The Company more than doubled its net income, grew 3x the market’s pace in credit portfolio and still registered a reduction in the default rates in the first months of this year
São Paulo, May 08, 2023 – Agibank registered a net income of R$ 60.2 million in the first quarter of 2023, a growth of 119.2% in relation to the same period of 2022, consolidating a continuous profitability position in the last quarters. Also noteworthy is the Operating Efficiency Ratio of 60.0%, a significant improvement over the 68.3% in the same period last year, due to the greater advance in the sum of the Net Interest Income and Service Revenues (+24.7%) over Total Expenses growth (+9.5%).
Total Revenues amounted to R$1,087.8 million this quarter, an evolution of 46.4% compared to 1Q22, mainly due to the increase in revenue from Credit Operations (+43.1%) in line with a substantially larger credit portfolio in the quarter and revenue from Treasury operations (+97.6%), reflecting the hedge accounting structure, carried out for greater efficiency in Assets & Liabilities Management.
According to Thiago Souza Aor, CFO and Investor Relations Officer, Agi anticipated the more volatile macroeconomic scenario and managed to build a position that ensures consistency in the results of financial intermediation and predictability of results. “This management has attracted commited and secured funding lines, which allows us to access more efficient funding, reduce the share of CDBs and increase the presence of institutional investors in our liabilities, preserving the consistency and perpetuity of the business,” he explains.
The gross credit portfolio reached R$ 11.3 billion, an increase of 59.0% when compared to the same period last year and of 11.2% in relation to December 2022. The gradual change in the credit profile was maintained, favoring lines with lower risks and nominal rates, such as payroll loans and payroll credit cards, which advanced 61.2% and 225.9% respectively in relation to March 2022. The payroll benefit card portfolio has already reached a balance of R$ 428.2 million and shows a high potential for penetration in the Company’s client base. Altogether, the payroll credit portfolio registers a 75% share of the total portfolio.
Moreover, in line with the strategy of strengthening the relationship with the client, Agibank expanded by 32.1% the personal credit portfolio for account holders. “This direction is fundamental for us to increase our participation as the client’s main Bank and allows us to leverage the other business units”, reinforces Thiago.
The expressive growth of the portfolio was accompanied by the reduction of defaulting indicators. The first quarter of this year closed with 4.9% against 5.2% in December 2022 (-30 bps QoQ in the portfolio overdue over 90 days) and the expansion of the coverage ratio to 115.8%, preserving the quality of the portfolio and solidity in risk management. “This improvement in defaults is even more expressive when compared to the indicators of the free individual credit market, which advanced 30 bps in the period, according to BACEN’s data,” highlights Glauber Correa, the company’s CEO.
In recent years, Agi has preemptively implemented relevant improvements in credit modeling and the entire credit cycle, prioritizing the concession to account holders who receive their salary at Agibank, which reduces the risk of default and increases the lifetime value of the client. “All these orchestrated initiatives allowed us to reduce the default rates, contrary to what is observed in the financial system. The build-up of a portfolio based on a long-term relationship with our customers, who have their income flow with us, translates into a business model that stands out in product cross-selling,” Correa explains.
The number of active clients has also been growing consistently over the quarters. At the end of March, the institution reached the milestone of 2 million active clients, with an average of 5 active products per account holder. This metric is increasing as the older vintages mature, with a margin of more than 6 products per account holder, contributing to the achievement of a consolidated LTV/CAC ratio of more than 20 times.
The capital condition continues to be even more solid, with a Basel Index of 14.6%, of which 11.1% is Tier 1 Capital. This position strengthens the sustainability of the business, improves competitiveness, and increases the capacity to generate value for customers and for the financial institution itself.
Since its foundation, Agibank has recognized that there is a large part of the population that still needs assistance to enjoy the usefulness of digital channels and have faster and easier access to financial services that can, in fact, improve life on a daily basis. For this reason, one of its main differentials is the operation that unites physical and digital. Today, in addition to offering a complete digital banking platform, Agi has almost 900 physical stores in Brazil, spread throughout cities with more than 100 thousand inhabitants, which serve as the first point of contact for customers unaccustomed to the virtual world. “We intend to open 20 new units in smaller cities in the coming months, because our proposal is to go beyond the sale of services and operate in an increasingly inclusive and personalized way to meet the different needs of our customers,” reinforces the company’s CEO.
And, to accompany the entire digital education process and observing the demand for an online service that is increasingly more welcoming, humanized and accessible, the institution recently created Gi, a digital consultant, which is the personification of the Agi brand. “Using the channels that our customers are already used to, such as WhatsApp, Gi provides customer service with a simple, light and informal language, answering questions, solving problems and helping in the hiring of new products and services. Currently, it talks to thousands of customers daily, registering more than 11 million messages per month, which already makes it responsible for more than 30% of sales made through digital channels,” adds Glauber.
Facing a still complex macroeconomic environment, Agi admits that it moves forward in 2023 focused on growth with profitability, strong discipline in execution and austerity. “We remain firm in the search for maximum efficiency, increased digitalization of credit origination, improved customer experience, customer satisfaction and the profitability of the business, anchored in an increasingly complete portfolio with more competitive conditions. Our discipline, focus, teamwork capacity, and ability to make the right choices have been determining factors in building the results”, says the CEO.