tito Labarta about whether you can share insights on the net inflow expected in the near future and if the BRL 14 billion is sustainable.

Bruno Constantino dos Santos, CFO

So the future, we're talking about the future; we have July, right? So it's only 1 month. What I can share with you is that July, we kept a very healthy base as in June. And we believe that the worst because of the COVID crisis is behind us. The BRL 6.9 billion that we presented in April as net new money is behind us. So we are seeing a healthy base of growth coming back. The IFA network was the part that was most affected by the crisis because we also could not have the tests, the certification for new IFAs to come to the market, and the restrictions of the lockdown impacted more the IFA than the XP direct channel. But now it's resuming. Things are getting back to normal. And we believe that we're going to keep a healthy base going forward.

Carlos Lazar, Investor Relations

For the second half of 2020, as issuer services resume activity, and that boost distribution revenues, is it fair to expect revenue yield expansion?

Bruno Constantino dos Santos, CFO

On that perspective by itself, yes, it is. But it will depend because remember, it's always a function of the denominator and numerator. So you're talking about the numerator, but it depends if the denominator, the AUC growth, with AUC that is not bringing revenue right upfront, you see that it's not bringing revenue right upfront, then the impact should reduce a little bit. So it will depend. If you say that, okay, I'm going to be very conservative in your AUC projections going forward, I would say, yes, I should expect revenue going up. If you say, I'm going to be really aggressive about your AUC going forward, maybe the revenue yield could go down a little bit. It's a function of the numerator and denominator. One thing that I didn't comment but I think it's important to highlight going forward. We kept hiring new people into our company. But of course, because of the COVID crisis, even the challenge of onboarding, we reduced a little bit the pace. And now with everything that we saw when we got into this crisis, we didn't know how it would work for XP. And with the benefit of what happened and how our people engaged to make the impossible possible during this pandemic, we are confident about the future and what we can deliver and all the opportunities ahead of us. So we decided to resume at full speed our other projects and hiring people.

Carlos Lazar, Investor Relations

Another one also from Mario Pierry here. What is the trend in terms of commission expenses that you can share with us?

Bruno Constantino dos Santos, CFO

Commissions are already significantly high. The trend in commission expenses primarily depends on the mix of products rather than anything else. Due to our investments in the IFA network, you'll notice that the combined line for commissions and incentives will grow over time, which is where the margin compression originates. We're estimating a rough impact of about 200 basis points from these investments in the IFA network overall. However, I wouldn't say there is pressure on specific commissions since they are already extremely high. If someone is willing to pay a full commission and take everything for the IFA, that’s an option, but it won’t be profitable in the end. I haven't seen any competitor numbers that demonstrate the health of their IFA business. Ours is strong; it's a long-term partnership with our IFAs, who are entrepreneurs, and we are focused on creating a legacy together. This commitment to our purpose is a significant distinction compared to other market players.

Carlos Lazar, Investor Relations

From Guilherme Oliva, do you have any estimated impact in XP Inc.’s numbers considering the future launch of the XP bank?

Bruno Constantino dos Santos, CFO

No. As I mentioned, we are not sharing specific numbers due to the bank, but the bank is another tool in our ecosystem that enables us to offer products that we could not before its existence. The credit card is one of those products. The structured notes issued by our bank, as well as derivatives with institutional and corporate clients, are additional examples. We have generated revenue from several products that were not possible prior to the establishment of the bank.

Carlos Lazar, Investor Relations

One final question here. Where will we be in 2025? How big are projects for XP for the next 5 years? And what is the company's market share targets?

Bruno Constantino dos Santos, CFO

No, we do not set a market share target. It's difficult to predict our position in 2025. If we reflect on 2015, I doubt we could have anticipated our current standing, despite our ambitious culture and values. When considering the long term, we believe we can achieve anything, as our second core value is about making the impossible possible. Our priority is to maintain our culture and core principles, focusing on doing the right thing for our clients and striving for excellence. If a competitor is offering a superior solution, we aren't afraid to acknowledge it and adapt accordingly. Our focus is on the long-term satisfaction of our clients, and we have created a unique ecosystem. However, it's important to note that we are still a small player within Brazil's highly concentrated financial sector dominated by five major banks. Therefore, while I can’t predict 2025, I believe we have the potential to accomplish much more in the next five years than we have in the past two decades.

Carlos Lazar, Investor Relations

Well, thank you, Bruno. Thank you all for joining us in this conference call. Our Investor Relations area continues to be completely available for you to discuss any matter of the second quarter results and any other subjects that you wanted to raise with us. Thank you, and have a good night.

Bruno Constantino dos Santos, CFO

Thank you very much. See you in the next call.

Carlos Lazar, Investor Relations

Bye-bye.

Bruno Constantino dos Santos, CFO

Bye-Bye.