Thanks, Andre, Maffra. Thank you very much for joining us one more time in this call, and good afternoon, everyone, and thank you all for attending our results call and a very special one for us. It's our first year as a listed company. So on Slide 5, I will highlight the main takeaways from 2020, which was as you all know, a very challenging year for all of us, where resilience and adaptation were key elements. We understand it would be a waste to go through the pandemic and not learn from it. We kept thinking about what we could learn from the pandemic to become a better company and improve our business model going forward. And now I would like to share some essence we have taken from this pandemic. So number one, XP from anywhere, a different way of working. If not for the dynamic, we would not know how predictive and functional we can be working from home. XP from anywhere brings a total new way of corporate working going forward, delivering a very interesting equation in our opinion. First, happier employees. People can be closer to what they love, not going to the rush hours wasting a lot of time in the traffic, and happier employees usually mean happier clients as well. And all of that based on a more productive company. Also, our talent pool has expanded immensely, and that's how Villa XP, as it's known or [indiscernible] XP was born because of the Panama. Number two, ESG initiatives. We have the obligation to set the example. We know that. So we had a better world than we inherit. This was already a clear trend before the pandemic, but it accelerated when the pandemic hit, especially the poor. So XP decided to move forward,…

It wasn't me, sorry. Okay. So this was our quick video. And now we move to the strategy session. So on Slide 7, we are going to talk about our long-term strategy to address, if not all, most of the Brazilian financial revenue pool. As you can see on the left side, since 2016, we have grown our revenue by a CAGR of 60%, reaching the BRL8.7 billion in 2020. But it's still irrelevant compared to the size of the total revenue pool in the system. The actual size of the revenue pool based on our internal estimates is close to BRL800 billion. XP's participation in the revenue pool is less than 1.2%. And our strategy is to keep increasing the size of our TAM. At the IPO time, back in December 2019, our addressable TAM was roughly BRL70 billion or less than 10% of the total. As of last year, 2020, we increased our TAM to approximately BRL125 billion or less than 20% of total. This year, 2021, especially with the credit card and debit card, and also the digital bank accounts, our TAM expands to approximately BRL180 billion or less than 25% of the total, less than 1/4 of the total. And this is more -- less than 1/4 of the total is more than 20x our revenue in 2020. We know that it will take time in order to address our revenue pool. But the long-term opportunity here, and that's what we want to emphasize, is massive. We believe that through technology and the acceleration of digitalization, we will be able to speed up things in our ecosystem. This is why you keep hearing from me and other partners of the Company repeating that we truly believe our journey is just beginning. So now we move to…

Thank you, Bruno. Hello, everyone. Well, on this slide, we have two business lines that didn't exist less than a year ago. Scaling a business line from this direction in such a short period of time, it was only possible because of our advanced tech platform. As we recently reported, as Bruno mentioned, our collateralized credit portfolio has grown exponentially during 2020, attracting individuals and SMBs due to its low interest rates and friendly experience. Our credit model allows our book to be asset-light in terms of capital requirements, and we are confident that we can multiply this portfolio by several times on the next three to five years. Now I would like to spend more time on our XP Visa Infinity credit card, which will be available to our customer base in the next month. As Bruno mentioned, we truly believe this is an important step to build our financial ecosystem. Our goal is to offer all the financial services, including digital account payments, credit and become a one-stop shop for all banking segments. This will expand our customer base and our ability to cross-sell other products, which will cut the less tie our clients have with the big banks. On the first two months of operation, our credit card has shown a penetration of almost 50, yes, 5-0, percent of the eligible customer base. Our TPV in February has reached already BRL110 million with one week more to go. Remember that I just mentioned the official launch will be next month. So we not even released the product for the whole base. All these developments were made possible by our technology efforts and investments, and I will discuss a few tech milestones on the next slide. We have recently announced the successful implementation of Soma, our proprietary design…

Thank you, Maffra. So now we go to the KPI... André Martins: Actually we have another video before...

We have the Soma video. You're right. It's a short video. André Martins: Yes, just a quick one.

Quick one, yes. [Video Presentation]

Okay. Now we go to the KPIs. So moving to the next Slide, 12, you can see our -- we have already released that. So our custody, BRL606 billion as of December 2020, increase of 61% year-over-year, active clients, 2.8 million, almost an increase of 63% year-over-year, and then we have our net inflow. One, on the left, the real numbers and the right, adjusted by the extraordinary outflows or inflows, which we had only in the first quarter and third quarter. I think that's our known numbers. So nothing to say here. We can move to Slide 13. Yes. On Slide 13, we have our total gross revenue growing 58% year-over-year, reaching the BRL8.7 billion. When we compare to the BRL5.5 billion of 2019, it's interesting to note that in 2020, basically, we added on top of the 2019 revenue the whole revenue we had on 2018, which was approximately BRL3.2 billion. The main line pushing up the revenue is the retail business, contributing with 81% growth on a year basis and 92% in the fourth quarter. When we look at the breakdown, retail is by far the most relevant revenue line, representing almost 3/4 of our business, institutional 12%. Issuer services, it's interesting to highlight because this number throughout the year, that's only on the fourth quarter, okay? The revenue breakdown here is only for the fourth quarter, not the entire year, issuer services for the entire year has been close to 8%. So this means that it's picking up and that talks a lot not only with our leadership that we got last year in fixed income and hybrids for the first time. And all of the deals that we take to the market are genuine deals so we don't have a balance sheet business or private…

A couple of questions. Maybe just first on the last point on the net margin guidance that you gave. What tax rates should we assume? Because it's 15% to 20%, it was 9% in the quarter. So maybe -- that's my first question and then I'll have another question.

Okay. Yes, that's hard because, for example, let me give you one example, Tito. The 9% that you saw in the fourth quarter, if we have not the impact of the long-term incentive plan, it would be approximately 18%, okay? So the 9% is because when we increased, and we anticipated some grants, and we've shown the numbers of the fourth quarter, I think it was 200 and 180 in the fourth quarter in terms of share-based compensation expenses. That gives a tax shield. The tax that you see in other words, it gives you a tax shield. Basically, if we didn't have that, our effective tax rate would be higher. But in other words, the tax that we have there in our financials now, it's not what we pay. We -- because of the share-based compensation plan, we have this tax shield, but we pay more taxes than what is released in our financials. It's a noncash win. And if those RSUs and PSUs, become vested, then the tax is going to be due.

Right. Okay. That makes sense, Bruno. I guess the question, as that normalizes, right, because you said you sort of -- it was a onetime sort of acceleration. So as that normalizes, you should get back to between 15% to 20% tax rate? Or can it go above that, just to be clear?

It can. It can. It can go below 15% as well because that depends on the revenue breakdown. If a lot of the net income from financial instruments, we have a part of that that is done through XP because that's where the cash from the IPO, the following we did is placed, okay? If that part of the revenue is higher than other parts, then the effective tax rate should be lower. If other parts of the business have a more relevant stake in the breakdown of the revenue, then the effective tax rate should be higher. So it fluctuates. That's why we gave a large guidance going forward because it's not easy to -- for example, credit card, if we scale the business really fast, and then we have a lot of revenue there, that will bring down the effective -- it will bring up the effective tax rate and down the adjusted net margin. So it's not easy to forecast.

No, I understand. I can understand it's not easy for us here. Okay. So my second question, on the take rate, the revenue yield. You showed in the slide that was stable this year compared to last year. But in the quarter, it did come down a bit. So just to understand maybe some of the volatility on a quarterly basis, and I know this is also difficult to understand. But just to get a sense of what happened, right? Is it just less trading because you had a lot of volatility earlier in the year, and that came down a bit. If you can give some color on sort of the quarterly movements we saw this year.

Sure. No, no, it was not that. I mean the take rate came down on a quarterly basis marginally. It was, I think, 1.32 in the third quarter, if you look at the last 12 months, maybe you're taking only the quarter and multiplying by 4. And if you take the last 12 months in the third quarter was around 1.32, and it went down to 1.29. And remember, in the fourth quarter, I think it should be even lower than 1.29 because we forfeit relevant part of our revenue. We zeroed the online brokerage fees in mid-September at Rico and XP, we reduced by 75%. So out the year, in the first nine months, we had that revenue in the fourth quarter, we didn't. But we more than compensated that with other revenues in our ecosystem. And because of the growth and the appreciation of the custody in the fourth quarter, you have this math effect. If you look at the revenue itself, not only the retail, I mean quarter-over-quarter, it went from a little bit less than BRL1.7 billion in the third quarter to almost BRL1.85 billion in the fourth quarter. So the revenue for retail, it went up in the fourth quarter. The take rate, it went down a little bit because of -- mainly because of those two effects. We didn't have a revenue line that we had third quarter, brokerage -- online brokerage for Rico and reduced by 75% XP and the growth of AUC, which increased the denominator and makes that number go down because of the market appreciation in the fourth quarter.

Right. Okay. That makes sense. But I guess -- so going forward, if we just look at the quarterly take rate because of the elimination of the brokerage fees at Rico had cleared, is that more representative of what to expect going forward?

I would say, I would say, again, depends on how the other business will perform because take the credit card as an example. Again, the credit card has no AUC attached to it. It has a revenue, and it's basically retail revenue. So because of the credit card, retail revenue will increase, no way you see a patch, which means that only using that factor, take rates should go up. We're going to have other forces impacting the take rate. So usually, when the market appreciation is really high, take rate goes down a little bit. When it's -- the market has a sell off and it goes down, take rate goes up because our revenue doesn't have the volatility that the AUC might have because of market appreciation or depreciation. And that's the point. It's much more recurrent in several different aspects than I believe most people think. So take rates will vary, but the denominator plays an important role there.

Right. And just to clarify, the revenues from the credit card portfolio flow in through the retail revenues. Is that correct?

Yes. Yes. The way -- the managerial income statement, we have those four lines in our revenues, either retail, institutional, issuer services or digital content. And then it's based by the client profile, most of it. And if it's an institutional client, either corporate or institution is there. If it's more retail originated revenue, it goes into retail. André Martins: Thank you. That was Tito from Goldman Sachs. Now we will allow Mario Pierry from Bank of America Merrill Lynch.

Congratulations on the results. Let me ask you two questions, Bruno, as well. The first one, we saw, right, you added 1,600 IFAs this quarter. And I think this is a 25% increase in your IFA base. But when we look at the net client adds of 132,000, this seems to be weak relative to what you've been doing. So when should we expect this big increase in IFAs to start reflecting in number of clients and AUC? And then my second question is related to your credit portfolio. There was a big jump in your loan book. It seems like you're growing this very well. I was just trying to get a little bit of more color on what is the ROA of this business, right? You showed that you had zero NPLs. Loan book is growing very aggressively. So just trying to understand a little bit better about the profitability of the loan book?

Okay. Yes, Mario, regarding the IFA question, there is a time to make -- that happened, what you mentioned, in the fourth quarter, basically because of the positive scenario we have for the IFA profession in Brazil, especially with the banks closing the branch. So we believe this is going to stay for a longer term, but we believe the numbers will come. I think that when we have the full experience in terms of banking services and products, which will happen this year with the digital bank accounts, the credit card that, as Maffra mentioned, we are going to launch next month, and we are ready show those numbers that Maffra mentioned this year. TPV this year -- I'm sorry, this month, the TPV, north BRL110 million, and the month is not over yet and we have not even started for real. So all of that, when we have all that in our ecosystem, the dream that we have to have 100% of share of wallet of our clients and basically double our company with our existing clients, I think it will be a reality, not to have 100% necessarily, but to be able to have and cut completely the link with other banks in our existing clients. So that's what I believe to be the trigger. But again, it's really short period because that happened in the fourth quarter. And then it depends on the market, it depends on other circumstances, to keep bringing more clients in the custody of those clients. Regarding the credit part and the ROA, I mean, you mentioned the growth was really very high-growth that we had, especially in the second semester. Just bear in mind, as we put in our press release that in December, we had a benefit to increase that…

Okay. If I can just follow-up, and again, the growth is fantastic. You are at 0.6% of AUC. What do you think this number should be? And not looking for a short term, like -- but what do you think you can get to in the next five years?

We looked at other markets to see -- we went to the United States. That number stays between two to something percent. It depends. But in Brazil, I mean, we said like 3%, 5 -- we don't know -- I mean, we don't know because it's a brand-new product. What we know is that Brazilians, generally speaking, are really -- Brazilians that have money to invest are really underleveraged. We do not have the culture to leverage our investments or take bets and do whatever. Most people that do that are the people that don't have the asset part to deal with. If you take the -- just one example, if you think about the real estate market, United States is what, 20% equity, 80% debt. In Brazil, it's 5% equity, I would guess, 95% -- I mean, 95% equity and 5% debt. So Brazilians with assets, they are underleveraged by nature. And then I don't know what the number in terms of the AUC will be. But we think 0.6% is too little. So we expect a growth there. André Martins: Sorry I was on mute. Thank you, Mario. We will now answer Mr. Marcelo Telles from Crédit Suisse.

Thanks Bruno, thanks André, and congrats on the results. I have a couple of questions. Some of my main questions have been answered earlier, but can you comment a little bit how do you see competition from other platforms? Of course, you took a big step to try to retain your most important IFAs. So why are we -- where are you in that respect? I mean do you see the need that -- to engage in other type of retention agreements going forward? Or you think that perhaps the environment, the competitive environment has already started to normalize a little bit. So that's the first question. And the second question, can you talk a little bit about the growth in net inflows? You had BRL36 billion on net inflows in the quarter. Do you see room for that growth to accelerate into 2021, 2022, particularly with increase -- considering the increase you had in your IFA network more recently?

Sure, Marcelo. Thank you for the questions. Regarding competition, I mean, it's going to be intense for the future because it's a massive opportunity as we presented in our long-term strategy chart. It's almost BRL800 billion revenue pool. And a lot of players -- some of the players are trying not to lose that pool. Others are trying to gain that pool. And is part of the game, we have built this company from scratch with nothing competing with the banks, and we think it's a good thing. Competition is a good thing for the client, especially. So we're going to keep focus on the client, give the best experience, product, services, lowest price, and that's it. That's going to be -- it has to be the focus here. But we -- I mean, in terms of the IFA competition, it has been more intense in the past. But again, it's a natural thing, at least in my mind, when I think what we have built, we -- and has developed this profession throughout the year. So we are, by far, number one. When you look at what we onboarded in the fourth quarter, the 1,500 IFAs approximately, that's 2.5 -- probably 2.5x our closest competitor, just what we did in the fourth quarter. So again, it's natural that other platforms that want to build distribution like that comes to our IFA network and try to shop here. What we have to do is to offer our IFAs, better service, better tools. They can be more productive that we can increase the probability of them as entrepreneurs to be successful. And that I can tell you -- I mean that I am pretty confident we do that. And if you look, Maffra can complete here, if he wants, about other…

And just to add to Bruno's point and answering another question that's on the chat. We really believe that once we complete our GES count, the date, it's by, I would say, by the end of the first semester, and we truly believe that we will be able to bring more accounts. We'll be able to bring more share of wallet, and the stickiness to our platform will increase. So we believe that hedging new products, digital account, credit and the other products will bring more money, will increase the stickiness, will bring more clients. So it's great a virtual cycle.

[Foreign Language]

I can take this one, Bruno.

Go ahead.

Yes. I asked in Portuguese, and I apologize. I should have asked in English. I apologize for that.

For the English guys here, the question was about the credit card, what we can expect like in spending, what we can expect like in contribution margin. That was the question. So to answer your question, when I mentioned 50% of penetration on the eligible clients, it's only for the clients that are already eligible. That's a small part of the whole clients of XP because the launch is next month. So, we not even released the product when we had -- and we had, so far, this month, BRL110 million. So you can expect this number to increase really fast on the next months. And my point about the 50% is to show our power to cross-sell products on our base. That was my point because we are not doing marketing. We are not like proactive selling the card and the clients are coming. Once we release the card, for example, for any client, 50% of them order the card. That was my point. About your -- other question was about spending. Of course, you can imagine that we -- most of our clients, they are like high net worth clients when compared to Brazil. These numbers are public. So you can see that the average spend for like high end credit cards in Brazil, they are like between BRL7,000 to BRL10,000. So I would say that...

Per month?

Per month, yes. So I would say that's the range for the clients that we have today, okay?

Okay. And just on my first question regarding the economics of the credit business, it's 200 basis points, 250 basis points, a reasonable ROA assumption for...

Let me give that answer, Marcelo. Yes, it's a reasonable assumption. It can be lower than that because as I said, we look at credit as a service, okay? So sometimes, we -- I mean if you look only at that part of the business, you are going to miss the other part that is going to be part of the revenue because of the credit as a service, okay? And it's hard to model that. We know. And we -- I mean it's hard to open exactly how we do our math here. But what I can tell you is that your assumption of around 200 basis points only in terms of the credit, it's not wrong, okay? But what I'm trying to say is that there is more than that. And you're going to see that. Where are you going to see that in our retail revenue? It's going to appear in our take rate. It's going to appear here because we do have this credit as a service, and we look at the return on equity that everything we are doing, considering all the products that the credit is pushing and helping to increase the penetration and so forth as well. André Martins: Thank you, Telles. Have a good one. We just have two more questions, Bruno. I think that they will be let me...

Let me -- before -- sorry. Before -- Telles is asking about the numbers of the credit card. Again, we cannot open the basis points specifically. But what we can tell is we -- of course, we have our business plan, okay? And we have not, as Maffra said, launched yet the credit card, but it's with a select a group of clients. It's more on better phase, and we have already this more than BRL110 million of TPV this month. Our business plan, so far, it's more than one year advanced in terms of what we had when we decided to move forward. And I think that has to do with two facts. Number one is the number Maffra mentioned, the 50% penetration. We were much more conservative in terms of the option of the credit card. Because usually, credit card, it takes time for people to adopt and keep moving and so forth, for the type of the clients that we are addressing. Because the type of the clients we are addressing, probably have two, three credit cards already, okay? Number two, two is the spending. We were -- I mean we know our client spends a lot more than the average. So we need much I mean many -- much less, I would say, clients to make the same TPV and -- but we also were surprised by it so far. But we are just at the beginning. So it's hard for us to give any kind of guidance here. I know it's going to be important for all of you to model the business and so forth. We are going to work on something out to help. But what I can tell is that it's much ahead of the business plan, and we are optimistic about the stickiness of the card, especially linked to our brand, and let's see how it plays. André Martins: Okay. Next, Jorge Kuri has a question, kind listed as a question here at the Q&A. And that's an interesting one. He's asking about what do you feel, Bruno, about, I mean, recent market volatility maybe interest rates will go up eventually. What do you think this could bring to XP's business? I mean it could hurt structurally the business to have high interest rates or there's a level which is healthy because we make more money, and we still have compelling investment alternatives for clients.

Okay. Thank you, Jorge, for the question. I will start answering looking at our history. We have grown through very high interest rate environment in our history. And here we are. So that's number one. And the reason for that is because we don't need the market to grow, to keep growing, we just need to convince the clients from the incumbent banks to migrate into our platform, and we believe we have all the tools to do so. And now even more as we keep adding new products and enhance the experience of our clients. So that's number one. Number two, in the short term, when there is volatility or interest rates going up, that is a positive in the short-term because of fixed income, because of floating revenue because of volatility itself, remember that we have several books -- flow books in our business, and we are always hedged for volatility in tail risks so either the positive or the negative one. In our history as well, when we have like a lot of market volatility, like in Brazil in 2017 that May 17, the [indiscernible] day, we made money. We look at the pandemic right after Carnival in February last year, same thing. Yesterday, same thing with the Petrobras case and so forth. So we are always in the short term. Headed for tails risks and volatility in the short-term is something positive. And as I said, interest rates are going up. Considering the size of our business now, our floating revenue would go up substantially, depending on the growth of interest rates. And fixed income also would be much more attractive for investors to trade and to allocate, and we could make money there as well. Thinking about the longer term, of course, to have Brazil on track, doing the reforms, keep moving and growing is what we want as Brazilians, as a company that wants to -- the best for the country, that want to generate wealth in Brazil and so forth. So -- and for our business in the longer term, I also believe it's better to have Brazil developing itself. The Brazilian capital markets, is developing a lot. So I don't think interest rates -- interest rates needs to go up from 2%. We all know that. It will this year. We don't know by how much and how fast. But again, if we do not come back to the above 15% interest rate that we had in our past, I think that doesn't change the picture at all. In considering our size nowadays, it might even in terms of the results in the numbers. It might even be bad in that perspective. André Martins: Okay. Thank you, Jorge Kuri, Mr. Kuri from Morgan Stanley. The last one would be from Carlos Gomez from HSBC. He's asking you to comment on an expected time line for the conclusion of the transaction with Itaú.

Okay. That's Carlos. Thank you, but that's hard to say because it's pending the creation of newco, the export with Itau, so the latest the Company, it's pending approval by Fed and Brazilian Central Bank. It could come at any time. We personally -- I mean, I personally don't see a reason why not, but it depends on Fed and Brazilian Central Bank. And only after that, this newco is going to be created, and we can move forward with the merger proposal that we have agreed with Itau's controlling shareholders to do so. I think it's reasonable to estimate that we are going to have everything concluded in the first semester this year. But again, it's not a guarantee because I cannot speak for Fed or Central Bank. What I can tell you is that we are ready as soon as we have this creation of newco, we will have to file in SEC some forms and then proposed the merge, have the general meeting of XP Inc. Itau, now XP part, actually, the new company created will have its own general meeting to approve the merger. And we move from there. That's the time as soon as possible. André Martins: Great, Bruno. So we are running out of time. We have some other questions here, but I kindly ask you to get in contact with us, the IR team. We will be thrilled to talk to you about these results and especially about the long-term opportunities of XP that Bruno described and Maffra so well. Thank you very much for your participation. Thank you very much for all your partnership during this intense year of a public company. We would you like to conclude as well? Thank you, everyone.

Now, André, I just would like to thank you all for participating here and supporting us and say that it was a strange year, last year, a different year for all of us, but also an important year in our life as a company because first year as a listed company, we are still learning and improving there. And most important, I think we tested our company. We had never tested before. And the results, they are what you see and makes me personally even more confident that our journey looking into the future, it's going to be something else. And the main attribute or competitive advantages, as Guilherme said in his letter, is our culture. And I think when you have crisis like the one we did last year is when the culture of the Company is really tested. And I think our response, our employees partners response to the challenge were really impressive. So thank you all, and anything you need, we are here to answer and help. Thank you. André Martins: Thank you, Bruno, thank you, Maffra. Everyone, have a great...

Goodbye, everyone.