Good morning, ladies and gentlemen. We would like to welcome everyone to Banco Bradesco's Third Quarter 2013 Earnings Results Conference Call. This call is being broadcasted simultaneously through the Internet in the website, www.bradesco.com.br/ir. In that address, you can also find a banner through which the presentation will be available for download. [Operator Instructions] Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of Banco Bradesco's management and on information currently available to the company. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to future events and, therefore, depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect to the future results of Banco Bradesco and could cause results to differ materially from those expressed in such forward-looking statements. To represent Banco Bradesco, we have here today, Mr. Julio de Siqueira Carvalho de Araujo, Bradesco's Executive Vice President; Mr. Luiz Carlos Angelotti, Executive Managing Officer and Investor Relations Officer; Mr. Moacir Nachbar Junior, Deputy Officer; Mr. Paulo Faustino da Costa, Market Relations Department Director. Now, I will turn the conference over to Mr. Luiz Carlos Angelotti, Executive Managing Director and Investor Relations Officer.

Good morning, everyone. We deeply appreciate your attendance to our third quarter 2013 conference call. In the third quarter of 2013, the global scenario was marked by the continued financial market volatility. Dictations that the U.S. will begin reducing monetary stimulus had a relevant impact on financial asset prices. As a result, long-term interest rates moved up globally and the emerging consequences depreciated strongly, that U.S. will take decisions not to taper stimulus in September brought some relief to the markets. The Brazilian Central Bank has been working on reducing inflationary pressure, establishing the confidence on the economic margins and ensures that both low income gains and microeconomics predictability are maintained. We, therefore, continue to see favorable prospect for the Brazilian economy, that includes [ph] our growing [indiscernible] that are both sustainable and compatible with risk while delinquencies shown signs of decline. Consequently, given the continuing upward social mobility, the outlook for the banking and insurance industries remain favorable. Within this context, Bradesco keeps investing in technology and its urgent growth pillars of our strategy to gain market share in the banking and insurance market. On Slide 2. You can find the highlights for the period. Firstly, the adjusted net income amounting BRL 3,082,000,000 in the third quarter, up by 3.5% over the last quarter. And BRL 9,003,000,000 in the first 9 months, posting an adjusted return on average capacity of 18.4%. Our credit margin, net of provisions for loan loss improved by 8.2% in the quarter and 12.8% in the 9-months period, showing the improving margin of our loan portfolio. Our delinquent ratio over 90 days went down by another 10 basis points this quarter, reaching 3.6%. This ratio has already decreased by 30 basis points last quarter. This new drop suggests that the reduction in the delinquency is…

Thank you, Luiz and thank you all, for joining our conference call. I will try to give a brief presentation in order to save you more time before our Q&A section. I will start with the Slide 3 that shows delinquency ratio between our book net income and the adjusted net income. This quarter, the only known recurring event was the constitution of the provision for severe contingencies, which amounted to BRL 30 million gross. Adjusting for this event, our third quarter book net income increased from BRL 3,064,000,000 to an adjusted BRL 3,082,000,000. Also on this slide, you can see that our adjusted return on average equity came into 18.4% in the first 9 months. On Slide 4. You can see that our third quarter net income growth was mainly due to: first, lowered delinquents and the consequent reduction in large expenses; and second, higher net interest income both interest-earning and noninterest-earning portions, partially offset by the fact that the collective bargaining agreement, which is our already incorporated expense. In comparison, with the first 9 months of 2012, adjusted net income moved up by BRL 398 million or 4.6% due to: first, an increase in the interest-earning portion of the net interest income resulting from an increased volume of operations; second, the expansion of the client base in the service channels, which helped push up the income as a result of the higher number of transactions; third, reduce delinquency; fourth, the strict cost control, with operating expenses lagging behind inflation; and fifth, a good performance of our Insurance business. Earnings per share in the last 12 months increased by 4.8%, BRL 2.71 to BRL 2.84. In Slide 5, shows the relative share of our major provision in the net income. It's worth noting, expanded relative shares of low operations…

[Operator Instructions] Our first question comes from Mr. Jorge Kuri with Morgan Stanley.

I have 2 questions if I may, the first one is I'm trying to understand NII year-to-date and what does that tells us about next year? At the beginning of the year, you thought NII was going to be 7 to -- NII growth was going to be 7% to 11%. You're now expecting 1% to 3%, even though your long guidance didn't change much, right? Well, it changed but obviously not much as you're expecting 13% to 17%, now it's 11% to 15%. What do you think happened that you guys didn't account for back then? Certainly, you were expecting rates to be lower, 7 25, I believe at the beginning of the year, and they're now, they're probably going to end up closer to 10, so that's certainly would have helped. So just want to understand what exactly happened that you had to reduce your guidance so much and what does that tells us about 2014? And where do you think that's going, that's the first question. The second question, I'll ask my second question later. Sorry, go ahead.

Okay. About the NII. The beginning of the year, our expectations for the GDP growth was around 3.5%. Then our loan growth expectation was 13% to 17%. But during the year, the economy, the Brazilian economy, doesn't grow as we expected. Then we are in June, we needed to revise the loan growth, and we changed it to 11 to 15. The loan revenues represented around 35% [ph] of our net interest income. Then if we have here the loan sites they're not -- this will affect our NII and then this is the main events that we needed to change -- reduce our expectation. But now our expectation was that in the second half of the year, we will reach now the 13% in the end of the year. This is our expectation. But we think this third quarter with the 11% in our loan growth. And we understand that probably in the last quarter of the year, we would have something similar that we had in third quarter, could be a little better. But probably, we will finish the year with the grow around the 11%. Then considering the probably will finish the year with the grow in the lowest level of our guidance for the loan growth. We needed to revise our net interest income guidance, then we reduced it to 1% to 3%, because it affected our loan growth will be in the lower level of our expectations. And we had another effects in the loan revenues that is the mix that we are having to grow in some operation some portfolio the we have lower spread in the loans in the mortgage operations. This is reducing a little bit the revenues. And this is affect the growth for the net interest income. This is one part of the effect but we understand that probably, consider this level that we expect to finish the year in the loan portfolio growth, 11% there. We understand that this level for 1% to 3% growth for the net interest income is more reasonable. And the main aspect that we need to revise the guidance for NII is the loan growth portfolio.

All right, so what does that tell us about 2014? It seems that you're expecting the economy to grow even less than this year, you have 2.1 GDP growth versus 2.4 this year. What are your preliminary thoughts in terms of NII growth in terms of next year?

We don't have the amount, the guidance, so we probably announce the guidance in the beginning of 2014. But we expect for 2014 the GDP grow around 2.1% in the system. For the total system, we expect the total loan portfolio growth will be something around the 3 -- 13.2%, there's a number that our Economy Department has then that will probably a year, very similar that we are having out in 2013. We expect to have a positive growth in our NII in 2014. But we don't have now the guidance. But if I understand, that probably will be a year very similar to what we are having now in 2013. One thing that's probably we understand that is that the delinquency ratio that this year we had the decreased probably expect that's more stability for 2014, then probably the net interest income after delinquency ratio will be better for 2014.

All right. My second question is regarding your profitability. For the first 9 months of the year, you generated 4.5% earnings growth, while your assets grew 11%, so that means that your return on assets fell from 1 42 to 1 34. ROE didn't change much because the leverage went up. If you have kept leverage on change, your ROE would be around 17% instead of the 19% you reported. So as you think about the next 12 months, how should we think about return on assets and leverage and return on return and equity, we continue -- I'm assuming we will continue to see earnings growing below asset growth and to what extent you can continue to use leverage to keep ROEs where they are. And so in general, where do you see the combination of ROA, ROE on leverage over the next 12 months? Okay, about the asset quality, we have this, as we said, the probably ROE have grew, have come up 18% to 20% is the level that we understand that is more reasonable for the next fields there. We understand that's probably in 2014, considering the lower level for the increase ratio that we expected. Probably, we will have a better contribution for the profitability considering the growth that we expect. Though we expect this to be a very similar year. Then a more reasonable level for ROE is 18% to 20%. And the ROE, we have 1.3%, probably we'll maintain stable, and I think that probably this ratio will be stable for 2014.

Our next question comes from Mr. Mario Pierry from Deutsche Bank.

Let me ask you 2 questions. The first one is on asset quality, which we have seen a significant drop in provisions and provisions today that represents 3.7% of your average loan portfolio. Should we expect to see this ratio continuing to improve, especially as your loan mix is changing? As you mentioned to lower spreads businesses, and I assume most of these are lower risk businesses as well. So first question is related to the asset quality, what do you think provision levels can stabilize at? Also, if you could comment, we saw deterioration in NPLs to corporates from 0.2% to 0.4%, just wondering if this is related to any specific corporates? Or if you could give us any color on that?

Okay, about the asset quality, we have this quarter a new decrease in our ratio and we finished with 3.6%, we understand that probably, we expect now more stability in the next quarter probably during 2014, considering this attracts off the mix could be that we have some little more decrease but we have said that it is a more reasonable expectation about stability. This level of 3.6 is reasonable for this year and next year. The expenses, probably we'll finish this -- the last quarter with something very similar that we're having in this -- in the first quarter, around the BRL 2.9 billion after recoveries. Probably the expense for the last quarter will be some a little similar that we have. And for 2014, we understand that we consider that the stability the expense will be -- to continue stable between now, considering the increase that we are having in the portfolio that we expect something around -- the system will grow 13%, then probably, we will have some growth very similar. Then we can have for the next year, some growing expense but they are only considered because the growth that we expect for the total portfolio. They are not probably is this behavior that we expect for the expense. About the corporate events, we understand that these are specific situation not represent any things in strengths is our only our specific situation. There is no any affecting any segment or anything we see in the portfolio.

Okay, very clear. My second question then is related to as you've shown on your slide, your coverage ratio of fees over costs, this has been improving considerably. I was wondering do you have a specific target for this ratio? How much more can we see on improvement? Also, by you showing such stable costs, if you could give us any color of the benefits of all the investments we have made in technology over the last few years? Are we finally seeing those benefits coming through and how much longer can we see these benefits?

We don't have a specific target for the coverage ratio, what we expect that this ratio needs to be the highest that is possible. And we are working the both sides in the revenues, in the fees. We are investing in the channels, to offer more products for client, improve the number of clients or the number of credit cards. Then reduce the movement. We are -- we have probably to improve the movement growth of the transactions. And consequently, the fees revenues is increasing. Then our -- this is the way that we are working for this. We expect that we will continue for the next year, the growth of fees will maintain our double-digit growth for fees the next year. In the expense side, we are working for improved efficiency. We are -- we have the Efficiency Committee that sees it. And another committee that purchases. Then we are working for to -- try to have our opportunity for reducing cost, for revising process inside the bank. In our departments, in our areas. And we have some successes in probably for the next year, we expect to maintain the expense, the operating expense growth. And the inflation growth. That what we expect for the expense side. For the coverage ratio, we are working the both sides in improving revenues and the reducing cost.

Our next question comes from Mr. Eduardo Seda [ph] from Barzi Opurao [ph].

I have several questions regarding the IT project. Can you give us an update of your move to your IQ project is expected to finish this year? And what do you see as important there? What's going to change? Which module is being now? I believe you're finalizing the most important module now, which is the current account module and what that means for Bradesco? What can this completion mean in terms of additional gains to Bradesco and in terms of percent, in terms of cutting costs? And also, any sort of idea if the IT CapEx will fall next year because you're completing this project this year? Thank you, Ms. Sue [ph]. Our IT revitalization plan, last year -- we are now in the forefront of the IT revitalization plan. We changed everything we think about IT. We changed the hardware, the environment, the technology and now, the rest that we have is rewriting our systems. Last year, we switched all the 8% -- 83% of all the total systems. We are rewriting new language, unique language in more simple tool to deal. And this year, we expect to -- at the end of April, we'll be finishing around 100% of the systems, the rewrite on the systems. We need some time more to do the tests. They are not probably for 2014, we will be concluding the tests. And the systems that starts running, they start to give us some benefits. There are some examples that we have in our benches now, we have new system for the cashiers. They now -- they need less time to attend the clients. This system is running. In the end of 2012, we did the implementation. Then now our cashiers, they need less time to attend the clients, they now can…

Just a follow-up. In this particular module that you are launching, analyzing [ph] this, do you see any additional gain because of that? And you mentioned some gains from systems improvement you've done in 2012, but this particular one, I think, is the main portion with the core current account legacy system that we situate in, is there any additional gain with that? Do you think there's more cross-selling. There is more improvements that those features that we have already finalized can leverage on top of that?

There are some benefits that we have with this system that starts running or that start running this year or what is we don't have to measure or to inform you that the -- how much is the effect of that. We have many fronts that -- many systems that will affect our [indiscernible] profitability for the future because this, we will have more efficiency, we will have more [indiscernible] for products for our clients because there is more information that we are having about the profile of the client. Then we don't have how to measure this benefit or inform you how much we are having this in our guidance but we have this -- we expect to have positive effect in the next quarters.

Just then let me rephrase my question, your cost to income soft guidance for 2014 is 39%, you're running right now at 42%, do you feel, reiterate this 39% for next year?

We are working hard to reaching this target in the end of the year. We understand that is a challenge, but we are now finishing the budget and our objectives for 2014. And one of the targets is [indiscernible] 39%. We are working for reaching this target in the end of the year.

Our next question comes from Regina Longo Sanchez with Itau BBA. Regina Longo Sanchez - Itaú Corretora de Valores S.A., Research Division: I also have 2 questions. The first one is related to the BIS ratio of the bank. We saw that it increased to 100 basis points quarter-over-quarter, mainly because of a reduction on the risk-weighted assets related to market risk exposure. I mean considering that this increase is market risk component in coming quarters and that loan growth tend to be not so strong in coming years, as well as growth will probably come in safer loans that will have lower risk-weighted factors, can we see the bank increasing its payout ratio or buying back more shares in the future? And then I have a second question that is also related to buyback.

Thank you, Regina. We did decrease the market risk that we had in the last quarter. One thing that I want to comment to that, we usually -- we use the internal model that is approved to the Central Bank. And the number that we have, considering our internal model, if you compare with the standard model, the standard model will be will be around 6% of the number that we have, then because of the -- our internal model consider it around 6 months of the volatility. Then probably in the next quarter, we expect that our market risk allocation will continue decreasing and we will have more spacing to improve the growth. But we are now in the [indiscernible] that we are starting implementation of Basel III, and we have some modifications in the guidance, in the calculation, some new adjustment that we need to consider. But we understand that we won't have any profitable [indiscernible] in the investing -- to do operations with our clients in end segments. And probably, these operations that have lower risks, the loans and mortgage. We will continue to have a huge growth for the next quarter. Then probably, we will have some more space for growth because of this less capital allocation that will have in the future. But we cannot forget about the Basel III implementation that provoke the Central Bank in the future. We will find some additional adjustments or some additional buffers. And the -- [indiscernible] -- we'll not change any -- our [indiscernible] our capital. Then we understand how to do the implementation of Basel III. We don't see any problem for the future. Regina Longo Sanchez - Itaú Corretora de Valores S.A., Research Division: Okay, thank you. And my second question is also related to buyback, I mean we saw that it increased the amounts of shares in the [indiscernible] bought back during the third quarter this year -- I mean, we saw that it increased around 2 million shares, but only nonvoting shares, I mean, can you confirm why the decision to buy nonvoting share was also signs that management believes that nonvoting shares are undervalued, relative to voting shares. I mean, considering the nonvoting shares receives 10% higher dividends than voting shares, and is this buyback was just the decision also when you see opportunities where at least some excess capital in the short-term it was not a major amount but it called my attention that it was the nonvoting share instead of the voting shares, so if you could share that with us, I appreciate.

Regina, I didn't understand your question, can you repeat. Regina Longo Sanchez - Itaú Corretora de Valores S.A., Research Division: Okay, sure. I saw that you bought back shares in the second and third quarter, around 2 million shares...

A very small portion. I think it's already movements, it's a very small portion. Regina Longo Sanchez - Itaú Corretora de Valores S.A., Research Division: Okay. My question was that, so that you only bought back nonvoting shares, and I want to know if this is a sign that you believe that nonvoting shares are undervalued. You could have bought voting shares, I mean, the ON shares. But you only bought back nonvoting shares, is that because you think it's really undervalued relative to the voting shares considering that the BN shares and nonvoting receives 10% higher dividends than the voting shares, that's my question.

When I -- when I bought, I think it was an isolated operation. We don't have any intention to, it's a very small quantity [indiscernible] big price of the market, [indiscernible] is the correct price then the market has the information to classify the shares. But we don't have any intention to continuously buyback the shares. It was an isolated operation that we did. It's a very small quantity, 2 million shares, very small. Regina Longo Sanchez - Itaú Corretora de Valores S.A., Research Division: Okay. So are you saying that the market price is correct having the number in the public meeting [indiscernible] a year ago, the growth we saw the slide when the voting shares were actually trading with some more significant discount relative to the PN shares. And you said that probably it should be more with a lower discount, maybe around if I recall correctly, 3.5%, so I mean, I know that the market is the market but if you could just confirm that the nonvoting shares receives 10% higher dividends, and then I'll be fine with that. It's just that we haven't seen people, I mean, I'm wondering why the voting shares are actually trading with the premium when we thought [indiscernible] management showing slides in this public meeting this year ago that it should be traded with a small discount but some discount.

Regina, as I told you, the markets do depreciation of their shares. We had some movements in the end of the year that we have more demands for the common shares. I understand that the price that we have in the market is the correct price that we have in the system.

Our next question comes from Philip Finch with UBS.

I've got 2 questions. First is regarding your NIM outlook. We saw your net interest margins come down to 7% in the third quarter, can we assume where this is going to be the trough level? And going forward, I mean, and let's say this isn't the level of trough, when do you think we could see an inflection in margins? And the second question is regarding your capital position, so just a follow-up on that. Q1 ratio improved nicely to 12.7% in the third quarter, What, in your opinion, is the optimal level of Tier 1 you would like to have going forward? And secondly, related to this, what is your Tier 1 ratio on the Basel III capital rules?

About the NIM that we have, we finished it with 7% the NIM in this quarter. Probably, we expect to finish the year with a similar number. And for 2014, probably we expect some stability in this ratio. Would decrease to 0 because of the mix [indiscernible], probably is more stability that we expect. About the Tier 1, this quarter we had an improvement at Tier 1 because we have in our market risk capital allocation this is because we had an improvement in the Tier 1. But we have now in the month of October, starts here in Brazil the implementation of Basel III. And we are in a movement to do the transition. Probably, we will maintain this level for Tier 1 for the next periods with some margins. We don't have the final number but considering the lower level that we expect to have for the future there, for Tier 1, the minimum requirement, we will maintain some margin that this levels that we have in the simulation 9.3% is the -- in the Slide 11 is a simulation that we did for Tier 1 equity is without any subordinate debt -- substantial subordinated debt that we can, including this level. Probably considering the future requirements, we will have [indiscernible] 2% or 3% more than the minimum requirement to have some space for growth according to our needs or our expectations. This is what we expect for the Basil ratio for the future.

Our next question comes from Mr. Francis [indiscernible] from Banco Safra.

Two questions, I think that the most general ones we're already made. Just I would like to talk a little bit more about the credit mix movement you guys are doing. Well, the results are showing that you guys are basically changed higher risk, higher spread credit for low risk, lower spread lines, of course, this is having an impact on NII and this has been a strong movement like the auto loans, vehicle loans are being dropping and payroll loans are being growing faster. My question is how long this movement will take and I'm doing this question because your competitors are doing the same movement, and I believe some markets as the payroll markets for example is starting to get very, very competitive right now. So if you guys can give us a color of how long this movement should take, which is important for us to predict our NII numbers, I think that's my first question. And I'll come up with the second.

How long do we expect to maintain? Probably, we have these 2 products, payroll loans and the mortgage operations. We have a lot of space for continuous growing. Mortgage is something, in the country, only is around the 7% of our GDP is now the total portfolio that we have in the system. And probably we expect that we will be doable 2020. And this one product that we have a lot of space to grow in the next years. We are only 30% in the last 2 years, but we expect for 2014, probably a similar growth. Payroll loans, we understand that we have a lot of opportunity in our client base. We have around 80 million pension -- retired people that receive their pension through Bradesco and now inside the bench, we have to offer for these clients, the payroll loans operation. In the past, it wasn't possible for us. And now we know how to do this. Around 50% of these clients, they don't have the operation. We feel [indiscernible] growing in these 2 products. How long we expect that we'll maintain this effect, we don't know, we don't know how to give you this information. We understand that probably, these operations will impact a little -- will reduce a little the revenues or lower spreads but the margin after the interest ratio will be better and we will probably continue growing. This is what we expect for the future considering the expectation that we have for these 2 products. What we have for the orders. There are many other opportunity in the portfolio to continuous growing period. SMEs is something that we expect continuous investing and in the last 12 months have had the highest growth, around 12% in our portfolio. And has a good margin in the smallest companies. Probably this portfolio for the future will have continuous growing we are offering now. We start with the special line around BRL 6.5 billion for the SMEs operation there and then is one segment that probably we expect continues growing in the future and we will help improve the spread for and the balance [indiscernible] this operation that has lower spreads payroll loans and the mortgage.

Right. So If I understand you guys, it don't seem in the short-term the strength to change, but you guys, of course, have seen opportunities on the other side as well? Thank you. And my second question, is just a follow-up of the efficiency ratio subject. You guys did a movement, and correct me if I'm wrong, 2 years ago of increased their branch footprint and I think, it was more than 1,000 new branch, and I would like just to hear from you guys, how you guys, I think, a long time passed from that decision. How do you guys analyze that strategy. Do you guys think it was right? How can we see the results of that strategy on your P&L, for example, so you guys can give us a little more color on that, I think that would be great.

We didn't say that we did the correct decision to open the 1,000 branch. We said we added value to the company with these branches that we opened, it was because the decision, that's not continues with the postal agreement that we had with the postal company to offer financial products in their branches. We understand that with the decision that we had opened these 1,000 branches last year, the majority of these branches they reached the breakeven point and now this branch continues increasing the revenues and probably, we will have this thing backup for this investment in more 1 year, 1.5 year, all of these branches we will have the payback. Then we understand we did the correct decision opening these 1,000. And one thing, the coverage, the clients that we had, that we acquired or that we are improving with the agreement with the postal branch [indiscernible], around 5 million clients that we transferred for our banks for their continual -- doing operations with Bradesco.

Our next question comes from Mr. [indiscernible] Valdez with Barclays.

I just wanted to go back to the question.

Can you speak a little loud?

Yes, can you hear me well? I'm sorry, I just wanted to go back to the question on the risk-weighted asset drop. We saw that risk-weighted assets went down by 6% quarter-over-quarter and that's basically what drove the BIS ratio up. I just wanted to understand and make sure I understood well, you guys mentioned that the reduced exposure limits the market risk that we saw is because you switched from the standard model to an internal model for market risk measurement?

Bradesco is the unified Brazilian Bank that uses internal model for market risk. And this internal model, compared with the standard model, we consider [indiscernible] to do the calculations or do the positional audit of 60 days. Our model considering that the number that we finished in this quarter, the total capital allocation that we have compared with the standard model, the standard model represents about 6% of the capital allocation. We didn't have -- probably in the next periods, our capital allocation considering our internal model that we used, we will have a decrease considering that we will have an evolution in the fields. We are using this internal model during this year. And in June, we -- the number that we have for capital allocation considering this internal model. And in June, the number that you have, we reduced now around this [indiscernible] around 6% in September. And this is the number that you have in September compared with the standard model. The standard model represents around 6% of the number. Then probably for the next quarters, our capital allocation -- we will reduce because the volatility, the positions that we have now in the treasury, will require less capital.

Okay, understood. So I understand the way to calculate the capital allocation for marketplace, but what drove down the risk-weighted assets of the bank?

Okay, we, in the beginning of the year, the Central Bank gave us permission to adopt some new rules that is acceptable for Basel III and we had -- we used no money for [indiscernible] operations which companies that have more than BRL 100 million operations in the system. And operations guarantees, the mortgage operations that we have the permission to reduce the risk-weighted. This drop that we have in the risk-weighted is because the new rules that the Central Bank is adopting in Brazil.

Okay. So shall we see any further risk-weighted assets, like sharp movements during the year, for the next quarter for example?

No, now probably we will maintain this for the risk-weighted assets. They don't have any modification -- new modification. Probably we will maintain the same criteria for the future. And we don't expect any modification, -- the only modification probably will be [indiscernible] to be the growth of the assets that we expect to maintain for the future.

Our next question comes from Mr. Boris Molina from Santander.

Had a question regarding costs. If we took total operating expenses, excluding taxes on revenues which were unusually low, and intangible assets and amortization, which are noncapital expenses, your cost growth was 11% year-on-year, largely due to other operating expenses, so I know that you don't provide guidance for cost growth for other operating expenses but can you please give us some clarification, because in our view, actual efficiencies aren't accelerating, costs are accelerating, so is this a sustainable growth, acceleration in cost or is there other nonrecurring issues in this line?

We actually think that's sustainable because we are inside the bank, we are changing procedures. We are changing the way to do things and with this movement that we're doing, in some talking about the administrative cost, we are -- we know how to reduce the cost because we are changing the procedures internally. We understand that probably we will have to maintain for the next year the expectations that will have to grow less than the inflation in the operational cost. We understand that probably for the next year, we don't have now the guidance but we will go less than inflation will -- for the next quarter -- for the next year ended. We expect to maintain this, sustain this the next periods. Inflation level, we understand that is the limit to grow operating expense.

I was referring more to the other operating expense line but it's not a personal or admin but other operating expenses, that was pretty high in the quarter. Do you have any color on what drove this increase in other operating expenses?

Not only we don't have the administrative cost, it's the cost with judgments and acquisitions for amortization agreements that we do acquisition payments -- payroll agreements that we have when we buy the right for to do the same the payments for third-party of some companies and in this line, we have this expense.

Okay, I understand. My second question is related to Slide #34 on your presentation where you include how tax rates have been increasing as a percentage of your equity and reference capital for regulatory purposes, now we know that there is a regulation in Brazil that allows you to avoid tax in temporary differences, some of them from your capital ratios under Basel III, however, do you have any guidance on what the Basel III ratio would look like one that you have in the Slide if you deducted the first taxes that are allowed under current regulation?

Now, the Brazilian regulation we have 2 kinds of tax credit -- tax, 1 part of the tax cut related to provisions for loan loss, we don't need to deduct for the Basel III ratio. We will deduct only the other tax spread. We don't have guidance because this tax spread is -- they grow according to our operations. Probably will continue growing and the tax spreads -- continues growing in the future but we understand that this [indiscernible] will not affect in the Basel ratio that we will cause some limitation to do the operations -- continue to do the operations. We're working in the way to be more efficient in the tax -- in the tax calculation and tax expenses but according to rules, our provisions that we will have in Brazil need to be added and we will have this tax spread and consider that our operations will continuously grow in the future, these tax spreads will grow. But as I said it doesn't really affect us and cause some limitations for the future.

But do you expect as a percentage of your equity, you have this chart that went up sharply and I don't know if you have any explanation why they rose so sharply and where they should come down back to the high-teens that were about a year-or-so ago?

I think, around the tax credit, now that we have around 38%, if you're considering the total tax spread. Some time ago, it was around 30%, probably it will be running between 30% and 40% for the future.

Our next question comes from Mrs. Regina Longo Sanchez from Itau BBA. Regina Longo Sanchez - Itaú Corretora de Valores S.A., Research Division: I think in the English conference call, we haven't talked about the noninterest financial margin and we saw a material decline in the trading risk to BRL 42 million from BRL 162 million in the previous quarter, which I like to see that, by the way, and I'd like to know that as a result of this lower volatility risk, it's reasonable to expect the noninterest financial margin into post figures, maybe closer to historical levels, at least above BRL 200 million, it was BRL 107 million this quarter and BRL 18 million last quarter, especially considering it will be unlikely for the treasury, I mean, to have losses again, I mean as it has reduced its exposure, is it okay, I mean, to work something between BRL 200 million and BRL 300 million for this noninterest financial margin [indiscernible] that you call in Portuguese, for coming quarters?

Thank you, Regina. In the beginning of the year, we had this increase in the volatility in the marketing and our credit department they work according to the limits that we have inside the bank and the internal governance that we have -- actually these rules that we have internally. But with the increase of the volatility in the systems, the operations that we have, the bar had some increase during the first quarter and the second quarter. The first department [indiscernible] start to do some movements, trying to working reduction of this bar and now we have one lower level, about the noninterest earnings. We understand that probably for the future, we understand that we will have how to return for the average that we had in the past, something around BRL 200 million is the way or there is reasonable for our credit department that they could maintain the level similar that they had in the past. I think that's possible this number BRL 200 million is the level that we expect for the future considering the position or the record our credit card department has.

Ladies and gentlemen, since there are no further questions I would like to invite Luiz Carlos Angelotti to proceed.

In conclusion, I would just like to say that given the challenges this quarter, we believe our operating performance and results were solid reflecting not only our strong market position, capitalized by business diversity and penetration but also our ability to adapt to different challenges and scenarios. Bradesco has affirmed its positive outlook for Brazil in the long-term, which can be advanced by its investments growth strategy, which are focused on organic growth and consistence, whereby we seek to take advantage of how the business opportunity generates by our banking and insurance activities. Thank you all, and have a nice day.

This concludes Banco Bradesco audio conference for today. Thank you very much for your participation. Have a good day.