Annual Integrated Report
26
Annual Integrated Report
Table of Contents
Introduction Value Creation | Economic Performance Environmental | Social | Governance Appendices
Context and strategy
In 2022, with a management approach that aims to position
us with a long-term vision through credit cycles, we have
strategically adjusted our operations to effectively navigate
through a context of economic deterioration.
This adjustment process was set in motion during the final
quarter of 2021, as we detected trends in the economic and
market environment that rendered the landscape more
challenging for the expansion of our business in the ensuing
year.
At that point in time, there was a confluence of high inflation,
an upward-trending benchmark interest rate, and a high level of
household indebtedness.
These factors exerted pressure on customers' ability to pay
elevated the risk of delinquencies in our portfolio in 2022.
and
In light of this, we adopted a strategy of greater lending
selectivity, particularly within the individual client segment.
A practical effect of this decision was that, in 2022, we prioritized
increasing the proportion of collateralized products (i.e., those
with lower risk) in our loan portfolio mix.
Simultaneously, we bolstered our offering of solutions that
empower our customers to organize their finances and regain the
ability to make payments - such as the "Debt-Free" campaign,
which debuted in January.
The adoption of a more prudent approach had a substantial
impact on our operations throughout the year, affording us
greater security in navigating the economic environment.
By the end of December, 48% of the portfolio was already
comprised of assets from the "new vintages" - a term we use to
refer to contracts signed after January 1st, 2022, as part of our
strategy of increased selectivity.
This proved to be a pivotal step in managing delinquencies and
credit costs, as the newer vintages have exhibited healthier loan
quality indicators than their predecessors.
While old contracts displayed an over 90-day NPL ratio of 3.8%,
the new ones saw delinquencies reach 2.3% - signaling that the
strategy yielded positive results for both our business and the
financial well-being of customers.
Focus on
collateralized products
65%
Portfolio of
collateralized
loans to individuals
(+0.3p. p. QoQ)
New vintages
Total origination
48% >> R$ 37.6
Share of
originations
from Jan/22
(+7.1p.p. QoQ)
Billions/month
In addition, we achieved the best results in our history across
several business segments. This is exemplified by cards (R$ 338
billion in turnover, up by 10%) and consórcio (R$ 14.7 billion in
origination, an increase of 42%).
Through our multifaceted operations and an increasingly
loyal clientele, we were able to achieve a 2.3% increase in fee
revenues, even amidst a highly demanding market environment.
This contributed to offsetting part of the revenue decline
stemming from net interest income, which is a natural occurrence
in a context of macroeconomic downturn and heightened
selectivity.
Despite a challenging economic climate, we were able to
generate a managerial net profit of R$ 12.9 billion and an ROAE of
16.3%. We are well-positioned to enter 2023 with clear growth
levers, as well as a higher quality and more robust balance sheet
(see more in the table below).
For a comprehensive overview of our financial results and a
detailed analysis thereof, please visit the Results Center on our
Investor Relations website.
There, you will find both our results presentation and the
complete transcript of the teleconference, during which the
figures were discussed with market analysts.
2022 x 2021
36.9% 85%
Efficiency
+1,6p.p.
1.3%
Efficiency
-0,4p.p.
13.9%
BIS Ratio
Recurrence
-4,0p.p.
16.3%
ROAE¹
-4,9p.p.
Result
(R$ million)
2022
2022 x 2021
4Q22
4Q22 x 3Q22
Net interest income
51,827
-6.8%
12,517
-0.6%
Fees
19,308
2.3%
5,075
7.2%
NPL
Old
vintages
New
vintages
Total revenue
71,135
-4.5%
17,591
1.5%
Allowance for loan losses1
-23,930
72.7%
-7,364
18.6%
Over 30 days
6.7%
4.5%
General expenses
-22,706
7.0%
-6,049
6.3%
Other
-9,094
-36.9%
-2,603
25.2%
Over 90 days
3.8%
2.3%
Pre-tax profit
15,405
-38.4%
1,575
-53.0%
Taxes and minority interests
-2,506
-71.1%
114
-148.9%
From 15 to 90 days
5.2%
3.8%
Managerial net profit
12,900
-21.1%
1,689
-45.9%
VAS¹
[201-1]
Financial results
In 2022, despite the demanding backdrop, we continued building
our growth pillars, which are grounded in four tenets:
• Controlled and predictable cost of credit;
⚫ Franchise growth, with increased transactionality;
• Enhanced culture of productivity and efficiency; and
⚫ Business expansion centered on customer experience.
In addition to controlling the cost of credit, which was
accomplished through the strategy of greater selectivity
described in the preceding chapter, we have made further
progress within these pillars.
The consolidation of our relationship base was one of the
year's most noteworthy achievements. Our customer base
grew by 12.2%, reaching a total of 60 million at the end of the
year, including 32 million active customers and 9 million loyal
customers (those with 6 or more products).
We also modernized and integrated our distribution channels.
Our physical stores received 13 million monthly visits, while
our remote channel handled 10.3 million interactions each
month. Furthermore, our digital channels generated 45 million
contracts, representing a 17% increase from the previous year.
In 2022, the Bank's Value-Added Statement was
divided as follows:
28.3%
2.8%
0
28.6%
Equity Compensation
40.3%
Personnel
'The Value-Added Statement's composition is available here
Taxes, Fees and Contributions
Return on Third-Party Capital - Rentals
Santander
27View entire presentation