Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Has the Loan-to-Deposit Ratio (LDR) bottomed out, and what is the source of the increase in subsidiaries' cost of credit? A: The cost of funds (COF) is expected to continue decreasing, as the marginal cost of deposits has been declining. Subsidiaries' credit costs saw a spike due to provisions in P&M, particularly in group lending schemes. This is part of a cleanup process for loans restructured multiple times due to COVID-19. The overall group cost of credit is expected to remain around 3% due to several factors, including write-offs and downgrades to NPLs.
Q: With improvements in the cooperative segment, could 2025 credit costs be lower than this year's guidance? What needs to change for growth in this segment? A: If the current trends continue, there is potential for lower credit costs in 2025. For growth in the cooperative segment, improvements in asset quality vintages and the success of capability-building programs for loan officers are crucial. Additionally, enhancements in scoring and underwriting models will be monitored.
Q: Why is there an increase in special mention loans in the medium segment? A: The increase is due to administrative errors involving five customers, which will be corrected by the end of the month, returning these loans to their proper classification.
Q: Can you provide more color on the credit cost outlook for P&M and the overall group for Q4 2024 and 2025? A: P&M's credit costs are expected to decrease in Q4 2024, with a full-year estimate of around 7%. For 2025, credit costs should be lower than 7%. The overall group credit cost guidance remains at 3%, with potential reductions due to modification losses and macroeconomic assumption adjustments.
Q: What are the expectations for the macroeconomic assumptions impacting provisions in Q4 2024? A: The macroeconomic assumptions will be reviewed in November or December, potentially leading to reversals in provisions. This review is expected to support the overall provisions strategy for the fourth quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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